WSFS Financial Corporation (WSFS, Financial) reported a significant first-quarter revenue of $256.1 million, surpassing market expectations which were set at $234.25 million. The company's performance amidst challenging economic conditions highlights its resilience and effective management strategies.
In the first quarter, WSFS achieved a core earnings per share (EPS) of $1.13 and a core return on assets (ROA) of 1.29%. These strong results were largely attributed to an improvement in the net interest margin, which increased by 8 basis points to 3.88% compared to the previous quarter.
During this period, both loans and deposits showed little change, aligning with anticipated seasonal trends and a cautious stance from clients. This stability reflects the careful navigation of economic uncertainties by WSFS, continuing to build on its solid financial foundation.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for WSFS Financial Corp (WSFS, Financial) is $62.80 with a high estimate of $68.00 and a low estimate of $58.00. The average target implies an upside of 20.42% from the current price of $52.15. More detailed estimate data can be found on the WSFS Financial Corp (WSFS) Forecast page.
Based on the consensus recommendation from 5 brokerage firms, WSFS Financial Corp's (WSFS, Financial) average brokerage recommendation is currently 2.4, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for WSFS Financial Corp (WSFS, Financial) in one year is $36.21, suggesting a downside of 30.57% from the current price of $52.15. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the WSFS Financial Corp (WSFS) Summary page.
WSFS Key Business Developments
Release Date: January 28, 2025
- Core Earnings Per Share (EPS): $1.11 for Q4 2024; $4.39 for full-year 2024.
- Core Return on Assets: 1.24% for Q4 2024; 1.26% for full-year 2024.
- Return on Tangible Common Equity: 16.55% for Q4 2024; 17.83% for full-year 2024.
- Quarterly Revenue Growth: 7% year-over-year in Q4 2024.
- Wealth and Trust Business Revenue: $40 million for Q4 2024, with double-digit growth for the full year.
- Core Net Interest Margin: 3.80% for Q4 2024.
- Customer Deposits Growth: 4% in Q4 2024.
- Non-Interest Bearing Deposits: Grew 6% in Q4 2024, comprising 31% of average deposits.
- Loan Growth: Declined 1% in Q4 2024; grew 3% year-over-year.
- Total Net Credit Costs: $8.7 million, decreased by $11.4 million from the prior quarter.
- ACL Coverage: 1.48% at the end of 2024.
- Efficiency Ratio Outlook: 60% for full-year 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- WSFS Financial Corp (WSFS, Financial) reported strong financial performance with a core earnings per share of $1.11 and a return on tangible common equity of 16.55% for the fourth quarter.
- The Wealth and Trust business delivered a record quarter with $40 million in revenue, contributing to a 19% year-over-year growth.
- Customer deposits grew by 4% in the quarter, with non-interest bearing deposits increasing by 6%, indicating strong customer engagement.
- WSFS Financial Corp (WSFS) achieved a core net interest margin of 3.80% for the quarter, despite interest rate cuts, showcasing effective deposit repricing strategies.
- The company expects continued broad-based deposit growth and mid-single-digit loan growth in the commercial portfolio for 2025, indicating a positive outlook for future growth.
Negative Points
- WSFS Financial Corp (WSFS) faced a $4.7 million pre-tax impact due to the termination of a relationship with a longstanding Cash Connect client, affecting revenue and core non-interest expense.
- Loans declined by 1% quarter-over-quarter due to higher seasonal payoffs and business sales, although there was a 3% year-over-year growth.
- Non-performing assets increased due to the migration of one relationship with two loans, although these are believed to be well collateralized.
- The Cash Connect business is expected to see a decline in revenue due to interest rate reductions, although this is offset by lower funding costs.
- The company anticipates net charge-offs to be between 35 to 45 basis points of average loans for the year, reflecting ongoing normalization of credit.
