WSFS FINANCIAL CORP — Call Transcript 2026

Hello everyone, and thank you for joining us. Welcome to WSFS Financial Corporation first quarter earnings call. After today's prepared remarks, we'll host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I'd now like to turn the call over to your host for today, Mr. David Burg, Chief Financial Officer. Sir, you may begin. Thank you very much. Good afternoon, and thank you everyone for joining our first quarter 2026 earnings call. Our earnings release and earnings release supplement, which we will refer to on today's call, can be found in the investor relations section of our company website. With me on this call is Rodger Levenson, Chairman, President, and CEO. Prior to reviewing our financial results, I would like to read our safe harbor statement. Our discussion today will include information about our management's view of our future expectations, plans, and prospects that constitute forward-looking statements. Actual results may differ materially from historical results or those indicated by these forward-looking statements due to risks and uncertainties, including, but not limited to, the risk factors in our annual report on Form 10-K and our most recent quarterly reports on Form 10-Q, as well as other documents we periodically file with the Securities and Exchange Commission. All comments made during today's call are subject to the safe harbor statement. I will now turn to our financial results. WSFS had a strong start to 2026, continuing to demonstrate the strength of our franchise and diverse business model. Our first quarter results included a Core EPS of $1.68, Core ROA of 1.65%, and Core Return on Tangible Common Equity of 20.7%, which are all up versus the prior quarter and prior year. On a year-over-year basis, core net income increased 35% and Core PPNR increased 10%, resulting in Core EPS growth of 49% and tangible book value per share growth of 15%. These results include the previously disclosed loan recovery of $15.7 million. Excluding this recovery, Core EPS was $1.45, which is up 28% year-over-year, and Core ROA was 1.43%, which is up 14 basis points year-over-year. Core results for the first quarter exclude two items related to the sales of real estate properties, as we continue to optimize our office footprint and bring more associates together in fewer locations. These items resulted in a $2.2 million negative impact to net income and $0.04 impact to EPS. Net interest margin of 3.83 was flat, linked quarter, while absorbing the interest rate cuts that occurred in the fourth quarter. We continue to successfully reprice our deposits, and this margin reflects a reduction of 12 basis points in total client deposit costs to 1.33%. Our interest-bearing deposit beta was 46% for the quarter, an increase relative to the prior quarter. Core fee revenue, which represents nearly a third of total revenue, grew 11% year-over-year. This was driven by broad-based growth across our fee businesses and led by Wealth and Trust, which grew 25% year-over-year. Within Institutional Services, Corporate Trust, which performs trustee and agency services for mortgage-backed and asset-backed securitizations, and Global Capital Markets, which performs trustee and agency services for distressed debt and bankruptcies, were each up over 40% year-over-year as we continue to win new mandates and capture market share. The Bryn Mawr Trust Company of Delaware, our personal trust business, also delivered very strong year-over-year growth of 27%, driven by continued new account and client growth. In addition to Wealth and Trust, we also had other businesses that delivered strong double-digit growth, including capital markets within our commercial division and mortgage banking. Cash Connect fees declined quarter-over-quarter due to the impact of interest rate cuts and lower volumes. The business delivered a strong profit margin of 15%, more than doubling its profit margin year-over-year. Client deposits increased 5% linked-quarter, driven by growth in commercial and trust. While some deposits in both of these businesses are transactional and may be short term, we continue to see solid momentum. On a year-over-year basis, our deposits are up over 9%, driven by growth across trust, commercial, and private wealth management. Importantly, non-interest deposits grew 14% linked quarter and now represent 34% of our total deposits, up from 29% in the first quarter of last year. Gross loans were up slightly linked quarter. In commercial, strong momentum in C&I lending was partially offset by elevated payoffs in commercial mortgages. Annualized C&I growth was 7% linked quarter, driven by robust fundings. We also saw strong momentum in small business banking, which had annualized growth of 11% linked quarter. In consumer, despite seasonal trends, we continue to see solid originations in residential mortgage, which were up over 70% year-over-year. Residential mortgage and WSFS-originated consumer loans had annualized growth of 3% linked quarter and are up 14% year-over-year. Turning to asset quality, we saw a meaningful improvement across delinquencies and problem assets. Delinquencies are down 32% year-over-year, and problem assets are down 26% year-over-year. Nonperforming assets, which are down 25% year-over-year, increased, linked-quarter, driven by 2 loans, a C&I loan and a multifamily loan, both of which are well secured. Net recoveries for the quarter were $3.5 million as the previously disclosed $15.7 million recovery more than offset the charge-offs. Excluding the impact of this recovery, net charge-offs were $12.2 million, which is a 19% decrease from the prior quarter. During the quarter, we continued to execute on our capital return framework and returned $94 million of capital, including $85 million in buybacks, which equates to 2.5% of our outstanding shares. Since the beginning of 2025, WSFS has repurchased approximately 12% of our outstanding shares. In addition, the board approved an 18% increase in the quarterly dividend to $0.20 per share, along with an additional share repurchase authorization of 15% of our outstanding shares as of quarter-end. This brings our total authorization to 19% of outstanding shares, reflecting our intention to continue to execute on our capital return framework and maintain an elevated level of buybacks in line with the previously communicated targets and framework. As shown on slide 11 of the supplement, we updated our annual outlook for net charge-offs as a result of the recovery. Our new outlook is now 25-35 basis points for the year, down from the previous outlook of 35-45 basis points. As part of our typical process, we will provide an updated full-year outlook when we present our 2Q results in July. We're pleased with these results to start the year, and we remain committed to delivering high performance. We will now open the line for questions. We'll now begin the question and answer session. Please limit yourself to one question and follow-up questions. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you're muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Russell Gunther at Stephens. Your line is open. Please go ahead. Hey, good afternoon, guys. Good afternoon. Hey, Russell. Hey, Rodger. Hey, David. I'd like to start on the deposit growth, please. If we could touch on just the overall sustainability. Would love to get some incremental color in terms of the Wealth and Trust vertical. Maybe just parsing the drivers of growth here between the impact of market share gains versus the comment some of this is short-term and transactional in nature. Yep. Sure, Russell. Happy to address that. Thanks for the question. As you know, as you saw, our deposit growth was very strong this quarter. As we noted in our remarks, we did have some elevated transactional deposits at the end of the quarter, and those were both in commercial and trust. Having said that, we do feel like we continue to have momentum across these businesses and continue to have momentum in our deposit growth. Certainly would not take this quarter and extrapolate it out, in terms of the growth rate for the year. We're very pleased with the results, but not something that we feel is sustainable, even though we feel like we're strategically well-positioned. For example, when you look at the trust business, and by the way, two-thirds of the growth was really driven in trust. You can think about it in one-third in commercial of those deposits. When you think about our trust business, it is a combination of both strong growth in the market as well as our ability to take share and grow faster than the market. We are benefiting from strong market growth there, but in addition, continuing to take share on top of that. I would also add, Russell, that- Sure. Yeah, I would just add one comment. I think it's worth calling out that we are seeing more deposit competition for sure, really across all the businesses. That's in commercial and consumer. That pressure is going to continue to be there. Again, we feel like we're well-positioned competitively. Excellent. Thank you for that. My second question would just be to kind of parse your original 2026 guide, where you have 3 rate cuts embedded in there, the environment looking more like probably none. Could you just maybe sensitize to that or walk us through some of the puts and takes? Obviously, a bit of an asset-sensitive position on the margin. Maybe Cash Connect overall profitability diminishes a bit, but what impact does removing those 3 cuts have on that ROA target of 140 ±? Yep. Yeah. One is, as I mentioned when we come out in July, as you know the rates have been very volatile, and the expectations have changed a lot. We'll see what happens in the back half of the year. When we update our outlook, we will certainly provide kind of a more clear picture. Clearly, the March cut didn't happen, and as you noted, we are asset sensitive, so that does provide a little bit of a tailwind for us. What we had said in the past, what I had said is that generally kind of about two basis points per rate cut across the year was the cost to us of the rate cut. I would expect the same the other way. I think it is important to note, and I'll come back to my question on competition. We are seeing more deposit competition really across the board, more pricing competition. That's both in commercial and consumer across businesses. I think that's definitely something that's in the market. We have a number of promotional products out there as we continue to try to grow clients and win market share. Putting that all together, we do have a bit of a tailwind because of not having the cuts, but there are also other puts and takes there. Putting that all together, I think the current rate where we're at is probably a good place to be. The other thing I would note is just, as always in the first quarter, just because of the technical nature of the seasonality, just that the NIM is always a bit higher. Yeah. Okay. Understood. Thank you guys for taking my questions. Thanks, Russell. The next question comes from Janet Lee at TD Cowen. Your line is open. Good afternoon. Hi, good afternoon. The total loan growth on a period end basis was muted, but it looks like the commentaries around C&I utilization and pipelines are pretty strong, and a lot of that growth seems to have been offset by some CRE payoffs and partnership consumer loans. As we think about the loan growth in the coming quarters, how should we think about the cadence of partnership consumer loan runoffs as well as the paydown impact? Should we see a pickup in loan growth? Yeah. I'll start off. Yeah, exactly as you summarized it, I think we're very happy and pleased with the fundings and the momentum that we have on the C&I side of the commercial business, and I'll touch on both commercial and consumer. If you look at it across the last two quarters, we had annualized growth in C&I of 7% this quarter. Last quarter, we had annualized growth of 15%. When you look at the fundings across both of those quarters, they've been really strong and up materially over where they were a year ago. We feel good about the C&I momentum. As you know, C&I is really our primary product with respect to commercial lending. That's what we want to lead with. That's the product that also delivers our deposit growth and the broader relationship as well as transactional activity, and so that is the product that we're very focused on. When you look across the two quarters, we had good momentum. We had increased line utilization in both quarters, which is a good indication of client activity, and the pipeline is pretty healthy. We are contending with a higher rate of payoffs in commercial real estate. Some of that has also helped our decline in problem assets. Some of them had lower yields, and so we were happy to see those run off. It's something that we will have to contend with as we are dealing with a bit of an elevated maturity pipeline with respect to commercial real estate. What I would add also with commercial real estate is we are, as we've said before, we are primarily a recourse lender. We're very selective in how we do commercial real estate and the type of clients that we do business with, and so we're really focused on accretive growth and not just growth for growth's sake. I think this is a pattern. The pattern that you're seeing this quarter is we were pleased with our momentum. There's certainly pockets where we'd like to see a little bit more growth, but overall, we feel good about the momentum. For example, small business which had an uneven year last year, also had a very solid quarter, 11% annualized growth. We feel good about that, where we are. Yeah. This is Rodger. I would just add to that. I think over time on the consumer side, the Spring EQ portfolio will continue to roll off consistent with what you saw this quarter. It may be impacted by rate cuts a little bit, so there's a little bit of refi risk in that. But that's sort of I think a pretty good going rate of attrition there. I think our goal is, and some of the progress that you've seen in our home lending business, is to offset as much as possible of that growth and hopefully over time overcome that with our home lending products that we have. The commercial business will operate exactly as David has said. We're obviously taking a very hard look at those maturing loans along the criteria that David outlined. Much of that is acquired loans, and we want