U.S. markets closed
  • S&P 500

    4,145.19
    -6.75 (-0.16%)
     
  • Dow 30

    32,803.47
    +76.65 (+0.23%)
     
  • Nasdaq

    12,657.55
    -63.03 (-0.50%)
     
  • Russell 2000

    1,921.82
    +15.37 (+0.81%)
     
  • Crude Oil

    88.53
    -0.01 (-0.01%)
     
  • Gold

    1,792.40
    -14.50 (-0.80%)
     
  • Silver

    19.86
    -0.26 (-1.30%)
     
  • EUR/USD

    1.0187
    -0.0063 (-0.61%)
     
  • 10-Yr Bond

    2.8400
    +0.1640 (+6.13%)
     
  • GBP/USD

    1.2071
    -0.0088 (-0.72%)
     
  • USD/JPY

    134.9700
    +1.9540 (+1.47%)
     
  • BTC-USD

    23,110.26
    +41.82 (+0.18%)
     
  • CMC Crypto 200

    533.20
    -2.02 (-0.38%)
     
  • FTSE 100

    7,439.74
    -8.32 (-0.11%)
     
  • Nikkei 225

    28,175.87
    +243.67 (+0.87%)
     

WSFS Reports 2Q 2022 EPS of $0.94 and ROA of 1.17%; Results Reflect Growth in Loans and Diversified Fee Revenue

  • Oops!
    Something went wrong.
    Please try again later.
·39 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
WSFS Financial Corporation
WSFS Financial Corporation

Board Approved 15% Dividend Increase and New 10% Share Authorization

WILMINGTON, Del., July 25, 2022 (GLOBE NEWSWIRE) -- WSFS Financial Corporation (Nasdaq: WSFS), the parent company of WSFS Bank, today announced its financial results for the second quarter of 2022.

Selected quarterly financial results and metrics are as follows:

(Dollars in millions, except per share data)

 

2Q 2022

 

1Q 2022

 

2Q 2021

Net interest income

 

$

153.6

 

 

$

138.6

 

 

$

106.7

 

Fee revenue

 

72.0

 

 

60.6

 

 

49.0

 

Total net revenue

 

225.6

 

 

199.1

 

 

155.8

 

Provision for (recovery of) credit losses

 

8.3

 

 

19.0

 

 

(67.6)

 

Noninterest expense

 

134.0

 

 

174.5

 

 

96.0

 

Net income attributable to WSFS

 

60.7

 

 

3.8

 

 

95.7

 

Pre-provision net revenue (PPNR)(1)

 

91.6

 

 

24.7

 

 

59.7

 

Earnings per share (EPS) (diluted)

 

0.94

 

 

0.06

 

 

2.01

 

Return on average assets (ROA) (a)

 

1.17

%

 

0.07

%

 

2.60

%

Return on average equity (ROE) (a)

 

10.1

 

 

0.6

 

 

21.3

 

Efficiency ratio

 

59.3

 

 

87.5

 

 

61.6

 

 

 

 

 

 

 

 

 

 

 

GAAP results for the quarterly periods shown below included the following items that are excluded from core results. For 2Q 2022, the corporate development and restructuring expense primarily relates to our combination with Bryn Mawr Trust and the unrealized gain on equity investments, net relates to a gain on our investment in CRED.ai.

 

 

2Q 2022

 

1Q 2022

 

2Q 2021

(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)

Unrealized gain on equity investments, net

 

$

6.0

 

 

$

0.07

 

 

$

 

 

$

 

 

$

5.3

 

 

$

0.08

 

Corporate development and restructuring expense

 

10.3

 

 

0.15

 

 

51.6

 

 

0.60

 

 

2.4

 

 

0.04

 

Loss on debt extinguishment

 

 

 

 

 

 

 

 

 

1.1

 

 

0.02

 

Contribution to WSFS CARES Foundation

 

 

 

 

 

 

 

 

 

1.0

 

 

0.02

 

(1) As used in this press release, PPNR is a non-GAAP financial measure that adjusts income determined in accordance with GAAP to exclude the impacts of (i) income tax provision and (ii) provision or (recovery of) 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.

CEO Commentary

Rodger Levenson, Chairman, President and CEO, said, “Our second quarter results demonstrated the strength of our business model and unique market position as we continue to optimize our significant strategic investments over the past three years.”

“We remain on track to achieve the synergies identified from the Bryn Mawr Trust combination. In addition, commercial loan fundings were at the highest levels in recent history and we saw continued growth in our consumer loan portfolios. This performance combined with the growth in our fee businesses are positive indicators of the potential of our franchise.”

“Despite the uncertain near term economic outlook, our asset quality metrics remain very favorable with the increase in our ACL related to the loan growth in the quarter.”

“In alignment with our longstanding capital return philosophy, the Board approved a 15% increase in our quarterly common dividend to $0.15 per share and an additional 10% share repurchase authorization. These actions provide us with the flexibility to selectively invest in the franchise while maintaining the strength of our balance sheet.”

"During the quarter, WSFS was honored to be named a 2022 honoree of The Civic 50 Greater Philadelphia by the Philadelphia Foundation, in partnership with Points of Light and other local partners. This recognition is a result of the support of our Communities, including over 13,000 volunteer hours in 2021 by our dedicated Associates who continue to live our mission of 'We Stand For Service' every day."

Highlights for 2Q 2022:

  • Core ROA(2) was 1.27% in 2Q 2022 compared to 2.59% for 2Q 2021.

  • Core EPS(2) was $1.02 in 2Q 2022 compared to $2.00 for 2Q 2021.

  • Core fee revenue (noninterest income)(2) as a percentage of core net revenue(2) was a strong 30.0%.

  • Total net credit costs were $8.0 million during the quarter. Results reflected a $5.6 million increase in the allowance for credit losses (“ACL”), due to loan growth, partially offset by releases related to acquired portfolio run-off and sale. The ACL coverage ratio was 1.13% at June 30, 2022.

  • WSFS repurchased 1,185,602 shares at an average price of $40.74, totaling an aggregate of $48.3 million.

  • The Board of Directors approved a 15% increase in our quarterly cash dividend to $0.15 per share and a new share repurchase authorization of 10% outstanding shares. At June 30, 2022, 14% shares were available to be repurchased.

  • KCMI Capital, Inc. (“KCMI”) is a specialized commercial lending unit acquired in the Bryn Mawr Trust merger, which was not core to our overall lending strategy. The loan portfolio was sold at par value for $55.5 million.

  • The BMT Insurance Advisors (“BMTIA”) business was sold to Patriot Growth Insurance Services, LLC.

  • WSFS recognized a $6.0 million unrealized gain on our equity investment with CRED.ai, a Philadelphia-based fintech partner that provides a mobile-based everyday card spending experience.

  • $1.1 billion of available-for-sale (“AFS”) mortgage-backed securities (“MBS”), or 19% of AFS portfolio, were designated as held-to-maturity (“HTM”) at June 30, 2022 to limit the capital impact from the rising interest rate environment.

