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WSFS Financial Corp (NASDAQ:WSFS)
Q3 2020 Earnings Call
Oct 23, 2020, 1:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by and welcome to the WSFS Financial Corporation Third Quarter 2020 Earnings Call. [Operator Instructions]

I would now like to [Indecipherable] today's conference call, Mr. Dominic Canuso, Chief Financial Officer. Sir, you may begin.

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

Thank you, Kevin. And thanks to all of you for taking the time to participate on our call today. With me on this call are Rodger Levenson, Chairman, President and CEO; Art Bacci, Chief Wealth Officer; Steve Clark, Chief Commercial Banking Officer; and Rick Wright, Chief Retail Banking Officer.

Before Rodger begins with his remarks, 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 the risks and uncertainties, including, but not limited to, the risk factors included 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.

With that read, I'll turn the discussion over to Rodger Levenson.

Rodger Levenson -- Chairman, President and Chief Executive Officer

Thanks, Dominic. And thanks everyone for joining us on the call. WSFS had a very solid third quarter reporting earnings per share of $1.01, return on assets of 1.49% and return on tangible common equity of 16.61%. As detailed in the release and earnings supplement posted on the Investor Relations section of our company website, this performance was a direct result of our diversified business model and the incredible dedication of our over 1,800 highly engaged associates who have responded admirably to the challenges of the pandemic and related economic recovery.

Core pre-provision net revenue of $68 million represented a 7% increase over the prior quarter and translated into a very healthy 1.98% of assets. A highlight was our core fee income, which grew 13% on a linked quarter basis, driven by strong performance in our mortgage and wealth businesses. This fee income growth occurred even with the impact of Durbin, which became effective on July 1st.

As outlined in the supplement on Slide 6, our fee income is very well diversified and provides earnings stability and capacity through interest rate cycles. Loan and deposit growth reflected the current economic environment. Deposit growth was of particular note even when excluding regular seasonal municipal deposit levels. Our net interest margin of 3.66% contracted 27 basis points in the quarter, primarily as a result of excess liquidity related to these high levels of customer deposits and lower purchase loan accretion. Core expenses were flat on both the linked quarter and year-over-year basis. The core efficiency ratio was 57.1%. While we remained focused on disciplined expense management, we continue to make significant investments in our franchise, including our delivery transformation and talent acquisition throughout the organization.

Overall credit trends remain stable. Loan modifications declined significantly during the quarter and currently stands at 3% of overall loans. Delinquencies, non-performers and charge-offs remain at low levels. As a result of the completion of our targeted portfolio reviews started in the second quarter, total problem assets, which include all criticized, classified and non-performing loans, increased to 49% of Tier 1 capital plus ACL. Just over half of the problem loans are in the hotel, retail, retail real estate and foodservice portfolios, which have seen the biggest impact of the pandemic.

ACL coverage of 2.74%, excluding PPP, was flat to the second quarter and stands at 3.22% when including the remaining credit mark on our acquired portfolios. The provision in the quarter reflected relatively consistent economic forecasts versus prior quarter expectations and overall stable portfolio performance. The risk rating migration in the quarter was primarily incorporated into our second quarter provisioning. Future loss content will be dependent upon the path of the economic recovery and potential additional stimulus.

Despite a very strong capital position, we prudently suspended share repurchases in the second quarter due to the significant uncertainty at the onset of the pandemic. With improved visibility into the near-term operating environment, solid operating performance and significant capital and ACL levels, the Board approved the resumption of share repurchases in the fourth quarter. At current trading ranges, the IRR on share repurchases is very compelling and we therefore intend to be aggressive buyers of our stock.

Looking ahead, in the fourth quarter, we see a modest decline in core pre-provision net revenue based upon anticipated lower purchase loan accretion, a seasonal decline in mortgage revenue and continued franchise investment. This outlook envisions a continuation of the current economic recovery and 20% of PPP loan forgiveness. As has been our recent practice, we will provide our outlook on 2020 when we announce our fourth quarter results in January.

In conclusion, while the macro longer-term outlook will be determined by the length and path of the economic recovery, our entire company remains focused and energized on realizing the growth opportunity in front of us as the largest locally headquartered bank in the Philadelphia and Delaware Valley region.

