WSFS Financial Corporation Delivers Strong Q1 Results Amidst Macroeconomic Uncertainty
WSFS Financial Corporation, a leading financial services company, has reported solid first-quarter 2025 earnings, showcasing the strength of its franchise and diverse business model. Despite the uncertainty in the macroeconomic environment, WSFS demonstrated resilience and continued to deliver strong results.
The company's core earnings per share reached $1.13, representing an improvement from the prior quarter. Core return on assets (ROA) was 1.29%, with a core pre-provision net revenue (PPNR) of $104.6 million and a core return on tangible common equity (ROTCE) of 16.97%. These metrics reflect the company's ability to navigate challenging market conditions.
WSFS also saw an expansion in its core net interest margin, increasing by 8 basis points to 3.88%. This growth was driven by a reduction in total funding costs, which decreased by 15 basis points to 1.77%. The company's funding costs benefited from repricing actions and the redemption of $70 million in higher-priced sub-debt.
The company's fee revenue also grew significantly, with core fee revenue increasing by 6% year-over-year. Wealth and Trust led this growth, expanding by 19%, while Institutional Services and Bryn Mawr Trust Company of Delaware delivered strong year-over-year growth through increased deal flow.
However, Cash Connect fees declined quarter-over-quarter due to seasonally lower volumes and the impact of lower interest rates. Despite this, the business managed to maintain higher profit margins through expense and pricing offsets.
The company's gross loans were down less than 1% linked quarter, with commercial loans remaining generally flat. Client deposits decreased by 1% linked quarter, primarily due to seasonality and expected outflows in trust. Nonetheless, client deposits increased by 4% year-over-year, driven by broad-based growth across business lines.
WSFS's total net credit costs were $17.6 million, an increase of $8.9 million from the previous quarter. The company recorded net charge-offs of $24.6 million, with an ACL coverage ratio ending the quarter at 1.43%. Despite this, WSFS's capital ratios remain strong, significantly above well-capitalized regulatory targets.
WSFS returned $62.6 million of capital in the first quarter, including $53.8 million in buybacks and $8.8 million in dividends. This demonstrates the company's commitment to returning value to shareholders while maintaining a solid balance sheet.