(2) As used in this press release, core ROA, core EPS, core fee revenue (noninterest income), core net revenue and core fee revenue as a percentage of core net revenue 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.


Second Quarter 2022 Discussion of Financial Results

Balance Sheet

The following table summarizes loan and lease balances and composition at June 30, 2022 compared to March 31, 2022 and June 30, 2021:

Loans and Leases

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in millions)

 

June 30, 2022

 

March 31, 2022

 

June 30, 2021

Commercial & industrial (C&I)(4)

 

$

4,444

 

 

39

%

 

$

4,384

 

 

39

%

 

$

3,456

 

 

42

%

Commercial mortgage

 

3,322

 

 

29

 

 

3,361

 

 

30

 

 

2,025

 

 

25

 

Construction

 

934

 

 

8

 

 

924

 

 

8

 

 

779

 

 

9

 

Commercial small business leases

 

513

 

 

5

 

 

491

 

 

4

 

 

292

 

 

4

 

Total commercial loans

 

9,213

 

 

81

 

 

9,160

 

 

81

 

 

6,552

 

 

80

 

Residential mortgage

 

808

 

 

7

 

 

862

 

 

8

 

 

720

 

 

9

 

Consumer

 

1,522

 

 

13

 

 

1,382

 

 

12

 

 

1,105

 

 

13

 

ACL

 

(142)

 

 

(1)

 

 

(136)

 

 

(1)

 

 

(132)

 

 

(2)

 

Net loans and leases

 

$

11,401

 

 

100

%

 

$

11,268

 

 

100

%

 

$

8,245

 

 

100

%

(4) C&I loans include PPP loans.

At June 30, 2022, WSFS’ net loan and lease portfolio increased $133.4 million, or 5% (annualized), when compared with March 31, 2022. Excluding the sale of KCMI and run-off of acquired residential mortgage portfolio, net loans and leases increased $225.1 million, or 8% (annualized), primarily due to increases of $140.5 million in our consumer portfolio driven by our partnerships with Upstart and Spring EQ, $93.6 million in C&I, and $22.2 million in commercial small business leases, partially offset by decrease of $17.6 million in our commercial mortgage portfolio.

Net loans and leases at June 30, 2022 increased $3.2 billion when compared with June 30, 2021. The increase was primarily driven by the $3.5 billion of net loans and leases acquired in the combination with Bryn Mawr Trust, partially offset by a $217.7 million decrease in PPP loans.

The following table summarizes customer deposit balances and composition at June 30, 2022 compared to March 31, 2022 and June 30, 2021:

Customer Deposits

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in millions)

 

June 30, 2022

 

March 31, 2022

 

June 30, 2021

Noninterest demand

 

$

6,552

 

 

38

%

 

$

6,639

 

 

37

%

 

$

4,328

 

 

34

%

Interest-bearing demand

 

3,396

 

 

20

 

 

3,292

 

 

19

 

 

2,633

 

 

21

 

Savings

 

2,313

 

 

13

 

 

2,279

 

 

13

 

 

1,928

 

 

15

 

Money market

 

3,882

 

 

23

 

 

4,179

 

 

24

 

 

2,723

 

 

22

 

Total core deposits

 

16,143

 

 

94

 

 

16,389

 

 

93

 

 

11,612

 

 

92

 

Customer time deposits

 

1,104

 

 

6

 

 

1,156

 

 

7

 

 

1,052

 

 

8

 

Total customer deposits

 

$

17,247

 

 

100

%

 

$

17,545

 

 

100

%

 

$

12,664

 

 

100

%

 

Total customer deposits were $17.2 billion at June 30, 2022, a $298.2 million decrease from March 31, 2022 primarily due to a $128.7 million decline in short-term transaction related trust deposits and ongoing balance sheet management strategy to sweep $58.8 million in deposits.

Customer deposits increased by $4.6 billion from June 30, 2021 primarily driven by the $4.1 billion of deposits acquired in the combination with Bryn Mawr Trust and strong customer relationships across lending and fee based business lines, including $652.4 million of higher institutional trust deposits from Wealth Management.

Core deposits were a strong 94% of total customer deposits, and no- and low-cost checking accounts represented a robust 58% of total customer deposits, at June 30, 2022. These core deposits predominantly represent longer-term, less price-sensitive customer relationships. More than half of our core deposits, or 56%, from our Commercial, Small Business and Wealth Management customer relationships. The ratio of net loans and leases to customer deposits was 66% at June 30, 2022, reflecting continued significant capacity to fund future loan growth.

Net Interest Income

 

Three Months Ending

(Dollars in millions)

 

June 30, 2022

 

March 31, 2022

 

June 30, 2021

Net interest income before purchase accretion

 

$

148.4

 

 

$

135.2

 

 

$

93.4

 

Purchase accounting accretion

 

5.2

 

 

3.2

 

 

7.6

 

Net interest income before PPP

 

153.6

 

 

138.4

 

 

101.0

 

PPP

 

 

 

0.2

 

 

5.7

 

Net interest income

 

$

153.6

 

 

$

138.6

 

 

$

106.7

 

 

 

 

 

 

 

 

Net interest margin before purchase accretion

 

3.29

%

 

2.94

%

 

2.91

%

Purchase accounting accretion

 

0.11

 

 

0.07

 

 

0.24

 

Net interest margin before PPP

 

3.40

 

 

3.01

 

 

3.15

 

PPP

 

 

 

 

 

0.08

 

Net interest margin

 

3.40

%

 

3.01

%

 

3.23

%

 

Net interest income increased $15.1 million, or 11% (not annualized), compared to 1Q 2022, primarily due to $9.9 million from the rising interest rate environment, $3.2 million from loan growth and balance sheet mix, and $2.0 million from higher purchase accounting accretion. Net interest income increased $46.9 million, or 44%, compared to 2Q 2021, primarily due to a $55.0 million increase from the balance sheet size and mix due to the combination with Bryn Mawr Trust, offset by $5.7 million from the impact of PPP loans and a $2.4 million decrease in purchase accounting accretion.

Net interest margin increased 39bps from 1Q 2022 attributable to 26bps due to impact from the rising interest rate environment, 9bps from balance sheet mix, and 4bps from higher purchase accounting accretion. Net interest margin increased 17bps from 2Q 2021, due to a favorable increase of 38bps from the balance sheet size and mix, offset by reductions of 13bps from lower purchase accounting accretion and 8bps from PPP loans.

Excess customer liquidity reduced net interest margin by approximately 36bps compared to a reduction of 50bps in 2Q 2021 and 44bps in 1Q 2022. Excess customer liquidity as of June 30, 2022 decreased to $4.1 billion as compared to $4.7 billion at March 31, 2022, primarily driven by a reduced volumes in interest-earning cash from decreases in customer funding of $298.2 million, brokered deposits of $55.7 million, and loan growth of $139.0 million.