to make sure that to the extent we're going to extend those loans or refinance those loans, they fit our overall criteria from an asset quality and return standpoint. That's just a little bit of kind of longer picture of what you should see. C&I should be the primary driver, and then hopefully the growth of the home lending to offset the continued runoff of Spring EQ. Got it. Thank you. That's very helpful. Not to put words in your mouth, but if I were to interpret your prior commentary on net interest margin earlier, with no rate cuts, your earning asset yields would obviously benefit more, but you're expecting deposit costs to go up versus the 133 level in the first quarter. That mitigates that result in flattish NIM from here. Is that the right way to think about it? Yeah, Janet, I wouldn't say necessarily go up. The way I would think about it is, as you know, with the rate cuts we would have repricing in our loans and so our yields have been coming down, which we've been offsetting with our deposit decreases. In the absence of the rate cuts, we would see the stabilization in the loan yields. On the deposit pricing side, we've had good repricing, but what I was suggesting with my earlier comments is we have seen more price competition come into the market. When you look at our deposit prices, whether that's the CDs that we have, for example, a flagship CD is at 3%, our money market product is also at 3%, we're definitely far away from the high point in the market. We see many competitors who did not move in the last rate cut, and some competitors that have held or increased their pricing in some of these products. I think there's definitely more deposit competition in the market. We still have a little bit of a repricing tailwind from some of the maturing CDs that we have, but because our CDs have been shorter end, shorter term, a lot of that repricing is already behind us. That's why, really, I said kind of the NIM environment, there are puts and takes, but our NIM should be more or less stable other than that, some of that first quarter seasonality with the account. Got it. Thank you. Your next question comes from the line of Christopher Marinac at Brean Capital, LLC. Your line is open. Thanks. Good afternoon. I wanted to ask about the capital plans, and curious if the regulatory changes that may be happening this year kind of would cause you to revisit that again as you continue to execute the optimization quarter to quarter. Yeah, Chris, with respect to the buybacks, I guess I'll take you back to our framework that we laid out when we updated our buyback framework at the beginning of last year, and we said that we will be on a multi-year glide path, returning capital towards a 12% CET1 target. We said that we would approximately return about 100% of our net income, plus or minus. Some quarters a little bit more, some quarters a little bit less. That's generally, when you look at the last five quarters, that's really generally where we've been. When we think about capital return in general, obviously our number one priority is to invest in the business and we want to continue to grow the business. We feel good about our growth prospects, and we continue to invest in our businesses. When we think about capital return, we look at a couple of different considerations there. One is the regulatory ratios, and the other ones are also rating agency ratios. For example, we look at, in addition to CET1, we also look at TCE. We look at our AOCI volatility and rate volatility. We want to manage all of those factors to ensure that we have the right view on excess capital in our glide path. That's why those are really the drivers behind why we tend to stick around 100%, because of those factors. We saw more interest rate volatility in the last quarter, and you saw a little bit of pressure on our TCE, and that's an example of the kind of things that we're carefully monitoring. With respect to the capital changes, obviously this is in common period and we'll see how the final rules shake out. We feel like it will have some incremental capital to us on the regulatory side because of the risk weightings and changes to assets. Based on our preliminary modeling, maybe a 4%-5% benefit to capital. Again, that's on the risk-weighted side, and we look at multiple capital ratios and multiple indicators including our total capital to assets and those type of metrics. We're going to weigh all of that, but that could potentially provide a little bit more capacity. Great, David. That's very helpful. Thanks for walking me through all that. I guess kind of a related question, as you sort of have the ability to be picky about the new loans that you do, have kind of your internal thresholds for return gone up over past several quarters in terms of what would be acceptable versus not acceptable for a new credit? I would say, Chris, no necessary changes in our thresholds. I think what's really important to us is looking at the relationship pricing altogether rather than thinking about loans on a transactional level. We put all of that into the mix. The deposits are obviously a big part of that. Other fee activity are a big part of that. We're not the low price point in the market. We think about credit, we think about relationship pricing. Those are the things that drive our hurdle. Great. Thanks again, Dave, and thank you for taking our questions today. Thanks, Chris. Your next question comes from Manuel Navas at Piper Sandler. Your line is open. Hey, good afternoon. On the Corporate Trust side and the Global Capital Markets side, those 40% greater revenue quarters up year-over-year, is there some better way to track that? How should we think about that going forward? You said this is a great quarter. Not all of them can be this great. How should we think about those businesses over the course of the whole year? Yeah. Good afternoon, Manuel. Yeah, those two businesses are essentially what comprises our Institutional Services business. As you know, the Corporate Trust business really focuses on ABS and MBS securitizations. The Capital Markets business focuses on distressed debt and bankruptcies. We saw good momentum across both businesses. There have been a couple of drivers behind that. We've been investing in headcount and technology across the businesses. Those businesses are very important. Referrals and relationships are very important to those businesses. We have developed over time, a unique product expertise across those businesses. We have the ability to be innovative. We can respond faster to clients. As we continue to do more work in those businesses, our reputation has really spread, and we continue to win other and new mandates. That's been a great trend. In addition, the strength of our balance sheet and our credit ratings, and as you know, we have three strong investment-grade ratings. Those are also very important support factors for our ability to do these deals because clearly this is about our ability to be there for the long term, to be there as a trustee and a custodian of these assets. The last point I would make is there has been strong market growth particularly when you look at the asset-backed and mortgage-backed security market. The market growth there has been about 20% per year. We have been able to ride that market. We've been able to actually win, share, and grow in excess of that growth rate as you can see from the numbers. We've benefited from that market growth. Certainly, we don't expect that market growth to continue at that rate. It may slow down to a more normalized growth rate, but we feel good about our ability to continue to win share. Okay. I appreciate that. In terms of the loan growth potential, can you speak to customer sentiment beyond what's captured in the better pipelines that are up 35% and line utilization is up? How are your customers in the footprint thinking about what's going on in the environment? Or does it seem like it's business as usual? Hey, Manuel. It's Rodger. As you can imagine, been spending a fair bit of time out and about with our clients and prospects. I would say generally, that it's business as usual. I think all this volatility, including what's going on right now overseas, I think it's kind of set in that there's going to be some volatility and that businesses are kind of moving on, and they're investing, and they're seeing opportunities to grow as a general statement. I would say at the beginning of the year some of our local businesses had some exposure to the weather. We had a pretty rough period of time there in the early part of the year. Businesses have kind of moved past that, and I'd say generally, optimism is at a pretty reasonable level at this point. I think you see that in not only the fundings, but in some of the comments on our pipeline and other things. We feel good about that supporting the overall C&I growth going forward. I appreciate that commentary. Is there any opportunity to add talent, any talent that you feel like you need to add to keep that lending trajectory going? We're always interested, as David said, in investing in the business and in the commercial business in particular. That's all about adding talent. I think the bar for us, though, is very high. We're looking at people who can move books of business, have deep relationships in the market, and are culturally consistent with us across the commercial platform. Just as a reminder, an example of that last year in the sort of right between the third and the fourth quarter, we hired the M&T market president for the Greater Philly region, Greater Philly and Delaware region. Somebody we've known for a long period of time to join us, and that was a significant pickup for us. I think that's indicative of the fact that very well-known individual, proven person in the marketplace could have gone wherever pretty much I think he wanted to go, and he chose WSFS. I think that shows that we're kind of the provider of choice for people who are at larger institutions who want to be part of something that has a balance sheet big enough to support larger customers with a product offering at a bigger bank, but in a much more nimble, service-driven way. I would expect that we will see more talent like that coming to us over time as it has for as long as I can remember. Well, that's a great move. Thank you. Thank you for the comments. Sure. Thank you. Analysts are more than welcome to rejoin the queue if they have any new questions. Next up we have Charlie Driscoll from KBW. Your line is now open. Hi guys. Thanks for the question. This is Charlie on for KBW. Hey, Charlie. Circling back on the capital priority question with the possible regulatory relief. Boosting capital and still meaningfully above your medium-term CECL targets. Understanding you're already pretty aggressive on the buyback and with the premium valuation giving you optionality. Just wondering your updated thoughts on M&A here, if you're looking for a more traditional bank or something less traditional, just anything there. Thank you. No update, Charlie, on that topic. Clearly we've talked about we'd love to find opportunities, particularly in our fee businesses, for investment, whether they're one-off talent or small acquisitions or potentially even something larger. I think our profile is growing in that space significantly, particularly the Wealth and Trust area. We'll continue to look for those opportunities. In terms of whole bank, we think we have a great opportunity to execute on our strategic plan with the footprint that we have today, focusing on this Greater Philadelphia and Delaware region and a lot of headroom to grow and a very distracted large bank competitive set. That being said, if something came along that we think would be additive to that, we would certainly consider it. But the bar would be, I think, very high because we do think there's so much opportunity right in front of us. We always keep our eyes open for those kinds of situations. We would also just reiterate, we feel we can execute on our strategic plan in the banking business by focusing on the organic growth opportunity right in front of us to take market share. Great, thank you. Just on credit broadly, you booked a big recovery in the quarter, maybe any inside baseball you can give on that specific credit and any broader kind of commentary on what you're seeing in your portfolios or any areas you're more concerned about or looking at more carefully? Thank you. Yeah, Charlie, I would say on that specific credit, generally we take a conservative posture with the way we look at our assets. As a reminder, this was a loan that was an acquired loan, not a loan that we originated and was kind of unique to our portfolio, but it was a loan to a fund that was invested in office real estate. We didn't have direct collateral. We didn't have direct recourse to the collateral, and so we saw no value in that, and we took a full write-off. There's a lot of liquidity in the market, and one indication of that liquidity was that the sponsor in this case was able to get a full refinancing of that loan, and we were able to get a full recovery. I think that's an indication of kind of the liquidity that we see in the market for some of these assets. In terms of our overall portfolio, I think we feel good. As I kind of outlined in our comments, they're always potentially uneven deals in commercial, but generally, when you look at the trend over the last five quarters, we've been trending down pretty much in all of our indicators. That makes us feel good about our portfolio. We gave you some disclosure around our MDI portfolio, which is very small, about 3% of our assets. Also very granular and distributed. We see no credit issues in that portfolio. There are almost no problem assets, no MPAs, charge-offs, or delinquencies there. We feel good about our portfolio overall. Again, there's always one or two credits that could be specific problems, but nothing systemic that we're seeing overall and something we continue to monitor closely. Great, thank you. Thanks for the color. I'll step back. Thank you. With no further questions in the queue, I would like to turn the conference back to David Burg. Okay. Well, thank you very much, everyone, for joining the call today. If you have any specific follow-up questions, please reach out to Andrew in investor relations or me. Have a great day. Thank you. Thank you. This concludes today's call. Thank you for attending. You may now disconnect.

