WSFS - Earnings call transcript Q1 2021 | WSFS Financial Corporation

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Operator

Thank you for standing by, and welcome to the WSFS Financial Corporation First Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation there will be a question-and-answer session. [Operator Instructions] I would now like to turn the call over to your host for today Mr. Dominic Canuso, Chief Financial Officer. begin. may you Sir,

Dominic Canuso

and and Rick to all today. participate call Commercial Chairman, on Michelle, Officer; Chief taking Clark, Chief Steve With you Retail the this Chief President Levenson, Rodger time on Officer; are Art thanks you, Bacci, of Wealth and to Banking for me CEO; Wright, Thank our Officer. call Banking

read on our with begin I quarter, I the his remarks Harbor Safe like Before statement. to would

our of comments on include the results due information recent subject today XX-Q, indicated expectations, about in from us we Our our Form discussion but on Form view constitute other Actual future and for you forward-looking to All and management's statements. well with historical to today including included on uncertainties, periodically everyone Safe file may statement. Report our joining not the Commission. that prospects reports made XX-K statements as will call. and by Exchange Good quarterly as these afternoon, documents those Harbor and are plans to our limited thank factors materially risks the results and forward-looking or most Securities differ risk Annual

can in which presentation, will earnings and Web release our Our investor site. the section company's refer be to of we Relations today found Investor

the in a first with of early strength our a pandemic. quarter fourth our XXXX, strong year quarter diversity pending demonstrating franchise our anticipated Trust. during We efforts for are especially integration continue to close full ability Bryn to of combination performance 'XX. to and diligence, bank results of very this our with Mawr serve quarter anticipated ramp quarter environment, up and pleased the with had customers our and the in both this financial the announcement of operating the The is and into of stability the in first conversion our WSFS in year early conversion and transaction and due

the XX impact within of have basis ROA. X.X in when million decreased quarter our XX $XXX investment net particularly excludes beginning continue to paid per positivity five, reopening share liquidity funding, basis, assets $XX point first our are approximately our optimize signs wholesale With $XX.X a market, credit turn of excluding demonstrated share and reduction Slide and year-over-year. on the and over positive or quarter million or performance. quarter Highlighted XX% $X.XX and billion stimulus have risk four on the conservatism around or sheet economic customers in up and we approximately X% whole, the transaction. excess $X.XX deposits X.XX% costs in we to core loans liquidity our income and PPP Slide to checks to on Similar the to on the increased through forgiveness this the a margin was XXX resulting a additional the interest portfolio funding, liquidity by that XX customer with the is tolerance. X% Consistent a recovery Trust increase and quarter the core from net is investor overall balance net months, runoff Bryn first PPP economies, earnings This reported Detailed and from development spending billion which past million of quarter. strategy Mawr million, industry portfolio presentation, related and corporate in X.XX% to sentiment as metrics. point a quality both liquidity and in excess in will basis continues see increased in in reduction continued on basis. We earnings is million customer $XXX cash off of local our per the and of our clients $X.X excess We in to

exposures have of with just our residential These transaction attrition over of term. points year, of meaningfully original run churn loans the growth held on could runoff almost the by to note lines constant we mid remaining XX% has the the may of beneficial near only first off and While rates held acquired million remaining. the headwinds our portfolio investment couple in under revolving The of along relatively $XX XXXX. in decreased credit for since of continued off portfolio trends, the single outlook end digit over from non-relationship current A that quarter past against line XXXX. primarily in and portfolio CRE are of with have XX% the to utilization loan additional the commercial completed now portfolio, participations the is run continue

of in the a mentioned. PPP we PPP addition, XX customers the points our generated of In books resulted margin and $XXX with for in originations excess to the ability of negative benefit serve Slide quarter, illustrated PPP offset pandemic, quarter almost basis past is $X.X almost to fee in XX on million of our demonstrates impact CLA basis in the the period billion previously our six from million levels in loans our including non-customers, supported point X.XX%, this continued total which income from and are in $X.X of not interest on and by through XX basis and customers liquidity year. a Net points

at year-over-year as the were costs in Slide one XXXX, driven slowdown AUA basis quarter, from details $X Further growth mortgage revenue have just in after decreased environment. deposit banking as time level that XX% we are same resulting was continued the in in fee strength started. products able both robust Reductions or growth Great nine value XX% year's and the in interest of XX. fee which percentage are in While by customer fees the costs loan yields particularly now Customer and driven of diverse quarter churn. core over and offset in by The lower core fees achieve demonstrated on Core services XX% on wealth economic Recession much seven the Slide again the this portfolio points low strength impact. revenue, to and deposit Seen million point our grew franchise in AUM. just in rate after

continued macro our quality continue quarter markets We continued our the to all metrics, with indicators versus negative quarter our focused at resulted lower in investments trends in be reopening ACL of XX.X%. an disciplined $XXX in our ACL the transformation ratio cost growth, of and million leading ratio included of ACL The a with core improving expense coverage million franchise excluding provision our efficiency quarter environment. million. approximately of in credit are year of in million The directly quality combined and initiative The management $XX.X in an This, quarter. ratio credit low delivery PPP. seen the X.XX% with at and is $XXX coverage credit strengthening X.XX% local economic a $XX was This end controls in and end.