Credit Quality

The following table summarizes credit quality metrics as of and for the period ended June 30, 2022 compared to March 31, 2022 and June 30, 2021.

(Dollars in millions)

June 30, 2022

 

March 31, 2022

 

June 30, 2021

Problem assets

 

$

567.5

 

 

 

$

618.1

 

 

 

$

624.9

 

Nonperforming assets

33.9

 

 

37.8

 

 

40.1

 

Delinquencies

59.5

 

 

54.6

 

 

54.5

 

Net charge-offs

2.6

 

 

3.3

 

 

4.8

 

Total net credit costs (recoveries) (r)

8.0

 

 

19.3

 

 

(68.1)

 

Problem assets to total Tier 1 capital plus ACL

26.24

%

 

28.79

%

 

39.73

%

Classified assets to total Tier 1 capital plus ACL

16.65

 

 

18.58

 

 

26.06

 

Ratio of nonperforming assets to total assets

0.16

 

 

0.18

 

 

0.26

 

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

0.10

 

 

0.12

 

 

0.17

 

Delinquencies to gross loans

0.52

 

 

0.48

 

 

0.66

 

Ratio of quarterly net charge-offs to average gross loans

0.09

 

 

0.12

 

 

0.23

 

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

1.13

 

 

1.19

 

 

1.59

 

Ratio of allowance for credit losses to nonaccruing loans

676

 

 

591

 

 

551

 

See “Notes”

Overall credit metric ratios remained positive and stable during the quarter and continued to reflect the strength of the originated and acquired portfolios. Total problem assets(5) decreased to $567.5 million at June 30, 2022 compared to $618.1 million at March 31, 2022, primarily from upgrades in commercial mortgage loans and our hotel sector. Total problem assets to total Tier 1 capital plus ACL was 26.24% at June 30, 2022, compared to 28.79% at March 31, 2022. Delinquencies to gross loans increased to 0.52% at June 30, 2022 compared to 0.48% at March 31, 2022.

The ratio of nonperforming assets to total assets decreased to 0.16% at June 30, 2022 compared to 0.18% at March 31, 2022. The ratio of nonperforming assets (excluding accruing TDRs) to total assets at June 30, 2022 decreased to 0.10% as compared to 0.12% at March 31, 2022. Net charge-offs for 2Q 2022 were $2.6 million, or 0.09% (annualized) of average gross loans.

Total net credit costs were $8.0 million in the quarter as compared to $19.3 million in 1Q 2022. The decrease in credit costs was primarily due to the initial provision for credit losses of $23.5 million recorded in 1Q 2022 in connection with the combination with Bryn Mawr Trust. The ACL of $142.0 million as of June 30, 2022 increased $5.6 million from March 31, 2022, primarily due to loan growth, partially offset by releases from the sale of KCMI and our acquired residential mortgage run-off portfolio.

(5) Total problem assets includes all criticized, classified, and nonperforming loans as well as other real estate owned (OREO).

Core Fee Revenue

Core fee revenue (noninterest income) of $66.0 million increased $5.5 million, or 9% (not annualized), compared to 1Q 2022, primarily driven by increases of $1.9 million in Cash Connect®, $1.9 million from capital markets income, and $1.3 million of other banking fees, including fees associated with our consumer lending partnerships as well as gain on sale of SBA loans.

Core fee revenue increased $22.3 million, or 51%, compared to 2Q 2021, primarily driven by a $17.2 million increase in Wealth Management revenue, of which $15.2 million was attributable to the combination with Bryn Mawr Trust. In addition, the year-over-year increase included $3.5 million of other banking fees, including fees associated with our consumer lending partnerships, gain on sale of SBA loans and traditional bank service fees, $3.4 million in capital markets income, and $0.8 million in Cash Connect®. Partially offsetting the increase was a $2.2 million decline in mortgage banking fees primarily resulting from the decline in refinancing originations compared to the historically higher levels in 2Q 2021.

For 2Q 2022, core fee revenue was 30.0% of core net revenue compared to 30.4% in 1Q 2022 and 29.0% in 2Q 2021, and continues to be well diversified among various sources, including traditional and other banking fees, mortgage banking, capital markets, Wealth Management, and Cash Connect®.

Core Noninterest Expense(6)

Core noninterest expense of $123.7 million for 2Q 2022 increased $0.8 million compared to 1Q 2022 primarily from increases of $3.5 million of higher variable operating costs to support growth in our balance sheet and fee-based businesses. This increase was offset by a decrease of $2.7 million in salaries and benefits as the first quarter's expenses were elevated due to routine annual incentive payments and related costs that were paid during the quarter.

When compared to 2Q 2021, core noninterest expense increased $32.2 million compared to $91.5 million in 2Q 2021, primarily due to higher costs from the acquisition of Bryn Mawr Trust. These higher costs support the overall franchise growth of the combined company, including $15.8 million in salaries and benefits, and $6.2 million in equipment, occupancy and amortization expenses. In addition, there was $4.7 million of higher variable operating costs as described above. Our core efficiency ratio(6) was 56.2% in 2Q 2022, compared to 61.7% in 1Q 2022 and 60.7% in 2Q 2021 primarily due to the impact of higher net interest income.

Income Taxes

We recorded a $22.4 million income tax provision in 2Q 2022, compared to a $1.7 million income tax provision in 1Q 2022 and $31.7 million in 2Q 2021. The effective tax rate was 26.9% in 2Q 2022, compared to 30.5% in 1Q 2022 and 24.9% in 2Q 2021.

The 1Q 2022 elevated effective tax rate was the result of nondeductible merger costs associated with the acquisition of Bryn Mawr Trust. The increase in effective tax rate for 2Q 2022 relative to 2Q 2021 was primarily due to discrete tax expense of $1.4 million related to nondeductible goodwill written off during the sale of BMTIA. Excluding this item, our effective tax rate in 2Q 2022 was 25.2%.

(6) 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 recovery of a legal settlement. 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 15% increase in the quarterly cash dividend to $0.15 per share of common stock. This dividend will be paid on August 19, 2022 to stockholders of record as of August 5, 2022. The Board of Directors also approved an additional share repurchase authorization of 10% of outstanding shares as of June 30, 2022.

During 2Q 2022, WSFS repurchased 1,185,602 shares of common stock for an aggregate of $48.3 million. As of June 30, 2022, including the additional share repurchase authorization, WSFS has 8,615,301 shares, or approximately 14% of outstanding shares, remaining to repurchase under its current authorizations.

WSFS’ total stockholders’ equity decreased $205.1 million, or 8% (not annualized), during 2Q 2022. The decrease was primarily due to a decline in accumulated other comprehensive income (AOCI) of $205.1 million from market-value decreases on investment securities resulting from the current rising interest rate environment. Additionally, quarterly earnings of $60.7 million were offset by capital returns to stockholders of $48.3 million from share repurchases described above, and $8.4 million from quarterly dividends.