Speaker 6: Hello everyone, and thank you for joining us. Welcome to WSFS Financial Corporation first quarter earnings call. After today's prepared remarks, we'll host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I'd now like to turn the call over to your host for today, Mr. David Burg, Chief Financial Officer. Sir, you may begin. Hello everyone, and thank you for joining us. hello everyone and thank you for joining us Welcome to WSFS Financial Corporation first quarter earnings call. welcome to wsfs financial corporation first quarter earnings call After today's prepared remarks, we'll host a question and answer session. after today's prepared remarks we'll host a question and answer session If you would like to ask a question, please press star one to raise your hand. if you would like to ask a question please press star one to raise your hand To withdraw your question, press star one again. to withdraw your question press star one again I'd now like to turn the call over to your host for today, Mr. David Burg, Chief Financial Officer. i'd now like to turn the call over to your host for today mr david burg chief financial officer Sir, you may begin. sir you may begin

Speaker 3: Thank you very much. Good afternoon, and thank you everyone for joining our first quarter 2026 earnings call. Our earnings release and earnings release supplement, which we will refer to on today's call, can be found in the investor relations section of our company website. With me on this call is Rodger Levenson, Chairman, President, and CEO. Prior to reviewing our financial results, I would like to read our safe harbor statement. Our discussion today will include information about our management's view of our future expectations, plans, and prospects that constitute forward-looking statements. Thank you very much. thank you very much Good afternoon, and thank you everyone for joining our first quarter 2026 earnings call. good afternoon and thank you everyone for joining our first quarter 2026 earnings call Our earnings release and earnings release supplement, which we will refer to on today's call, can be found in the investor relations section of our company website. our earnings release and earnings release supplement which we will refer to on today's call can be found in the investor relations section of our company website With me on this call is Rodger Levenson, Chairman, President, and CEO. with me on this call is rodger levenson chairman president and ceo Prior to reviewing our financial results, I would like to read our safe harbor statement. prior to reviewing our financial results i would like to read our safe harbor statement Our discussion today will include information about our management's view of our future expectations, plans, and prospects that constitute forward-looking statements. our discussion today will include information about our management's view of our future expectations plans and prospects that constitute forward-looking statements Actual results may differ materially from historical results or those indicated by these forward-looking statements due to risks and uncertainties, including, but not limited to, the risk factors in our annual report on Form 10-K and our most recent quarterly reports on Form 10-Q, as well as other documents we periodically file with the Securities and Exchange Commission. All comments made during today's call are subject to the safe harbor statement. I will now turn to our financial results. WSFS had a strong start to 2026, continuing to demonstrate the strength of our franchise and diverse business model. Our first quarter results included a Core EPS of $1.68, Core ROA of 1.65%, and Core Return on Tangible Common Equity of 20.7%, which are all up versus the prior quarter and prior year. Actual results may differ materially from historical results or those indicated by these forward-looking statements due to risks and uncertainties, including, but not limited to, the risk factors in our annual report on Form 10-K and our most recent quarterly reports on Form 10-Q, as well as other documents we periodically file with the Securities and Exchange Commission. actual results may differ materially from historical results or those indicated by these forward-looking statements due to risks and uncertainties including but not limited to the risk factors in our annual report on form 10-k and our most recent quarterly reports on form 10-q as well as other documents we periodically file with the securities and exchange commission All comments made during today's call are subject to the safe harbor statement. all comments made during today's call are subject to the safe harbor statement I will now turn to our financial results. i will now turn to our financial results WSFS had a strong start to 2026, continuing to demonstrate the strength of our franchise and diverse business model. wsfs had a strong start to 2026 continuing to demonstrate the strength of our franchise and diverse business model Our first quarter results included a Core EPS of $1.68, Core ROA of 1.65%, and Core Return on Tangible Common Equity of 20.7%, which are all up versus the prior quarter and prior year. our first quarter results included a core eps of $1.68 core roa of 1.65% and core return on tangible common equity of 20.7% which are all up versus the prior quarter and prior year On a year-over-year basis, core net income increased 35% and Core PPNR increased 10%, resulting in Core EPS growth of 49% and tangible book value per share growth of 15%. These results include the previously disclosed loan recovery of $15.7 million. Excluding this recovery, Core EPS was $1.45, which is up 28% year-over-year, and Core ROA was 1.43%, which is up 14 basis points year-over-year. Core results for the first quarter exclude two items related to the sales of real estate properties, as we continue to optimize our office footprint and bring more associates together in fewer locations. These items resulted in a $2.2 million negative impact to net income and $0.04 impact to EPS. Net interest margin of 3.83 was flat, linked quarter, while absorbing the interest rate cuts that occurred in the fourth quarter. On a year-over-year basis, core net income increased 35% and Core PPNR increased 10%, resulting in Core EPS growth of 49% and tangible book value per share growth of 15%. on a year-over-year basis core net income increased 35% and core ppnr increased 10% resulting in core eps growth of 49% and tangible book value per share growth of 15% These results include the previously disclosed loan recovery of $15.7 million. these results include the previously disclosed loan recovery of $15.7 million Excluding this recovery, Core EPS was $1.45, which is up 28% year-over-year, and Core ROA was 1.43%, which is up 14 basis points year-over-year. excluding this recovery core eps was $1.45 which is up 28% year-over-year and core roa was 1.43% which is up 14 basis points year-over-year Core results for the first quarter exclude two items related to the sales of real estate properties, as we continue to optimize our office footprint and bring more associates together in fewer locations. core results for the first quarter exclude two items related to the sales of real estate properties as we continue to optimize our office footprint and bring more associates together in fewer locations These items resulted in a $2.2 million negative impact to net income and $0.04 impact to EPS. these items resulted in a $2.2 million negative impact to net income and $0.04 impact to eps Net interest margin of 3.83 was flat, linked quarter, while absorbing the interest rate cuts that occurred in the fourth quarter. net interest margin of 3.83 was flat linked quarter while absorbing the interest rate cuts that occurred in the fourth quarter We continue to successfully reprice our deposits, and this margin reflects a reduction of 12 basis points in total client deposit costs to 1.33%. Our interest-bearing deposit beta was 46% for the quarter, an increase relative to the prior quarter. Core fee revenue, which represents nearly a third of total revenue, grew 11% year-over-year. This was driven by broad-based growth across our fee businesses and led by Wealth and Trust, which grew 25% year-over-year. Within Institutional Services, Corporate Trust, which performs trustee and agency services for mortgage-backed and asset-backed securitizations, and Global Capital Markets, which performs trustee and agency services for distressed debt and bankruptcies, were each up over 40% year-over-year as we continue to win new mandates and capture market share. We continue to successfully reprice our deposits, and this margin reflects a reduction of 12 basis points in total client deposit costs to 1.33%. we continue to successfully reprice our deposits and this margin reflects a reduction of 12 basis points in total client deposit costs to 1.33% Our interest-bearing deposit beta was 46% for the quarter, an increase relative to the prior quarter. our interest-bearing deposit beta was 46% for the quarter an increase relative to the prior quarter Core fee revenue, which represents nearly a third of total revenue, grew 11% year-over-year. core fee revenue which represents nearly a third of total revenue grew 11% year-over-year This was driven by broad-based growth across our fee businesses and led by Wealth and Trust, which grew 25% year-over-year. this was driven by broad-based growth across our fee businesses and led by wealth and trust which grew 25% year-over-year Within Institutional Services, Corporate Trust, which performs trustee and agency services for mortgage-backed and asset-backed securitizations, and Global Capital Markets, which performs trustee and agency services for distressed debt and bankruptcies, were each up over 40% year-over-year as we continue to win new mandates and capture market share. within institutional services corporate trust which performs trustee and agency services for mortgage-backed and asset-backed securitizations and global capital markets which performs trustee and agency services for distressed debt and bankruptcies were each up over 40% year-over-year as we continue to win new mandates and capture market share The Bryn Mawr Trust Company of Delaware, our personal trust business, also delivered very strong year-over-year growth of 27%, driven by continued new account and client growth. In addition to Wealth and Trust, we also had other businesses that delivered strong double-digit growth, including capital markets within our commercial division and mortgage banking. Cash Connect fees declined quarter-over-quarter due to the impact of interest rate cuts and lower volumes. The business delivered a strong profit margin of 15%, more than doubling its profit margin year-over-year. Client deposits increased 5% linked-quarter, driven by growth in commercial and trust. While some deposits in both of these businesses are transactional and may be short term, we continue to see solid momentum. On a year-over-year basis, our deposits are up over 9%, driven by growth across trust, commercial, and private wealth management. The Bryn Mawr Trust Company of Delaware, our personal trust business, also delivered very strong year-over-year growth of 27%, driven by continued new account and client growth. the bryn mawr trust company of delaware our personal trust business also delivered very strong year-over-year growth of 27% driven by continued new account and client growth In addition to Wealth and Trust, we also had other businesses that delivered strong double-digit growth, including capital markets within our commercial division and mortgage banking. in addition to wealth and trust we also had other businesses that delivered strong double-digit growth including capital markets within our commercial division and mortgage banking Cash Connect fees declined quarter-over-quarter due to the impact of interest rate cuts and lower volumes. cash connect fees declined quarter-over-quarter due to the impact of interest rate cuts and lower volumes The business delivered a strong profit margin of 15%, more than doubling its profit margin year-over-year. the business delivered a strong profit margin of 15% more than doubling its profit margin year-over-year Client deposits increased 5% linked-quarter, driven by growth in commercial and trust. client deposits increased 5% linked-quarter driven by growth in commercial and trust While some deposits in both of these businesses are transactional and may be short term, we continue to see solid momentum. while some deposits in both of these businesses are transactional and may be short term we continue to see solid momentum On a year-over-year basis, our deposits are up over 9%, driven by growth across trust, commercial, and private wealth management. on a year-over-year basis our deposits are up over 9% driven by growth across trust commercial and private wealth management Importantly, non-interest deposits grew 14% linked quarter and now represent 34% of our total deposits, up from 29% in the first quarter of last year. Gross loans were up slightly linked quarter. In commercial, strong momentum in C&I lending was partially offset by elevated payoffs in commercial mortgages. Annualized C&I growth was 7% linked quarter, driven by robust fundings. We also saw strong momentum in small business banking, which had annualized growth of 11% linked quarter. In consumer, despite seasonal trends, we continue to see solid originations in residential mortgage, which were up over 70% year-over-year. Residential mortgage and WSFS-originated consumer loans had annualized growth of 3% linked quarter and are up 14% year-over-year. Turning to asset quality, we saw a meaningful improvement across delinquencies and problem assets. Delinquencies are down 32% year-over-year, and problem assets are down 26% year-over-year. Importantly, non-interest deposits grew 14% linked quarter and now represent 34% of our total deposits, up from 29% in the first quarter of last year. importantly non-interest deposits grew 14% linked quarter and now represent 34% of our total deposits up from 29% in the first quarter of last year Gross loans were up slightly linked quarter. gross loans were up slightly linked quarter In commercial, strong momentum in C&I lending was partially offset by elevated payoffs in commercial mortgages. in commercial strong momentum in c&i lending was partially offset by elevated payoffs in commercial mortgages Annualized C&I growth was 7% linked quarter, driven by robust fundings. annualized c&i growth was 7% linked quarter driven by robust fundings We also saw strong momentum in small business banking, which had annualized growth of 11% linked quarter. we also saw strong momentum in small business banking which had annualized growth of 11% linked quarter In consumer, despite seasonal trends, we continue to see solid originations in residential mortgage, which were up over 70% year-over-year. in consumer despite seasonal trends we continue to see solid originations in residential mortgage which were up over 70% year-over-year Residential mortgage and WSFS-originated consumer loans had annualized growth of 3% linked quarter and are up 14% year-over-year. residential mortgage and wsfs-originated consumer loans had annualized growth of 3% linked quarter and are up 14% year-over-year Turning to asset quality, we saw a meaningful improvement across delinquencies and problem assets. turning to asset quality we saw a meaningful improvement across delinquencies and problem assets Delinquencies are down 32% year-over-year, and problem assets are down 26% year-over-year. delinquencies are down 32% year-over-year and problem assets are down 26% year-over-year Nonperforming assets, which are down 25% year-over-year, increased, linked-quarter, driven by 2 loans, a C&I loan and a multifamily loan, both of which are well secured. Net recoveries for the quarter were $3.5 million as the previously disclosed $15.7 million recovery more than offset the charge-offs. Excluding the impact of this recovery, net charge-offs were $12.2 million, which is a 19% decrease from the prior quarter. During the quarter, we continued to execute on our capital return framework and returned $94 million of capital, including $85 million in buybacks, which equates to 2.5% of our outstanding shares. Since the beginning of 2025, WSFS has repurchased approximately 12% of our outstanding shares. In addition, the board approved an 18% increase in the quarterly dividend to $0.20 per share, along with an additional share repurchase authorization of 15% of our outstanding shares as of quarter-end. Nonperforming assets, which are down 25% year-over-year, increased, linked-quarter, driven by 2 loans, a C&I loan and a multifamily loan, both of which are well secured. nonperforming assets which are down 25% year-over-year increased linked-quarter driven by 2 loans a c&i loan and a multifamily loan both of which are well secured Net recoveries for the quarter were $3.5 million as the previously disclosed $15.7 million recovery more than offset the charge-offs. Excluding the impact of this recovery, net charge-offs were $12.2 million, which is a 19% decrease from the prior quarter. net recoveries for the quarter were $3.5 million as the previously disclosed $15.7 million recovery more than offset the charge-offs. excluding the impact of this recovery net charge-offs were $12.2 million which is a 19% decrease from the prior quarter During the quarter, we continued to execute on our capital return framework and returned $94 million of capital, including $85 million in buybacks, which equates to 2.5% of our outstanding shares. during the quarter we continued to execute on our capital return framework and returned $94 million of capital including $85 million in buybacks which equates to 2.5% of our outstanding shares Since the beginning of 2025, WSFS has repurchased approximately 12% of our outstanding shares. since the beginning of 2025 wsfs has repurchased approximately 12% of our outstanding shares In addition, the board approved an 18% increase in the quarterly dividend to $0.20 per share, along with an additional share repurchase authorization of 15% of our outstanding shares as of quarter-end. in addition the board approved an 18% increase in the quarterly dividend to $0.20 per share along with an additional share repurchase authorization of 15% of our outstanding shares as of quarter-end This brings our total authorization to 19% of outstanding shares, reflecting our intention to continue to execute on our capital return framework and maintain an elevated level of buybacks in line with the previously communicated targets and framework. As shown on slide 11 of the supplement, we updated our annual outlook for net charge-offs as a result of the recovery. Our new outlook is now 25-35 basis points for the year, down from the previous outlook of 35-45 basis points. As part of our typical process, we will provide an updated full-year outlook when we present our 2Q results in July. We're pleased with these results to start the year, and we remain committed to delivering high performance. We will now open the line for questions. This brings our total authorization to 19% of outstanding shares, reflecting our intention to continue to execute on our capital return framework and maintain an elevated level of buybacks in line with the previously communicated targets and framework. this brings our total authorization to 19% of outstanding shares reflecting our intention to continue to execute on our capital return framework and maintain an elevated level of buybacks in line with the previously communicated targets and framework As shown on slide 11 of the supplement, we updated our annual outlook for net charge-offs as a result of the recovery. as shown on slide 11 of the supplement we updated our annual outlook for net charge-offs as a result of the recovery Our new outlook is now 25-35 basis points for the year, down from the previous outlook of 35-45 basis points. our new outlook is now 25-35 basis points for the year down from the previous outlook of 35-45 basis points As part of our typical process, we will provide an updated full-year outlook when we present our 2Q results in July. as part of our typical process we will provide an updated full-year outlook when we present our 2q results in july We're pleased with these results to start the year, and we remain committed to delivering high performance. we're pleased with these results to start the year and we remain committed to delivering high performance We will now open the line for questions. we will now open the line for questions

