WILMINGTON, Del.–(BUSINESS WIRE)–WSFS Financial Corporation (Nasdaq: WSFS), the parent company of WSFS Bank, today announced its financial results for the first quarter of 2023.
Selected financial results and metrics are as follows:
|
(Dollars in millions, except per share data) |
|
|
1Q 2023 |
|
|
|
4Q 2022 |
|
|
|
1Q 2022 |
|
|
Net interest income |
|
$ |
182.5 |
|
|
$ |
193.9 |
|
|
$ |
138.6 |
|
|
Fee revenue |
|
|
63.1 |
|
|
|
64.9 |
|
|
|
60.6 |
|
|
Total net revenue |
|
|
245.7 |
|
|
|
258.8 |
|
|
|
199.1 |
|
|
Provision for credit losses |
|
|
29.0 |
|
|
|
13.4 |
|
|
|
19.0 |
|
|
Noninterest expense |
|
|
133.0 |
|
|
|
132.9 |
|
|
|
174.5 |
|
|
Net income attributable to WSFS |
|
|
62.4 |
|
|
|
84.4 |
|
|
|
3.8 |
|
|
Pre-provision net revenue (PPNR)(1) |
|
|
112.6 |
|
|
|
125.9 |
|
|
|
24.7 |
|
|
Earnings per share (EPS) (diluted) |
|
|
1.01 |
|
|
|
1.37 |
|
|
|
0.06 |
|
|
Return on average assets (ROA) (a) |
|
|
1.27 |
% |
|
|
1.69 |
% |
|
|
0.07 |
% |
|
Return on average equity (ROE) (a) |
|
|
11.2 |
|
|
|
15.7 |
|
|
|
0.6 |
|
|
Fee revenue as % of total net revenue |
|
|
25.6 |
|
|
|
25.0 |
|
|
|
30.4 |
|
|
Efficiency ratio |
|
|
54.0 |
|
|
|
51.2 |
|
|
|
87.5 |
|
GAAP results for the quarterly periods shown below included the following items that are excluded from core results. For 1Q 2023, the valuation adjustment of $0.6 million is related to our derivative liability established from the sale of 360,000 Visa Class B shares in 2Q 2020.
|
|
|
1Q 2023 |
|
4Q 2022 |
|
1Q 2022 |
||||||||||||
|
(Dollars in millions, except per share data) |
|
Total |
|
Per share |
|
Total |
|
Per share |
|
Total |
|
Per share |
||||||
|
Visa derivative valuation adjustment(2) |
|
$ |
0.6 |
|
$ |
0.01 |
|
$ |
0.6 |
|
$ |
0.01 |
|
$ |
— |
|
$ |
— |
|
Corporate development and restructuring expense |
|
|
— |
|
|
— |
|
|
0.8 |
|
|
0.01 |
|
|
51.6 |
|
|
0.60 |
|
(1) As used in this press release, PPNR is a non-GAAP financial measure that adjusts net income determined in accordance with GAAP to exclude the impacts of (i) income tax provision and (ii) provision for (recovery of) credit losses. For a reconciliation of this and other non-GAAP financial measures to their comparable GAAP measures, see “Non-GAAP Reconciliation” at the end of the press release. |
|
(2) The Visa derivative valuation adjustment represents an expense to increase the liability and is included in Other income on the Summary Statements of Income. |
CEO Commentary
Rodger Levenson, Chairman, President and CEO, said, “Despite the disruption in banking markets in mid-March, WSFS performed very well this quarter, reflecting the continued strength and diversity of our relationship-based business model. A huge thank you to all of our Associates who rallied together to serve our Customers during this period of uncertainty.
“Our balance sheet remains strong with significant liquidity capacity and capital levels above well-capitalized, even when including the effective AOCI(3) from the total investment portfolio.
“While most credit quality metrics remain at historically favorable levels, ACL reserves increased prudently due to the near-term economic outlook.
