WSFS Financial Corporation 1Q 2025 Earnings Release Supplement April 2025 1 Forward Looking Statements & Non-GAAP Forward Looking Statements: This presentation contains estimates, predictions, opinions, projections and other "forward-looking statements" as that phrase is defined in the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, references to the Company's predictions or expectations of future business or financial performance as well as its goals and objec ...

Financial Data and Key Metrics Changes - WSFS Financial Corporation reported core earnings per share of $1.13, core return on assets (ROA) of 1.29%, core pre-provision net revenue (PPNR) of $104.6 million, and core return on tangible common equity of 16.97%, all showing improvements from the prior quarter [5][6][14] - The core net interest margin expanded by 8 basis points to 3.88%, with total funding costs reduced by 15 basis points to 1.77% [6][7] - Year-over-year, the net interest margin increased by 4 basis points despite absorbing 100 basis points of interest rate cuts [7] Business Line Data and Key Metrics Changes - Core fee revenue grew by 6% year-over-year, driven by a 19% increase in Wealth and Trust services [7] - Institutional Services and Bryn Mawr Trust Company of Delaware showed strong year-over-year growth, attributed to higher deal flow [8] - Client deposits declined by 1% linked quarter but increased by 4% year-over-year, with non-interest bearing deposits up 6% year-over-year [11][12] Market Data and Key Metrics Changes - The loan to deposit ratio remained stable at 77%, providing flexibility for future growth [12] - Total net credit costs increased to $17.6 million, with net charge-offs at $24.6 million, primarily due to a charge-off of a non-performing office-related loan [12][13] Company Strategy and Development Direction - The company announced a 13% increase in the quarterly dividend to $0.17 per share and an additional share repurchase authorization of 10% of outstanding shares [15] - A medium-term target CET1 ratio of 12% was established, with a gradual glide path over two to three years [15][66] Management's Comments on Operating Environment and Future Outlook - Management noted that clients are cautious about expansion due to macroeconomic uncertainties, leading to postponed investments [40][42] - The overall credit quality remains stable, with no significant red flags identified in delinquency metrics [45] - Management expressed confidence in the ability to manage net interest margin compression through various tools, including deposit beta management and wholesale funding optimization [56][60] Other Important Information - The company returned $62.6 million of capital in the first quarter, including $53.8 million in buybacks and $8.8 million in dividends [14] - The capital ratios remain strong, with a CET1 of 14.1% and a tangible common equity (TCE) of 8.63% [14] Q&A Session Summary Question: Why was there no updated guidance in the presentation? - Management stated that it is typical to update guidance after the second quarter due to the volatility of the environment [22][23] Question: What is the outlook for net charge-offs? - Management indicated that the increase in charge-offs was due to a one-off item and that the overall portfolio is performing as expected [24][26] Question: How should expenses be viewed going forward? - Management noted that the first quarter expenses were lower than the run rate, estimating a future run rate around $160 million [33] Question: What is the outlook for commercial growth? - Management observed that clients are cautious about expansion due to market volatility, but the pipeline remains consistent [40][42] Question: How are deposit beta expectations evolving? - Management exceeded their initial goal for deposit beta, reaching 38% this quarter, and will continue to push for higher rates [56][63] Question: What is the timeframe for the CET1 target? - Management indicated a two to three-year glide path for the CET1 target, depending on macroeconomic conditions [66][68] Question: How is the company addressing potential impacts from new tariff policies? - Management is monitoring the situation closely but has not made changes to underwriting criteria yet due to the uncertainty [78][79] Question: What needs to happen for net growth to resume? - Management emphasized that greater certainty in the macro environment would help spur net growth, as clients are currently in a holding pattern [83][84]