Thank you. I will now turn it over to Dominic to facilitate Q&A.

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

Thanks, Roger. Kevin, if you can open the line for questions?

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from Frank Schiraldi with Piper Sandler.

Frank Schiraldi -- Piper Sandler -- Analyst

Good afternoon.

Rodger Levenson -- Chairman, President and Chief Executive Officer

Hi, Frank.

Frank Schiraldi -- Piper Sandler -- Analyst

Hey. Roger, just wanted to follow up on your comments on the buyback. You certainly used the word aggressive. And if I look at your presentation, you guys talk about close to $500 million in excess capital that you either have on the books or you're going to generate over the next five quarters. And I guess, acquisition seem kind of unlikely. I would imagine net growth is difficult, just given the rundown in the Beneficial portfolio. So, is buybacks at this point the primary use of capital? And $500 million in excess capital, I guess, would be even greater than that 15% buyback that you have outstanding here?

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

Yeah. So, Frank, maybe a little bit of high level context. I think, certainly right now, buybacks is one of the primary uses of capital. We feel, as we said in the second quarter, very well reserved for the economic environment and the potential losses that could occur with that. So we don't see that certainly based on everything that's going on now. But I do think there is continued uncertainty out there about the path of the recovery. And so, optionality on that front as well as optionality for opportunities is also part of the thought process on the capital deployment.

Clearly we just approved the 15%. But when we put the share repurchase suspension in place in the second quarter, that gives us a fair bit of headroom here over the next several quarters. But it will be a continual process of evaluating all those factors in terms of other opportunities that might present themselves.

Frank Schiraldi -- Piper Sandler -- Analyst

And then, just a follow-up, if I could, on the migration into problem assets in the quarter. I know, if you look at the presentation, certainly you breakout pieces like restaurant and retail and go back to last quarter, I guess, and pull out where the migration was this quarter, specifically in those categories. I think the hotel stuff has already been completed, if I recall, in 2Q. So just wondering if you could maybe talk about what were the greatest driver within those portfolios. And then maybe if there was a driver outside of those portfolios of the migration in the quarter.

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

Sure. Thanks, Frank. Steve, do you want to talk about the process that we entailed in the third quarter and where that left the metrics?

Steve Clark -- Executive Vice President and Chief Commercial Banking Officer

Sure, would be happy to. Hello, Frank. So, yeah, the third quarter was really a continuation of what we had started in the second quarter. And Frank, you're correct, we did complete our risk rating review of 100% of the hotel book in the second quarter. And we were about halfway through the risk rating review for the other high-risk kind of category. So we had completed about 50% of the review in CRE retail, almost 40% of the review on retail trade and about 50% of the restaurant. And again, as a reminder, these were categories we had coated red and yellow. So that review was completed in full in the third quarter and the migration really was consistent with our expectation. The migration, predominantly about half of $100 million was CRE in those high-risk categories and the balance was really spread across all different categories of C&I owner occupied with real no significant concentration in those categories.

Frank Schiraldi -- Piper Sandler -- Analyst

Okay, got you. And then, is the review of those targeted categories is complete? Is there further -- I mean, I guess, there's always -- you're always looking at the loan book, but is there still a piece of that review to be completed and does the provisioning that you took in the second quarter already incorporate additional risk rating migration that we could see in 4Q or future periods?

Rodger Levenson -- Chairman, President and Chief Executive Officer

Yes. I'll let Dominic kind of answer the second part of your question. But the first part of your question, yes, we have completed 100% of the review of the red and yellow-coated borrowers and industries. So that represents a tick over $3 billion of our commercial book. So that review is done.

Now, as you recall, we do have just our normal process we set quarterly with all of our RMs and credit teams and review every RM's portfolio on a quarterly basis. So something may fall out of those quarterly reviews positively or negatively. But in terms of the targeted review, we have 100% completed that.

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

And just to build on that, I think, as we discussed in the -- after the second quarter, both the process in which Steve and the credit team took with regard to loan reviews and with our CECL ACL build, we took a very conservative view with the objective under the CECL model to capture as much of the credit and economic impacts in the future on to the balance sheet at the end of the second quarter. We had, as Steve said, knew where we were at the end of that quarter with regard to the targeted processes. And we took that into consideration through qualitative adjustment factors such that with the review completed and the migration that occurred resulted in no meaningful change in our ACL coverage ratios.

