WSFS Financial (WSFS) - 2024 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported core earnings per share of $1.11, core return on tangible common equity of 19.2$7.2 million or 5% linked quarter [11] Market Data and Key Metrics Changes - Asset quality remained stable, with problem loans and delinquencies flat at 4.41% and 81 basis points of gross loans, respectively [13] - Net charge-offs decreased to 27 basis points of average gross loans, including a net recovery [13] Company Strategy and Development Direction - The company is focused on delivering top-quintile financial performance in 2024 and is tracking well to the full-year outlook communicated in January [14] - There is no current focus on traditional bank M&A, as the company believes it is uniquely positioned for significant organic growth [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to return to profitability levels in the Cash Connect business as they optimize cash usage [19] - The company anticipates a plateauing of net interest margin in Q2, with expectations of recovery in the second half of the year [32] Other Important Information - The company added 4,336 serviced non-bank ATMs during the quarter due to the exit of a large industry participant [12] - A one-time adjustment of $1.3 million in deferred revenue impacted wealth management revenue this quarter [26] Q&A Session Summary Question: Market share and competitor exit in Cash Connect - Management confirmed that U.S. Bancorp exited the space, allowing the company to add approximately 12,000 units [16] Question: Strategic shift regarding Upstart partnership - Management indicated that the Upstart partnership was paused due to unsatisfactory returns on cross-sell opportunities, but they remain well-reserved for expected losses [21][22] Question: M&A appetite and deposit discussions - Management stated that they are not currently focused on traditional bank M&A but continue to invest in wealth and commercial areas [24] Question: Wealth management and deferred revenue - A one-time item related to deferred revenue adjustment was clarified, with expectations of recovery in future quarters [26] Question: NIM outlook and deposit costs - Management discussed the impact of rising deposit costs on NIM, with expectations of stabilization and recovery in the second half of the year [30][32] Question: Charge-offs and guidance - Management expects charge-offs to plateau and potentially decline, particularly in the Upstart portfolio [39] Question: Loan growth and pipelines - The commercial bank's pipeline remains strong, with no significant impact from high rates on demand [42]