Core Insights - WSFS Financial reported revenue of $256.11 million for Q1 2025, a 2% year-over-year increase, with EPS of $1.13 compared to $1.11 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate by 1.76%, while the EPS exceeded the consensus estimate by 8.65% [1] Financial Performance Metrics - Efficiency Ratio stood at 59.2%, better than the average estimate of 63.5% from two analysts [4] - Net Interest Margin was reported at 3.9%, slightly above the average estimate of 3.8% [4] - Average Balance of Total Interest Earning Assets was $18.38 billion, lower than the estimated $18.76 billion [4] - Total Non-Interest Income was $80.90 million, below the estimated $86.42 million [4] - Net Interest Income reached $175.22 million, surpassing the average estimate of $174.29 million [4] Stock Performance - WSFS shares returned -3.5% over the past month, outperforming the Zacks S&P 500 composite's -5.1% change [3] - The stock holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Viewpoint - WSFS Financial reported quarterly earnings of $1.13 per share, exceeding the Zacks Consensus Estimate of $1.04 per share, and showing a slight increase from $1.11 per share a year ago, indicating an earnings surprise of 8.65% [1][2] Financial Performance - The company posted revenues of $256.11 million for the quarter ended March 2025, which was 1.76% below the Zacks Consensus Estimate, compared to $251.14 million in the same quarter last year [2] - Over the last four quarters, WSFS has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - WSFS shares have declined approximately 3.6% since the beginning of the year, while the S&P 500 has seen a decline of 8.6% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating expectations for it to outperform the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.10 on revenues of $267.46 million, and for the current fiscal year, it is $4.48 on revenues of $1.07 billion [7] - The estimate revisions trend for WSFS is favorable ahead of the earnings release, which may influence future stock movements [6][7] Industry Context - The Financial - Savings and Loan industry, to which WSFS belongs, is currently ranked in the top 28% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8]

Financial Performance - WSFS reported 1Q 2025 EPS of $1.12, a 2.8% increase from $1.09 in 4Q 2024[2] - Total net revenue for 1Q 2025 was $256.1 million, compared to $261.5 million in 4Q 2024[2] - Core fee revenue grew 6% year-over-year, driven by a 19% increase in the Wealth and Trust segment[6] - Core fee revenue decreased to $80.9 million, down 3% from $83.2 million in 4Q 2024, but increased 6% compared to 1Q 2024[27] - Adjusted net income (non-GAAP) attributable to WSFS for Q1 2025 was $66,137,000, compared to $67,330,000 in Q1 2024[56] - Return on average tangible common equity (non-GAAP) was 16.91% in Q1 2025, up from 18.76% in Q1 2024[56] Income and Expenses - Net interest income for 1Q 2025 was $175.2 million, down 2% from $178.2 million in 4Q 2024[2] - Noninterest expense decreased to $151.8 million in Q1 2025, down from $169.1 million in Q4 2024[48] - Core noninterest expense decreased to $151.5 million, down 9% from 4Q 2024, but increased 3% compared to 1Q 2024[29] - The efficiency ratio improved to 59.16% in Q1 2025, compared to 64.57% in Q4 2024[50] - Core efficiency ratio (non-GAAP) improved to 59.0% in Q1 2025 from 58.6% in Q1 2024[55] Asset and Equity Management - Total assets decreased to $20,548,950 thousand as of March 31, 2025, from $20,814,303 thousand at December 31, 2024, representing a decline of 1.28%[51] - Total stockholders' equity increased by $81.9 million, or 3%, during 1Q 2025, primarily due to quarterly earnings of $65.9 million[34] - The equity to asset ratio improved to 13.00% from 12.44%[51] - The common equity Tier 1 capital ratio increased to 14.10% from 13.81%[51] - Tangible common book value per share increased to $29.25 in Q1 2025 from $24.52 in Q1 2024[55] Loan and Deposit Activity - Total client deposits decreased by $150.7 million, or 1%, compared to December 31, 2024[14] - Total commercial loans and leases grew by $82.5 million, or 1%, compared to March 31, 2024[11] - The loan-to-deposit ratio was 77% at March 31, 2025, indicating capacity for future loan growth[17] - Net loans and leases slightly decreased to $12,975,323 thousand from $13,045,917 thousand, a reduction of 0.54%[51] - Total