Frank Schiraldi -- Piper Sandler -- Analyst

Okay. All right. Thank you.

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

Thanks, Frank.

Operator

Our next question comes from Michael Perito with KBW.

Michael Perito -- KBW -- Analyst

Hey. Good afternoon, guys. Thanks for taking my questions.

Rodger Levenson -- Chairman, President and Chief Executive Officer

Hey, Mike.

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

Hey, Michael.

Michael Perito -- KBW -- Analyst

I wanted to start on the fee income side. Obviously a really strong quarter, the investment management mortgage verticals here. But curious if you could maybe try and just conceptually break out a little bit how much of this was kind of COVID-related, how much of this was some of the hiring and efforts you guys have been making to grow out the fee products in Philadelphia? And building on that, what's kind of the outlook for fee growth as we kind of get toward 2021 at this point, given some of the strong trend you're seeing today?

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

Sure, Mike. This is Dominic. I'll start with that as you see on Slide 6 on our Investor Relations material, we did see a nice step up in the third quarter across really many of our fee categories. I mean, this in particular offset the onset of the Durbin amendment, which clearly was an impact to our banking fees. So we're pleased with the overall growth from that perspective.

I think you clearly see in mortgage -- I think that's an industrywide event. I think two things are happening. One, the lower interest rate environment driving significant volumes and then the attractiveness in the secondary market for these assets are driving the pipeline valuation a little bit higher. I think with rate staying lower, this could continue. We do see the third quarter is definitely a high mark than we would expect in the fourth quarter typical seasonality of lower volumes to result.

I think Cash Connect, we definitely saw some nice step up, but this was a little bit of a catch-up in volumes associated with coming out and reopening from -- of the economies nationwide as that business serves really all 50 states. And then, wealth and trust, a combination of both improved AUM, the equity markets but also a good amount of continued volume in the trust business. So, we do see the fourth quarter being lower a bit given the outsized performance in mortgage and a little bit in Cash Connect. I think, the long-term prospects and while we provide more information regarding 2021 specifically with our fourth quarter results in January, we continue to see the opportunity to grow both our local and national businesses at high-single digits, low-double digits for the foreseeable future.

We've talked about, since the combination with Beneficial, the opportunity to invest in a lot of these fee-based areas to further penetrate into the newer markets of the greater Philadelphia region. And we see that opportunity to continue to be there and, in fact, is providing some of the benefits we're seeing particularly in the mortgage business.

Michael Perito -- KBW -- Analyst

Helpful, Dominic. Thank you. And then, just -- before I move on to clarify on the investment management side, I know it can move from quarter to quarter, but was there anything particularly elevated in there that we should be mindful of as to kind of overall forecast forward here?

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

Art, do you want to talk about that?

Arthur J. Bacci -- Executive Vice President and Chief Wealth Officer

Yeah. Michael, could you repeat your question? You came in a little blurry for me.

Michael Perito -- KBW -- Analyst

I'm sorry. I was just curious, the $13.3 million in investment management fiduciary revenue we serve. I know it can change from quarter to quarter, but was there anything particularly elevated in that figure that we should be mindful of as we roll off forecast forward?

Arthur J. Bacci -- Executive Vice President and Chief Wealth Officer

Michael, really it was spread across. All of our businesses had a strong third quarter. The institutional trust business benefited from some bankruptcy work that increased. And obviously we expect that to kind of continue to grow into next year. It might slow down in the fourth quarter just seasonally. The corporate trust business issuance of mortgage-backed securities remain very strong. We kind of predict a pretty good fourth quarter in terms of personal trust. And then, the advisory businesses saw good AUM growth and we ended the third quarter with AUM up 2% and we usually bill in arrears. So I would expect fee income in the fourth quarter generally, assuming all else equal, be in line with the AUM growth that we saw at the end of the third quarter.

