WSFS Financial Q1 Earnings Call Highlights

Key Points

• Strong Q1 results: WSFS reported core EPS of $1.68 (or $1.45 excluding a $15.7M loan recovery), with core ROA of 1.65%, ROTCE of 20.7%, and year‑over‑year core EPS growth of 49% and tangible book value up 15%.
• NIM and deposit dynamics: Net interest margin held steady at 3.83% while total client deposit costs fell 12 bps to 1.33% and deposits rose 5% linked quarter (9% YoY), though management warned of rising deposit competition and limited remaining CD repricing.
• Fee growth, asset quality and capital returns: Core fee revenue climbed 11% YoY led by Wealth & Trust and Institutional Services (each with double‑digit gains), delinquencies and problem assets declined materially year‑over‑year, and WSFS returned $94M of capital (including $85M buybacks), raised the dividend 18% to $0.20, and lowered its full‑year net charge‑off outlook to 25–35 bps.

WSFS Financial NASDAQ: WSFS opened 2026 with what management described as a strong first quarter, driven by higher profitability metrics, solid fee income growth, and continued execution on capital returns. During the company’s earnings call, Chief Financial Officer David Burg highlighted improvements in core earnings and asset quality trends while also noting more intense deposit competition across the market.

First-quarter profitability supported by loan recovery and fee growth

Burg said WSFS posted core EPS of $1.68, core return on assets (ROA) of 1.65%, and core return on tangible common equity (ROTCE) of 20.7%, each improving versus the prior quarter and prior year. Year over year, core net income increased 35% and core pre-provision net revenue (PPNR) rose 10%, driving 49% core EPS growth and 15% tangible book value per share growth.

The quarter included a previously disclosed $15.7 million loan recovery. Excluding that recovery, Burg said core EPS was $1.45, up 28% year over year, and core ROA was 1.43%, up 14 basis points from the prior year.

Core results also excluded two items tied to real estate property sales as WSFS continues optimizing its office footprint. Burg said those items reduced net income by $2.2 million, or $0.04 per share.

Net interest margin held steady as deposit costs fell

WSFS reported a net interest margin (NIM) of 3.83%, which Burg said was flat linked quarter “while absorbing the interest rate cuts that occurred in the fourth quarter.” He attributed the stability partly to deposit repricing, noting total client deposit costs declined 12 basis points to 1.33% during the quarter. The company’s interest-bearing deposit beta was 46%, increasing versus the prior quarter.

In the Q&A, Burg addressed how changes in the expected rate-cut path could affect performance. He said the company is asset sensitive, which can provide a tailwind if fewer cuts occur. Burg added that, historically, WSFS estimated “about two basis points per rate cut across the year” as the impact from rate reductions, suggesting the inverse could also apply if cuts do not materialize.

At the same time, he emphasized that deposit competition is rising. Burg said WSFS is seeing “more pricing competition” in both commercial and consumer deposits and pointed to competitors that “did not move in the last rate cut” and others that “have held or increased their pricing” on certain products. He said the company still expects some repricing benefit from maturing CDs, but with shorter-term CDs, “a lot of that repricing is already behind us,” leading management to expect NIM to be “more or less stable,” aside from typical first-quarter seasonality.

Fee revenue climbed, led by Wealth and Trust and Institutional Services

Burg said core fee revenue—nearly one-third of total revenue—grew 11% year over year, driven by broad-based gains across WSFS’s fee businesses. Wealth and Trust revenue rose 25% year over year, while The Bryn Mawr Trust Company of Delaware, the firm’s personal trust business, increased 27% on “continued new account and client growth,” according to Burg.

Within Institutional Services, Burg said Corporate Trust (trustee and agency services for mortgage-backed and asset-backed securitizations) and Global Capital Markets (trustee and agency services for distressed debt and bankruptcies) were each up more than 40% year over year, supported by new mandates and market share gains.