Speaker 6: We'll now begin the question and answer session. Please limit yourself to one question and follow-up questions. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you're muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Russell Gunther at Stephens. Your line is open. Please go ahead. We'll now begin the question and answer session. we'll now begin the question and answer session Please limit yourself to one question and follow-up questions. please limit yourself to one question and follow-up questions If you would like to ask a question, please press star one to raise your hand. if you would like to ask a question please press star one to raise your hand To withdraw your question, press star one again. to withdraw your question press star one again We ask that you pick up your handset when asking a question to allow for optimum sound quality. we ask that you pick up your handset when asking a question to allow for optimum sound quality If you're muted locally, please remember to unmute your device. if you're muted locally please remember to unmute your device Please stand by while we compile the Q&A roster. please stand by while we compile the q&a roster Your first question comes from the line of Russell Gunther at Stephens. your first question comes from the line of russell gunther at stephens Your line is open. your line is open Please go ahead. please go ahead

Speaker 8: Hey, good afternoon, guys. Hey, good afternoon, guys. hey good afternoon guys

Speaker 3: Good afternoon. Hey, Russell. Good afternoon. good afternoon Hey, Russell. hey russell

Speaker 8: Hey, Rodger. Hey, David. I'd like to start on the deposit growth, please. If we could touch on just the overall sustainability. Would love to get some incremental color in terms of the Wealth and Trust vertical. Maybe just parsing the drivers of growth here between the impact of market share gains versus the comment some of this is short-term and transactional in nature. Hey, Rodger. hey rodger Hey, David. hey david I'd like to start on the deposit growth, please. i'd like to start on the deposit growth please If we could touch on just the overall sustainability. if we could touch on just the overall sustainability Would love to get some incremental color in terms of the Wealth and Trust vertical. would love to get some incremental color in terms of the wealth and trust vertical Maybe just parsing the drivers of growth here between the impact of market share gains versus the comment some of this is short-term and transactional in nature. maybe just parsing the drivers of growth here between the impact of market share gains versus the comment some of this is short-term and transactional in nature

Speaker 3: Yep. Sure, Russell. Happy to address that. Thanks for the question. As you know, as you saw, our deposit growth was very strong this quarter. As we noted in our remarks, we did have some elevated transactional deposits at the end of the quarter, and those were both in commercial and trust. Having said that, we do feel like we continue to have momentum across these businesses and continue to have momentum in our deposit growth. Certainly would not take this quarter and extrapolate it out, in terms of the growth rate for the year. We're very pleased with the results, but not something that we feel is sustainable, even though we feel like we're strategically well-positioned. For example, when you look at the trust business, and by the way, two-thirds of the growth was really driven in trust. Yep. yep Sure, Russell. sure russell Happy to address that. happy to address that Thanks for the question. thanks for the question As you know, as you saw, our deposit growth was very strong this quarter. as you know as you saw our deposit growth was very strong this quarter As we noted in our remarks, we did have some elevated transactional deposits at the end of the quarter, and those were both in commercial and trust. as we noted in our remarks we did have some elevated transactional deposits at the end of the quarter and those were both in commercial and trust Having said that, we do feel like we continue to have momentum across these businesses and continue to have momentum in our deposit growth. having said that we do feel like we continue to have momentum across these businesses and continue to have momentum in our deposit growth Certainly would not take this quarter and extrapolate it out, in terms of the growth rate for the year. certainly would not take this quarter and extrapolate it out in terms of the growth rate for the year We're very pleased with the results, but not something that we feel is sustainable, even though we feel like we're strategically well-positioned. we're very pleased with the results but not something that we feel is sustainable even though we feel like we're strategically well-positioned For example, when you look at the trust business, and by the way, two-thirds of the growth was really driven in trust. for example when you look at the trust business and by the way two-thirds of the growth was really driven in trust You can think about it in one-third in commercial of those deposits. When you think about our trust business, it is a combination of both strong growth in the market as well as our ability to take share and grow faster than the market. We are benefiting from strong market growth there, but in addition, continuing to take share on top of that. I would also add, Russell, that- You can think about it in one-third in commercial of those deposits. you can think about it in one-third in commercial of those deposits When you think about our trust business, it is a combination of both strong growth in the market as well as our ability to take share and grow faster than the market. when you think about our trust business it is a combination of both strong growth in the market as well as our ability to take share and grow faster than the market We are benefiting from strong market growth there, but in addition, continuing to take share on top of that. we are benefiting from strong market growth there but in addition continuing to take share on top of that I would also add, Russell, that- i would also add russell that-

Speaker 8: Sure. Sure. sure

Speaker 3: Yeah, I would just add one comment. I think it's worth calling out that we are seeing more deposit competition for sure, really across all the businesses. That's in commercial and consumer. That pressure is going to continue to be there. Again, we feel like we're well-positioned competitively. Yeah, I would just add one comment. yeah i would just add one comment I think it's worth calling out that we are seeing more deposit competition for sure, really across all the businesses. i think it's worth calling out that we are seeing more deposit competition for sure really across all the businesses That's in commercial and consumer. that's in commercial and consumer That pressure is going to continue to be there. that pressure is going to continue to be there Again, we feel like we're well-positioned competitively. again we feel like we're well-positioned competitively