Michael Perito -- KBW -- Analyst

Great. Helpful. Thanks. And then, just switching to the expense side of the equation. Yeah, I mean, obviously you guys continue to make investments as you alluded to, Rodger. But I think, as the digital delivery transformation advances, it would seem to me that there might be opportunities elsewhere to kind of gain efficiencies and reduce costs. And I'm just -- I think you guys alluded to something of that nature on the second quarter earnings call. I'm just curious how that process has been going and how far along you guys are in kind of reviewing your cost structure as we approach year-end here?

Rodger Levenson -- Chairman, President and Chief Executive Officer

Sure, Mike. I'll take that. I think it's important to remind everyone that the journey we've been on since the combination with Beneficial over the last year-and-a-half. As part of that acquisition, we made two specific efforts with regard to cost synergies won and branch consolidation. We took a big step with our branch footprint with a combination where we closed 25% of our branches or 30 branches. To clarify, about a third of that was actually your typical proximity based branch closures where you look at coverage within 3 miles and merge those branch locations. But the other 20 branches that we closed, or about 18% of the remaining branches, were truly efficiencies. So we took that opportunity to get ahead of what we saw as the continued trend and lower transaction count and our ability to serve our customers through that remaining footprint and our digital platforms.

So, for us, we were a bit of ahead of the curve before COVID and we feel comfortable with where we are. However, we continue to evaluate that as digital adoption continues. As part of that, not only was it the real estate cost, but lower FTE count associated with those of our branches. We are evaluating our non-retail office footprint, including our real estate cost LPOs and training centers and are evaluating what post COVID environment would look like and to the extent we have opportunities within that footprint. But we feel like the cost base we have today is very appropriate for us to deliver the high touch customer service we do with our high fee income and our relationship based lending model, a 57% efficiency see ratio we feel is really compelling, given the low interest rate environment we are at and we're very focused on now executing on the investments, particularly in delivery transformation and the continued fee opportunities that we see ahead of us.

Michael Perito -- KBW -- Analyst

Helpful. Thank you for taking my questions, guys.

Rodger Levenson -- Chairman, President and Chief Executive Officer

Thanks, Mike.

Operator

Our next question comes from Brody Preston with Stephens, Inc.

Brody Preston -- Stephens, Inc. -- Analyst

Hey. Good afternoon, everyone.

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

Hey, Brody.

Rodger Levenson -- Chairman, President and Chief Executive Officer

Hi, Brody.

Brody Preston -- Stephens, Inc. -- Analyst

Hey. So, I just wanted to circle back on the buyback. Roger, I just wanted to confirm, is there -- were there any conversations. I guess, maybe, or I guess approvals that need to be had from the Fed or any regulators before you could resume repurchasing?

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

So, we consult with our regulators on any significant actions that we're taking, whether it's capital related or other things. So that's part of the normal process for us. And so, we were in conversation with them and obviously those conversations went well and we're moving forward.

Brody Preston -- Stephens, Inc. -- Analyst

Okay. Okay. Thank you for that. So, I guess, just tying that to the capital slide that you all put in there, as you noted and Frank mentioned earlier, really strong excess capital position. But the -- I guess the ACL scenario that you have outlined in there is 30 basis points. As of the second quarter, you had -- I think it's $10.2 billion in risk-weighted assets. So that implies $30 million to $35 million, I guess, in losses and a severe adverse scenario, which is, I mean, you guys make 2 times that in quarterly PPNR in any given quarter. So, is there any reason for us to assume that you would not be aggressive on the buyback in the fourth quarter and beyond that?

Rodger Levenson -- Chairman, President and Chief Executive Officer

So, I'll start now. Dominic, please chime in. So, in the near-term, there's nothing that we could see that would prevent us from being, again, aggressive. One of the -- and I should have said this as part of the initial response to Frank. But one of the things and the reasons that we like buybacks as a way of returning capital to our shareholders is its optionality. It gives us the option at any time to respond to opportunities or challenges and we divert that capital to address those situations.

I think Frank said it well, nothing on that front is obvious right now, so buyback is where we're headed. But it's always subject to change based on circumstances and things that can play out in the future. Sitting here today, there's nothing in the near-term that would steer us away from being aggressive on buybacks. It just obviously gives a caveat. A lot of this is very dependent upon the external macro environment and how that all plays out. But sitting here today, we feel very confident in being aggressive in the near-term.