client deposits decreased to $16,879,061 thousand from $17,029,808 thousand, a decline of 0.88%[51] Credit Quality - Problem assets increased to $683.7 million, up 6% from $645.0 million as of December 31, 2024, and up 19% from $573.2 million as of March 31, 2024[21] - Delinquencies rose to $147.7 million, an increase of $25.9 million or 21bps compared to December 31, 2024, primarily due to the C&I portfolio[22] - Net charge-offs increased to $24.6 million, or 76bps of average gross loans, driven by a $15.9 million charge-off of a nonperforming C&I loan[23] - Nonperforming assets decreased to $116.9 million, down $10.5 million compared to December 31, 2024, primarily due to the aforementioned charge-off[24] - The provision for credit losses increased to $17.4 million in Q1 2025, compared to $15.1 million in Q1 2024[48] Dividends and Share Repurchase - The board approved a 13% increase in the quarterly dividend to $0.17 per share[7] - WSFS repurchased 1,027,214 shares at an average price of $52.37, totaling $53.8 million[9] - The quarterly cash dividend was increased by 13% to $0.17 per share, with an incremental share repurchase authorization of 10% of outstanding shares[32] Operational Metrics - The number of associates (FTEs) increased to 2,336 in Q1 2025 from 2,241 in Q1 2024[53] - The number of serviced non-bank ATMs and smart safes declined by 7,817 units, or 17% compared to Q1 2024, primarily due to a shift away from lower margin units[42] - The number of WSFS owned and branded ATMs increased to 580 in Q1 2025 from 583 in Q1 2024[53] Other Financial Metrics - Net profit margin improved to 7.38% in Q1 2025, up from 3.18% in Q1 2024, driven by pricing actions and a shift to higher margin services[41] - Cash Connect's net revenue for Q1 2025 was $21.5 million, a decrease of 10.8% from $24.1 million in Q1 2024[41] - Wealth and Trust pre-tax income decreased to $29.4 million, down 11% from 4Q 2024, primarily due to a decline in net interest income[37] - Net AUM was $8.9 billion at the end of 1Q 2025, a decrease of $0.2 billion, or 2%, compared to 4Q 2024[39] - Unrealized losses on securities available for sale decreased to $(467,752,000) in Q1 2025 from $(539,939,000) in Q1 2024[53]

Core Insights - WSFS Financial is expected to report quarterly earnings of $1.04 per share, reflecting a decline of 6.3% year over year, while revenues are forecasted to increase by 3.8% to $260.71 million [1] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analysts' assessments [1][2] Earnings Estimates and Metrics - Analysts predict an 'Efficiency Ratio' of 63.5%, up from 59.3% in the same quarter last year [4] - The 'Net Interest Margin' is estimated to remain steady at 3.8%, consistent with the previous year's figure [4] - The 'Average Balance - Total interest earning assets' is projected to reach $18.76 billion, an increase from $18.37 billion year over year [5] - 'Total Non-Interest Income' is expected to be $86.42 million, up from $75.86 million in the same quarter last year [5] - 'Net Interest Income' is forecasted at $174.29 million, slightly down from $175.28 million reported in the same quarter last year [6] Stock Performance - Over the past month, WSFS shares have returned -6.2%, compared to a -6.6% change in the Zacks S&P 500 composite [7] - WSFS currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance in the near future [7]

Core Viewpoint - WSFS Financial has experienced a decline of 10.6% in its stock price over the past two weeks, but the formation of a hammer chart pattern suggests a potential trend reversal as buying interest may be emerging to counteract selling pressure [1][2]. Technical Analysis - The hammer chart pattern indicates a minor difference between opening and closing prices, with a long lower wick suggesting that the stock found support after hitting a new low during a downtrend [3][4]. - This pattern signals that bears may have lost control, and the success of bulls in preventing further price declines indicates a possible trend reversal [4]. Fundamental Analysis - Recent upward revisions in earnings estimates for WSFS serve as a bullish indicator, correlating strongly with near-term stock price movements [6]. - The consensus EPS estimate for the current year has increased by 0.2% over the last 30 days, reflecting analysts' agreement on the company's potential for better earnings [7]. - WSFS holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [8].

