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This article first appeared on GuruFocus.
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Core Earnings Per Share (EPS): $1.43 for Q4 2025, up 29% year-over-year; $5.21 for full-year 2025, up 19% year-over-year.
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Core Return on Assets (ROA): 1.42% for Q4 2025; 1.39% for full-year 2025.
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Core Return on Tangible Common Equity: 18% for both Q4 and full-year 2025.
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Net Interest Margin (NIM): 3.83% for Q4 2025, down 8 basis points from the previous quarter.
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Core Fee Revenue Growth: Increased 2% quarter-over-quarter and 8% year-over-year.
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Total Gross Loans Growth: 2% quarter-over-quarter or 9% annualized.
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Total Client Deposits Growth: 2% quarter-over-quarter or 10% annualized.
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Noninterest-Bearing Deposits: Grew 6% quarter-over-quarter, representing 32% of total client deposits.
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Net Charge-Offs: Increased 16 basis points to 46 basis points of average loans for Q4 2025.
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Capital Return: $119 million returned in Q4 2025, including $109 million in buybacks.
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Efficiency Ratio Outlook: Expected to be in the high 50s for 2026.
Release Date: January 27, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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WSFS Financial Corp (NASDAQ:WSFS) reported a strong fourth-quarter core earnings per share of $1.43, marking a 29% increase over the prior year.
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The company achieved a core return on tangible common equity of 18% for both the fourth quarter and full-year 2025, indicating robust profitability.
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Net interest margin (NIM) was 3.83% for the quarter, showing resilience despite interest rate cuts.
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Total gross loans grew 2% linked quarter or 9% annualized, driven by broad-based growth across businesses, particularly in commercial and residential mortgage sectors.
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Noninterest-bearing deposits grew 6% linked quarter, now representing 32% of total client deposits, highlighting strong deposit growth and client trust.
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Net interest margin decreased by 8 basis points linked quarter due to rate cuts and a one-time interest recovery in the previous quarter.
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Delinquencies increased by 46 basis points linked quarter, primarily due to several nonperforming and problem assets moving to delinquent status.
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Net charge-offs increased to 46 basis points of average loans, driven by a partial charge-off of a nonperforming land development loan.
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Cash Connect revenue is expected to decline due to interest rates, although this will be offset by reduced expenses.
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Commercial loan losses may remain uneven, indicating potential volatility in asset quality.
Q: Can you discuss the better commercial trends and what is driving strong originations and a positive outlook? A: David Burg, CFO, explained that the first half of the previous year was marked by economic uncertainty, causing small business owners to delay decisions. As clarity improved with legislative developments, the pipeline built up, leading to strong originations and fundings in the fourth quarter. The company expects continued momentum, although not at the same growth rate every quarter.
Q: What are the parameters for capital return, especially regarding buybacks? A: David Burg, CFO, stated that the primary focus is on CET1 and TCE ratios, incorporating AOCI volatility. The company aims to return about 100% of net income annually through buybacks, adjusting based on market conditions and investment opportunities. The strategy is to maintain a multiyear glide path towards capital targets.
Q: How will Cash Connect be impacted by the anticipated rate cuts, and what are the expectations for profitability improvement? A: David Burg, CFO, noted that rate cuts will impact top-line revenue, with an estimated $2.5 million annual impact per 25-basis-point cut. However, margin improvements are expected due to pricing strategies, expense management, and a shift towards higher-margin Smart safes. The focus is on driving margins into the mid-single digits or higher.
Q: What is the outlook for expenses and efficiency ratios? A: David Burg, CFO, mentioned that the efficiency ratio is expected to remain in the high 50s, with strong expense discipline and productivity actions such as real estate optimization and divestiture of non-core businesses. The company aims to invest in the franchise while maintaining cost control.
Q: How does WSFS plan to manage deposit growth and the overall size of the balance sheet? A: David Burg, CFO, explained that the company is focused on growing core client relationships and noninterest-bearing deposits. The securities portfolio will be maintained at current levels, with reinvestments in agency and MBS securities. The goal is to match fund loan growth with deposit growth while managing pricing strategies.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.