Brody Preston -- Stephens, Inc. -- Analyst

Okay. Just flipping back to the trust business real quick. I wanted to ask, is there, I guess, a tax arm within that that helps people with their taxes at all? And if so, could that become a tailwind if we get another change in the tax code under a potential Biden presidency?

Rodger Levenson -- Chairman, President and Chief Executive Officer

Art, would you like to take that?

Arthur J. Bacci -- Executive Vice President and Chief Wealth Officer

Sure, I'll take that. Brody, we definitely see that opportunity. Generally the fourth quarter for us is one of our more active quarters on the personal trust side. And we are already seeing in September and October an elevated level of volume with people setting up marital trust in anticipation of higher tax rates going forward. So that's certainly an element of our planning.

Brody Preston -- Stephens, Inc. -- Analyst

Okay, great. Thank you for that. And then, Dominic, on Cash Connect, I think last quarter we talked about bottoming on net revenue with the rates going to zero and then moving higher from there with growth, which was good to see this quarter. So I just want to get a sense for how the growth outlook for new ATMs and smart safes looks [Phonetic] and I also wanted to ask if there was any potential for gaining wallet share with existing clients in the Cash Connect business?

Rodger Levenson -- Chairman, President and Chief Executive Officer

Yeah, sure. Great question. What I'd say is, we -- to reiterate what we saw this year in this unique environment was the resiliency of both cash in our economy along with Cash Connect's ability to serve through various cycles. And we definitely saw the rebound play out in the third quarter, not only bringing more units back online but supporting our ISO customers and filling their ATMs and then reengaging on the smart safe program.

We absolutely see the same growth trajectory in the future as we've seen in the recent past. In fact, this year alone, during this COVID environment, we see the opportunity to grow our units served around 7%, which is a nice growth rate considering we serve a lot of retail and location-based services. We also do look to deepen our relationship with our existing ISO customers not just with the volume of cash but with increased services. As you know, we provide armored carrier services along with insurance reconciliation and optimization, so non-asset-based fee services that continues to improve our performance margins and ROA. And we continue to look for that further penetration within those customers and then diversify as well.

Brody Preston -- Stephens, Inc. -- Analyst

Okay. Thank you very much for that. And last one for me was, I just want to get a sense for how much was left in deposit and borrowing-related accretable yield.

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

The accretable yield on the deposits?

Brody Preston -- Stephens, Inc. -- Analyst

Yeah, just from the...

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

Purchase loan accretion in general?

Rodger Levenson -- Chairman, President and Chief Executive Officer

Yeah. Just wanted to get a sense of the total accretable yield if there was any still left from the beneficial-related CDs and borrowings.

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

Yeah. And I'd have to follow up with you on the specific amount. Most of them were short tenured accretion, so we can follow up offline with that. But we continue to have purchase loan accretion portfolio just under $90 million both on the yield and credit side, which creates that elongated tail to the purchase loan accretion impact to our net interest margin.

Brody Preston -- Stephens, Inc. -- Analyst

Okay. That's fair enough. But it sounds like it's mostly related to the loan portfolio at this point. And so, just for calculating a core loan yield, it would be safe to back the majority out of there?

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

That's correct.

Brody Preston -- Stephens, Inc. -- Analyst

All right. Thank you very much, Dominic. I appreciate the time everyone.

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

Sure. Thanks, Brody.

Rodger Levenson -- Chairman, President and Chief Executive Officer

Thank you.

Operator

[Operator Instructions] Our next question comes from Russell Gunther with D.A. Davidson.

Russell Gunther -- D.A. Davidson -- Analyst

Hey. Good afternoon, guys.

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

Hey, Russell.

Rodger Levenson -- Chairman, President and Chief Executive Officer

Hey, Russell.

Russell Gunther -- D.A. Davidson -- Analyst

Hi. Just a quick follow-up on the expense line conversation. I believe in the comments around the PP and our guide for next quarter, you mentioned continued franchise investments, been running just shy of kind of $91 million on a core expense basis the last couple of quarters. Get your thoughts on the sustainability of that and where that is likely to head in the fourth quarter.

And then, Dominic, as a follow-up, you mentioned the 57% efficiency is a good place to be in a zero to be in a zero rate environment. So, can you talk about your ability to improve upon that as we look into 2021 or at least commit to kind of holding it where it is?