At June 30, 2022, WSFS Bank’s Tier 1 leverage ratio of 10.02%, Common Equity Tier 1 capital ratio and Tier 1 capital ratio of 13.60%, and Total Capital ratio of 14.57% were all substantially in excess of the “well-capitalized” regulatory benchmarks.

WSFS’ tangible common equity(7) decreased $192.8 million, or 13% (not annualized) compared to March 31, 2022. WSFS’ common equity to assets ratio was 11.27% at June 30, 2022, and our tangible common equity to tangible assets ratio(7) decreased by 84bps during the quarter to 6.63% primarily due to the reasons described above.

At June 30, 2022, book value per share was $36.41, a decrease of $2.53, or 6% (not annualized), from March 31, 2022, and tangible common book value per share(7) was $20.37, a decrease of $2.62, or 11% (not annualized), from March 31, 2022 primarily due to the reasons described above.

(7) 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, insurance and credit and deposit products to individual, corporate, and institutional clients through multiple integrated businesses. Combined, these businesses had $60.3 billion in assets under management (AUM) and assets under administration (AUA) as of June 30, 2022. As previously disclosed, Bryn Mawr Trust will be the prominent brand within our Wealth Management segment.

Wealth Management reported pre-tax income of $20.2 million in 2Q 2022 compared to $15.5 million in 1Q 2022, and $10.7 million in 2Q 2021. The quarter-over-quarter increase was primarily attributable to net interest income growth in private banking from the favorable interest rate environment, revenue growth in the administrative trust businesses and a decline in certain credit-related and legal expenses. The year-over-year increase was mainly from the combination of Bryn Mawr Trust.

Total revenue (net interest income and fee revenue) was $43.3 million in 2Q 2022, an increase of $4.3 million, or 11% (not annualized), compared to 1Q 2022, and an increase of $22.9 million, or 112%, compared to 2Q 2021. These increases were primarily due to the reasons described above.

The administrative trust businesses revenue was $16.0 million in 2Q 2022, compared to $15.2 million in 1Q 2022, and $10.8 million in 2Q 2021. The quarter-over-quarter increase was primarily attributable to institutional service organic growth, supported by continued strength in corporate activity and new client relationships which drove a 40.7% increase in deal volume during the first half of 2022, compared to the same period in 2021, as reported by Asset Backed Alert.

The wealth advisory businesses revenue was $14.5 million in 2Q 2022 compared to $14.4 million in 1Q 2022 and $3.9 million in 2Q 2021. Net AUM of $7.6 billion at the end of 2Q 2022 decreased $1.3 billion compared to 1Q 2022, and increased $5.1 billion compared to 2Q 2021. The quarter-over-quarter decline was primarily impacted by the decline in equity and fixed income markets.

Total noninterest expense (including intercompany allocations and excluding provision for credit losses) was $22.8 million in 2Q 2022, compared to $23.8 million in 1Q 2022 and $10.9 million in 2Q 2021. Noninterest expenses decreased $1.0 million from 1Q 2022 and increased $11.9 million from 2Q 2021 primarily due to the reasons described above.

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 34,000 non-bank ATMs and retail safes nationwide supplying or servicing approximately $2.0 billion in cash at June 30, 2022. 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 $2.3 million for 2Q 2022, an increase of $0.6 million, or 31% (not annualized), compared to 1Q 2022 driven by increased managed services activity, and a decrease of $0.9 million compared to 2Q 2021 driven by lower ATM vault cash activity and increased operating costs associated with the rising interest rate environment. ROA of 1.26% in 2Q 2022 increased 14bps from 1Q 2022 and decreased 82bps from 2Q 2021 driven by a shift in funding composition mix and lower net income.

Net revenue of $11.6 million in 2Q 2022 was up $1.2 million from 1Q 2022 driven by higher managed service fee revenue and the rising interest rate environment (offset by higher external funding expense). Net revenue was flat year-over-year from 2Q 2021 with higher fee revenue offset by increased cost of funds.

Noninterest expense (including intercompany allocations of expense) was $9.3 million in 2Q 2022, an increase of $0.6 million higher compared to 1Q 2022 driven by armored carrier expense and external funding expense, and $0.9 million higher compared to 2Q 2021 driven by higher external funding and operating expense.

At the end of 2Q 2022, Cash Connect® had approximately $2.0 billion in cash managed, driven by year-over-year growth in remote cash capture and reconciliation units (18% and 15%, respectively). Cash Connect® intends to continue to focus on investment in its growing product lines and expand these services across the country, alongside a wide network and strong pipeline of channel partners, retailers, and top-tier financial institutions.

Second Quarter 2022 Earnings Release Conference Call

Management will conduct a conference call to review 2Q 2022 results at 1:00 p.m. Eastern Time (ET) on Tuesday, July 26, 2022. Interested parties may register in advance for the call on our Investor Relations website (www.investors.wsfsbank.com). A rebroadcast of the conference call will be available beginning at 4:00 p.m. ET on July 26, 2022 until August 6, 2022 and can be accessed through our Investor Relations website.

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-headquartered bank and trust company headquartered in Delaware and the Greater Philadelphia region. As of June 30, 2022, WSFS Financial Corporation had $20.6 billion in assets on its balance sheet and $60.3 billion in assets under management and administration. WSFS operates from 121 offices, 94 of which are banking offices, located in Pennsylvania (62), Delaware (39), New Jersey (18), 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, NewLane Finance®, Powdermill® Financial Solutions, West Capital Management®, WSFS Institutional Services®, WSFS Mortgage®, WSFS Wealth® Investments, and The Bryn Mawr Trust Company of Delaware. 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 Disclaimer

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 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, interest rates, inflation, supply chain issues and slowdowns in economic growth, including as a result of the novel coronavirus and its variants ("COVID-19") pandemic; possible additional loan losses and impairment of the collectability of loans; additional credit, fraud and litigation risks associated with our PPP lending activities; economic and financial impact of federal, state and local emergency orders, vaccine mandates 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 or variants thereof, 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 and the potential waning of vaccine effectiveness or effects of low vaccination rates; 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 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, the changing interest rate environment and inflation, that may limit the Company's access to additional funding to meet its liquidity needs; the discontinued publication of London Inter-Bank Offered Rate (LIBOR) and the transition to an alternative reference interest rate, such as the Secured Overnight Financing 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, residential, small business and Small Business Administration portfolios and wealth management business following its recent acquisition of Bryn Mawr Trust; 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 recent acquisition of Bryn Mawr Trust; 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, 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 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; and other risks and uncertainties, including those discussed in the Company's Form 10-K for the year ended December 31, 2021, the Company's Form 10-Q for the quarterly period ended March 31, 2022, 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 CORPORATION
FINANCIAL HIGHLIGHTS
SUMMARY STATEMENTS OF INCOME (Unaudited)

 

 

Three months ended

 

Six months ended

(Dollars in thousands, except per share data)

 

June 30, 2022

 

March 31, 2022

 

June 30, 2021

 

June 30, 2022

 

June 30, 2021

Interest income:

Interest and fees on loans

 

