Core Insights - WSFS Financial is expected to report quarterly earnings of $1.04 per share, reflecting a decline of 6.3% year over year, while revenues are forecasted to increase by 3.8% to $260.71 million [1] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analysts' assessments [1][2] Earnings Estimates and Metrics - Analysts predict an 'Efficiency Ratio' of 63.5%, up from 59.3% in the same quarter last year [4] - The 'Net Interest Margin' is estimated to remain steady at 3.8%, consistent with the previous year's figure [4] - The 'Average Balance - Total interest earning assets' is projected to reach $18.76 billion, an increase from $18.37 billion year over year [5] - 'Total Non-Interest Income' is expected to be $86.42 million, up from $75.86 million in the same quarter last year [5] - 'Net Interest Income' is forecasted at $174.29 million, slightly down from $175.28 million reported in the same quarter last year [6] Stock Performance - Over the past month, WSFS shares have returned -6.2%, compared to a -6.6% change in the Zacks S&P 500 composite [7] - WSFS currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance in the near future [7]

Core Viewpoint - WSFS Financial has experienced a decline of 10.6% in its stock price over the past two weeks, but the formation of a hammer chart pattern suggests a potential trend reversal as buying interest may be emerging to counteract selling pressure [1][2]. Technical Analysis - The hammer chart pattern indicates a minor difference between opening and closing prices, with a long lower wick suggesting that the stock found support after hitting a new low during a downtrend [3][4]. - This pattern signals that bears may have lost control, and the success of bulls in preventing further price declines indicates a possible trend reversal [4]. Fundamental Analysis - Recent upward revisions in earnings estimates for WSFS serve as a bullish indicator, correlating strongly with near-term stock price movements [6]. - The consensus EPS estimate for the current year has increased by 0.2% over the last 30 days, reflecting analysts' agreement on the company's potential for better earnings [7]. - WSFS holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [8].

Company Overview - WSFS Financial shares increased by 7% to close at $49.24, supported by high trading volume, contrasting with a 7.9% decline over the past four weeks [1] - The stock price surge followed Trump's announcement of a 90-day pause on reciprocal tariffs for most trading partners, excluding China, which alleviated trade war concerns and improved the economic outlook [2] Earnings Expectations - WSFS Financial is projected to report quarterly earnings of $1.04 per share, reflecting a year-over-year decrease of 6.3%, while revenues are expected to reach $260.71 million, an increase of 3.8% from the previous year [3] - The consensus EPS estimate for WSFS has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without earnings estimate revisions [4] Industry Context - WSFS is categorized under the Zacks Financial - Savings and Loan industry, where Northfield Bancorp (NFBK) also operates, having closed 4.5% higher at $10.29, despite a -10.1% return over the past month [4] - Northfield's consensus EPS estimate for its upcoming report is $0.18, representing a 20% increase from the previous year, and it currently holds a Zacks Rank of 3 (Hold) [5]

Core Viewpoint - WSFS Financial (WSFS) is experiencing significant selling pressure, with a 6.9% decline over the past four weeks, but is positioned for a potential trend reversal as it enters oversold territory, supported by analyst expectations of better-than-previously predicted earnings [1] Group 1: Technical Indicators - The Relative Strength Index (RSI) is a key technical indicator used to determine if a stock is oversold, with a reading below 30 typically indicating oversold conditions [2] - WSFS has an RSI reading of 29.64, suggesting that heavy selling may be exhausting itself, indicating a potential bounce back towards equilibrium in supply and demand [5] Group 2: Fundamental Indicators - There is a strong consensus among sell-side analysts that WSFS will report better earnings, leading to a 0.2% increase in the consensus EPS estimate over the last 30 days, which typically correlates with price appreciation [7] - WSFS holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a strong potential for a turnaround [8]

