WSFS Financial (WSFS) Tops Q4 EPS by 4c, Beats on Revenues

WSFS Financial (NASDAQ: WSFS) reported Q4 EPS of $0.71, $0.04 better than the analyst estimate of $0.67. Revenue for the quarter came in at $89.9 million versus the consensus estimate of $57.89 million.

Highlights for 4Q 2017:

• Core earnings per share (EPS)(1) of $0.71 for 4Q 2017 increased 22% from $0.58 in 4Q 2016.
• Core ROA(1) was 1.31% for 4Q 2017 compared to 1.12% for 4Q 2016. Core return on average tangible common equity(1) was 16.46% for 4Q 2017 compared to 15.39% for 4Q 2016.
• Core net revenue(1) of $89.9 million increased $9.2 million, or 11% from 4Q 2016, reflecting strong organic growth, including a $4.8 million, or 9% increase in core net interest income(1) and a $4.4 million, or 16% increase in core fee income (noninterest income)(1) across several business lines.
• Core noninterest expense(1) increased $4.3 million, or 9% from 4Q 2016, creating 2 percentage points of positive operating leverage and resulting in a strong core efficiency ratio(1) of 57.0%.
• Loans grew 10% (annualized), customer funding increased 12% (annualized), and the net interest margin grew 5 basis points to 4.00% compared to 3Q 2017. Compared to 4Q 2016, loans grew 7%, customer funding increased 9%, and the net interest margin grew 10 basis points to 4.00%. These healthy growth rates demonstrate our ability to simultaneously increase market share in a competitive environment, while also expanding our geographic footprint and growing our gross margins and profitability.

CEO outlook and commentary

Mark A. Turner, President and CEO, said, “Our fourth quarter results were impacted by previously announced actions resulting from the Tax Cuts and Jobs Act of 2017 and other discrete items. Excluding these items, we recorded strong fourth quarter core results, which cap a successful year. For the quarter, we recorded core EPS of $0.71 and core ROA of 1.31%, which represent significant improvement from the prior year. We gained meaningful market share during the fourth quarter as loans grew an impressive 10% and customer deposits increased 12% on an annualized basis. Execution and optimization of previous acquisitions was a strategic focus in 2017, and we are pleased to report a strong 4Q 2017 core efficiency ratio of 57.0% and 2 percentage points of positive operating leverage compared to 4Q 2016. Our 4Q 2017 core results were balanced and almost entirely driven by organic growth, confirming the strength of our business model and growth strategy. Our full-year 2017 results were highlighted by 17% growth in core EPS, a core ROA of 1.21%, 7% loan growth, 9% customer funding growth, core fee income growth of 19%, and a 60.1% core efficiency ratio. These core results and the resulting momentum position us well to exceed our Strategic Plan goals in 2018, even before the favorable impact of the recent tax rate change.

“Further, the results of our 2017 Associate engagement survey conducted by the Gallup organization placed us among the top 5% of Gallup clients worldwide. During the year, we also were named a top workplace in Delaware for the twelfth consecutive year in The News Journal’s ‘Top Workplaces’ survey, ranking second in the large company category. We were also named the ‘Top Bank’ in Delaware for the seventh year in a row. In addition, we were named a ‘Top Workplace’ in our newer, greater-Philadelphia market by philly.com, earning third place in the mid-size company category.

“Strong Associate and Customer engagement across our footprint coupled with high performing, high quality, and sustainable financial results, continue to fuel our growth and ability to execute on our strategic goals. These results and accolades demonstrate the continued success of our focused strategy of: ‘Engaged Associates delivering stellar experiences growing Customer Advocates and value for our Owners’.”

For earnings history and earnings-related data on WSFS Financial (WSFS) click here.

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