WSFS Financial (WSFS) Q2 2024 earnings summary

Executive summary

• Q2 2024 core EPS was $1.08 and core ROA was 1.25%, with GAAP EPS at $1.16 and GAAP ROA at 1.34%, reflecting strong loan, deposit, and fee revenue growth.

• Net income for Q2 2024 was $69.3 million, up from $65.8 million in 1Q24 and $68.7 million in Q2 2023; six-month net income was $135.0 million.

• Core fee revenue rose 13% sequentially and 28% year-over-year, with double-digit growth in Cash Connect®, Wealth Management, Capital Markets, and Mortgage segments.

• Loans and deposits grew 6% and 3% annualized, respectively, with total assets reaching $20.7 billion and $13.1 billion in loans and leases.

• Moody’s reaffirmed the Baa2 investment-grade rating with a stable outlook in July 2024.

Financial highlights

• Net interest margin was 3.85% for Q2 2024, with net interest income at $174.4 million, down year-over-year due to higher deposit costs.

• Noninterest income rose to $91.6 million, up $24.7 million year-over-year, driven by Cash Connect®, Wealth Management, and a $3.4 million Visa B derivative gain.

• Noninterest expense increased to $155.8 million, mainly from higher salaries and Cash Connect® funding costs.

• Provision for credit losses was $19.8 million, up $4.0 million year-over-year, mainly due to commercial mortgages.

• Efficiency ratio was 58.5% (GAAP) and 59.8% (core), with core PPNR at 2.13% and core fee revenue ratio at 33.0%.

Outlook and guidance

• FY 2024 guidance: mid-single digit loan growth, flat deposit growth, NIM in the 3.80%-3.90% range, and double-digit fee revenue growth.

• Net charge-offs expected at 0.50%-0.60%, or ~30 bps excluding Upstart and NewLane; efficiency ratio to remain around 60%.

• Full-year core ROA expected around 1.20%-1.25%; assumes flat interest rates and ~1% GDP growth.

• Deposit growth projected to be flat year-over-year due to competition and seasonality; loan to deposit ratio forecasted at 80%-83% year-end.

• Long-term commitment to return ~35% of net income via dividends and buybacks.