“WSFS remains very well positioned to serve our Customers and Communities. During the quarter, we were honored to be named to Forbes’ list of America’s Best Banks for the fourth year in a row and recognized by Gallup as one of its Exceptional Workplaces of 2023 for the seventh time since 2016.”
|
(3) As used in this press release, effective AOCI is a non-GAAP financial measure. For a reconciliation of this and other non-GAAP financial measures to their comparable GAAP measures, see “Non-GAAP Reconciliation” at the end of the press release. |
Highlights for 1Q 2023:
- Core EPS(4) was $1.02 compared to $0.66 for 1Q 2022.
- Core ROA(4) was 1.27% compared to 0.83% for 1Q 2022.
- Customer deposits were flat prior to March 8th, and declined by $200.6 million, or 1% (5% annualized) for the full quarter.
- Highly diverse and granular deposit portfolio, including insured and total protected(5) deposits of 64% and 73% of total customer deposits, respectively.
- Net loan growth of 2% (7% annualized) from 4Q 2022 driven by the commercial portfolio and moderated consumer partnership growth.
- Net interest margin of 4.25% compared to 4.49% for 4Q 2022, reflects increasing deposit betas and funding mix, partially offset by higher loan yields.
- Core fee revenue (noninterest income)(4) was $63.7 million, an increase of $3.1 million, or 5%, compared to 1Q 2022, resulting in a 25.8% core fee revenue ratio(4).
- Total net credit costs were $29.0 million, primarily due to the impacts of the economic uncertainty and forecast on the quarterly provision and net loan growth. The ACL coverage ratio was 1.28% compared to 1.17% at December 31, 2022.
- WSFS Bank capital ratios remain well above well-capitalized levels, with total risk-based capital of 14.56%.
- WSFS repurchased 262,000 shares of common stock at an average price of $49.11 per share, totaling an aggregate of $12.9 million. The Board of Directors also approved a quarterly cash dividend of $0.15 per share.
|
(4) As used in this press release, core EPS, core ROA, core fee revenue (noninterest income), and core fee revenue ratio are non-GAAP financial measures. These non-GAAP financial measures exclude certain pre-tax adjustments and the tax impact of such adjustments. For a reconciliation of these and other non-GAAP financial measures to their comparable GAAP measures, see “Non-GAAP Reconciliation” at the end of the press release. |
|
(5) Protected deposits include insured and collateralized deposits |
First Quarter 2023 Discussion of Financial Results
Balance Sheet
The following table summarizes loan and lease balances and composition at March 31, 2023 compared to December 31, 2022 and March 31, 2022:
|
Loans and Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
(Dollars in millions) |
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
|||||||||||||||
|
Commercial & industrial (C&I) |
|
$ |
4,443 |
|
|
37 |
% |
|
$ |
4,408 |
|
|
37 |
% |
|
$ |
4,384 |
|
|
39 |
% |
|
Commercial mortgage |
|
|
3,473 |
|
|
29 |
|
|
|
3,351 |
|
|
28 |
|
|
|
3,361 |
|
|
30 |
|
|
Construction |
|
|
1,024 |
|
|
8 |
|
|
|
1,044 |
|
|
9 |
|
|
|
924 |
|
|
8 |
|
|
Commercial small business leases |
|
|
577 |
|
|
5 |
|
|
|
559 |
|
|
5 |
|
|
|
491 |
|
|
4 |
|
|
Total commercial loans |
|
|
9,517 |
|
|
79 |
|
|
|
9,362 |
|
|
79 |
|
|
|
9,160 |
|
|
81 |
|
|
Residential mortgage |
|
|
801 |
|
|
6 |
|
|
|
782 |
|
|
7 |
|
|
|
862 |
|
|
8 |
|
|
Consumer |
|
|
1,868 |
|
|
16 |
|
|
|
1,811 |
|
|
15 |
|
|
|
1,382 |
|
|
12 |
|
|
ACL |
|
|
(169 |
) |
|
(1 |
) |
|
|
(152 |
) |
|
(1 |
) |
|
|
(136 |
) |
|
(1 |
) |
|
Net loans and leases |
|
$ |
12,017 |
|
|
100 |
% |
|
$ |
11,803 |
|
|
100 |
% |
|
$ |
11,268 |
|
|
100 |
% |
At March 31, 2023, WSFS’ net loan and lease portfolio increased $213.6 million, or 7% (annualized), when compared with December 31, 2022 due to increases of $122.0 million in commercial mortgage, $57.5 million in our consumer portfolio, primarily from Spring EQ (home equity loans), $35.1 million in C&I, and $17.6 million in commercial small business leases, partially offset by a decrease of $20.3 million in construction loans.
