Janney Montgomery Scott Upgrades WSFS Financial (WSFS) to Buy; Attractive Entry for Patient Investors

October 27, 2009 7:08 AM EDT

Janney Montgomery Scott upgrades WSFS Financial (Nasdaq: WSFS) from Neutral to Buy. Price target increased from $32 to $33.

Janney analyst says, "WSFS's tough third quarter results reflect the company's exposure to construction loans and a review of the commercial loan book. There were, however, several positives. WSFS's recent capital raise strengthened the balance sheet, and management's continued focus on building relationships, as evidenced by commercial loan and deposit growth, will help the company emerge a strong and growing bank. The stock's current price at approximately 80% of tangible book adequately discounts the risks and is an attractive entry point for patient investors...WSFS continues to improve its Delaware franchise by focusing on core deposit and commercial loan growth. Consistent with industry trends, core deposits increased 6.8% (not annualized) for the September 2009 quarter and were 68% of total deposits. Commercial loan growth was a respectable 1.9% (not annualized). The net interest margin increased four basis points on a linked quarter basis to 3.35% due to lower funding costs. We expect the net interest margin to increase next quarter to 3.39%...We reduce our 2009 and 2010 earnings per share estimates to ($0.20) and $1.05, from $0.02 and $1.40, respectively, to reflect higher credit costs than we had previously modeled."

To see more analyst ratings on WSFS Click Here.

WSFS Financial Corporation operates as the thrift holding company for the Wilmington Savings Fund Society, FSB, which provides various financial services primarily in the mid-Atlantic region of the United States.

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