WSFS Financial (US:WSFS)2022-07-26 18:07Financial Data and Key Metrics Changes - Reported ROA of 1.17% and EPS of $0.94 included non-recurring items, with core results showing net income of $65.4 million or an ROA of 1.27% and an EPS of $1.02 [7][9] - NIM in the second quarter was 3.40%, a 39 basis point increase over Q1, driven by rising loan yields [15] - Customer deposits decreased 7% annualized, with a loan to deposit ratio standing at 66% [13][14] Business Line Data and Key Metrics Changes - Loan growth was 8% annualized when excluding the KCMI sale, with commercial loan growth at 5% annualized [11] - Consumer loans grew 41% annualized, now representing 13% of total gross loans [12] - Fee revenue ratio remained flat at 30.0%, with fees growing $5.5 million or 9% not annualized [16] Market Data and Key Metrics Changes - The commercial pipeline continues to grow, with net new commercial fundings reaching a record $685 million in the quarter [12] - The company anticipates annual fee revenue growth in the low single digits due to lower residential refi volume and market impacts [22] Company Strategy and Development Direction - The company is executing its strategic plan and anticipates mid-to-high single-digit loan growth for the second half of the year [21] - The company has updated its capital return philosophy, increasing the annual capital return to 35% of earnings [49] Management Comments on Operating Environment and Future Outlook - Management expects deposit betas to increase in the second half of the year, but at a lower rate than previous cycles [27] - Full-year ROA is now anticipated near 1.35%, with a 4Q ROA around 1.65% [22] Other Important Information - The Board approved a 15% increase in the quarterly dividend to $0.15 per share and authorized an additional 10% share repurchase [19] - TCE decreased to 6.63% due to interest rate impacts on AOCI [20] Q&A Session Summary Question: NIM guidance and inputs - The increase in NIM is primarily driven by the higher interest rate environment, with expectations for betas to pick up in the second half of the year [26] Question: Consumer loan growth details - The partnership portfolios account for about 45% of total consumer lending, with a significant portion coming from unsecured loans [28] Question: Fee outlook and market volatility - AUM business is expected to see declines in the third quarter, but the diversified wealth business helps offset some of that decline [36] Question: Unsecured lending strategy - The unsecured product is still a small portion of the overall portfolio, and performance remains strong [45] Question: Bryn Mawr integration and capital management - The company expects to generate significant capital from returns and is evaluating capital deployment strategies [48]