$

129,342

 

 

$

118,881

 

 

$

98,645

 

 

$

248,223

 

 

$

207,497

 

Interest on mortgage-backed securities

 

27,377

 

 

23,113

 

 

12,506

 

 

50,490

 

 

23,210

 

Interest and dividends on investment securities

 

1,340

 

 

1,321

 

 

1,383

 

 

2,661

 

 

2,832

 

Other interest income

 

1,961

 

 

822

 

 

368

 

 

2,783

 

 

644

 

 

 

160,020

 

 

144,137

 

 

112,902

 

 

304,157

 

 

234,183

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

3,766

 

 

3,128

 

 

3,778

 

 

6,894

 

 

8,274

 

Interest on Federal Home Loan Bank advances

 

 

 

 

 

 

 

 

 

5

 

Interest on senior debt

 

1,949

 

 

1,929

 

 

2,053

 

 

3,878

 

 

4,319

 

Interest on trust preferred borrowings

 

682

 

 

513

 

 

317

 

 

1,195

 

 

641

 

Interest on other borrowings

 

8

 

 

9

 

 

5

 

 

17

 

 

10

 

 

 

6,405

 

 

5,579

 

 

6,153

 

 

11,984

 

 

13,249

 

Net interest income

 

153,615

 

 

138,558

 

 

106,749

 

 

292,173

 

 

220,934

 

Provision for (recovery of) credit losses

 

8,268

 

 

18,971

 

 

(67,563)

 

 

27,239

 

 

(87,723)

 

Net interest income after provision for (recovery of) credit losses

 

145,347

 

 

119,587

 

 

174,312

 

 

264,934

 

 

308,657

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

Credit/debit card and ATM income

 

8,772

 

 

7,681

 

 

7,567

 

 

16,453

 

 

14,372

 

Investment management and fiduciary revenue

 

31,192

 

 

30,181

 

 

15,360

 

 

61,373

 

 

29,613

 

Deposit service charges

 

6,071

 

 

5,825

 

 

5,319

 

 

11,896

 

 

10,779

 

Mortgage banking activities, net

 

2,211

 

 

2,898

 

 

4,453

 

 

5,109

 

 

13,053

 

Loan and lease fee income

 

1,698

 

 

1,334

 

 

1,730

 

 

3,032

 

 

5,215

 

Securities gains, net

 

 

 

 

 

 

 

 

 

329

 

Unrealized gain (loss) on equity investment, net

 

5,991

 

 

(3)

 

 

5,261

 

 

5,988

 

 

5,261

 

Bank-owned life insurance income

 

374

 

 

105

 

 

695

 

 

479

 

 

900

 

Other income

 

15,720

 

 

12,553

 

 

8,633

 

 

28,273

 

 

17,318

 

 

 

72,029

 

 

60,574

 

 

49,018

 

 

132,603

 

 

96,840

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

Salaries, benefits and other compensation

 

68,189

 

 

70,930

 

 

52,408

 

 

139,119

 

 

105,546

 

Occupancy expense

 

9,902

 

 

10,792

 

 

8,083

 

 

20,694

 

 

16,543

 

Equipment expense

 

10,388

 

 

10,373

 

 

7,338

 

 

20,761

 

 

14,729

 

Data processing and operations expense

 

5,288

 

 

5,359

 

 

3,444

 

 

10,647

 

 

6,829

 

Professional fees

 

5,273

 

 

3,451

 

 

3,401

 

 

8,724

 

 

7,257

 

Marketing expense

 

1,637

 

 

1,266

 

 

1,286

 

 

2,903

 

 

2,278

 

FDIC expenses

 

1,468

 

 

1,391

 

 

1,056

 

 

2,859

 

 

2,125

 

Loss on debt extinguishment

 

 

 

 

 

1,087

 

 

 

 

1,087

 

Loan workout and other credit costs

 

(226)

 

 

328

 

 

(552)

 

 

102

 

 

568

 

Corporate development expense

 

6,393

 

 

34,038

 

 

2,543

 

 

40,431

 

 

4,638

 

Restructuring expense

 

3,934

 

 

17,514

 

 

(144)

 

 

21,448

 

 

(409)

 

Other operating expenses

 

21,803

 

 

19,015

 

 

16,082

 

 

40,818

 

 

30,460

 

 

 

134,049

 

 

174,457

 

 

96,032

 

 

308,506

 

 

191,651

 

Income before taxes

 

83,327

 

 

5,704

 

 

127,298

 

 

89,031

 

 

213,846

 

Income tax provision

 

22,425

 

 

1,737

 

 

31,687

 

 

24,162

 

 

53,094

 

Net income

 

60,902

 

 

3,967

 

 

95,611

 

 

64,869

 

 

160,752

 

Less: Net income (loss) attributable to noncontrolling interest

 

162

 

 

163

 

 

(56)

 

 

325

 

 

3

 

Net income attributable to WSFS

 

$

60,740

 

 

$

3,804

 

 

$

95,667

 

 

$

64,544

 

 

$

160,749

 

Diluted earnings per share of common stock:

 

$

0.94

 

 

$

0.06

 

 

$

2.01

 

 

$

1.00

 

 

$

3.37

 

Weighted average shares of common stock outstanding for fully diluted EPS

 

64,283,288

 

 

65,127,000

 

 

47,691,709

 

 

64,696,053

 

 

47,675,223

 

See “Notes”


WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS
SUMMARY STATEMENTS OF INCOME (Unaudited) - continued

 

 

Three months ended

 

Six months ended

 

 

June 30, 2022

 

March 31, 2022

 

June 30, 2021

 

June 30, 2022

 

June 30, 2021

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

Return on average assets (a)

 

1.17

%

 

0.07

%

 

2.60

%

 

0.62

%

 

2.23

%

Return on average equity (a)

 

10.13

 

 

0.57

 

 

21.32

 

 

5.08

 

 

18.15

 

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

 

18.61

 

 

1.58

 

 

31.43

 

 

9.14

 

 

26.99

 

Net interest margin (a)(b)

 

3.40

 

 

3.01

 

 

3.23

 

 

3.20

 

 

3.40

 

Efficiency ratio (c)

 

59.29

 

 

87.51

 

 

61.55

 

 

72.52

 

 

60.21

 

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

 

31.86

 

 

30.39

 

 

31.42

 

 

31.17

 

 

30.43

 

See “Notes”


WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
SUMMARY STATEMENTS OF FINANCIAL CONDITION (Unaudited)

(Dollars in thousands)

 

June 30, 2022

 

March 31, 2022

 

June 30, 2021

Assets:

 

 

 

 

 

 

Cash and due from banks

 

$

1,036,554

 

 

$

1,784,460

 

 

$

1,944,059

 

Cash in non-owned ATMs

 

633,710

 

 

490,784

 

 

470,157

 

Investment securities, available-for-sale

 

4,496,087

 

 

5,495,929

 

 

3,366,579

 

Investment securities, held-to-maturity

 