In line with our Strategic Plan, the C&I portfolio (including owner-occupied real estate) continued to be our largest portfolio at 37% of net loans and leases. Additionally, our total commercial loan portfolio continues to represent a majority of our lending portfolio at 79% of net loans and leases.
Net loans and leases at March 31, 2023 increased $748.5 million, or 7%, when compared with March 31, 2022. The increase was driven by increases of $486.3 million in our Consumer portfolio, primarily from Spring EQ, $111.8 million in commercial mortgage, and $99.8 million in construction loans.
The following table summarizes customer deposit balances and composition at March 31, 2023 compared to December 31, 2022 and March 31, 2022:
|
Customer Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
(Dollars in millions) |
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
||||||||||||
|
Noninterest demand |
|
$ |
5,299 |
|
33 |
% |
|
$ |
5,739 |
|
36 |
% |
|
$ |
6,639 |
|
37 |
% |
|
Interest-bearing demand |
|
|
3,159 |
|
20 |
|
|
|
3,347 |
|
21 |
|
|
|
3,292 |
|
19 |
|
|
Savings |
|
|
1,967 |
|
13 |
|
|
|
2,162 |
|
13 |
|
|
|
2,279 |
|
13 |
|
|
Money market |
|
|
4,002 |
|
25 |
|
|
|
3,731 |
|
23 |
|
|
|
4,179 |
|
24 |
|
|
Total core deposits |
|
|
14,427 |
|
91 |
|
|
|
14,979 |
|
93 |
|
|
|
16,389 |
|
93 |
|
|
Customer time deposits |
|
|
1,453 |
|
9 |
|
|
|
1,102 |
|
7 |
|
|
|
1,156 |
|
7 |
|
|
Total customer deposits |
|
$ |
15,880 |
|
100 |
% |
|
$ |
16,081 |
|
100 |
% |
|
$ |
17,545 |
|
100 |
% |
From year-end 2022 customer deposits were flat prior to March 8th. For the quarter, total customer deposits decreased $200.6 million, or 1% (5% annualized), when compared with December 31, 2022, primarily driven by continued customer utilization of excess liquidity.
Customer deposits decreased by $1.7 billion from March 31, 2022 primarily driven by both continued customer utilization of excess liquidity and $622.7 million from Trust deposits as capital market transactions slow due to market conditions.
More than half of our customer deposits, or 53%, are from our Commercial, Small Business and Wealth Management customer relationships. The loan to deposit ratio was 76% at March 31, 2023, reflecting continued capacity to fund future loan growth. Our insured and total protected deposits were 64% and 73% of total customer deposits, respectively.
Core deposits were a strong 91% of total customer deposits, and no- and low-cost checking accounts represented a robust 53% of total customer deposits, at March 31, 2023, with a weighted average cost of 23bps for the quarter. These core deposits predominantly represent longer-term, less price-sensitive customer relationships.