Asked how to think about those businesses going forward, Burg cited investments in headcount and technology, the importance of referrals and relationships, and WSFS’s “unique product expertise.” He also pointed to the support provided by the company’s investment-grade credit ratings. Burg noted the broader asset-backed and mortgage-backed securities market has been growing around 20% per year, though he added WSFS does not expect that market growth rate to persist and believes it can continue gaining share even if growth normalizes.

Elsewhere, Burg said Cash Connect fees declined quarter over quarter due to rate cuts and lower volumes, but the business produced a 15% profit margin, “more than doubling its profit margin year-over-year.”

Deposit momentum strong but management cautions on sustainability

Client deposits increased 5% linked quarter, driven by commercial and trust, while deposits were up more than 9% year over year, supported by growth in trust, commercial, and private wealth management. Burg noted some of the quarter-end increase reflected “elevated transactional deposits,” including in both commercial and trust, and cautioned against extrapolating the quarterly growth rate across the year.

In response to an analyst question on sustainability, Burg said roughly two-thirds of the quarterly deposit growth came from trust and one-third from commercial. He described trust growth as a combination of strong market growth and WSFS gaining share faster than the market.

Non-interest-bearing deposits increased 14% linked quarter and represented 34% of total deposits, up from 29% in the first quarter of the prior year.

Loans, credit quality, and capital return actions

Gross loans were up slightly linked quarter. Burg said strong momentum in commercial C&I lending was partially offset by elevated commercial mortgage payoffs. Annualized C&I growth was 7% linked quarter, and the company also saw 11% annualized growth in small business banking. In consumer, Burg said residential mortgage originations rose more than 70% year over year, and residential mortgage plus WSFS-originated consumer loans produced 3% annualized linked-quarter growth and were up 14% year over year.

CEO Rodger Levenson said the Spring EQ portfolio is expected to continue rolling off “consistent with what you saw this quarter,” with some refinancing sensitivity if rates move. He said WSFS’s goal is for progress in home lending to “offset as much as possible” the Spring EQ runoff over time.

On asset quality, Burg said delinquencies fell 32% year over year and problem assets declined 26% year over year. Nonperforming assets were down 25% year over year but increased linked quarter due to two loans—a C&I loan and a multifamily loan—that Burg said are “well secured.” Net recoveries were $3.5 million in the quarter as the $15.7 million recovery more than offset charge-offs; excluding the recovery, net charge-offs were $12.2 million, down 19% from the prior quarter.

Burg also discussed the nature of the recovery, describing it as an acquired loan to a fund invested in office real estate. WSFS had previously taken a full write-off because it lacked direct collateral and recourse, but the sponsor later refinanced, resulting in a full recovery. Burg characterized the outcome as an indication of “liquidity in the market for some of these assets.”

Capital return remained a focus. Burg said WSFS returned $94 million of capital in the quarter, including $85 million in buybacks—about 2.5% of outstanding shares. Since the beginning of 2025, WSFS has repurchased roughly 12% of its outstanding shares. The board also approved an 18% dividend increase to $0.20 per share and authorized additional share repurchases of 15% of shares outstanding as of quarter-end, bringing total authorization to 19%.

Management updated its outlook for full-year net charge-offs to 25–35 basis points, down from 35–45 basis points, due to the recovery. Burg said the company plans to provide a broader full-year outlook update when it reports second-quarter results in July.

About WSFS Financial NASDAQ: WSFS

WSFS Financial Corporation is the bank holding company for WSFS Bank, a regional financial institution headquartered in Wilmington, Delaware. The company traces its roots to the Safe Deposit & Trust Company, founded in 1832, and formally organized as WSFS Financial in the mid-1980s. Over its long history, WSFS has grown through a combination of organic expansion and selective acquisitions to serve a broad base of individual, commercial and institutional clients.

WSFS Bank offers a full suite of banking and financial services, including retail and commercial deposit accounts, commercial and industrial lending, real estate financing, and treasury management solutions.

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