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

Yeah, sure. So, first, on the non-interest expense. We have been in the low-$90 million, close to $90 million the last few quarters. We do expect that to increase and that's part of the step down from the third quarter, fourth quarter core PPNR, ex-PPP. That increase in cost base is primarily the continued investment in delivery transformation and supporting the growth in our fee businesses. So it may step up a couple of percentage points in the fourth quarter. And then, as we mentioned earlier, with regard to 2021, we'll provide a more comprehensive discussion on our outlook once we complete our plan for next year.

Clearly there's a lot in play with regard to the economic environment and banking environment. But most importantly, we continue to see the opportunity ahead of us, as Roger mentioned, as the largest local headquartered bank in the greater Philadelphia region and state of Delaware. And we see the opportunities from those business cases that we've been talking about for the last few years to be there. And we'll continue to make those investments.

Russell Gunther -- D.A. Davidson -- Analyst

Got it. And I appreciate the near-term thought. I guess, with the ability to kind of harvest the franchise investment that's already been made on the top line, do you think you can, again, at least commit to holding that 57% efficiency ratio, if not, improve upon it?

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

Yes. So, I think typically as we've said before, we do focus on efficiency ratio. We're pleased with the results for the third quarter. And when we do look forward in our investment base, if we look for positive operating leverage. However, what I will say is, we also have demonstrated our ability to accelerate investments when we see opportunities, particularly when there's disruption in the economy or in our markets. And that could affect the near-term shape of that. But it would all be revenue-generating investments that may just have somewhat periodic lag. So, we're evaluating all those opportunities. So, as I mentioned, it's a bit early to commit to kind of that near-term expectation. But I think you can see in our track record and in our historical expense management discipline that we do typically manage to positive operating leverage except when we see those opportunity for accelerated growth investment.

Russell Gunther -- D.A. Davidson -- Analyst

Understood. Okay. Thanks for the follow-up. And then, just switching gears on to the organic growth outlook, we're able to show a little bit of positive momentum on the core portfolio. I guess, one, if you could just address where you'd expect the C&I to pick back up or if that's to remain a headwind going forward. And then beyond that, the remainder of the core portfolio, if there's opportunity to sustain positive growth in the near-term?

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

Sure. Steve, do you want to take that?

Steve Clark -- Executive Vice President and Chief Commercial Banking Officer

Sure, Dominic. Yes. Regarding commercial growth opportunity, we still see almost weekly opportunity in CRE, multi-family, residential, land and land development, residential construction and a little bit of, kind of, neighborhood retail. Looking at all of that through a pretty, call it, the COVID lens, the C&I side still is, I would say, headwind, and not a lot of investment going on by our borrowers. So, any opportunity, it's really kind of market share opportunities, but we are seeing instances where PPP loans, which have not yet been forgiven, are precluding companies from transferring banks. So, I think C&I, in the short-term, will still be very, very muted in terms of growth.

Russell Gunther -- D.A. Davidson -- Analyst

Okay. Great. Thanks for taking my questions, guys.

Steve Clark -- Executive Vice President and Chief Commercial Banking Officer

Thank you, Russell.

Operator

Thank you. And with no further questions on the queue, I'd like to turn the conference back over to Rodger Levenson.

Rodger Levenson -- Chairman, President and Chief Executive Officer

Thank you again, everybody. We will be attending a couple of investor conferences in the coming weeks and look forward to seeing many of you soon. As always, if there is any follow-up questions, please feel free to contact any of us directly. Have a nice weekend and thank you again for your interest in WSFS.

Operator

[Operator Closing Remarks]

Duration: 35 minutes

Call participants:

Dominic C. Canuso -- Executive Vice President and Chief Financial Officer

Rodger Levenson -- Chairman, President and Chief Executive Officer

Steve Clark -- Executive Vice President and Chief Commercial Banking Officer

Arthur J. Bacci -- Executive Vice President and Chief Wealth Officer

Frank Schiraldi -- Piper Sandler -- Analyst

Michael Perito -- KBW -- Analyst

Brody Preston -- Stephens, Inc. -- Analyst

Russell Gunther -- D.A. Davidson -- Analyst

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