Net Interest Income
|
|
|
Three Months Ending |
||||||||||
|
(Dollars in millions) |
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
||||||
|
Net interest income before purchase accretion |
|
$ |
179.1 |
|
|
$ |
190.0 |
|
|
$ |
135.2 |
|
|
Purchase accounting accretion |
|
|
3.4 |
|
|
|
3.8 |
|
|
|
3.2 |
|
|
Net interest income before PPP |
|
|
182.5 |
|
|
|
193.9 |
|
|
|
138.4 |
|
|
PPP |
|
|
— |
|
|
|
— |
|
|
|
0.2 |
|
|
Net interest income |
|
$ |
182.5 |
|
|
$ |
193.9 |
|
|
$ |
138.6 |
|
|
|
|
|
|
|
|
|
||||||
|
Net interest margin before purchase accretion |
|
|
4.17 |
% |
|
|
4.40 |
% |
|
|
2.94 |
% |
|
Purchase accounting accretion |
|
|
0.08 |
|
|
|
0.09 |
|
|
|
0.07 |
|
|
Net interest margin before PPP |
|
|
4.25 |
|
|
|
4.49 |
|
|
|
3.01 |
|
|
PPP |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Net interest margin |
|
|
4.25 |
% |
|
|
4.49 |
% |
|
|
3.01 |
% |
Net interest income decreased $11.4 million, or 6% (not annualized), compared to 4Q 2022, primarily due to increasing deposit betas and funding mix, partially offset by higher loan yields. Net interest income increased $44.0 million, or 32%, compared to 1Q 2022, primarily due to the benefits of our asset-sensitive balance sheet.
Net interest margin decreased 24bps from 4Q 2022 primarily due to the reasons noted above. Net interest margin increased 124bps from 1Q 2022, primarily due to a favorable increase of 102bps from the benefits of our asset-sensitive balance sheet and 22bps from loan growth and mix.
Asset Quality
The following table summarizes asset quality metrics as of and for the period ended March 31, 2023 compared to December 31, 2022 and March 31, 2022.
|
(Dollars in millions) |
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
||||||
|
Problem assets |
$ |
416.7 |
|
|
$ |
462.1 |
|
|
$ |
618.1 |
|
|
Nonperforming assets |
|
33.1 |
|
|
|
43.4 |
|
|
|
37.8 |
|
|
Delinquencies |
|
100.5 |
|
|
|
61.2 |
|
|
|
54.6 |
|
|
Net charge-offs |
|
11.7 |
|
|
|
7.7 |
|
|
|
3.3 |
|
|
Total net credit costs (recoveries) (r) |
|
29.0 |
|
|
|
13.0 |
|
|
|
19.3 |
|
|
Problem assets to total Tier 1 capital plus ACL |
|
18.65 |
% |
|
|
21.44 |
% |
|
|
28.79 |
% |
|
Classified assets to total Tier 1 capital plus ACL |
|
15.38 |
|
|
|
14.29 |
|
|
|
18.58 |
|
|
Ratio of nonperforming assets to total assets |
|
0.16 |
|
|
|
0.22 |
|
|
|
0.18 |
|
|
Ratio of nonperforming assets (excluding accruing TDRs) to total assets |
|
0.16 |
|
|
|
0.12 |
|
|
|
0.12 |
|
|
Delinquencies to gross loans |
|
0.83 |
|
|
|
0.51 |
|
|
|
0.48 |
|
|
Ratio of quarterly net charge-offs to average gross loans |
|
0.40 |
|
|
|
0.26 |
|
|
|
0.12 |
|
|
Ratio of allowance for credit losses to total loans and leases (q) |
|
1.28 |
|
|
|
1.17 |
|
|
|
1.19 |
|
|
Ratio of allowance for credit losses to nonaccruing loans |
|
528 |
|
|
|
666 |
|
|
|
591 |
|
|
See “Notes” |
|||||||||||
Most asset quality metrics remained relatively stable during the quarter and continued to reflect the strength of the originated and acquired portfolios. Total problem assets(6) decreased to $416.7 million at March 31, 2023 compared to $462.1 million at December 31, 2022. Total problem assets to total Tier 1 capital plus ACL was 18.65% at March 31, 2023, compared to 21.44% at December 31, 2022.
Delinquencies to gross loans increased to 0.83% at March 31, 2023 compared to 0.51% at December 31, 2022, primarily driven by a 19bps increase from two long-term problem loan relationships, one of which is still accruing. While these loans are C&I long-term care facilities, this portfolio is approximately $130.0 million in total outstandings.