1,064,182

 

 

84,898

 

 

95,126

 

Other investments

 

37,527

 

 

30,980

 

 

28,635

 

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

 

11,401,486

 

 

11,268,099

 

 

8,245,019

 

Bank owned life insurance

 

100,515

 

 

100,364

 

 

32,759

 

Goodwill and intangibles

 

1,019,857

 

 

1,032,189

 

 

551,951

 

Other assets

 

760,298

 

 

676,971

 

 

414,576

 

Total assets

 

$

20,550,216

 

 

$

20,964,674

 

 

$

15,148,861

 

Liabilities and Stockholders’ Equity:

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

6,551,542

 

 

$

6,638,890

 

 

$

4,328,060

 

Interest-bearing deposits

 

10,695,127

 

 

10,906,016

 

 

8,335,960

 

Total customer deposits

 

17,246,669

 

 

17,544,906

 

 

12,664,020

 

Brokered deposits

 

22,938

 

 

78,638

 

 

62,825

 

Total deposits

 

17,269,607

 

 

17,623,544

 

 

12,726,845

 

Other borrowings

 

369,783

 

 

372,402

 

 

236,470

 

Other liabilities

 

597,950

 

 

450,911

 

 

303,735

 

Total liabilities

 

18,237,340

 

 

18,446,857

 

 

13,267,050

 

Stockholders’ equity of WSFS

 

2,315,360

 

 

2,520,463

 

 

1,884,054

 

Noncontrolling interest

 

(2,484)

 

 

(2,646)

 

 

(2,243)

 

Total stockholders' equity

 

2,312,876

 

 

2,517,817

 

 

1,881,811

 

Total liabilities and stockholders' equity

 

$

20,550,216

 

 

$

20,964,674

 

 

$

15,148,861

 

Capital Ratios:

 

 

 

 

 

 

Equity to asset ratio

 

11.27

%

 

12.02

%

 

12.44

%

Tangible common equity to tangible asset ratio (o)

 

6.63

 

 

7.47

 

 

9.13

 

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

 

13.60

 

 

13.93

 

 

14.21

 

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

 

10.02

 

 

9.98

 

 

10.11

 

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

 

13.60

 

 

13.93

 

 

14.21

 

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

 

14.57

 

 

14.89

 

 

15.41

 

Asset Quality Indicators:

 

 

 

 

 

 

Nonperforming assets:

 

 

 

 

 

 

Nonaccruing loans

 

$

21,011

 

 

$

23,087

 

 

$

24,024

 

Troubled debt restructuring (accruing)

 

12,484

 

 

12,933

 

 

14,997

 

Assets acquired through foreclosure

 

358

 

 

1,818

 

 

1,044

 

Total nonperforming assets

 

$

33,853

 

 

$

37,838

 

 

$

40,065

 

Past due loans (h)

 

$

11,894

 

 

$

11,623

 

 

$

8,533

 

Allowance for credit losses

 

141,976

 

 

136,334

 

 

132,423

 

Ratio of nonperforming assets to total assets

 

0.16

%

 

0.18

%

 

0.26

%

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

 

0.10

 

 

0.12

 

 

0.17

 

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

 

1.13

 

 

1.19

 

 

1.59

 

Ratio of allowance for credit losses to nonaccruing loans

 

676

 

 

591

 

 

551

 

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

 

0.09

 

 

0.12

 

 

0.23

 

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

 

0.10

 

 

0.12

 

 

0.20

 

See “Notes”


WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued) 
AVERAGE BALANCE SHEET (Unaudited)

(Dollars in thousands)

 

Three months ended

 

 

June 30, 2022

 

March 31, 2022

 

June 30, 2021

 

 

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)

 

$

4,831,874

 

 

$

56,950

 

 

4.74

%

 

$

4,851,090

 

 

$

52,466

 

 

4.39

%

 

$

3,900,612

 

 

$

46,039

 

 

4.74

%

Commercial real estate loans (s)

 

4,238,090

 

 

43,448

 

 

4.11

 

 

4,292,159

 

 

40,639

 

 

3.84

 

 

2,791,438

 

 

28,277

 

 

4.06

 

Residential mortgage

 

787,909

 

 

8,774

 

 

4.45

 

 

843,699

 

 

9,657

 

 

4.58

 

 

647,442

 

 

11,271

 

 

6.96

 

Consumer loans

 

1,463,391

 

 

19,232

 

 

5.27

 

 

1,357,970

 

 

15,284

 

 

4.56

 

 

1,123,440

 

 

11,950

 

 

4.27

 

Loans held for sale

 

66,502

 

 

938

 

 

5.66

 

 

74,694

 

 

835

 

 

4.53

 

 

131,460

 

 

1,108

 

 

3.38

 

Total loans and leases

 

11,387,766

 

 

129,342

 

 

4.56

 

 

11,419,612

 

 

118,881

 

 

4.22

 

 

8,594,392

 

 

98,645

 

 

4.61

 

Mortgage-backed securities (d)

 

5,282,333

 

 

27,377

 

 

2.07

 

 

5,223,794

 

 

23,113

 

 

1.77

 

 

2,978,331

 

 

12,506

 

 

1.68

 

Investment securities (d)

 

295,845

 

 

1,340

 

 

2.13

 

 

330,826

 

 

1,321

 

 

1.82

 

 

318,415

 

 

1,383

 

 

1.97

 

Other interest-earning assets

 

1,206,849

 

 

1,961

 

 

0.65

 

 

1,721,659

 

 

822

 

 

0.19

 

 

1,414,264

 

 

368

 

 

0.10

 

Total interest-earning assets

 

$

18,172,793

 

 

$

160,020

 

 

3.54

%

 

$

18,695,891

 

 

$

144,137

 

 

3.13

%

 

$

13,305,402

 

 

$

112,902

 

 

3.41

%

Allowance for credit losses

 

(136,773)

 

 

 

 

 

 

(134,780)

 

 

 

 

 

 

(194,211)

 

 

 

 

 

Cash and due from banks

 

268,485

 

 

 

 

 

 

209,730

 

 

 

 

 

 

176,015

 

 

 

 

 

Cash in non-owned ATMs

 

566,174

 

 

 

 

 

 

509,568

 

 

 

 

 

 

468,136

 

 

 

 

 

Bank owned life insurance

 

100,356

 

 

 

 

 

 

100,756

 

 

 

 

 

 

32,329

 

 

 

 

 

Other noninterest-earning assets

 

1,766,854

 

 

 

 

 

 

1,638,727

 

 

 

 

 

 

998,948

 

 

 

 

 

Total assets

 

$

20,737,889

 

 

 

 

 

 

$

21,019,892

 

 

 

 

 

 

$

14,786,619

 

 

 

 

 

Liabilities and stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand

 

$

3,348,511

 

 

$

941

 

 

0.11

%

 

$

3,435,377

 

 

$

581

 

 

0.07

%

 

$

2,560,283

 

 

$

531

 

 

