WSFS Financial (US:WSFS)2021-03-01 21:36Financial Performance - For the year ended December 31, 2020, WSFS reported a return on assets (ROA) of 0.87%, with a core ROA of 0.74%[48]. - Net income for the year ended December 31, 2020, was $114.8 million, a decrease of $34.0 million from $148.8 million in 2019[297]. - Net interest income increased by $21.0 million to $466.0 million in 2020, driven by lower deposit rates and the impact of PPP loans[298]. - Noninterest income increased by $12.9 million in 2020, attributed to growth across business lines and the acquisition of Beneficial[298]. - Noninterest expenses decreased by $44.3 million to $368.8 million in 2020 from $413.1 million in 2019, primarily due to reduced credit/debit card income and corporate development costs[308]. - The effective tax rate for 2020 was 21.8%, down from 23.9% in 2019, mainly due to lower nondeductible expenses related to the acquisition of Beneficial[309]. Loan and Deposit Growth - In 2020, WSFS provided nearly $1.0 billion in PPP loans to over 5,400 customers, generating $21.7 million in additional interest income[29]. - Customer deposits increased from $4.6 billion to $11.6 billion from December 31, 2016, representing a 20% compound annual growth rate (CAGR)[31]. - The net loans and leases amounted to $8,795.9 million as of December 31, 2020, reflecting a significant increase from $8,424.5 million in 2019[63]. - Total deposits increased by $2.3 billion, or 24%, to $11.9 billion, driven by customer funding during the COVID-19 pandemic[279]. - The company aims to grow deposits by expanding its branch network and enhancing customer experience, alongside targeted marketing programs[53]. Credit Quality and Loss Provisions - The COVID-19 pandemic led to an additional provision for credit losses of $153.2 million for the year ended December 31, 2020, with the allowance for credit losses increasing by $181.2 million during the same period[277]. - Provision for credit losses rose by $127.6 million in 2020 due to the economic impact of the COVID-19 pandemic[298]. - The allowance for credit losses increased to $228.8 million at December 31, 2020, from $47.6 million at December 31, 2019, with a ratio of 2.51% to total loans and leases[306]. - Total past due loans amounted to $16.7 million at December 31, 2020, compared to $16.2 million in 2019[291]. - The ratio of allowance for credit losses to total nonperforming assets was 378% at December 31, 2020, up from 120% in 2019[291]. Capital Management - The company has a strong focus on disciplined capital management, returning a minimum of 25% of annual net income to stockholders through dividends and share repurchases[46]. - Common equity Tier 1 capital ratio was 12.50% at December 31, 2020, significantly exceeding the "well-capitalized" regulatory benchmark[282]. - The Bank must maintain a common equity Tier 1 capital ratio of at least 4.5% of risk-weighted assets, with a total capital ratio of at least 8%[140]. - As of December 31, 2020, the Bank was in compliance with all minimum capital requirements, including common equity Tier 1 capital and leverage capital[146]. Market and Economic Conditions - The unemployment rate in Delaware was 5.1% as of November 2020, lower than the national average of 6.7%[60]. - The economic effects of COVID-19 have caused increased market volatility and a significant decrease in consumer confidence, impacting the company's operations[277]. - The Federal Reserve reduced all reserve requirement ratios to zero in response to the COVID-19 pandemic, which may affect the company's interest-earning assets[156]. Strategic Initiatives - The company plans to continue its Delivery Transformation initiative, which aims to enhance digital channel adoption and improve customer experience through various technological investments[54]. - The company plans to invest $17.5 million in its Delivery Transformation initiative to enhance digital channel adoption in 2021[286]. - The company is focused on strategic acquisitions to support its growth strategy, which will be a mix of organic and acquisition-related growth[53]. Risk Management - Approximately 90 Key Risk Indicators (KRIs) are monitored company-wide as part of the Enterprise Risk Management program[57]. - The transition from LIBOR to alternative rates is ongoing, with a cross-functional team assessing risks and implementing changes[121]. - The company has not reported short-term modifications as troubled debt restructurings (TDRs) under GAAP due to CARES Act provisions[115].