The ratio of nonperforming assets to total assets remained relatively stable at 0.16% compared to 0.22% at December 31, 2022, and includes the adoption of troubled loan accounting. Net charge-offs for 1Q 2023 were $11.7 million, or 0.40% (annualized) of average gross loans. The increase over the prior quarter was primarily due to slightly higher commercial charge-offs and normal maturation of NewLane and Upstart portfolios, along with lower recoveries in the quarter.
|
(6) Total problem assets includes all criticized, classified, and nonperforming loans as well as other real estate owned (OREO). |
Total net credit costs were $29.0 million in the quarter compared to $13.0 million in 4Q 2022. The increase in credit costs was primarily due to $17.9 million from the impacts of the economic uncertainty and forecast and $6.6 million related to the mix of new loan originations. The ACL was $169.2 million as of March 31, 2023, an increase of $17.3 million from December 31, 2022, primarily due to the above factors, partially offset by favorable migration and net charge-offs. The ACL coverage ratio was 1.28% compared to 1.17% at December 31, 2022.
Core Fee Revenue
Core fee revenue (noninterest income) of $63.7 million decreased $1.8 million, or 3% (not annualized), compared to 4Q 2022, primarily driven by a decrease of $2.2 million in other income from our equity investments. The decrease was partially offset by an increase of $0.4 million in mortgage banking fees.
Core fee revenue increased $3.1 million, or 5%, compared to 1Q 2022, primarily driven by an $8.1 million increase in Cash Connect® income. The increase was partially offset by decreases of $1.8 million in mortgage banking fees, $1.3 million from BMT Insurance Advisors (sold in 2Q 2022), $0.6 million from gain on sale of SBA loans, and $0.5 million from other investing activities.
For 1Q 2023, our core fee revenue ratio was 25.8% compared to 25.2% in 4Q 2022 and 30.4% in 1Q 2022. Fees continue to be resilient and well-diversified among various sources, including traditional and other banking fees, mortgage banking, capital markets, Wealth Management, and Cash Connect®.
Core Noninterest Expense(7)
Core noninterest expense of $133.1 million increased $0.9 million, or 1% (not annualized), compared to 4Q 2022. When excluding a $2.3 million net benefit from nonrecurring items, core noninterest expense was $135.4 million, or an increase of $3.2 million. The increase is primarily due to $2.8 million in salaries and benefits and $1.9 million from Cash Connect® driven by the rising interest rate environment. These increases were partially offset by $1.8 million lower professional fees related to Wealth customer-related tax services (offset in fee revenue) and legal costs.
Core noninterest expense increased $10.2 million, or 8% (not annualized), compared to 1Q 2022. When excluding the nonrecurring items, core noninterest expense increased $12.5 million, or 10%, primarily due to $7.5 million of higher variable operating costs, including $5.7 million from Cash Connect®, in addition to $2.2 million in salaries and benefits, and $1.2 million in FDIC assessment. Our core efficiency ratio was 53.9% in 1Q 2023, compared to 50.8% in 4Q 2022 and 61.7% in 1Q 2022.
Income Taxes
We recorded a $20.9 million income tax provision in 1Q 2023, compared to a $28.0 million income tax provision in 4Q 2022 and $1.7 million in 1Q 2022, driven by higher earnings.
The effective tax rate was 25.0% in 1Q 2023, compared to 24.9% in 4Q 2022 and 30.5% in 1Q 2022. The decrease in effective tax rate for 1Q 2023 compared to 1Q 2022 was primarily due to the acquisition of Bryn Mawr Trust in 1Q 2022, including higher state taxes and other nondeductible costs.
|
(7) As used in this press release, core noninterest expense is a non-GAAP financial measure. This non-GAAP financial measure excludes corporate development and restructuring expense. For a reconciliation of this and other non-GAAP financial measures to their comparable GAAP measures, see “Non-GAAP Reconciliation” at the end of the press release. |
Capital Management
Capital levels remain strong and are all substantially in excess of the “well-capitalized” regulatory benchmarks at March 31, 2023 with WSFS Bank’s Tier 1 leverage ratio of 10.57%, Common Equity Tier 1 capital ratio and Tier 1 capital ratio of 13.39%, and Total Risk-based capital ratio of 14.56%.
