Wsfs Financial Corporation · NASDAQ:WSFS
Wsfs Financial — Q4 2023 Earnings Presentation
21 slides from Wsfs Financial's earnings presentation, Jan 25, 2024
Slide 1: WSFS Financial Corporation 4Q 2023 Earnings Release Supplement
1 WSFS Financial Corporation 4Q 2023 Earnings Release Supplement January 2024 Exhibit 99.2
Slide 2: Forward Looking Statements & Non-GAAP
2 Forward Looking Statements & Non-GAAP Forward Looking Statements: This presentation contains estimates, predictions, opinions, projections and other "forward-looking statements" as that phrase is defined in the Private Securities Litigation Reform Act of 1995. Such statements include, without limi
Slide 3: Financial Highlights
3 Financial Highlights 4Q 2023 Highlights: • Strong customer deposit growth of $525mm or 13% (annualized) • Driven by $297mm increase in Trust deposits • Record core fee revenue1 of $78mm in the quarter, up 6% QoQ, with continued growth opportunities • Cash Connect® up 9% QoQ and Wealth & Trust up 7
Slide 4: 4Q 2023 Notable Items
4 4Q 2023 Notable Items $63.9 $9.5 $2.0 $5.1 $1.1 $7.1 $69.7 $50 $55 $60 $65 $70 Reported Net Income Spring EQ Sale WSFS CARES FDIC Special Assessment Other / Tax Impacts BOLI Core Net Income 4Q 2023 Adjustments Key Items Spring EQ: • Digital home equity loan partner • Recognized gain from our equit
Slide 5: Deposits Highlights
5 Deposits Highlights • $525mm (13% annualized) increase in ending customer deposits • 1.62% total average customer deposit cost with 31% total deposit beta • 31% noninterest deposits offsets pricing pressures • 56% of deposits from non-Consumer accounts • 86% of Trust deposits are noninterest; comp
Slide 6: Loan Portfolio Highlights
6 Loan Portfolio Highlights • Total gross loan growth of $83mm or 3% annualized • Commercial: CRE driven by conversion of Construction loans to permanent; strong C&I originations were outpaced by elevated payoffs and paydowns • Over 95% of Commercial Customers have deposit and/or Wealth relationship
Slide 7: Commercial Loan Composition
7 3 Commercial Loan Composition1 1 As defined by the North American Industry Classification System (NAICS) 2 Based on the underlying real estate collateral 3 Office portfolio excludes Medical Office CRE; additional Office portfolio details on Slide 14 2 Flex, Warehouse, Self- Storage, General Indust
Slide 8: Investment Portfolio
8 Investment Portfolio High-quality investment portfolio providing consistent cashflows and borrowing capacity 1 Investment portfolio value includes market value AFS and book value of HTM 2 Weighted average duration and yield of the MBS portfolio 3 This is a non-GAAP financial measure and should be
Slide 9: Net Interest Margin Trends
9 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 0.35% 0.80% 1.16% 1.38% 1.62%0.46% 1.05% 1.40% 1.59% 1.83% 5.98% 6.42% 6.69% 6.81% 6.92% 2.0% 4.0% 6.0% 8.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 Lo an Y ie ld (% ) Cu st om er D ep os it C
Slide 10: Interest Rate Risk
10 1 As of December 31, 2023 2 WSFS IRR model estimates: Static Balance Sheet / Instantaneous Rate Shocks 3 This IRR analysis only provides directional guidance for 2024, since the IRR model assumes static balance sheet and through the cycle beta Interest Rate Risk1,2 WSJ Prime @ 8.50% • Maintains a
Slide 11: Robust Core Fee Revenue
11 $16 $15 $15 $19 $19 $18 $18 $20 $21 $23 $31 $31 $32 $33 $36 $65 $64 $67 $73 $78 $- $10 $20 $30 $40 $50 $60 $70 $80 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 Co re F ee R ev en ue ( $m m )2 Banking Cash Connect Wealth Management3 Robust Core Fee Revenue1 Well-diversified record core fee revenue of $
Slide 12: Stable Asset Quality
12 Stable Asset Quality 1 Prior to 1Q23, NPA included accruing TDRs 2 Concentration limits are based on relationship exposure, and Tier-1 + ACL; as of December 31, 2023 3 Based on relationship’s outstanding balances 4 Defined as the sum of CRE and Construction (excluding Owner-Occupied) $462 $417 $4
Slide 13: ACL Ratio
13 ACL Ratio $150 $160 $170 $180 $190 9/30/2023 Economic Impact Net Loan Growth Migration / Other 12/31/2023 4Q 2023 ACL ($mm) ($3) $176 $8 $186 $5 1 This is a non-GAAP financial measures and should be considered along with results prepared in accordance with GAAP, and not as a substitute for GAAP r
Slide 14: Commercial Real Estate Portfolio
14 $0.0 $0.1 $0.2 $0.3 $0.4 $0.5 $0.6 2024 2025 2026 2027 2028 Bi lli on s Office Multi-Family Industrial Flex Retail Single Family Other 11.8% 8.9% 8.2% 10.9% 12.6% Commercial Real Estate Portfolio 1 Inclusive of Office-related Construction 2 Office CRE portfolio excludes $98.9mm ($105.6mm exposure
Slide 15: Capital
15 Capital All capital ratios remain healthy and significantly above “well-capitalized;” Tangible book value increased $4 or 20% this quarter $24.33 $34.14 $15 $20 $25 $30 $35 4Q19 2Q20 4Q20 2Q21 4Q21 2Q22 4Q22 2Q23 4Q23 Corp. TBV and AOCI’s Impact per Share TBV/share TBV/share ex-AOCI 10.27% 9.96%
Slide 16: 2024 Outlook
16 3 2024 Outlook Loan Growth Mid-single digit growth; Increase market share due to favorable market position Deposit Growth Low-single digit growth; Broad-based growth across our businesses Net Interest Margin Range of 3.80% - 3.90%; NIM expected to plateau mid-year; IB deposit beta of ~50% by year
Slide 17: Appendix: Non-GAAP Financial Information
17 Non-GAAP Financial Information Appendix:
Slide 18: Non-GAAP Information
18 Non-GAAP Information This presentation contains financial measures determined by methods other than in accordance with accounting principles generally accepted in the United States (GAAP). This presentation may include the following non-GAAP measures: • Adjusted Net Income (non-GAAP) attributable
Slide 19: Appendix: Non-GAAP Financial Information
19 Appendix: Non-GAAP Financial Information Three Months Ended (dollars in thousands, except per share data) December 31, 2023 September 30, 2023 December 31, 2022 Calculation of tangible common equity ratio: Total Assets (GAAP) $ 20,594,672 $ 20,040,992 $ 19,914,755 Less: Goodwill and other intangi
Slide 20: Appendix: Non-GAAP Financial Information
20 Appendix: Non-GAAP Financial Information 1 Pre-tax adjustments include realized/unrealized gain/(loss) on equity investments, net, Visa derivative valuation adjustment, FDIC special assessment, corporate development and restructuring expense, and contribution to WSFS Cares Foundation Three Months
Slide 21: Appendix: Non-GAAP Financial Information
21 Appendix: Non-GAAP Financial Information Three Months Ended (dollars in thousands) December 31, 2023 September 30, 2023 December 31, 2022 Calculation of return on average tangible common equity: GAAP net income attributable to WSFS $ 63,908 $ 74,166 $ 84,449 Plus: Tax effected amortization of in