Loan Portfolio Composition - The loan portfolio composition as of December 31, 2024, includes commercial and industrial loans at $2.66 billion (20.4%), owner-occupied commercial loans at $1.97 billion (15.2%), and commercial mortgages at $4.03 billion (31.0%) [58] - The total gross loans and leases increased to $13.19 billion in 2024 from $12.77 billion in 2023, reflecting a growth of approximately 3.3% [58] - The allowance for credit losses was $195.28 million, representing 1.5% of total loans and leases for both years [58] - The commercial mortgage portfolio was $4.0 billion, with the largest property types being retail-related ($1.3 billion), residential multi-family ($1.1 billion), and office ($0.6 billion) [66] - The commercial and industrial and owner-occupied commercial loan portfolios totaled $4.6 billion, accounting for 35% of the total loan and lease portfolio [68] - The commercial small business leases portfolio was $647.5 million, or 5% of total loans, with average deal sizes of approximately $29,000 [70] - At December 31, 2024, $1.5 billion was committed for construction loans, with $0.8 billion outstanding [67] - The residential loan portfolio included loans with loan-to-value ratios of up to 80%, with approximately $146.2 million in loans exceeding this ratio without private mortgage insurance [71] Consumer Loans - As of December 31, 2024, the total consumer loans amounted to $2.086 billion, an increase from $2.012 billion in 2023, representing a growth of approximately 3.7% [81] - Home equity lines of credit outstanding totaled $535 million, while installment loans reached $224.8 million, together accounting for about 37% of total consumer loans [80] - In 2024, the company originated $433.9 million in residential loans, up from $343.7 million in 2023, marking an increase of approximately 26.3% [83] - The company originated $2.0 billion in commercial and commercial mortgage loans in 2024, a decrease from $2.4 billion in 2023, reflecting a decline of about 16.7% [82] Financial Performance - For the year ended December 31, 2024, the net income attributable to the Company was $263.671 million, with a core ROA of 1.26% [104] - The tangible common equity to tangible assets ratio was 8.08% as of December 31, 2024, with tangible assets amounting to $19.826 billion [104] - Fee income from lending activities generated $7.9 million in 2024, compared to $8.8 million in 2023, showing a decrease of approximately 10.2% [87] Regulatory Environment - The Company is subject to extensive federal and state banking regulations, impacting its profitability and operational decisions [106] - The Federal Reserve conducts regular examinations of the Company, which influence its risk management and financial condition ratings [112] - The Company is a grandfathered unitary thrift holding company, allowing it to acquire non-banking companies without significant restrictions [117] - The Dodd-Frank Act requires the Company to act as a source of financial strength to the Bank during financial distress [119] - The Company relies on debt issuances and dividends from its Bank and other subsidiaries for cash flow, with federal regulations impacting dividend payments [121] - The Federal Reserve mandates that holding companies should only pay dividends from available earnings and maintain a strong capital position [121] - The regulatory capital requirements include a minimum common equity Tier 1 capital ratio of 4.5% of risk-weighted assets and a total capital ratio of at least 8% [130] - As of December 31, 2024, the Bank met all requirements for being classified as "well-capitalized" under regulatory standards [135] - The Company must file a notice with the Federal Reserve at least 30 days prior to any capital distribution, including dividends [136] - The OCC can prohibit capital distributions if deemed unsafe or unsound, ensuring the financial stability of the institution [137] Deposit Insurance and Risk Management - The maximum deposit insurance amount per depositor is $250,000, providing a safety net for customers [140] - The Bank is not currently in default on any FDIC assessment payments, allowing for continued capital distributions [138] - The capital ratios for the Bank and the Company indicate levels above the regulatory minimums, ensuring compliance and operational flexibility [133] - The FDIC's current risk-based premium system has initial assessment rates ranging from 3 to 30 basis points on insured deposits, with a designated reserve ratio of 2% for the Deposit Insurance Fund (DIF) [141] - The FDIC's restoration plan aims to restore the DIF reserve ratio to at least 1.35% by September 30, 2028, due to the DIF reserve ratio falling below the statutory minimum [141] - The Bank's deposit insurance costs have increased by 2 basis points as a result of the FDIC's final rule adopted on October 18, 2022 [142] - The Bank received a "satisfactory" rating in its most recent Community Reinvestment Act performance evaluation [160] Interest Rate Sensitivity - Total interest-rate sensitive assets amount to $19,311,916,000, with $9,391,543,000 maturing in less than one year [305] - Total interest-rate sensitive liabilities are $9,077,220,000, resulting in a positive interest-rate sensitive gap of $10,234,696,000 [305] - The one-year interest-rate sensitive assets to interest-rate sensitive liabilities ratio is 105.28% [305] - The one-year interest-rate sensitive gap represents 2.26% of total assets [305] - The allowance for credit losses (ACL) is established based on historical loss experience and current economic conditions, reflecting significant judgment [312] - The ACL may fluctuate due to changes in economic conditions, borrower circumstances, and macroeconomic variables [314] - Interest rates have a greater impact on the company's performance than inflation due to the monetary nature of its assets and liabilities [308] - The company estimates that 75% of money market deposits and 50% of savings and interest-bearing demand deposits are sensitive to interest rate changes [307] - The interest-sensitivity gap analysis is subject to variations as the company adjusts its interest sensitivity position throughout the year [306] Other Financial Activities - The Company issued $150.0 million of senior notes due 2030 with a fixed coupon rate of 2.75% until December 15, 2025, and a variable rate thereafter [100] - The Company assumed $70.0 million in subordinated notes due 2027, currently bearing interest at a variable rate of 6.67% [101] - The Company recorded investments in the RBC Trusts' common securities of $0.4 million each as investments in unconsolidated entities [99] - The Company repurchased three loans in 2024 for $0.7 million, one loan in 2023 for $0.8 million, and two loans in 2022 for $0.8 million [78]