WSFS’ total stockholders’ equity increased $101.2 million, or 5% (not annualized), during 1Q 2023. The increase was primarily due to quarterly earnings of $62.4 million and an improvement in accumulated other comprehensive income (AOCI) of $57.4 million from market-value increases on investment securities. These increases were partially offset by capital returns of $22.1 million to stockholders including $12.9 million from share repurchases and $9.3 million from quarterly dividends.
WSFS’ tangible common equity(8) increased $105.2 million, or 9% (not annualized), compared to December 31, 2022. WSFS’ common equity to assets ratio was 11.35% at March 31, 2023, and our tangible common equity to tangible assets ratio(8) increased by 41bps during the quarter to 6.72%, primarily due to the reasons described above.
At March 31, 2023, book value per share was $37.57, an increase of $1.78, or 5% (not annualized), from December 31, 2022, and tangible common book value per share(8) was $21.15, an increase of $1.79, or 9% (not annualized), from December 31, 2022, primarily due to the reasons described above.
During 1Q 2023, WSFS repurchased 262,000 shares of common stock for an aggregate of $12.9 million. As of March 31, 2023, WSFS has 6,326,771 shares, or approximately 10% of outstanding shares, remaining to repurchase under its current authorizations.
The Board of Directors approved a quarterly cash dividend of $0.15 per share of common stock. This dividend will be paid on May 19, 2023 to stockholders of record as of May 5, 2023.
|
(8) As used in this press release, tangible common equity, tangible common equity to tangible assets ratio and tangible common book value per share are non-GAAP financial measures. These non-GAAP financial measures exclude goodwill and intangible assets and the related tax-effected amortization. For a reconciliation of these and other non-GAAP financial measures to their comparable GAAP measures, see “Non-GAAP Reconciliation” at the end of the press release. |
Selected Business Segments (included in previous results):
Wealth Management
The Wealth Management segment provides a broad array of planning and advisory services, investment management, trust services, credit and deposit products to individual, corporate, and institutional clients through multiple integrated businesses.
Selected quarterly performance results and metrics are as follows:
|
(Dollars in millions) |
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
||||
|
Net interest income |
|
$ |
17.9 |
|
$ |
18.7 |
|
$ |
7.1 |
|
|
Provision for (recovery of) credit losses |
|
|
1.3 |
|
|
0.1 |
|
|
(0.2 |
) |
|
Fee revenue |
|
|
30.9 |
|
|
31.0 |
|
|
31.9 |
|
|
Noninterest expense(9) |
|
|
24.2 |
|
|
23.6 |
|
|
23.8 |
|
|
Pre-tax income |
|
|
23.4 |
|
|
25.9 |
|
|
15.5 |
|
|
Performance Metrics |
|
|
|
|
|
|
||||
|
Institutional and Delaware trust revenue |
|
$ |
17.0 |
|
$ |
17.1 |
|
$ |
14.1 |
|
|
Private wealth management revenue |
|
|
13.1 |
|
|
13.1 |
|
|
14.7 |
|
|
AUM/AUA(10) |
|
|
65,562 |
|
|
64,517 |
|
|
58,082 |
|
Wealth Management reported pre-tax income of $23.4 million in 1Q 2023 compared to $25.9 million in 4Q 2022, and $15.5 million in 1Q 2022. The quarter-over-quarter decrease was primarily attributable to higher interest expense while the year-over-year increase was mainly from the higher interest rate environment.
Fee revenue was $30.9 million in 1Q 2023, relatively flat compared to 4Q 2022, and a decrease of $1.0 million, or 3%, compared to 1Q 2022, primarily due to income from BMT Insurance Advisors in 1Q 2022, which was sold in the second quarter of 2022. Fee revenue was generally consistent with prior quarter across The Bryn Mawr Trust Company of Delaware, Institutional Services, and the AUM-based Private Wealth Management business.