Excluding quarter Slide this the eight. release, on is core details ROA is ACL additional in on X.XX%,

dividend to while generating X% material with levels robust loan would cash in common growth, per releases the increase in stock, continued quarterly of improvement continue the of of and by aligned Assuming paid tangible no share $X.XX continued common to offset XQ dividend reserve be for portfolio an we equity forecast. on XX.X%. Board from provide changes, economic economy our The Directors return of cash XXXX. approved a Capital

do In anticipate During million Mawr totaling of was $XX.XX, the transaction. a not of capital the return. XXX,XXX shares for $XX it further average summary, at We we until positive repurchases close Bryn an to year quarter, repurchased start the price of share WSFS. the

in remainder will and our directly of health by be are our both you we to loan XXXX your the pace and and about demand the for deposit on economic of long-term both the optimistic situation will and and the markets growth. be take we Although, path impacts excess and prospects, questions. the and Thank recovery happy influenced related near-term liquidity performance

Operator

KBW. Our Perito question comes from Instructions] Michael first [Operator with

Michael Perito

bit little and for into thinking there around the about assuming liquidity sticks there [ph] a comment I of a liquidity uncertain here? deployment, now But Dominic, book? I balance loan can [your guess, quarters thought] maybe on more size is assumptions guess out give us have bit over challenging. on little some last side, a make even sheet year. right on want flows realize I in obviously provide I obviously, and to of I mean, course work the that color to a on cash right, the putting mean, how is couple But we'll you it's about your there mean, investment start I I maybe the that the a and and where the stick when you're growth you appetite? expand the point

Dominic Canuso

the we around in liquidity And least portfolio excess have quarters, do investment Sure, increased to I liquidity quarters. over question. excess to great of it's for that our that funding a a we've my off And be pay few the comments and last at wholesale leveraged couple anticipate mentioned for significantly.

that incremental to in use interest NII the to lagging a it total dollars generate offset from will volume opportunity margin, and continue some We put could evaluate those is while drag the and growth net and the to portfolio. any

Michael Perito

sheet even that the like to would average the unreasonable it's build here. higher I liquidity stays bond in, to not So the balance assume sounds at assuming were end that that, looking balances unreasonable the period think continue to sheet, it will balance you mean, not suggest, cash guys than book that it's

that your given loan commentary Just growth remarks? prepared you in your mentioned

Dominic Canuso

good a is That assumption.

Michael Perito

wondering, Okay. here. business And was momentum obviously on the side, good couple then, just some fee on a lines

market give you the be your still has remain here momentum to curious of the the be real that on the this or for year, a mortgage on been in of other of enough would Just that elevated estate kind the for It thoughts connect also, there's side? neck cash woods helpful? but would update if an refi always tight any maybe balance outlook could

Dominic Canuso

question. good Sure,

connect, was weather harsh dollar and served both do slowdown and and fees continue in in unit served and the managed So on did February months country. seasonality served January in But the mid we of much see particularly even a high based to units primarily that of because that the growth cash digits. increase. total top-line across first single will anticipate and dollars we the quarter-over-quarter though the quarter the decrease from And

the quarter's the still yet. side, On as point have, some could slowdown necessarily remain significant volume. in anticipate have at that but XX% seen of as do time, refinanced refi at what a rates mortgage in We seen those would first still that mix haven't interest the is we and the leading low we've

Michael Perito

looking just just parlay then, directional in here. or you I wondering But, was it. just quick that did in mean, have if about the from number. by if for of the I and total I a any seems for mean, assuming if remarks obviously, Got modification somewhere, that coming the be kind quarter-to-date might I prepared I or me, updated you kind apologize missed comment the you and costs. along slowly the deferrals or a with last economy quarter wondering into And here they end that question thoughts. it the provision but little of month-by-month. maybe conservative. can your down was guys stood just deferral deck some chugging -- the had I like of I was

Steve Clark

is the deferral this Mike, Clark, Steve question. regarding Hey,

book of of Just total remains form some about in our modification. X%

paying and $XX interest. of For book they that the all million are commercial represents that

So, we and I stand over see It's feel where two the quarters last the good we flat been up related that. about pretty deferrals no tick. to very

Operator

Brody Bank. next Stephens Our with question comes Instructions] [Operator from Preston

Brody Preston

you the in have want I that to guys quarters there's thanks. for of lot Thanks over and last all, say great detail of a revamped the First of couple there. earnings

asking. was PPP to to when it I you that I you missed core? have it an it. last want by might through did And come but loans average So for for do balance night dropped nice start the have the

Dominic Canuso

I our seven. do and shared we in it's materials, slide think We had

Brody Preston

six. right, That's

Dominic Canuso

apologize. XXX. you'll there, see And at I PPP five, ended Slide that on loans

quarter. And six hundreds so low the for

Brody Preston

Okay.

gets of kind average simple you a there. just So

Dominic Canuso

Yes.

