WILMINGTON, DE — WSFS Financial Corporation (Nasdaq: WSFS), parent of WSFS Bank, posted robust second-quarter results, driven by strong growth in fee-based businesses and solid deposit and lending activity. Core earnings per share rose to $1.27, with a core return on assets of 1.38%, both improving over the prior quarter.
Chairman, President and CEO Rodger Levenson credited the performance to broad-based growth across the company’s lines of business. “These results were driven by continued strong performance in our fee-based businesses, with 9% quarter-over-quarter growth in core fee revenue,” he said. Levenson also noted deposit and loan growth, including gains in commercial and consumer lending.
Earnings and Margin Strength
WSFS generated $107.8 million in core pre-provision net revenue, up from $104.6 million in Q1. Net interest margin improved slightly to 3.89%, aided by deposit repricing, reduced wholesale funding, and higher cash balances. Net interest income rose $4.3 million sequentially.
Total loan yields declined slightly to 6.60% due to the sale of Upstart-generated unsecured consumer loans, a non-strategic portfolio the company is actively exiting. Excluding runoff portfolios, loans increased 2% annualized, supported by growth in commercial and consumer segments.
Deposit Base and Liquidity Remain Solid
Client deposits rose 1% from the first quarter, primarily from Trust-related accounts, bringing the year-over-year increase to 5%. Noninterest demand deposits accounted for 32% of client balances, and the loan-to-deposit ratio stood at a conservative 76%, giving WSFS capacity for further lending.
The company’s deposit base remains well-diversified, with over half sourced from its Commercial, Small Business, and Wealth and Trust divisions.
Asset Quality and Credit Management
Asset quality remained stable. Nonperforming assets declined by $10.7 million, while total problem assets were unchanged. Net charge-offs fell to $9.8 million, including the impact of the Upstart loan sale. Excluding that, charge-offs totaled just $4.5 million. Total net credit costs declined to $14.3 million, reflecting lower provisioning and reserves.
The allowance for credit losses held steady at $186.3 million, or 1.43% of loans.
Core Fee Revenue Rises
Noninterest income surged 9% from Q1 to $88.0 million, powered by a 12% increase in Wealth and Trust revenue, and additional contributions from WSFS Mortgage and a Spring EQ earnout. Fee income now comprises 32.8% of total revenue, up from 31.5% in the prior quarter.
Expense and Efficiency
Core noninterest expenses rose 5% sequentially to $159.7 million, largely due to higher compensation, credit-related costs, and technology spending. The efficiency ratio held steady at 59.6%, reflecting ongoing cost discipline.
Capital and Shareholder Returns
Capital levels remained strong, with the Common Equity Tier 1 ratio at 14.07% and total risk-based capital at 15.86%. WSFS returned $87.3 million to shareholders through dividends and share repurchases, buying back 1.56 million shares during the quarter.
Book value per share rose 3% to $47.71, while tangible book value climbed 4% to $30.32.
Segment Highlights
- Wealth and Trust posted $30.7 million in pre-tax income, driven by strong fee growth and higher deposits, offset by increased reserves and expenses tied to business expansion.
- Cash Connect® delivered a rebound in profitability due to $1.6 million in insurance recoveries related to a terminated client. Excluding the recovery, pre-tax earnings were flat, as lower ATM volumes were offset by expense reductions.
WSFS enters the second half of 2025 with solid momentum, strong capital, and growing contributions from its wealth, mortgage, and trust franchises. The recent strategic divestiture of non-core lending assets is expected to further sharpen the bank’s focus on core growth areas.
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