Speaker 8: Excellent. Thank you for that. My second question would just be to kind of parse your original 2026 guide, where you have 3 rate cuts embedded in there, the environment looking more like probably none. Could you just maybe sensitize to that or walk us through some of the puts and takes? Obviously, a bit of an asset-sensitive position on the margin. Maybe Cash Connect overall profitability diminishes a bit, but what impact does removing those 3 cuts have on that ROA target of 140 ±? Excellent. excellent Thank you for that. thank you for that My second question would just be to kind of parse your original 2026 guide, where you have 3 rate cuts embedded in there, the environment looking more like probably none. my second question would just be to kind of parse your original 2026 guide where you have 3 rate cuts embedded in there the environment looking more like probably none Could you just maybe sensitize to that or walk us through some of the puts and takes? could you just maybe sensitize to that or walk us through some of the puts and takes Obviously, a bit of an asset-sensitive position on the margin. obviously a bit of an asset-sensitive position on the margin Maybe Cash Connect overall profitability diminishes a bit, but what impact does removing those 3 cuts have on that ROA target of 140 ±? maybe cash connect overall profitability diminishes a bit but what impact does removing those 3 cuts have on that roa target of 140 ±

Speaker 3: Yep. Yeah. One is, as I mentioned when we come out in July, as you know the rates have been very volatile, and the expectations have changed a lot. We'll see what happens in the back half of the year. When we update our outlook, we will certainly provide kind of a more clear picture. Clearly, the March cut didn't happen, and as you noted, we are asset sensitive, so that does provide a little bit of a tailwind for us. What we had said in the past, what I had said is that generally kind of about two basis points per rate cut across the year was the cost to us of the rate cut. I would expect the same the other way. I think it is important to note, and I'll come back to my question on competition. Yep. yep Yeah. yeah One is, as I mentioned when we come out in July, as you know the rates have been very volatile, and the expectations have changed a lot. one is as i mentioned when we come out in july as you know the rates have been very volatile and the expectations have changed a lot We'll see what happens in the back half of the year. we'll see what happens in the back half of the year When we update our outlook, we will certainly provide kind of a more clear picture. when we update our outlook we will certainly provide kind of a more clear picture Clearly, the March cut didn't happen, and as you noted, we are asset sensitive, so that does provide a little bit of a tailwind for us. clearly the march cut didn't happen and as you noted we are asset sensitive so that does provide a little bit of a tailwind for us What we had said in the past, what I had said is that generally kind of about two basis points per rate cut across the year was the cost to us of the rate cut. what we had said in the past what i had said is that generally kind of about two basis points per rate cut across the year was the cost to us of the rate cut I would expect the same the other way. i would expect the same the other way I think it is important to note, and I'll come back to my question on competition. i think it is important to note and i'll come back to my question on competition We are seeing more deposit competition really across the board, more pricing competition. That's both in commercial and consumer across businesses. I think that's definitely something that's in the market. We have a number of promotional products out there as we continue to try to grow clients and win market share. Putting that all together, we do have a bit of a tailwind because of not having the cuts, but there are also other puts and takes there. Putting that all together, I think the current rate where we're at is probably a good place to be. The other thing I would note is just, as always in the first quarter, just because of the technical nature of the seasonality, just that the NIM is always a bit higher. We are seeing more deposit competition really across the board, more pricing competition. we are seeing more deposit competition really across the board more pricing competition That's both in commercial and consumer across businesses. that's both in commercial and consumer across businesses I think that's definitely something that's in the market. i think that's definitely something that's in the market We have a number of promotional products out there as we continue to try to grow clients and win market share. we have a number of promotional products out there as we continue to try to grow clients and win market share Putting that all together, we do have a bit of a tailwind because of not having the cuts, but there are also other puts and takes there. putting that all together we do have a bit of a tailwind because of not having the cuts but there are also other puts and takes there Putting that all together, I think the current rate where we're at is probably a good place to be. putting that all together i think the current rate where we're at is probably a good place to be The other thing I would note is just, as always in the first quarter, just because of the technical nature of the seasonality, just that the NIM is always a bit higher. the other thing i would note is just as always in the first quarter just because of the technical nature of the seasonality just that the nim is always a bit higher

Speaker 8: Yeah. Okay. Understood. Thank you guys for taking my questions. Yeah. yeah Okay. okay Understood. understood Thank you guys for taking my questions. thank you guys for taking my questions

Speaker 3: Thanks, Russell. Thanks, Russell. thanks russell

Speaker 6: The next question comes from Janet Lee at TD Cowen. Your line is open. The next question comes from Janet Lee at TD Cowen. the next question comes from janet lee at td cowen Your line is open. your line is open

Speaker 4: Good afternoon. Good afternoon. good afternoon

Speaker 3: Hi, good afternoon. Hi, good afternoon. hi good afternoon

Speaker 4: The total loan growth on a period end basis was muted, but it looks like the commentaries around C&I utilization and pipelines are pretty strong, and a lot of that growth seems to have been offset by some CRE payoffs and partnership consumer loans. As we think about the loan growth in the coming quarters, how should we think about the cadence of partnership consumer loan runoffs as well as the paydown impact? Should we see a pickup in loan growth? The total loan growth on a period end basis was muted, but it looks like the commentaries around C&I utilization and pipelines are pretty strong, and a lot of that growth seems to have been offset by some CRE payoffs and partnership consumer loans. the total loan growth on a period end basis was muted but it looks like the commentaries around c&i utilization and pipelines are pretty strong and a lot of that growth seems to have been offset by some cre payoffs and partnership consumer loans As we think about the loan growth in the coming quarters, how should we think about the cadence of partnership consumer loan runoffs as well as the paydown impact? as we think about the loan growth in the coming quarters how should we think about the cadence of partnership consumer loan runoffs as well as the paydown impact Should we see a pickup in loan growth? should we see a pickup in loan growth

Speaker 3: Yeah. I'll start off. Yeah, exactly as you summarized it, I think we're very happy and pleased with the fundings and the momentum that we have on the C&I side of the commercial business, and I'll touch on both commercial and consumer. If you look at it across the last two quarters, we had annualized growth in C&I of 7% this quarter. Last quarter, we had annualized growth of 15%. When you look at the fundings across both of those quarters, they've been really strong and up materially over where they were a year ago. We feel good about the C&I momentum. As you know, C&I is really our primary product with respect to commercial lending. That's what we want to lead with. Yeah. yeah I'll start off. i'll start off Yeah, exactly as you summarized it, I think we're very happy and pleased with the fundings and the momentum that we have on the C&I side of the commercial business, and I'll touch on both commercial and consumer. yeah exactly as you summarized it i think we're very happy and pleased with the fundings and the momentum that we have on the c&i side of the commercial business and i'll touch on both commercial and consumer If you look at it across the last two quarters, we had annualized growth in C&I of 7% this quarter. if you look at it across the last two quarters we had annualized growth in c&i of 7% this quarter Last quarter, we had annualized growth of 15%. last quarter we had annualized growth of 15% When you look at the fundings across both of those quarters, they've been really strong and up materially over where they were a year ago. when you look at the fundings across both of those quarters they've been really strong and up materially over where they were a year ago We feel good about the C&I momentum. we feel good about the c&i momentum As you know, C&I is really our primary product with respect to commercial lending. as you know c&i is really our primary product with respect to commercial lending That's what we want to lead with. that's what we want to lead with That's the product that also delivers our deposit growth and the broader relationship as well as transactional activity, and so that is the product that we're very focused on. When you look across the two quarters, we had good momentum. We had increased line utilization in both quarters, which is a good indication of client activity, and the pipeline is pretty healthy. We are contending with a higher rate of payoffs in commercial real estate. Some of that has also helped our decline in problem assets. Some of them had lower yields, and so we were happy to see those run off. It's something that we will have to contend with as we are dealing with a bit of an elevated maturity pipeline with respect to commercial real estate. That's the product that also delivers our deposit growth and the broader relationship as well as transactional activity, and so that is the product that we're very focused on. that's the product that also delivers our deposit growth and the broader relationship as well as transactional activity and so that is the product that we're very focused on When you look across the two quarters, we had good momentum. when you look across the two quarters we had good momentum We had increased line utilization in both quarters, which is a good indication of client activity, and the pipeline is pretty healthy. we had increased line utilization in both quarters which is a good indication of client activity and the pipeline is pretty healthy We are contending with a higher rate of payoffs in commercial real estate. we are contending with a higher rate of payoffs in commercial real estate Some of that has also helped our decline in problem assets. some of that has also helped our decline in problem assets Some of them had lower yields, and so we were happy to see those run off. some of them had lower yields and so we were happy to see those run off It's something that we will have to contend with as we are dealing with a bit of an elevated maturity pipeline with respect to commercial real estate. it's something that we will have to contend with as we are dealing with a bit of an elevated maturity pipeline with respect to commercial real estate What I would add also with commercial real estate is we are, as we've said before, we are primarily a recourse lender. We're very selective in how we do commercial real estate and the type of clients that we do business with, and so we're really focused on accretive growth and not just growth for growth's sake. I think this is a pattern. The pattern that you're seeing this quarter is we were pleased with our momentum. There's certainly pockets where we'd like to see a little bit more growth, but overall, we feel good about the momentum. For example, small business which had an uneven year last year, also had a very solid quarter, 11% annualized growth. We feel good about that, where we are. What I would add also with commercial real estate is we are, as we've said before, we are primarily a recourse lender. what i would add also with commercial real estate is we are as we've said before we are primarily a recourse lender We're very selective in how we do commercial real estate and the type of clients that we do business with, and so we're really focused on accretive growth and not just growth for growth's sake. we're very selective in how we do commercial real estate and the type of clients that we do business with and so we're really focused on accretive growth and not just growth for growth's sake I think this is a pattern. i think this is a pattern The pattern that you're seeing this quarter is we were pleased with our momentum. the pattern that you're seeing this quarter is we were pleased with our momentum There's certainly pockets where we'd like to see a little bit more growth, but overall, we feel good about the momentum. there's certainly pockets where we'd like to see a little bit more growth but overall we feel good about the momentum For example, small business which had an uneven year last year, also had a very solid quarter, 11% annualized growth. for example small business which had an uneven year last year also had a very solid quarter 11% annualized growth We feel good about that, where we are. we feel good about that where we are