0.08

%

Savings

 

2,281,051

 

 

159

 

 

0.03

 

 

2,262,026

 

 

162

 

 

0.03

 

 

1,922,342

 

 

149

 

 

0.03

 

Money market

 

3,984,562

 

 

1,231

 

 

0.12

 

 

4,092,835

 

 

925

 

 

0.09

 

 

2,754,895

 

 

801

 

 

0.12

 

Customer time deposits

 

1,142,139

 

 

1,273

 

 

0.45

 

 

1,173,023

 

 

1,323

 

 

0.46

 

 

1,078,296

 

 

1,842

 

 

0.69

 

Total interest-bearing customer deposits

 

10,756,263

 

 

3,604

 

 

0.13

 

 

10,963,261

 

 

2,991

 

 

0.11

 

 

8,315,816

 

 

3,323

 

 

0.16

 

Brokered deposits

 

35,469

 

 

162

 

 

1.83

 

 

63,376

 

 

137

 

 

0.88

 

 

63,407

 

 

455

 

 

2.88

 

   Total interest-bearing deposits

 

10,791,732

 

 

3,766

 

 

0.14

 

 

11,026,637

 

 

3,128

 

 

0.12

 

 

8,379,223

 

 

3,778

 

 

0.18

 

Trust preferred borrowings

 

90,312

 

 

682

 

 

3.03

 

 

90,263

 

 

513

 

 

2.30

 

 

67,011

 

 

317

 

 

1.90

 

Senior debt

 

248,448

 

 

1,949

 

 

3.14

 

 

248,565

 

 

1,929

 

 

3.10

 

 

228,260

 

 

2,053

 

 

3.60

 

Other borrowed funds

 

31,045

 

 

8

 

 

0.10

 

 

38,396

 

 

9

 

 

0.10

 

 

21,661

 

 

5

 

 

0.09

 

        Total interest-bearing liabilities

 

$

11,161,537

 

 

$

6,405

 

 

0.23

%

 

$

11,403,861

 

 

$

5,579

 

 

0.20

%

 

$

8,696,155

 

 

$

6,153

 

 

0.28

%

Noninterest-bearing demand deposits

 

6,631,062

 

 

 

 

 

 

6,450,783

 

 

 

 

 

 

3,963,476

 

 

 

 

 

Other noninterest-bearing liabilities

 

543,587

 

 

 

 

 

 

445,855

 

 

 

 

 

 

329,341

 

 

 

 

 

Stockholders’ equity of WSFS

 

2,404,262

 

 

 

 

 

 

2,722,263

 

 

 

 

 

 

1,799,839

 

 

 

 

 

Noncontrolling interest

 

(2,559)

 

 

 

 

 

 

(2,870)

 

 

 

 

 

 

(2,192)

 

 

 

 

 

Total liabilities and equity

 

$

20,737,889

 

 

 

 

 

 

$

21,019,892

 

 

 

 

 

 

$

14,786,619

 

 

 

 

 

Excess of interest-earning assets over interest-bearing liabilities

 

$

7,011,256

 

 

 

 

 

 

$

7,292,030

 

 

 

 

 

 

$

4,609,247

 

 

 

 

 

Net interest and dividend income

 

 

 

$

153,615

 

 

 

 

 

 

$

138,558

 

 

 

 

 

 

$

106,749

 

 

 

Interest rate spread

 

 

 

 

 

3.31

%

 

 

 

 

 

2.93

%

 

 

 

 

 

3.13

%

Net interest margin

 

 

 

 

 

3.40

%

 

 

 

 

 

3.01

%

 

 

 

 

 

3.23

%

See “Notes”


WSFS FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (Continued)
(Unaudited)

(Dollars in thousands, except per share data)

 

Three months ended

 

Six months ended

Stock Information:

 

June 30, 2022

 

March 31, 2022

 

June 30, 2021

 

June 30, 2022

 

June 30, 2021

Market price of common stock:

 

 

 

 

 

 

 

 

 

 

High

 

$48.62

 

$56.30

 

$55.12

 

$56.30

 

$55.18

Low

 

37.03

 

46.51

 

46.32

 

37.03

 

40.64

Close

 

40.09

 

46.62

 

46.59

 

40.09

 

46.59

Book value per share of common stock

 

36.41

 

38.94

 

39.63

 

 

 

 

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

 

20.37

 

22.99

 

28.02

 

 

 

 

Number of shares of common stock outstanding (000s)

 

63,587

 

64,735

 

47,535

 

 

 

 

Other Financial Data:

 

 

 

 

 

 

 

 

 

 

One-year repricing gap to total assets (k)

 

11.31%

 

12.19%

 

14.38%

 

 

 

 

Weighted average duration of the MBS portfolio

 

6.0 years

 

5.5 years

 

4.6 years

 

 

 

 

Unrealized (losses) gains on securities available for sale, net of taxes

 

$(395,212)

 

$(309,792)

 

$14,147

 

 

 

 

Number of Associates (FTEs) (m)

 

2,209

 

2,265

 

1,859

 

 

 

 

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

 

121

 

122

 

112

 

 

 

 

Number of WSFS owned and branded ATMs

 

617

 

630

 

614

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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 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 provision for (recovery of) 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

 

Six months ended

 

 

June 30, 2022

 

March 31, 2022

 

June 30, 2021

 

June 30, 2022

 

June 30, 2021

Net interest income (GAAP)

 

$

153,615

 

 

$

138,558

 

 

$

106,749

 

 

$

292,173

 

 

$

220,934

 

Core net interest income (non-GAAP)

 

153,615

 

 

138,558

 

 

106,749

 

 

292,173

 

 

220,934

 

Noninterest income (GAAP)

 

72,029

 

 

60,574

 

 

49,018

 

 

132,603

 

 

96,840

 

Less: Securities gains

 

 

 

 

 

 

 

 

 

329

 

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

 

5,991

 

 

(3)

 

 

5,261

 

 

5,988

 

 

5,261

 

Core fee revenue (non-GAAP)

 

$

66,038

 

 

$

60,577

 

 

$

43,757

 

 

$

126,615

 

 

$

91,250

 

Core net revenue (non-GAAP)

 

$

219,653

 

 

$

199,135

 

 

$

150,506

 

 

$

418,788

 

 

$

312,184

 

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

 

$

220,095

 

 

$

199,349

 

 

$

150,755

 

 

$

419,444

 

 

$

312,697

 

Noninterest expense (GAAP)

 

$

134,049

 

 

$

174,457

 

 

$

96,032

 

 

$

308,506

 

 

$

191,651

 

Less: Loss on debt extinguishment

 

 

 

 

 

1,087

 

 

 

 

1,087

 

Less: Corporate development expense

 

6,393

 

 

34,038

 

 

2,543

 

 

40,431

 

 

4,638

 

Less/(plus): Restructuring expense

 

3,934

 

 

17,514

 

 

(144)

 

 

21,448

 

 

(409)

 

Less: Contribution to WSFS CARES Foundation

 

