WSFS Financial Q2 Earnings Call Highlights

WSFS Financial posted strong second-quarter 2026 results, with core EPS of $1.66, core ROA of 1.55%, and core ROTCE of 20.2%. Core EPS rose 31% year over year, supported by higher fee income, deposit growth, and selected lending growth. Net interest margin expanded to 3.87% as deposit costs fell, and management lifted its full-year margin outlook to about 3.85%. The company also noted a more competitive deposit environment, which could create some upward pressure on funding costs. Asset quality improved and capital returns stayed strong, with problem assets, delinquencies, and nonperforming assets all declining year over year. WSFS returned $77 million of capital in the quarter, mainly through buybacks, and raised its full-year outlook for ROA, deposit growth, and fee revenue growth.

WSFS Financial NASDAQ: WSFS reported second-quarter 2026 core earnings per share of $1.66, core return on assets of 1.55% and core return on tangible common equity of 20.2%, with management citing growth in fee businesses, deposits and selected lending categories. Chief Financial Officer David Burg said core net income rose 19% from a year earlier, while core pre-provision net revenue increased 10%. Core EPS grew 31% year over year, and tangible book value per share increased 13%.

Net interest margin expanded 4 basis points from the first quarter to 3.87%. Burg attributed the increase to a 4-basis-point decline in client deposit costs and higher investment-security yields. The company’s interest-bearing deposit beta remained at 46%. Management updated its full-year 2026 outlook based on an assumption that the federal funds rate will not change during the remainder of the year. WSFS now expects net interest margin of approximately 3.85% for the year. During the question-and-answer session, Burg said the company expects to manage its margin despite a more competitive deposit environment. WSFS has allowed some higher-cost deposits to run off during the first half because of its liquidity position, he said, but may need to raise rates in certain areas to remain competitive and support client growth. “We want to make sure that we remain competitive,” Burg said, noting that deposit competition had increased during the prior six months. “There could be some upward pressure on deposit costs.”

Core fee revenue, which represented nearly one-third of total revenue, increased 2% from the first quarter and 5% from a year earlier. Wealth and trust revenue grew 17% year over year. Within Institutional Services, corporate trust revenue rose 28% year over year and global capital markets revenue increased 58%, according to Burg. The company said it continued to win mandates and gain market share in those businesses. For the first half of 2026, WSFS ranked as the third-most-active asset-backed securities and mortgage-backed securities trustee by deal count, increasing its market share to 14% from 11.7% in 2025, Burg said. Bryn Mawr Trust Company of Delaware, the company’s personal trust operation, grew 20% year over year as new accounts increased. Cash Connect fees declined from a year earlier because of interest-rate cuts and lower volumes. However, the business delivered a 15% profit margin for the second consecutive quarter. Burg told analysts that the ABS and MBS market has continued to expand, with industry growth of roughly 20% to 30%, while WSFS has also increased its share. He said the company’s...