Speaker 7: Yeah. This is Rodger. I would just add to that. I think over time on the consumer side, the Spring EQ portfolio will continue to roll off consistent with what you saw this quarter. It may be impacted by rate cuts a little bit, so there's a little bit of refi risk in that. But that's sort of I think a pretty good going rate of attrition there. I think our goal is, and some of the progress that you've seen in our home lending business, is to offset as much as possible of that growth and hopefully over time overcome that with our home lending products that we have. The commercial business will operate exactly as David has said. We're obviously taking a very hard look at those maturing loans along the criteria that David outlined. Yeah. yeah This is Rodger. this is rodger I would just add to that. i would just add to that I think over time on the consumer side, the Spring EQ portfolio will continue to roll off consistent with what you saw this quarter. i think over time on the consumer side the spring eq portfolio will continue to roll off consistent with what you saw this quarter It may be impacted by rate cuts a little bit, so there's a little bit of refi risk in that. it may be impacted by rate cuts a little bit so there's a little bit of refi risk in that But that's sort of I think a pretty good going rate of attrition there. but that's sort of i think a pretty good going rate of attrition there I think our goal is, and some of the progress that you've seen in our home lending business, is to offset as much as possible of that growth and hopefully over time overcome that with our home lending products that we have. i think our goal is and some of the progress that you've seen in our home lending business is to offset as much as possible of that growth and hopefully over time overcome that with our home lending products that we have The commercial business will operate exactly as David has said. the commercial business will operate exactly as david has said We're obviously taking a very hard look at those maturing loans along the criteria that David outlined. we're obviously taking a very hard look at those maturing loans along the criteria that david outlined Much of that is acquired loans, and we want to make sure that to the extent we're going to extend those loans or refinance those loans, they fit our overall criteria from an asset quality and return standpoint. That's just a little bit of kind of longer picture of what you should see. C&I should be the primary driver, and then hopefully the growth of the home lending to offset the continued runoff of Spring EQ. Much of that is acquired loans, and we want to make sure that to the extent we're going to extend those loans or refinance those loans, they fit our overall criteria from an asset quality and return standpoint. much of that is acquired loans and we want to make sure that to the extent we're going to extend those loans or refinance those loans they fit our overall criteria from an asset quality and return standpoint That's just a little bit of kind of longer picture of what you should see. that's just a little bit of kind of longer picture of what you should see C&I should be the primary driver, and then hopefully the growth of the home lending to offset the continued runoff of Spring EQ. c&i should be the primary driver and then hopefully the growth of the home lending to offset the continued runoff of spring eq

Speaker 4: Got it. Thank you. That's very helpful. Not to put words in your mouth, but if I were to interpret your prior commentary on net interest margin earlier, with no rate cuts, your earning asset yields would obviously benefit more, but you're expecting deposit costs to go up versus the 133 level in the first quarter. That mitigates that result in flattish NIM from here. Is that the right way to think about it? Got it. got it Thank you. thank you That's very helpful. that's very helpful Not to put words in your mouth, but if I were to interpret your prior commentary on net interest margin earlier, with no rate cuts, your earning asset yields would obviously benefit more, but you're expecting deposit costs to go up versus the 133 level in the first quarter. not to put words in your mouth but if i were to interpret your prior commentary on net interest margin earlier with no rate cuts your earning asset yields would obviously benefit more but you're expecting deposit costs to go up versus the 133 level in the first quarter That mitigates that result in flattish NIM from here. that mitigates that result in flattish nim from here Is that the right way to think about it? is that the right way to think about it

Speaker 3: Yeah, Janet, I wouldn't say necessarily go up. The way I would think about it is, as you know, with the rate cuts we would have repricing in our loans and so our yields have been coming down, which we've been offsetting with our deposit decreases. In the absence of the rate cuts, we would see the stabilization in the loan yields. On the deposit pricing side, we've had good repricing, but what I was suggesting with my earlier comments is we have seen more price competition come into the market. When you look at our deposit prices, whether that's the CDs that we have, for example, a flagship CD is at 3%, our money market product is also at 3%, we're definitely far away from the high point in the market. Yeah, Janet, I wouldn't say necessarily go up. yeah janet i wouldn't say necessarily go up The way I would think about it is, as you know, with the rate cuts we would have repricing in our loans and so our yields have been coming down, which we've been offsetting with our deposit decreases. the way i would think about it is as you know with the rate cuts we would have repricing in our loans and so our yields have been coming down which we've been offsetting with our deposit decreases In the absence of the rate cuts, we would see the stabilization in the loan yields. in the absence of the rate cuts we would see the stabilization in the loan yields On the deposit pricing side, we've had good repricing, but what I was suggesting with my earlier comments is we have seen more price competition come into the market. on the deposit pricing side we've had good repricing but what i was suggesting with my earlier comments is we have seen more price competition come into the market When you look at our deposit prices, whether that's the CDs that we have, for example, a flagship CD is at 3%, our money market product is also at 3%, we're definitely far away from the high point in the market. when you look at our deposit prices whether that's the cds that we have for example a flagship cd is at 3% our money market product is also at 3% we're definitely far away from the high point in the market We see many competitors who did not move in the last rate cut, and some competitors that have held or increased their pricing in some of these products. I think there's definitely more deposit competition in the market. We still have a little bit of a repricing tailwind from some of the maturing CDs that we have, but because our CDs have been shorter end, shorter term, a lot of that repricing is already behind us. That's why, really, I said kind of the NIM environment, there are puts and takes, but our NIM should be more or less stable other than that, some of that first quarter seasonality with the account. We see many competitors who did not move in the last rate cut, and some competitors that have held or increased their pricing in some of these products. we see many competitors who did not move in the last rate cut and some competitors that have held or increased their pricing in some of these products I think there's definitely more deposit competition in the market. i think there's definitely more deposit competition in the market We still have a little bit of a repricing tailwind from some of the maturing CDs that we have, but because our CDs have been shorter end, shorter term, a lot of that repricing is already behind us. we still have a little bit of a repricing tailwind from some of the maturing cds that we have but because our cds have been shorter end shorter term a lot of that repricing is already behind us That's why, really, I said kind of the NIM environment, there are puts and takes, but our NIM should be more or less stable other than that, some of that first quarter seasonality with the account. that's why really i said kind of the nim environment there are puts and takes but our nim should be more or less stable other than that some of that first quarter seasonality with the account

Speaker 4: Got it. Thank you. Got it. got it Thank you. thank you

Speaker 6: Your next question comes from the line of Christopher Marinac at Brean Capital, LLC. Your line is open. Your next question comes from the line of Christopher Marinac at Brean Capital, LLC. your next question comes from the line of christopher marinac at brean capital llc Your line is open. your line is open

Speaker 2: Thanks. Good afternoon. I wanted to ask about the capital plans, and curious if the regulatory changes that may be happening this year kind of would cause you to revisit that again as you continue to execute the optimization quarter to quarter. Thanks. thanks Good afternoon. I wanted to ask about the capital plans, and curious if the regulatory changes that may be happening this year kind of would cause you to revisit that again as you continue to execute the optimization quarter to quarter. good afternoon. i wanted to ask about the capital plans and curious if the regulatory changes that may be happening this year kind of would cause you to revisit that again as you continue to execute the optimization quarter to quarter

Speaker 3: Yeah, Chris, with respect to the buybacks, I guess I'll take you back to our framework that we laid out when we updated our buyback framework at the beginning of last year, and we said that we will be on a multi-year glide path, returning capital towards a 12% CET1 target. We said that we would approximately return about 100% of our net income, plus or minus. Some quarters a little bit more, some quarters a little bit less. That's generally, when you look at the last five quarters, that's really generally where we've been. When we think about capital return in general, obviously our number one priority is to invest in the business and we want to continue to grow the business. We feel good about our growth prospects, and we continue to invest in our businesses. Yeah, Chris, with respect to the buybacks, I guess I'll take you back to our framework that we laid out when we updated our buyback framework at the beginning of last year, and we said that we will be on a multi-year glide path, returning capital towards a 12% CET1 target. yeah chris with respect to the buybacks i guess i'll take you back to our framework that we laid out when we updated our buyback framework at the beginning of last year and we said that we will be on a multi-year glide path returning capital towards a 12% cet1 target We said that we would approximately return about 100% of our net income, plus or minus. we said that we would approximately return about 100% of our net income plus or minus Some quarters a little bit more, some quarters a little bit less. some quarters a little bit more some quarters a little bit less That's generally, when you look at the last five quarters, that's really generally where we've been. that's generally when you look at the last five quarters that's really generally where we've been When we think about capital return in general, obviously our number one priority is to invest in the business and we want to continue to grow the business. when we think about capital return in general obviously our number one priority is to invest in the business and we want to continue to grow the business We feel good about our growth prospects, and we continue to invest in our businesses. we feel good about our growth prospects and we continue to invest in our businesses When we think about capital return, we look at a couple of different considerations there. One is the regulatory ratios, and the other ones are also rating agency ratios. For example, we look at, in addition to CET1, we also look at TCE. We look at our AOCI volatility and rate volatility. We want to manage all of those factors to ensure that we have the right view on excess capital in our glide path. That's why those are really the drivers behind why we tend to stick around 100%, because of those factors. We saw more interest rate volatility in the last quarter, and you saw a little bit of pressure on our TCE, and that's an example of the kind of things that we're carefully monitoring. When we think about capital return, we look at a couple of different considerations there. when we think about capital return we look at a couple of different considerations there One is the regulatory ratios, and the other ones are also rating agency ratios. one is the regulatory ratios and the other ones are also rating agency ratios For example, we look at, in addition to CET1, we also look at TCE. for example we look at in addition to cet1 we also look at tce We look at our AOCI volatility and rate volatility. we look at our aoci volatility and rate volatility We want to manage all of those factors to ensure that we have the right view on excess capital in our glide path. we want to manage all of those factors to ensure that we have the right view on excess capital in our glide path That's why those are really the drivers behind why we tend to stick around 100%, because of those factors. that's why those are really the drivers behind why we tend to stick around 100% because of those factors We saw more interest rate volatility in the last quarter, and you saw a little bit of pressure on our TCE, and that's an example of the kind of things that we're carefully monitoring. we saw more interest rate volatility in the last quarter and you saw a little bit of pressure on our tce and that's an example of the kind of things that we're carefully monitoring With respect to the capital changes, obviously this is in common period and we'll see how the final rules shake out. We feel like it will have some incremental capital to us on the regulatory side because of the risk weightings and changes to assets. Based on our preliminary modeling, maybe a 4%-5% benefit to capital. Again, that's on the risk-weighted side, and we look at multiple capital ratios and multiple indicators including our total capital to assets and those type of metrics. We're going to weigh all of that, but that could potentially provide a little bit more capacity. With respect to the capital changes, obviously this is in common period and we'll see how the final rules shake out. with respect to the capital changes obviously this is in common period and we'll see how the final rules shake out We feel like it will have some incremental capital to us on the regulatory side because of the risk weightings and changes to assets. we feel like it will have some incremental capital to us on the regulatory side because of the risk weightings and changes to assets Based on our preliminary modeling, maybe a 4%-5% benefit to capital. based on our preliminary modeling maybe a 4%-5% benefit to capital Again, that's on the risk-weighted side, and we look at multiple capital ratios and multiple indicators including our total capital to assets and those type of metrics. again that's on the risk-weighted side and we look at multiple capital ratios and multiple indicators including our total capital to assets and those type of metrics We're going to weigh all of that, but that could potentially provide a little bit more capacity. we're going to weigh all of that but that could potentially provide a little bit more capacity