 

 

 

 

1,000

 

 

 

 

1,000

 

Core noninterest expense (non-GAAP)

 

$

123,722

 

 

$

122,905

 

 

$

91,546

 

 

$

246,627

 

 

$

185,335

 

Core efficiency ratio (non-GAAP)

 

56.2

%

 

61.7

%

 

60.7

%

 

58.8

%

 

59.3

%

Core fee revenue as a percentage of total core net revenue (non-GAAP) (b)

 

30.0

%

 

30.4

%

 

29.0

%

 

30.2

%

 

29.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

End of period

 

 

 

 

 

 

June 30, 2022

 

March 31, 2022

 

June 30, 2021

 

 

 

 

Total assets (GAAP)

 

$

20,550,216

 

 

$

20,964,674

 

 

$

15,148,861

 

 

 

 

 

Less: Goodwill and other intangible assets

 

1,019,857

 

 

1,032,189

 

 

551,951

 

 

 

 

 

Total tangible assets (non-GAAP)

 

$

19,530,359

 

 

$

19,932,485

 

 

$

14,596,910

 

 

 

 

 

Total stockholders’ equity of WSFS (GAAP)

 

$

2,315,360

 

 

$

2,520,463

 

 

$

1,884,054

 

 

 

 

 

Less: Goodwill and other intangible assets

 

1,019,857

 

 

1,032,189

 

 

551,951

 

 

 

 

 

Total tangible common equity (non-GAAP)

 

$

1,295,503

 

 

$

1,488,274

 

 

$

1,332,103

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common book value per share:

 

 

 

 

 

 

 

 

Book value per share (GAAP)

 

$

36.41

 

 

$

38.94

 

 

$

39.63

 

 

 

 

 

Tangible common book value per share (non-GAAP)

 

20.37

 

 

22.99

 

 

28.02

 

 

 

 

 

Tangible common equity to tangible assets:

 

 

 

 

 

 

 

 

Equity to asset ratio (GAAP)

 

11.27

%

 

12.02

%

 

12.44

%

 

 

 

 

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

 

6.63

 

 

7.47

 

 

9.13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Non-GAAP Reconciliation - continued (o):

 

Three months ended

 

Six months ended

 

 

June 30, 2022

 

March 31, 2022

 

June 30, 2021

 

June 30, 2022

 

June 30, 2021

GAAP net income attributable to WSFS

 

$

60,740

 

 

$

3,804

 

 

$

95,667

 

 

$

64,544

 

 

$

160,749

 

Plus/(less): Pre-tax adjustments: Securities gains, unrealized gain (loss) on equity investments, loss on debt extinguishment, corporate development and restructuring expense, and contribution to WSFS CARES Foundation

 

4,336

 

 

51,555

 

 

(775)

 

 

55,891

 

 

726

 

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

 

334

 

 

(12,344)

 

 

510

 

 

(12,358)

 

 

521

 

Adjusted net income (non-GAAP) attributable to WSFS

 

$

65,410

 

 

$

43,015

 

 

$

95,402

 

 

$

108,077

 

 

$

161,996

 

 

 

 

 

 

 

 

 

 

 

 

GAAP return on average assets (ROA)

 

1.17

%

 

0.07

%

 

2.60

%

 

0.62

%

 

2.23

%

Plus/(less): Pre-tax adjustments: Securities gains, unrealized gain (loss) on equity investments, loss on debt extinguishment, corporate development and restructuring expense, and contribution to WSFS CARES Foundation

 

0.08

 

 

0.99

 

 

(0.02)

 

 

0.54

 

 

0.01

 

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

 

0.02

 

 

(0.23)

 

 

0.01

 

 

(0.12)

 

 

0.01

 

Core ROA (non-GAAP)

 

1.27

%

 

0.83

%

 

2.59

%

 

1.04

%

 

2.25

%

 

 

 

 

 

 

 

 

 

 

 

Earnings per share (diluted) (GAAP)

 

$

0.94

 

 

$

0.06

 

 

$

2.01

 

 

$

1.00

 

 

$

3.37

 

Plus/(less): Pre-tax adjustments: Securities gains, unrealized gain (loss) on equity investments, loss on debt extinguishment, corporate development and restructuring expense, and contribution to WSFS CARES Foundation

 

0.07

 

 

0.79

 

 

(0.02)

 

 

0.86

 

 

0.02

 

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

 

0.01

 

 

(0.19)

 

 

0.01

 

 

(0.19)

 

 

0.01

 

Core earnings per share (non-GAAP)

 

$

1.02

 

 

$

0.66

 

 

$

2.00

 

 

$

1.67

 

 

$

3.40

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of return on average tangible common equity:

 

 

 

 

 

 

 

 

GAAP net income attributable to WSFS

 

$

60,740

 

 

$

3,804

 

 

$

95,667

 

 

$

64,544

 

 

$

160,749

 

Plus: Tax effected amortization of intangible assets

 

2,940

 

 

2,980

 

 

1,996

 

 

5,921

 

 

4,000

 

Net tangible income (non-GAAP)

 

$

63,680

 

 

$

6,784

 

 

$

97,663

 

 

$

70,465

 

 

$

164,749

 

Average stockholders’ equity of WSFS

 

$

2,404,262

 

 

$

2,722,263

 

 

$

1,799,839

 

 

$

2,562,384

 

 

$

1,785,907

 

Less: average goodwill and intangible assets

 

1,032,131

 

 

982,800

 

 

553,665

 

 

1,007,602

 

 

554,997

 

Net average tangible common equity

 

$

1,372,131

 

 

$

1,739,463

 

 

$

1,246,174

 

 

$

1,554,782

 

 

$

1,230,910

 

Return on average tangible common equity (non-GAAP)

 

18.61

%

 

1.58

%

 

31.43

%

 

9.14

%

 

26.99

%

 

 

 

 

 

 

 

 

 

 

 


 

 

Three months ended

 

Six months ended

 

 

June 30, 2022

 

March 31, 2022

 

June 30, 2021

 

June 30, 2022

 

June 30, 2021

Calculation of PPNR:

Net income (GAAP)

 

$

60,902

 

 

$

3,967

 

 

$

95,611

 

 

$

64,869

 

 

$

160,752

 

(Less)/plus: Income tax (benefit) provision

 

22,425

 

 

1,737

 

 

31,687

 

 

24,162

 

 

53,094

 

Plus/(less): Provision for (recovery of) credit losses

 

8,268

 

 

18,971

 

 

(67,563)

 

 

27,239

 

 

(87,723)

 

PPNR (non-GAAP)

 

$

91,595

 

 

$

24,675

 

 

$

59,735

 

 

$

116,270

 

 

$

126,123

 

 

 

 

 

 

 

 

 

 

 

 


Investor Relations Contact: Dominic C. Canuso

(302) 571-6833; dcanuso@wsfsbank.com

Media Contact: Rebecca Acevedo

(215) 253-5566; racevedo@wsfsbank.com