Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
|---|
| Core fee revenue grew 9% linked quarter and was a record quarterly high |
| WSFS performed very well in the third quarter as we continue to demonstrate the strength and diversity of our business model |
| We did have a strong quarter in our capital markets area, which helped drive up this quarter’s fee revenue |
| Our balance sheet remains strong, including significant liquidity capacity and regulatory capital levels that continue exceed well capitalized |
| The net interest margin remained very solid at 4.08%, reflecting the impact of the Fed hike in short term rates in July, expected increase in deposit betas and very modest deposit attrition |
| Obviously, quite strong in the quarter |
| But, certainly, we've acquired some very strong relationships and those we want to protect |
| So that creates opportunity for us |
| We have a strong focus on full relationships in the commercial space, which should give us some ability to offset, as I said, some of the lingering absorption of the excess liquidity in the consumer book |
| Our performance was driven by loan growth across all our commercial and consumer segments |
| Obviously, a good environment for you guys to continue to take share from competitors, given your positioning |
| NIM was favorably impacted by about 5 basis points due to higher purchase loan accretion and maturity events in a few reverse mortgages |
| That pipeline is relatively strong |
| So that is a tailwind in our loan growth |
| But we're seeing, as we said in the supplement, about $1 billion of runoff in that portfolio over the next two years to kind of look at that as $1 billion of runoff that can be redeployed into our loan portfolio and a nice pickup in yields on that transition and mix shift |
| Core EPS of $1.23 and core ROA of 1.46% represented growth from the second quarter of 6% and 4%, respectively |
| But, yeah, assuming all else equal, I would say, second half of the year, we'd start to see some lift in the NIM |
| Our book is 55% variable, so we would benefit from a Fed increase, but I would not predict higher yields – significantly higher yields going forward after that |
| Manuel Navas And you talked about a pipeline of construction and there was some nice construction gains in the quarter |
| The core fee revenue ratio increased to 28.60% |
| So we do believe we have the ability to, where necessary, increase some rates to manage a relationship |
| Yes, it remains an opportunity |
| But most of where we're seeing our growth is from taking market share and, to a lesser degree, expanding existing relationships |
| Arthur Bacci With our competitive positioning, we're the natural landing spot for talented relationship managers, particularly from larger banks |
| Growth came from each of our major business lines including wealth and trust, Cash Connect, mortgage banking, capital markets, and the core banking business |
| So we're very active in CNI calling and prospecting, very selective in CRE, but do have a tailwind of fundings coming from commitments that were extended last year and were underwritten in a higher rate environment and very sensitized to the rate environment |
| Overall, we remain on track to achieve the full-year outlook, which assumes no additional short term rate hikes and modest GDP growth in Q4 |
| And you've seen that as the relationship manager group has expanded over the last several years under Steve's leadership |
| But the real opportunity for us is C&I |
| So we get a lot of inbound calls, but the bar for us is definitely higher in terms of the quality of people that we would bring over |
| Statement |
|---|
| Consistent with the slowing economy and corresponding credit normalization, we did see a negative uptick in our asset quality metrics |
| Most of this variance was driven by two unrelated C&I credits that moved to non-performing status due to operating challenges specific to those businesses |
| From a margin perspective, cash balances came down quite a bit this quarter |
| But as we start to think about – you guys have – particularly given your low loan-to-deposit ratio, but also we're seeing maybe a tougher credit environment |
| Problem asset migration reflected downgrades in the commercial sectors, including office |
| Can we see overall fee income come down some in the fourth quarter, just given the guidance of mid-single digits for the year? And if so, was that driven by any business line in particular? Arthur Bacci I would tell you that the fee income has a little bit of noise at times just because of the income we generate from some BOLI derivative cost |
| I think our mortgage-backed securities portfolio had been elevated because we had the excess liquidity over the last few years, and we're allowing that to run down to more traditional levels around 20% or so and that's going to take a few years |
| It's the result of some of our competitors being distracted and some of the service issues companies are experiencing from their incumbent banks |
| And I guess that was a driver of the non-interest bearing balances being down linked quarter |
| Inclusive of these downgrades, the office loan portfolio has 6% problem loans, zero delinquency and less than $1 million in NPAs |
| I wouldn't expect it to continue to grow at 9% |
| We're not in the position of needing to get additional liquidity |
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