Speaker 2: Great, David. That's very helpful. Thanks for walking me through all that. I guess kind of a related question, as you sort of have the ability to be picky about the new loans that you do, have kind of your internal thresholds for return gone up over past several quarters in terms of what would be acceptable versus not acceptable for a new credit? Great, David. great david That's very helpful. that's very helpful Thanks for walking me through all that. thanks for walking me through all that I guess kind of a related question, as you sort of have the ability to be picky about the new loans that you do, have kind of your internal thresholds for return gone up over past several quarters in terms of what would be acceptable versus not acceptable for a new credit? i guess kind of a related question as you sort of have the ability to be picky about the new loans that you do have kind of your internal thresholds for return gone up over past several quarters in terms of what would be acceptable versus not acceptable for a new credit

Speaker 3: I would say, Chris, no necessary changes in our thresholds. I think what's really important to us is looking at the relationship pricing altogether rather than thinking about loans on a transactional level. We put all of that into the mix. The deposits are obviously a big part of that. Other fee activity are a big part of that. We're not the low price point in the market. We think about credit, we think about relationship pricing. Those are the things that drive our hurdle. I would say, Chris, no necessary changes in our thresholds. i would say chris no necessary changes in our thresholds I think what's really important to us is looking at the relationship pricing altogether rather than thinking about loans on a transactional level. i think what's really important to us is looking at the relationship pricing altogether rather than thinking about loans on a transactional level We put all of that into the mix. we put all of that into the mix The deposits are obviously a big part of that. the deposits are obviously a big part of that Other fee activity are a big part of that. other fee activity are a big part of that We're not the low price point in the market. we're not the low price point in the market We think about credit, we think about relationship pricing. we think about credit we think about relationship pricing Those are the things that drive our hurdle. those are the things that drive our hurdle

Speaker 2: Great. Thanks again, Dave, and thank you for taking our questions today. Great. great Thanks again, Dave, and thank you for taking our questions today. thanks again dave and thank you for taking our questions today

Speaker 3: Thanks, Chris. Thanks, Chris. thanks chris

Speaker 6: Your next question comes from Manuel Navas at Piper Sandler. Your line is open. Your next question comes from Manuel Navas at Piper Sandler. your next question comes from manuel navas at piper sandler Your line is open. your line is open

Speaker 5: Hey, good afternoon. On the Corporate Trust side and the Global Capital Markets side, those 40% greater revenue quarters up year-over-year, is there some better way to track that? How should we think about that going forward? You said this is a great quarter. Not all of them can be this great. How should we think about those businesses over the course of the whole year? Hey, good afternoon. hey good afternoon On the Corporate Trust side and the Global Capital Markets side, those 40% greater revenue quarters up year-over-year, is there some better way to track that? on the corporate trust side and the global capital markets side those 40% greater revenue quarters up year-over-year is there some better way to track that How should we think about that going forward? how should we think about that going forward You said this is a great quarter. you said this is a great quarter Not all of them can be this great. not all of them can be this great How should we think about those businesses over the course of the whole year? how should we think about those businesses over the course of the whole year

Speaker 3: Yeah. Good afternoon, Manuel. Yeah, those two businesses are essentially what comprises our Institutional Services business. As you know, the Corporate Trust business really focuses on ABS and MBS securitizations. The Capital Markets business focuses on distressed debt and bankruptcies. We saw good momentum across both businesses. There have been a couple of drivers behind that. We've been investing in headcount and technology across the businesses. Those businesses are very important. Referrals and relationships are very important to those businesses. We have developed over time, a unique product expertise across those businesses. We have the ability to be innovative. We can respond faster to clients. As we continue to do more work in those businesses, our reputation has really spread, and we continue to win other and new mandates. That's been a great trend. Yeah. yeah Good afternoon, Manuel. good afternoon manuel Yeah, those two businesses are essentially what comprises our Institutional Services business. yeah those two businesses are essentially what comprises our institutional services business As you know, the Corporate Trust business really focuses on ABS and MBS securitizations. as you know the corporate trust business really focuses on abs and mbs securitizations The Capital Markets business focuses on distressed debt and bankruptcies. the capital markets business focuses on distressed debt and bankruptcies We saw good momentum across both businesses. we saw good momentum across both businesses There have been a couple of drivers behind that. there have been a couple of drivers behind that We've been investing in headcount and technology across the businesses. we've been investing in headcount and technology across the businesses Those businesses are very important. those businesses are very important Referrals and relationships are very important to those businesses. referrals and relationships are very important to those businesses We have developed over time, a unique product expertise across those businesses. we have developed over time a unique product expertise across those businesses We have the ability to be innovative. we have the ability to be innovative We can respond faster to clients. we can respond faster to clients As we continue to do more work in those businesses, our reputation has really spread, and we continue to win other and new mandates. as we continue to do more work in those businesses our reputation has really spread and we continue to win other and new mandates That's been a great trend. that's been a great trend In addition, the strength of our balance sheet and our credit ratings, and as you know, we have three strong investment-grade ratings. Those are also very important support factors for our ability to do these deals because clearly this is about our ability to be there for the long term, to be there as a trustee and a custodian of these assets. The last point I would make is there has been strong market growth particularly when you look at the asset-backed and mortgage-backed security market. The market growth there has been about 20% per year. We have been able to ride that market. We've been able to actually win, share, and grow in excess of that growth rate as you can see from the numbers. We've benefited from that market growth. Certainly, we don't expect that market growth to continue at that rate. In addition, the strength of our balance sheet and our credit ratings, and as you know, we have three strong investment-grade ratings. in addition the strength of our balance sheet and our credit ratings and as you know we have three strong investment-grade ratings Those are also very important support factors for our ability to do these deals because clearly this is about our ability to be there for the long term, to be there as a trustee and a custodian of these assets. those are also very important support factors for our ability to do these deals because clearly this is about our ability to be there for the long term to be there as a trustee and a custodian of these assets The last point I would make is there has been strong market growth particularly when you look at the asset-backed and mortgage-backed security market. the last point i would make is there has been strong market growth particularly when you look at the asset-backed and mortgage-backed security market The market growth there has been about 20% per year. the market growth there has been about 20% per year We have been able to ride that market. we have been able to ride that market We've been able to actually win, share, and grow in excess of that growth rate as you can see from the numbers. we've been able to actually win share and grow in excess of that growth rate as you can see from the numbers We've benefited from that market growth. we've benefited from that market growth Certainly, we don't expect that market growth to continue at that rate. certainly we don't expect that market growth to continue at that rate It may slow down to a more normalized growth rate, but we feel good about our ability to continue to win share. It may slow down to a more normalized growth rate, but we feel good about our ability to continue to win share. it may slow down to a more normalized growth rate but we feel good about our ability to continue to win share

Speaker 5: Okay. I appreciate that. In terms of the loan growth potential, can you speak to customer sentiment beyond what's captured in the better pipelines that are up 35% and line utilization is up? How are your customers in the footprint thinking about what's going on in the environment? Or does it seem like it's business as usual? Okay. okay I appreciate that. i appreciate that In terms of the loan growth potential, can you speak to customer sentiment beyond what's captured in the better pipelines that are up 35% and line utilization is up? in terms of the loan growth potential can you speak to customer sentiment beyond what's captured in the better pipelines that are up 35% and line utilization is up How are your customers in the footprint thinking about what's going on in the environment? how are your customers in the footprint thinking about what's going on in the environment Or does it seem like it's business as usual? or does it seem like it's business as usual

Speaker 7: Hey, Manuel. It's Rodger. As you can imagine, been spending a fair bit of time out and about with our clients and prospects. I would say generally, that it's business as usual. I think all this volatility, including what's going on right now overseas, I think it's kind of set in that there's going to be some volatility and that businesses are kind of moving on, and they're investing, and they're seeing opportunities to grow as a general statement. I would say at the beginning of the year some of our local businesses had some exposure to the weather. We had a pretty rough period of time there in the early part of the year. Businesses have kind of moved past that, and I'd say generally, optimism is at a pretty reasonable level at this point. Hey, Manuel. hey manuel It's Rodger. it's rodger As you can imagine, been spending a fair bit of time out and about with our clients and prospects. as you can imagine been spending a fair bit of time out and about with our clients and prospects I would say generally, that it's business as usual. i would say generally that it's business as usual I think all this volatility, including what's going on right now overseas, I think it's kind of set in that there's going to be some volatility and that businesses are kind of moving on, and they're investing, and they're seeing opportunities to grow as a general statement. i think all this volatility including what's going on right now overseas i think it's kind of set in that there's going to be some volatility and that businesses are kind of moving on and they're investing and they're seeing opportunities to grow as a general statement I would say at the beginning of the year some of our local businesses had some exposure to the weather. i would say at the beginning of the year some of our local businesses had some exposure to the weather We had a pretty rough period of time there in the early part of the year. we had a pretty rough period of time there in the early part of the year Businesses have kind of moved past that, and I'd say generally, optimism is at a pretty reasonable level at this point. businesses have kind of moved past that and i'd say generally optimism is at a pretty reasonable level at this point I think you see that in not only the fundings, but in some of the comments on our pipeline and other things. We feel good about that supporting the overall C&I growth going forward. I think you see that in not only the fundings, but in some of the comments on our pipeline and other things. i think you see that in not only the fundings but in some of the comments on our pipeline and other things We feel good about that supporting the overall C&I growth going forward. we feel good about that supporting the overall c&i growth going forward

Speaker 5: I appreciate that commentary. Is there any opportunity to add talent, any talent that you feel like you need to add to keep that lending trajectory going? I appreciate that commentary. i appreciate that commentary Is there any opportunity to add talent, any talent that you feel like you need to add to keep that lending trajectory going? is there any opportunity to add talent any talent that you feel like you need to add to keep that lending trajectory going