Company Overview - WSFS Financial shares increased by 7% to close at $49.24, supported by high trading volume, contrasting with a 7.9% decline over the past four weeks [1] - The stock price surge followed Trump's announcement of a 90-day pause on reciprocal tariffs for most trading partners, excluding China, which alleviated trade war concerns and improved the economic outlook [2] Earnings Expectations - WSFS Financial is projected to report quarterly earnings of $1.04 per share, reflecting a year-over-year decrease of 6.3%, while revenues are expected to reach $260.71 million, an increase of 3.8% from the previous year [3] - The consensus EPS estimate for WSFS has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without earnings estimate revisions [4] Industry Context - WSFS is categorized under the Zacks Financial - Savings and Loan industry, where Northfield Bancorp (NFBK) also operates, having closed 4.5% higher at $10.29, despite a -10.1% return over the past month [4] - Northfield's consensus EPS estimate for its upcoming report is $0.18, representing a 20% increase from the previous year, and it currently holds a Zacks Rank of 3 (Hold) [5]

Core Viewpoint - WSFS Financial (WSFS) is experiencing significant selling pressure, with a 6.9% decline over the past four weeks, but is positioned for a potential trend reversal as it enters oversold territory, supported by analyst expectations of better-than-previously predicted earnings [1] Group 1: Technical Indicators - The Relative Strength Index (RSI) is a key technical indicator used to determine if a stock is oversold, with a reading below 30 typically indicating oversold conditions [2] - WSFS has an RSI reading of 29.64, suggesting that heavy selling may be exhausting itself, indicating a potential bounce back towards equilibrium in supply and demand [5] Group 2: Fundamental Indicators - There is a strong consensus among sell-side analysts that WSFS will report better earnings, leading to a 0.2% increase in the consensus EPS estimate over the last 30 days, which typically correlates with price appreciation [7] - WSFS holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a strong potential for a turnaround [8]

Loan Portfolio Composition - The loan portfolio composition as of December 31, 2024, includes commercial and industrial loans at $2.66 billion (20.4%), owner-occupied commercial loans at $1.97 billion (15.2%), and commercial mortgages at $4.03 billion (31.0%) [58] - The total gross loans and leases increased to $13.19 billion in 2024 from $12.77 billion in 2023, reflecting a growth of approximately 3.3% [58] - The allowance for credit losses was $195.28 million, representing 1.5% of total loans and leases for both years [58] - The commercial mortgage portfolio was $4.0 billion, with the largest property types being retail-related ($1.3 billion), residential multi-family ($1.1 billion), and office ($0.6 billion) [66] - The commercial and industrial and owner-occupied commercial loan portfolios totaled $4.6 billion, accounting for 35% of the total loan and lease portfolio [68] - The commercial small business leases portfolio was $647.5 million, or 5% of total loans, with average deal sizes of approximately $29,000 [70] - At December 31, 2024, $1.5 billion was committed for construction loans, with $0.8 billion outstanding [67] - The residential loan portfolio included loans with loan-to-value ratios of up to 80%, with approximately $146.2 million in loans exceeding this ratio without private mortgage insurance [71] Consumer Loans - As of December 31, 2024, the total consumer loans amounted to $2.086 billion, an increase from $2.012 billion in 2023, representing a growth of approximately 3.7% [81] - Home equity lines of credit outstanding totaled $535 million, while installment loans reached $224.8 million, together accounting for about 37% of total consumer loans [80] - In 2024, the company originated $433.9 million in residential loans, up from $343.7 million in 2023, marking an increase of approximately 26.3% [83] - The company originated $2.0 billion in commercial and commercial mortgage loans in 2024, a decrease from $2.4 billion in 2023, reflecting a decline of about 16.7% [82] Financial Performance - For the year ended December 31, 2024, the net income attributable to the Company was $263.671 million, with a core ROA of 1.26% [104] - The tangible common equity to tangible assets ratio was 8.08% as of December 31, 2024, with tangible assets amounting to $19.826 