Financial Data and Key Metrics Changes - The company reported core earnings per share of $1.11 for Q4 2024, with a full-year core earnings per share of $4.39, reflecting a strong performance [6] - Core return on assets was 1.24% for the quarter and 1.26% for the full year, while core return on tangible common equity was 16.55% for the quarter and 17.83% for the year [6] - Core fee revenue grew by 7% year-over-year in Q4, with a full-year growth of 19% [8] Business Line Data and Key Metrics Changes - The Wealth & Trust business achieved a record fee quarter of $40 million, contributing significantly to core fee revenue growth [8] - Core net interest margin was 3.80% for the quarter, up 2 basis points from the previous quarter [9] - Loans declined by 1% linked quarter but grew by 3% year-over-year, with mid-single-digit growth in commercial and industrial (C&I) and commercial mortgage segments [10] Market Data and Key Metrics Changes - Customer deposits grew by 4% linked quarter, with noninterest-bearing deposits increasing by 6% and comprising 31% of average deposits in Q4 [10] - The company finished the year with a loyalty deposit ratio of 77%, indicating strong customer retention [11] Company Strategy and Development Direction - The company aims for mid-single-digit loan growth in the Commercial portfolio and flat growth in the Consumer portfolio, with expectations of continued broad-based deposit growth [14] - The strategic focus includes optimizing investments made in the franchise and capitalizing on growth opportunities in fee businesses, particularly in Wealth & Trust [16][104] - The company plans to maintain an efficiency ratio of around 60% while continuing to invest in talent and technology [19][74] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, expecting another year of high performance with a core return on assets of approximately 1.25% [13] - The company anticipates net charge-offs to be between 35 basis points to 45 basis points of average loans for the year, reflecting normalization in credit [17] - Management highlighted the importance of managing expenses while continuing to invest in growth areas [33][71] Other Important Information - The company experienced a negative $4.7 million pre-tax impact from the termination of a relationship with a Cash Connect client, which is considered an isolated incident [7] - Nonperforming assets increased due to the migration of one relationship, but management believes these loans are well collateralized [12] Q&A Session Summary Question: Expense outlook and efficiency guidance - Management indicated that expenses were up about 50% year-over-year, primarily due to incentive compensation true-ups and investments in headcount [28][30] Question: Cash Connect profitability levers - Management discussed opportunities for pricing leverage and optimizing cash logistics to improve profitability despite interest rate impacts [36][38] Question: Capital levels and M&A interest - The company plans to return about 35% of net income through dividends and buybacks, while remaining open to M&A opportunities that are accretive [46][49] Question: Loan growth outlook and mix - Management detailed that consumer loan growth would be flat due to runoff from partnerships, while commercial loans are expected to grow mid-single digits [92][93]

Financial Performance - The company's reported EPS was $1.09 in 4Q24 and $4.41 for the full year FY24[6] - Core EPS was $1.11 in 4Q24 and $4.39 for FY24[6] - The reported Return on Assets (ROA) was 1.21% for 4Q24 and 1.27% for FY24[6] - Net income was $64.2 million for 4Q24 and $263.7 million for FY24[6] - Pre-provision Net Revenue (PPNR) reached $92.4 million for 4Q24 and $408.7 million for FY24[6] Balance Sheet & Key Ratios - Customer Deposits increased by $602.8 million in 4Q, resulting in a full-year increase of $607.4 million or 4%[8] - Loans declined by $123.1 million in 4Q, but increased by $442.6 million or 3% for the full year[8] - The Net Interest Margin (NIM) was 3.80% in 4Q24[6] - The company's core fee revenue ratio was 31.8% for 4Q24 and 32.5% for FY24[6] - The ACL ratio was 1.48%[6]

