WILMINGTON, DE — WSFS Financial Corporation (Nasdaq: WSFS) reported a 17% increase in third-quarter profit on October 22, as higher lending income and a surge in wealth management fees lifted earnings despite increased credit costs and a quarterly decline in deposits.
The parent company of WSFS Bank earned $89.3 million, or $1.75 per diluted share, for the quarter ended September 30, compared with $76.4 million, or $1.37 per share, a year earlier. Earnings per share increased 28%, aided by the company’s share repurchases.
Total net revenue rose 6% to $287.6 million from $270.5 million a year earlier, while net interest income increased 7% to $196.6 million.
The results reflected growth in lending balances, lower deposit costs compared with a year earlier and continued expansion of the company’s Wealth and Trust business.
Wealth and Trust fee revenue increased 30% from the prior year, adding $12.5 million. The segment generated $52.7 million in pretax income, up 53% from $34.4 million a year earlier.
Assets under management and administration reached $109.5 billion, an increase of $7.8 billion from the previous quarter, supported by account growth and market appreciation.
Within the segment, WSFS Institutional Services recorded 45% fee growth, while The Bryn Mawr Trust Company of Delaware increased fees 22%. Private Wealth Management fees rose 14%.
The growth helped offset weaker performance in other fee-generating operations, including Cash Connect, where lower ATM volumes and the effects of interest rate reductions weighed on revenue.
WSFS reported a net interest margin of 3.88%, compared with 3.87% in the second quarter and 3.91% a year earlier. The measure reflects the difference between income earned on interest-bearing assets and the cost of funding those assets.
Net interest income increased $12.6 million from the third quarter of 2025, primarily because of lower deposit costs and higher average loan balances.
Total client deposit costs declined to 1.33% from a year earlier, although they increased four basis points from the second quarter as competition for deposits intensified.
Gross loans and leases reached $13.66 billion at September 30, up 5% from a year earlier and $162.6 million from June 30.
Residential mortgage balances increased 27% year over year, while commercial and industrial lending grew 9%. Home equity lending also expanded 20%.
Client deposits totaled $18.38 billion, up 7% from September 2025 but down $619.5 million, or 3%, from the previous quarter.
WSFS attributed the quarterly decline primarily to expected withdrawals of transactional deposits from its institutional services and commercial banking businesses. Seasonal municipal deposits and growth in money market and time deposits partially offset those outflows.
The bank’s credit portfolio presented a more mixed picture.
Problem assets increased $57.5 million during the quarter to $530.4 million, primarily because of credit downgrades involving multifamily housing and construction loans. The balance nevertheless remained 16% below its year-earlier level.
Nonperforming assets rose to $82.7 million from $81 million in June, partly because of a student housing-related loan.
WSFS established an $8.1 million specific reserve against that loan and recorded a $2 million write-down on a property acquired through foreclosure.
The provision for credit losses increased to $8.4 million from $5 million in the second quarter and $6.6 million a year earlier.
Despite those pressures, loan delinquencies fell to $92.7 million, their lowest level in two years, according to the company. WSFS also recorded $600,000 in net loan recoveries, compared with $7.1 million in net charge-offs during the preceding quarter.
Operating expenses declined to $161.6 million from $163.1 million a year earlier, reflecting lower external fraud losses and professional fees, partly offset by other costs.
The company’s efficiency ratio improved to 56.1% from 60.2% a year earlier, indicating that WSFS spent less to generate each dollar of revenue.
Return on average assets increased to 1.58% from 1.44%, while return on average equity rose to 13% from 11.3%.
“WSFS continued to perform well in the third quarter with a 25% year-over-year increase in core EPS,” Chairman, President and Chief Executive Officer Rodger Levenson stated, referring to the company’s adjusted earnings measure.
Levenson cited the expansion of the bank’s net interest margin, loan growth and wealth management performance as principal drivers of the results.
WSFS also continued returning capital to shareholders, repurchasing 748,970 common shares for $59.6 million during the quarter and paying $10.2 million in dividends.
Combined shareholder distributions totaled $69.8 million. Through the first nine months of 2026, the company repurchased shares equivalent to 5.6% of its outstanding stock at the beginning of the year.
The company’s Common Equity Tier 1 capital ratio stood at 13.74% at September 30, above regulatory well-capitalized thresholds.
WSFS reported $22.1 billion in total assets at quarter-end. Its banking and wealth management operations serve the Greater Philadelphia and Delaware region, including Chester County, through a network of 115 offices across six states.
The board also approved a quarterly cash dividend of 20 cents per common share, payable November 20 to shareholders of record November 6.
Additional financial information is available through the company’s investor relations website at https://investors.wsfsbank.com.
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