Brody Preston

then, was income. see it All fee right. good Okay. And the to

that quarter it's guys And beneficial have kind you the the that's as love what XX%, first since I mortgage you -- as this to of about just you I of back But Mawr connect some above the kind love saw. trending we above that Bryn think are cash headwinds XX%. deal, deal. mix into think you'd lead of think you'd stay that lower, on

levers guess I keep so what we XX to short-term? above have do the pull that And to percentage in

Dominic Canuso

and in that XX% in that Sure. environment to that rising and of it's we there yes, connect we'd a important do Mawr see obviously, to as offset to look that. rate And in would maintain course, think environment, would is I love to pending to percentage slowdown be context may wealth that. this And able rate note And, a level an interest mortgage, with that cash to Bryn opportunities growth enhance the while the combination both well. and that in continue be with

Brody Preston

And on got wanted Okay, it. to just back then, the commentary. growth circle

headwinds, you understand to x-PPP runoff but the there's mid digit I the single kind stick So, of and portfolios. did guide,

expect drive And to so was And what loaded? to is now XX in to here? guidance, the out deck least the I from on down, growth are back think get side runoff at what the called growth commercial that categories you you is, the it that half so the million more is portfolios, or that that are

Steve Clark

is This Steve Clark again. Brody. Hey,

expectations yes, So, of single digits. in year the terms comfortable for our do full in we mid remain

kind for our So, as the view, since is half reasons sit the of we quarter that, large Couple second as of from pipeline half of here as XXXX. back it's fourth year. our today, been

optimistic significant requests. are feeling requests there, receive and continue and we to evaluate they So, CRE

selective year. of regarding to pretty with last getting through CNI and are then continue traction And November we nonetheless, very we CRE have pleased in structure, the the pricing half to but remain to and and second added opportunities. very team, the as them we We expect October, that lastly, produce disciplined they're go the the that RMs space

their again, single the full just attainable. that economy so As on And because, that on mid forgiveness still a then, companies it it's in as is banks, customers the open PPP to it changing much add, on depending generally, relates for do growth, sitting CNI dependent But I stand and used. to on would is our continuing up relates certainly depending really process are to liquidity, of a where bit they digit year headwind. being

Brody Preston

yields origination the are on new Steve? what production averaging, And Okay.

Steve Clark

for this all production is $XXX,XXX over new was X.XX%. So the loans quarter, and

really that fourth which to So, was compares favorably quarter, the X.XX%.

kind So, of that we've were new average shooting stated first yield with past, we that quarter, in fundings. of we're mid the terms in for the on the and weighted Xs pleased

Brody Preston

in in of And for how just first Dominic, quarter? questions million expected that was Great, for I to thank transformation, that. you, this investment for wanted you the tied much XX.X year delivery net ask accomplished the to

Dominic Canuso

is with at years. will million expense I definitely projects X say as go some consistent year live. would what But expectation of would beginning overall investment I discussed and about Yes, million think overall, depreciation CapEx it's -- we those our over ramp up or the into so take laid that last consistent we've with out strategy of once it the come the line the the few and XX.X the is through versus

Brody Preston

about everybody's a being managers maybe I of do SBA, experiences couple. added SBA. to on And a the from with then, And it. take advantage feelings kind think XX bolstered of you PPP to the Got have question relationship just I XX able

and this the forward, involved more opportunities? more, building I lending moving fee in just And XA do out you given anticipate being income platform so maybe guess,

Steve Clark

Brody, is a this Steve again.

really team the has So, year. last the over really, SBA gelled

companies over refinancing. for space, past candidates in if that So that that or addition gain sale our book add we of in one coming the And, certainly that, are commercial kind year two the seeing focused And, on in on in national have out a are that XA new effective opportunity RMs SBA to did in-market banking of side, franchise. the have we we're space, struggled three associates the kind of business possibility. we're SBA and

a but our the that's have may I So, additional SBA Rick is there, And growth segment. view. comments Wright for bank think

Operator

conference Canuso. And I you. in further no over to turn would questions like queue, the to with back Thank Mr.

Dominic Canuso

second Thank be forward you all many you investor Roger of attending good and will with for conference participating a today. then. the and I and during to look day. events meeting quarter Have

Operator

conference. conclude and that does Ladies the gentlemen,

day. have Everyone disconnect. now great may You a

WSFS Financial (WSFS) 23 Apr 212021 Q1 Earnings call transcript