WSFS Financial (US:WSFS)2025-10-24 18:00Financial Data and Key Metrics Changes - The company reported a core EPS of $1.4, a core return on assets of 1.48%, and a core return on tangible common equity of 18.7%, all of which increased compared to the second quarter [5] - Year-over-year, core net income rose by 21%, core PPNR grew by 6%, and core earnings per share increased by 30% [5] - Tangible book value per share increased by 12%, and net interest margin expanded by two basis points to 3.91% quarter over quarter [5][6] Business Line Data and Key Metrics Changes - Core fee revenue was flat quarter over quarter but grew by 5% when excluding the impact of strategic exits in Wealth and Trust [6] - The Wealth and Trust business grew by 13% year over year, with institutional services up 30% and Brimmore Trust of Delaware up 20% [6][32] Market Data and Key Metrics Changes - Total client deposits increased by 1% linked quarter and grew by 5% year over year, with non-interest deposits up 12% year over year [7] - Loans decreased by 1% linked quarter, primarily due to the sale of the Upstart loan portfolio and continued runoff in the Spring EQ portfolio [7] Company Strategy and Development Direction - The company intends to maintain elevated levels of buybacks while adjusting the pace based on macroeconomic conditions and business performance [11] - The management is focused on disciplined originations and proactive engagement with clients to maintain asset quality [24] - The company is exploring talent acquisition in both commercial and wealth businesses to enhance organic growth [66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting the full-year outlook despite an additional rate cut in October [11] - The company is prepared for potential future rate cuts and has strategies in place to manage margins through deposit repricing and hedging [11][70] Other Important Information - The company returned $56.3 million of capital during the quarter, including $46.8 million in buybacks, representing 1.5% of outstanding shares [10] - Year-to-date, the company has repurchased 5.8% of its outstanding shares, maintaining a strong capital position with a CET1 of 14.39% [11] Q&A Session Summary Question: Achieving CET1 target and organic growth rates - Management indicated that they are currently buying back approximately 100% of net income and have high capital levels despite buybacks, allowing for continued buybacks for the next few years [18] Question: Asset quality and reserve levels - Management noted good momentum in asset quality and indicated a conservative approach to reserves due to macroeconomic volatility [24] Question: Growth in wealth and trust business - Management highlighted growth in new accounts and transactions, particularly in institutional services and Brimmore Trust of Delaware [32] Question: Cash Connect business and NII benefit - Management confirmed that while revenue from Cash Connect may decrease with rate cuts, expenses would offset this, leading to overall profitability benefits [46] Question: Commercial loan growth and consumer partnership payoffs - Management discussed the impact of problem loan payoffs and expected continued growth in the home lending business, offsetting runoff in the Spring EQ portfolio [54]