WSFS earnings increased in the third quarter of 2026, supported by loan growth, stronger Wealth and Trust fees and lower expenses. The parent of WSFS Bank reported net income of $89.3 million, up from $76.4 million a year earlier. Diluted earnings per share reached $1.75, a 28% increase, while core EPS rose 25% to the same amount.
Key Takeaways
- Wealth and Trust fee growth offset weakness elsewhere, leaving core fee revenue up 3% year over year.
- Net interest margin edged higher despite rising deposit costs and a decline in quarter-end deposits.
- Problem assets increased sequentially, although delinquencies fell to their lowest level in two years.
Table of Contents
- WSFS earnings benefit from lending and expense discipline
- Wealth and Trust strength masks weaker fee businesses
- Loan growth continues as transactional deposits leave
- Credit indicators diverge as capital returns continue
- Conclusion
WSFS earnings benefit from lending and expense discipline
The company’s third-quarter 2026 results announcement, released October 22, showed total net revenue of $287.6 million, compared with $270.5 million a year earlier. Net interest income rose 7% to $196.6 million, supported by higher average loan balances and lower deposit costs than in the third quarter of 2025.
Net interest margin reached 3.88%, up one basis point from the preceding quarter but down three basis points year over year. Higher investment yields and loan balances supported the quarterly improvement, partly offset by deposit pricing competition.
Core noninterest expense fell 3% sequentially to $161.5 million, and the core efficiency ratio improved to 56.1%. Core measures are non-GAAP figures that exclude specified adjustments. On the earnings call, CFO David Burg cautioned that roughly $2 million to $3 million of favorable non-recurring items helped expenses, putting the underlying run rate somewhat higher.
| Item | Details |
|---|---|
| Common Equity Tier 1 ratio | 13.74% at September 30, 2026. |
| Total risk-based capital ratio | 15.47% at September 30, 2026. |
| Loan-to-deposit ratio | 73%, based on net loans and leases divided by client deposits. |
| Tangible book value per share | $32.67, down 5% from June 30 and up 2% year over year. |
Wealth and Trust strength masks weaker fee businesses
Wealth and Trust fees increased 30% year over year, extending the business’s run of double-digit growth to eight consecutive quarters. WSFS Institutional Services fees rose 45%, while the Delaware personal trust business grew 22% and Private Wealth Management increased 14%.
That strength did not translate into comparable growth across all fee businesses. Core fee revenue totaled $91 million, up 3% year over year but down 1% sequentially. Cash Connect revenue declined because of the effects of 2025 interest-rate cuts and lower ATM volumes, while lower demand for interest-rate swaps weighed on Capital Markets revenue quarter over quarter.
Burg said management’s sustained growth objective for Wealth and Trust remained double digits, rather than the 30% pace achieved in this quarter.
Loan growth continues as transactional deposits leave
Gross loans and leases increased 1% from June 30 to $13.66 billion, equivalent to 5% annualized growth. Home lending expanded 6% during the quarter, while commercial lending grew 1%. Continued runoff of the Spring EQ portfolio partly offset those gains.
Quarter-end client deposits fell 3% to $18.38 billion, reflecting expected outflows of elevated transactional balances in Institutional Services and Commercial. Average deposits nevertheless increased slightly, showing why quarter-end balances alone do not capture the full funding trend.
Total client deposit costs rose four basis points sequentially to 1.33%. Burg said mortgage rates above 7% were reducing the consumer lending pipeline and would likely slow growth in that segment. He continued to expect loans and deposits to grow at mid-single-digit rates through the cycle.
Credit indicators diverge as capital returns continue
Problem assets increased $57.5 million from the preceding quarter to $530.4 million, primarily reflecting downgrades in multifamily and construction loans. They remained 16% below their year-earlier level.
Other credit measures were firmer: delinquencies declined 3% sequentially, and the bank recorded $0.6 million of net recoveries. However, credit costs included an $8.1 million specific reserve on a student housing-related loan and a $2 million write-down of an other-real-estate-owned property.
WSFS returned $69.8 million to shareholders through $59.6 million of share repurchases and $10.2 million of dividends. Year-to-date repurchases represented 5.6% of shares outstanding at December 31, 2025.
Conclusion
The fourth quarter will test management’s expectations for slower consumer loan growth and continued double-digit Wealth and Trust expansion. Deposit pricing and the higher expense run rate identified by Burg will also matter when assessing whether WSFS can sustain its latest profitability gains.
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