Core Insights - WSFS Financial reported revenue of $261.51 million for the quarter ended December 2024, a decrease of 1.4% year-over-year, and EPS of $1.11, down from $1.15 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $266.75 million by 1.96%, while the EPS exceeded the consensus estimate of $0.98 by 13.27% [1] Financial Metrics - Net Interest Margin was reported at 3.8%, surpassing the two-analyst average estimate of 3.7% [4] - Efficiency Ratio stood at 64.6%, higher than the two-analyst average estimate of 61.5% [4] - Net Interest Income reached $178.21 million, exceeding the average estimate of $175.60 million based on two analysts [4] - Total Non-Interest Income was $83.31 million, below the two-analyst average estimate of $91.15 million [4] Stock Performance - Over the past month, WSFS shares returned +0.8%, compared to a +1.1% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Group 1 - WSFS Financial reported quarterly earnings of $1.11 per share, exceeding the Zacks Consensus Estimate of $0.98 per share, but down from $1.15 per share a year ago, representing an earnings surprise of 13.27% [1] - The company posted revenues of $261.51 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 1.96%, compared to year-ago revenues of $265.33 million [2] - Over the last four quarters, WSFS has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Group 2 - The stock's immediate price movement will depend on management's commentary during the earnings call and the sustainability of earnings expectations [3][4] - WSFS shares have increased by approximately 1.3% since the beginning of the year, while the S&P 500 has gained 3.7% [3] - The current consensus EPS estimate for the coming quarter is $1.03 on revenues of $264.94 million, and for the current fiscal year, it is $4.23 on revenues of $1.09 billion [7] Group 3 - The Zacks Industry Rank indicates that the Financial - Savings and Loan sector is in the top 11% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this category [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The current estimate revisions trend for WSFS is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6]

Financial Performance - 4Q 2024 EPS was $1.09, with a full-year EPS of $4.41, reflecting strong financial performance [2] - Net interest income for 4Q 2024 was $178.2 million, while total net revenue was $261.5 million, showing a slight decrease from 3Q 2024 [3] - Core ROA for 4Q 2024 was 1.24%, up from 1.22% in 3Q 2024, indicating improved asset efficiency [7] - The efficiency ratio for 4Q 2024 was 64.6%, compared to 61.1% in 3Q 2024, reflecting increased noninterest expenses [3] - Net interest margin was 3.80%, an increase of 2bps from Q3 2024, but a decrease of 19bps from Q4 2023 [16] - Net income attributable to WSFS for the twelve months ended December 31, 2024, was $263.671 million, slightly down from $269.156 million in 2023 [43] - GAAP net income attributable to WSFS for Q4 2024 was $64,202, compared to $63,908 in Q4 2023, reflecting a year-over-year increase of 0.46% [50] Customer Deposits and Loans - Customer deposits increased by $602.8 million, or 4% (not annualized), compared to 3Q 2024, driven by growth across Trust, Consumer, and Commercial business lines [10] - Total customer deposits increased by $607.4 million, or 4%, from December 31, 2023, driven by growth in Consumer and Commercial businesses [11] - Total gross loans decreased by $123.1 million, or 1% (4% annualized), from 3Q 2024, primarily due to higher commercial payoffs [8] - The loan-to-deposit ratio was 77% at December 31, 2024, providing capacity for future loan growth [12] - Net loans and leases increased to $13,045,917, up from $12,612,470, representing a growth of 3.43% year-over-year [45] Noninterest Income and Expenses - Fee revenue in Wealth and Trust reached a quarterly record with a 12% year-over-year growth [7] - Core fee revenue for Q4 2024 was $83.2 million, a decrease of $6.9 million, or 8%, compared to Q3 2024, but an increase of $5.2 million, or 7%, compared to Q4 2023 [22] - Noninterest income for the three months ended December 31, 2024, was $83.307 million, a decrease of 7.8% from $90.158 million in the previous quarter [43] - Noninterest expense for Cash Connect increased to $25.2 million, up from $26.1 million in Q3 2024, largely due to one-time charges related to the terminated client [38] - Core noninterest expense increased to $167.0 million, up $3.3 million, or 2%, from Q3 2024, and up $27.2 million, or 19%, from Q4 2023 [24] Shareholder Actions - WSFS repurchased 393,238 shares of common stock at an average price of $53.27 per share, totaling $20.9 million in 4Q 2024 [7] - During Q4 2024, the company repurchased 393,238 shares of common stock for $20.9 million, with approximately 6% of outstanding shares remaining for repurchase under current authorization [31] Asset Management - Total Assets Under Management (AUM) reached $89.4 billion, reflecting a 6% increase compared to Q4 2023, despite a 2% decrease from Q3 2024 [36] - Wealth Management segment achieved pre-tax income of $33.1 million, a 9% increase from Q3 2024, driven by a $1.5 million rise in net interest income and a $3.0 million increase in fee revenue [34] Tax and Equity - The effective tax rate for Q4 2024 was 23.9%, down from 24.7% in Q3 2024 and 31.6% in Q4 2023 [26] - Total stockholders' equity decreased by $88.5 million, or 3%, during Q4 2024, primarily due to an increase in accumulated other comprehensive loss [29] - Book value per share was $44.15, a decrease of $1.22, or 3%, from Q3 2024, but an increase of $3.22, or 8%, compared to Q4 2023 [30] Risk Factors and Future Outlook - Forward-looking statements indicate potential risks including market conditions, interest rate changes, and regulatory compliance that could impact future performance [42] - The company is actively pursuing recovery of costs related to the terminated Cash Connect client through insurance and other means [38]