Total noninterest expense(9) was $24.2 million in 1Q 2023, compared to $23.6 million in 4Q 2022 and $23.8 million in 1Q 2022. The quarter-over-quarter increase was primarily driven by salaries, benefits and other compensation.
Net AUM of $8.0 billion at the end of 1Q 2023 increased $0.3 billion compared to 4Q 2022, and decreased $1.0 billion compared to 1Q 2022. The quarter-over-quarter increase was primarily impacted by positive returns in both equity and fixed income markets. The year-over-year decrease was due to market declines and client cash outflows.
|
(9) Includes intercompany allocation of expense and excludes provision for credit losses. |
|
(10) Represents Assets Under Management and Assets Under Administration. |
Cash Connect®
Cash Connect® is a premier provider of ATM vault cash, smart safe and cash logistics services in the United States, servicing non-bank ATMs and retail safes nationwide and supports ATMs for WSFS Bank Customers with one of the largest branded ATM networks in our region.
Selected quarterly financial results and metrics are as follows:
|
(Dollars in millions) |
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
||||||
|
Net revenue(11) |
|
$ |
15.5 |
|
|
$ |
13.9 |
|
|
$ |
10.5 |
|
|
Noninterest expense(12) |
|
|
14.8 |
|
|
|
12.7 |
|
|
|
8.7 |
|
|
Pre-tax income |
|
|
0.6 |
|
|
|
1.2 |
|
|
|
1.8 |
|
|
Performance Metrics |
|
|
|
|
|
|
||||||
|
Cash managed |
|
$ |
1,698 |
|
|
$ |
1,717 |
|
|
$ |
1,863 |
|
|
Number of serviced non-bank ATMs and retail safes |
|
|
34,067 |
|
|
|
33,820 |
|
|
|
36,072 |
|
|
Number of WSFS owned and branded ATMs |
|
|
691 |
|
|
|
686 |
|
|
|
630 |
|
|
ROA |
|
|
0.45 |
% |
|
|
0.65 |
% |
|
|
1.12 |
% |
Cash Connect® reported pre-tax income of $0.6 million for 1Q 2023, a decrease of $0.6 million, compared to 4Q 2022 driven by timing of both insurance-related and certain other operating expenses, and a decrease of $1.2 million compared to 1Q 2022, driven by increased operating costs associated with the rising interest rate environment and costs associated with the growth in the retail safe business. ROA of 0.45% in 1Q 2023 decreased 20bps from 4Q 2022 and decreased 67bps from 1Q 2022, primarily driven by the reasons described above.
Net revenue of $15.5 million in 1Q 2023 was up $1.6 million from 4Q 2022 and up $5.0 million from 1Q 2022 driven by the rising interest rate environment (offset by higher external funding expense) and higher year-over-year managed services volume.
Noninterest expense was $14.8 million in 1Q 2023, an increase of $2.2 million higher compared to 4Q 2022, primarily due to higher external funding expense and the timing impacts noted above, and $6.2 million higher compared to 1Q 2022 driven by higher external funding expense and armored carrier expense year-over-year.
At the end of 1Q 2023, Cash Connect® had approximately $1.7 billion in cash managed with 18% year-over-year growth in retail safe units. Cash Connect® continues to focus on investment in its growing product lines and expand these services across the country, alongside a wide network and strong pipeline of channel partners, retailers, and top-tier financial institutions, in a commitment to improve margin and ROA.
|
(11) Includes intercompany allocation of income and net interest income. |
|
(12) Includes intercompany allocation of expense. |
First Quarter 2023 Earnings Release Conference Call
Management will conduct a conference call to review 1Q 2023 results at 1:00 p.m. Eastern Time (ET) on Tuesday, April 25, 2023. Interested parties may access the conference call live on our Investor Relations website (https://investors.wsfsbank.com). For those who cannot access the live conference call, a replay will be accessible shortly after the event concludes through our Investor Relations website.
Contacts
Investor Relations Contact: Dominic C. Canuso
(302) 571-6833; [email protected]
Media Contact: Rebecca Acevedo
(215) 253-5566; [email protected]
