WSFS Financial (WSFS) Q4 2023 earnings summary

Executive summary

• Q4 2023 reported net income was $63.9m and core net income was $69.7m; diluted EPS was $1.05 and core EPS was $1.15.

• Customer deposits grew $525.1m, or 13% annualized, while gross loans and leases grew $83.5m, or 3% annualized.

• Record core fee revenue of $78.0m and a 3.99% NIM supported results amid rising deposit costs and increased credit costs.

• FY24 outlook included ~1.20% core ROA, mid-single-digit loan growth and low-single-digit deposit growth.

Financial highlights

• FY23 reported net income was $269.2m and diluted EPS was $4.40; core net income was $278.8m and core EPS was $4.55.

• Q4 net interest income was $178.1m, fee revenue was $87.2m and total net revenue was $265.3m.

• Core fee revenue reached a quarterly record $78.0m, up 6% QoQ and 19% YoY; the core fee revenue ratio was 30.4%.

• Q4 reported and core PPNR were 2.30% and 2.27% of average assets; FY23 reported and core PPNR were 2.24% and 2.26%.

• Q4 reported and core efficiency ratios were 55.6% and 54.5%; FY23 ratios were 55.2% and 54.6%.

Outlook and guidance

• FY24 core ROA outlook was ~1.20%, with mid-single-digit loan growth and low-single-digit deposit growth.

• Core NIM guidance was 3.80%-3.90%, expected to plateau mid-year; interest-bearing deposit beta was projected at ~50% by year-end.

• Core fee revenue growth was expected to be double-digit; net charge-offs were forecast at 0.50%-0.60% of average loans, or ~35 bps excluding Upstart and NewLane.

• Guidance assumed flat rates, a soft landing and FY24 GDP growth of ~1%; efficiency ratio outlook was ~60% and tax rate ~25%.

• Franchise growth plans included further Cash Connect ATM unit expansion and earnings contribution from an industry participant’s exit.