WSFS Financial’s third quarter results were shaped by shifting loan portfolio dynamics and a mixed performance across business lines. While the company’s revenue declined compared to last year and missed Wall Street’s expectations, non-GAAP earnings per share surpassed analyst forecasts. Management pointed to strong performance in its core home lending and consumer loans, as well as improvements in asset quality driven by strategic exits from noncore portfolios. CEO Rodger Levenson stated that tangible book value per share increased 12%, and CFO David Burg highlighted, “We have good momentum and good progress across asset quality metrics.”
Is now the time to buy WSFS? Find out in our full research report (it’s free for active Edge members).
WSFS Financial (WSFS) Q3 CY2025 Highlights:
- Revenue: $270.5 million vs analyst estimates of $268.1 million (1.1% year-on-year growth, 0.9% beat)
- Adjusted EPS: $1.40 vs analyst estimates of $1.25 (11.8% beat)
- Adjusted Operating Income: $103.8 million vs analyst estimates of $106.4 million (38.4% margin, 2.5% miss)
- Market Capitalization: $2.97 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From WSFS Financial’s Q3 Earnings Call
- Russell Elliott Gunther (Stephens Inc.) asked about the company’s base case for returning capital to its target level, especially given high profitability. CFO David Burg explained that WSFS could sustain buybacks at or above 100% of net income for several years, adjusting as needed based on growth and investment opportunities.
- Russell Elliott Gunther (Stephens Inc.) inquired about reserve levels amid a volatile macro backdrop. Burg noted that while macro indicators suggest capacity for reserve releases, WSFS is maintaining a conservative approach due to economic uncertainties, including potential rate and labor market volatility.
- Christopher Marinac (Janney Montgomery Scott) sought clarity on growth drivers in Wealth and Trust, asking whether new account openings or increased activity with existing clients were more significant. Management emphasized strong new account growth, particularly in institutional services and BMT of Delaware, alongside higher transaction volumes.
- Sun Young Lee (TD Bank) questioned the impact of declining rates on the Cash Connect business. Burg stated that while lower rates reduce fee revenue, profitability improves due to lower associated costs, and margin expansion is also being driven by pricing leverage and operational efficiencies.
- Kelly Motta (KBW) asked about the company’s ability to manage net interest margin amid further rate cuts. Burg detailed the tools available—including deposit repricing, hedging, and reinvestment strategies—to offset margin compression, and provided detail on the composition of floating-rate loans and indexed deposits.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will be monitoring (1) the pace of loan growth and the extent to which new originations in home lending and commercial segments offset runoff in legacy portfolios, (2) continued improvements in asset quality and the sustainability of lower credit costs, and (3) the execution of capital return plans, including share buybacks relative to earnings and capital levels. The impact of evolving interest rates and management’s ability to adapt deposit pricing strategies will also be key indicators of business momentum.
WSFS Financial currently trades at $52.98, in line with $52.75 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free for active Edge members).
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