billion [104] - Fee income from lending activities generated $7.9 million in 2024, compared to $8.8 million in 2023, showing a decrease of approximately 10.2% [87] Regulatory Environment - The Company is subject to extensive federal and state banking regulations, impacting its profitability and operational decisions [106] - The Federal Reserve conducts regular examinations of the Company, which influence its risk management and financial condition ratings [112] - The Company is a grandfathered unitary thrift holding company, allowing it to acquire non-banking companies without significant restrictions [117] - The Dodd-Frank Act requires the Company to act as a source of financial strength to the Bank during financial distress [119] - The Company relies on debt issuances and dividends from its Bank and other subsidiaries for cash flow, with federal regulations impacting dividend payments [121] - The Federal Reserve mandates that holding companies should only pay dividends from available earnings and maintain a strong capital position [121] - The regulatory capital requirements include a minimum common equity Tier 1 capital ratio of 4.5% of risk-weighted assets and a total capital ratio of at least 8% [130] - As of December 31, 2024, the Bank met all requirements for being classified as "well-capitalized" under regulatory standards [135] - The Company must file a notice with the Federal Reserve at least 30 days prior to any capital distribution, including dividends [136] - The OCC can prohibit capital distributions if deemed unsafe or unsound, ensuring the financial stability of the institution [137] Deposit Insurance and Risk Management - The maximum deposit insurance amount per depositor is $250,000, providing a safety net for customers [140] - The Bank is not currently in default on any FDIC assessment payments, allowing for continued capital distributions [138] - The capital ratios for the Bank and the Company indicate levels above the regulatory minimums, ensuring compliance and operational flexibility [133] - The FDIC's current risk-based premium system has initial assessment rates ranging from 3 to 30 basis points on insured deposits, with a designated reserve ratio of 2% for the Deposit Insurance Fund (DIF) [141] - The FDIC's restoration plan aims to restore the DIF reserve ratio to at least 1.35% by September 30, 2028, due to the DIF reserve ratio falling below the statutory minimum [141] - The Bank's deposit insurance costs have increased by 2 basis points as a result of the FDIC's final rule adopted on October 18, 2022 [142] - The Bank received a "satisfactory" rating in its most recent Community Reinvestment Act performance evaluation [160] Interest Rate Sensitivity - Total interest-rate sensitive assets amount to $19,311,916,000, with $9,391,543,000 maturing in less than one year [305] - Total interest-rate sensitive liabilities are $9,077,220,000, resulting in a positive interest-rate sensitive gap of $10,234,696,000 [305] - The one-year interest-rate sensitive assets to interest-rate sensitive liabilities ratio is 105.28% [305] - The one-year interest-rate sensitive gap represents 2.26% of total assets [305] - The allowance for credit losses (ACL) is established based on historical loss experience and current economic conditions, reflecting significant judgment [312] - The ACL may fluctuate due to changes in economic conditions, borrower circumstances, and macroeconomic variables [314] - Interest rates have a greater impact on the company's performance than inflation due to the monetary nature of its assets and liabilities [308] - The company estimates that 75% of money market deposits and 50% of savings and interest-bearing demand deposits are sensitive to interest rate changes [307] - The interest-sensitivity gap analysis is subject to variations as the company adjusts its interest sensitivity position throughout the year [306] Other Financial Activities - The Company issued $150.0 million of senior notes due 2030 with a fixed coupon rate of 2.75% until December 15, 2025, and a variable rate thereafter [100] - The Company assumed $70.0 million in subordinated notes due 2027, currently bearing interest at a variable rate of 6.67% [101] - The Company recorded investments in the RBC Trusts' common securities of $0.4 million each as investments in unconsolidated entities [99] - The Company repurchased three loans in 2024 for $0.7 million, one loan in 2023 for $0.8 million, and two loans in 2022 for $0.8 million [78]