Speaker 7: We're always interested, as David said, in investing in the business and in the commercial business in particular. That's all about adding talent. I think the bar for us, though, is very high. We're looking at people who can move books of business, have deep relationships in the market, and are culturally consistent with us across the commercial platform. Just as a reminder, an example of that last year in the sort of right between the third and the fourth quarter, we hired the M&T market president for the Greater Philly region, Greater Philly and Delaware region. Somebody we've known for a long period of time to join us, and that was a significant pickup for us. We're always interested, as David said, in investing in the business and in the commercial business in particular. we're always interested as david said in investing in the business and in the commercial business in particular That's all about adding talent. that's all about adding talent I think the bar for us, though, is very high. i think the bar for us though is very high We're looking at people who can move books of business, have deep relationships in the market, and are culturally consistent with us across the commercial platform. we're looking at people who can move books of business have deep relationships in the market and are culturally consistent with us across the commercial platform Just as a reminder, an example of that last year in the sort of right between the third and the fourth quarter, we hired the M&T market president for the Greater Philly region, Greater Philly and Delaware region. just as a reminder an example of that last year in the sort of right between the third and the fourth quarter we hired the m&t market president for the greater philly region greater philly and delaware region Somebody we've known for a long period of time to join us, and that was a significant pickup for us. somebody we've known for a long period of time to join us and that was a significant pickup for us I think that's indicative of the fact that very well-known individual, proven person in the marketplace could have gone wherever pretty much I think he wanted to go, and he chose WSFS. I think that shows that we're kind of the provider of choice for people who are at larger institutions who want to be part of something that has a balance sheet big enough to support larger customers with a product offering at a bigger bank, but in a much more nimble, service-driven way. I would expect that we will see more talent like that coming to us over time as it has for as long as I can remember. I think that's indicative of the fact that very well-known individual, proven person in the marketplace could have gone wherever pretty much I think he wanted to go, and he chose WSFS. i think that's indicative of the fact that very well-known individual proven person in the marketplace could have gone wherever pretty much i think he wanted to go and he chose wsfs I think that shows that we're kind of the provider of choice for people who are at larger institutions who want to be part of something that has a balance sheet big enough to support larger customers with a product offering at a bigger bank, but in a much more nimble, service-driven way. i think that shows that we're kind of the provider of choice for people who are at larger institutions who want to be part of something that has a balance sheet big enough to support larger customers with a product offering at a bigger bank but in a much more nimble service-driven way I would expect that we will see more talent like that coming to us over time as it has for as long as I can remember. i would expect that we will see more talent like that coming to us over time as it has for as long as i can remember

Speaker 5: Well, that's a great move. Thank you. Thank you for the comments. Well, that's a great move. well that's a great move Thank you. thank you Thank you for the comments. thank you for the comments

Speaker 7: Sure. Sure. sure

Speaker 3: Thank you. Thank you. thank you

Speaker 6: Analysts are more than welcome to rejoin the queue if they have any new questions. Next up we have Charlie Driscoll from KBW. Your line is now open. Analysts are more than welcome to rejoin the queue if they have any new questions. analysts are more than welcome to rejoin the queue if they have any new questions Next up we have Charlie Driscoll from KBW. next up we have charlie driscoll from kbw Your line is now open. your line is now open

Speaker 1: Hi guys. Thanks for the question. This is Charlie on for KBW. Hi guys. hi guys Thanks for the question. thanks for the question This is Charlie on for KBW. this is charlie on for kbw

Speaker 3: Hey, Charlie. Hey, Charlie. hey charlie

Speaker 1: Circling back on the capital priority question with the possible regulatory relief. Boosting capital and still meaningfully above your medium-term CECL targets. Understanding you're already pretty aggressive on the buyback and with the premium valuation giving you optionality. Just wondering your updated thoughts on M&A here, if you're looking for a more traditional bank or something less traditional, just anything there. Thank you. Circling back on the capital priority question with the possible regulatory relief. Boosting capital and still meaningfully above your medium-term CECL targets. circling back on the capital priority question with the possible regulatory relief. boosting capital and still meaningfully above your medium-term cecl targets Understanding you're already pretty aggressive on the buyback and with the premium valuation giving you optionality. understanding you're already pretty aggressive on the buyback and with the premium valuation giving you optionality Just wondering your updated thoughts on M&A here, if you're looking for a more traditional bank or something less traditional, just anything there. just wondering your updated thoughts on m&a here if you're looking for a more traditional bank or something less traditional just anything there Thank you. thank you

Speaker 7: No update, Charlie, on that topic. Clearly we've talked about we'd love to find opportunities, particularly in our fee businesses, for investment, whether they're one-off talent or small acquisitions or potentially even something larger. I think our profile is growing in that space significantly, particularly the Wealth and Trust area. We'll continue to look for those opportunities. In terms of whole bank, we think we have a great opportunity to execute on our strategic plan with the footprint that we have today, focusing on this Greater Philadelphia and Delaware region and a lot of headroom to grow and a very distracted large bank competitive set. That being said, if something came along that we think would be additive to that, we would certainly consider it. But the bar would be, I think, very high because we do think there's so much opportunity right in front of us. No update, Charlie, on that topic. no update charlie on that topic Clearly we've talked about we'd love to find opportunities, particularly in our fee businesses, for investment, whether they're one-off talent or small acquisitions or potentially even something larger. clearly we've talked about we'd love to find opportunities particularly in our fee businesses for investment whether they're one-off talent or small acquisitions or potentially even something larger I think our profile is growing in that space significantly, particularly the Wealth and Trust area. i think our profile is growing in that space significantly particularly the wealth and trust area We'll continue to look for those opportunities. we'll continue to look for those opportunities In terms of whole bank, we think we have a great opportunity to execute on our strategic plan with the footprint that we have today, focusing on this Greater Philadelphia and Delaware region and a lot of headroom to grow and a very distracted large bank competitive set. in terms of whole bank we think we have a great opportunity to execute on our strategic plan with the footprint that we have today focusing on this greater philadelphia and delaware region and a lot of headroom to grow and a very distracted large bank competitive set That being said, if something came along that we think would be additive to that, we would certainly consider it. that being said if something came along that we think would be additive to that we would certainly consider it But the bar would be, I think, very high because we do think there's so much opportunity right in front of us. but the bar would be i think very high because we do think there's so much opportunity right in front of us We always keep our eyes open for those kinds of situations. We would also just reiterate, we feel we can execute on our strategic plan in the banking business by focusing on the organic growth opportunity right in front of us to take market share. We always keep our eyes open for those kinds of situations. we always keep our eyes open for those kinds of situations We would also just reiterate, we feel we can execute on our strategic plan in the banking business by focusing on the organic growth opportunity right in front of us to take market share. we would also just reiterate we feel we can execute on our strategic plan in the banking business by focusing on the organic growth opportunity right in front of us to take market share

Speaker 1: Great, thank you. Just on credit broadly, you booked a big recovery in the quarter, maybe any inside baseball you can give on that specific credit and any broader kind of commentary on what you're seeing in your portfolios or any areas you're more concerned about or looking at more carefully? Thank you. Great, thank you. great thank you Just on credit broadly, you booked a big recovery in the quarter, maybe any inside baseball you can give on that specific credit and any broader kind of commentary on what you're seeing in your portfolios or any areas you're more concerned about or looking at more carefully? just on credit broadly you booked a big recovery in the quarter maybe any inside baseball you can give on that specific credit and any broader kind of commentary on what you're seeing in your portfolios or any areas you're more concerned about or looking at more carefully Thank you. thank you

Speaker 3: Yeah, Charlie, I would say on that specific credit, generally we take a conservative posture with the way we look at our assets. As a reminder, this was a loan that was an acquired loan, not a loan that we originated and was kind of unique to our portfolio, but it was a loan to a fund that was invested in office real estate. We didn't have direct collateral. We didn't have direct recourse to the collateral, and so we saw no value in that, and we took a full write-off. There's a lot of liquidity in the market, and one indication of that liquidity was that the sponsor in this case was able to get a full refinancing of that loan, and we were able to get a full recovery. Yeah, Charlie, I would say on that specific credit, generally we take a conservative posture with the way we look at our assets. yeah charlie i would say on that specific credit generally we take a conservative posture with the way we look at our assets As a reminder, this was a loan that was an acquired loan, not a loan that we originated and was kind of unique to our portfolio, but it was a loan to a fund that was invested in office real estate. as a reminder this was a loan that was an acquired loan not a loan that we originated and was kind of unique to our portfolio but it was a loan to a fund that was invested in office real estate We didn't have direct collateral. we didn't have direct collateral We didn't have direct recourse to the collateral, and so we saw no value in that, and we took a full write-off. we didn't have direct recourse to the collateral and so we saw no value in that and we took a full write-off There's a lot of liquidity in the market, and one indication of that liquidity was that the sponsor in this case was able to get a full refinancing of that loan, and we were able to get a full recovery. there's a lot of liquidity in the market and one indication of that liquidity was that the sponsor in this case was able to get a full refinancing of that loan and we were able to get a full recovery I think that's an indication of kind of the liquidity that we see in the market for some of these assets. In terms of our overall portfolio, I think we feel good. As I kind of outlined in our comments, they're always potentially uneven deals in commercial, but generally, when you look at the trend over the last five quarters, we've been trending down pretty much in all of our indicators. That makes us feel good about our portfolio. We gave you some disclosure around our MDI portfolio, which is very small, about 3% of our assets. Also very granular and distributed. We see no credit issues in that portfolio. There are almost no problem assets, no MPAs, charge-offs, or delinquencies there. We feel good about our portfolio overall. I think that's an indication of kind of the liquidity that we see in the market for some of these assets. i think that's an indication of kind of the liquidity that we see in the market for some of these assets In terms of our overall portfolio, I think we feel good. in terms of our overall portfolio i think we feel good As I kind of outlined in our comments, they're always potentially uneven deals in commercial, but generally, when you look at the trend over the last five quarters, we've been trending down pretty much in all of our indicators. as i kind of outlined in our comments they're always potentially uneven deals in commercial but generally when you look at the trend over the last five quarters we've been trending down pretty much in all of our indicators That makes us feel good about our portfolio. that makes us feel good about our portfolio We gave you some disclosure around our MDI portfolio, which is very small, about 3% of our assets. we gave you some disclosure around our mdi portfolio which is very small about 3% of our assets Also very granular and distributed. also very granular and distributed We see no credit issues in that portfolio. we see no credit issues in that portfolio There are almost no problem assets, no MPAs, charge-offs, or delinquencies there. there are almost no problem assets no mpas charge-offs or delinquencies there We feel good about our portfolio overall. we feel good about our portfolio overall Again, there's always one or two credits that could be specific problems, but nothing systemic that we're seeing overall and something we continue to monitor closely. Again, there's always one or two credits that could be specific problems, but nothing systemic that we're seeing overall and something we continue to monitor closely. again there's always one or two credits that could be specific problems but nothing systemic that we're seeing overall and something we continue to monitor closely

Speaker 1: Great, thank you. Thanks for the color. I'll step back. Great, thank you. great thank you Thanks for the color. thanks for the color I'll step back. i'll step back

Speaker 6: Thank you. With no further questions in the queue, I would like to turn the conference back to David Burg. Thank you. thank you With no further questions in the queue, I would like to turn the conference back to David Burg. with no further questions in the queue i would like to turn the conference back to david burg

Speaker 3: Okay. Well, thank you very much, everyone, for joining the call today. If you have any specific follow-up questions, please reach out to Andrew in investor relations or me. Have a great day. Okay. okay Well, thank you very much, everyone, for joining the call today. well thank you very much everyone for joining the call today If you have any specific follow-up questions, please reach out to Andrew in investor relations or me. if you have any specific follow-up questions please reach out to andrew in investor relations or me Have a great day. have a great day

Speaker 7: Thank you. Thank you. thank you

Speaker 3: Thank you. Thank you. thank you

Speaker 6: This concludes today's call. Thank you for attending. You may now disconnect. This concludes today's call. this concludes today's call Thank you for attending. thank you for attending You may now disconnect. you may now disconnect