Results

WSFS Financial Corporation

05/04/2026 | Press release | Distributed by Public on 05/04/2026 15:18

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
WSFS Financial Corporation (WSFS, and together with its subsidiaries, the Company) is a savings and loan holding company headquartered in Wilmington, Delaware. Substantially all of our assets are held by our subsidiary, Wilmington Savings Fund Society, FSB (WSFS Bank or the Bank), one of the ten oldest bank and trust companies in the United States (U.S.) continuously operating under the same name. With $22.1 billion in assets and $97.6 billion in assets under management (AUM) and assets under administration (AUA) at March 31, 2026, WSFS Bank is the oldest and largest locally-managed bank and trust company headquartered in the Greater Philadelphia and Delaware region. As a federal savings bank that was formerly chartered as a state mutual savings bank, WSFS Bank enjoys a broader scope of permissible activities than most other financial institutions. A fixture in the community, we have been in operation for more than 194 years. In addition to our focus on stellar client experience, we have continued to fuel growth and remain a leader in our community. We are a relationship-focused, locally-managed, community banking institution. Our mission and strategy is simple: "We Stand for Service®."
As of March 31, 2026, the Company's consolidated operating subsidiaries included WSFS Bank, The Bryn Mawr Trust Company of Delaware (BMT-DE), Bryn Mawr Trust Advisors (BMTA), and WSFS SPE Services, LLC. The Company also has three unconsolidated subsidiaries: WSFS Capital Trust III, Royal Bancshares Capital Trust I, and Royal Bancshares Capital Trust II. Operating subsidiaries of WSFS Bank included 1832 Holdings, Inc. and one majority-owned subsidiary, NewLane Finance Company (NewLane Finance®).
Our WSFS Bank segment had a total loan and lease portfolio of $12.8 billion as of March 31, 2026, which was funded primarily with deposits generated through commercial relationships and our consumer banking business. We have built a $10.0 billion commercial loan and lease portfolio by recruiting seasoned commercial lenders in our markets, offering the high level of service and flexibility typically associated with a community bank and through acquisitions. We also offer a broad variety of consumer loan products and retail securities brokerage through our retail branches. The Home Lending division offers mortgage banking and title services through our branches and WSFS Mortgage®, our mortgage banking division specializing in a variety of residential mortgage and refinancing solutions. We fund our lending businesses primarily with deposits generated through commercial relationships and consumer, wealth and trust client deposits, as well as through our digital banking platforms.
Our Wealth and Trust segment provides a broad array of planning and advisory services, investment management, trust services, and credit and deposit products to individual, corporate and institutional clients. Combined, these businesses had $97.6 billion of AUM and AUA at March 31, 2026.
Bryn Mawr Trust® is our predominant Private Wealth Management brand, providing advisory, investment management and trustee services to institutions, affluent and high-net-worth individuals. Private Wealth Management serves high-net-worth clients and institutions by providing trustee and advisory services, financial planning, customized investment strategies, brokerage products such as annuities and traditional banking services such as credit and deposit products tailored to its clientele. Private Wealth Management includes businesses that operate under the Bank's charter and as a registered investment advisor (RIA). It generates revenue through a percentage fee based on account assets, fee-only arrangements, net interest income and other fee-only services such as estate administration, trust tax planning and custody.
BMT-DE provides personal trust and fiduciary services to families and individuals across the U.S. and internationally. WSFS Institutional Services® provides trustee, agency, bankruptcy administration, custodial and commercial domicile services to institutional, corporate clients and special purpose vehicles.
Our leasing business, conducted by NewLane Finance®, originates small business leases and provides commercial financing to businesses nationwide, targeting various equipment categories including technology, software, office, medical, veterinary and other areas. In addition, NewLane Finance® offers captive insurance through its subsidiary, Prime Protect.
Our Cash Connect® segment is a premier provider of ATM vault cash, smart safe (safes that automatically accept, validate, record and hold cash in a secure environment) and other cash logistics services through strategic partnerships with several of the largest networks, manufacturers and service providers in the ATM industry. Cash Connect® services non-bank and WSFS-branded ATMs and smart safes nationwide, and manages approximately $1.3 billion in total cash and services approximately 23,400 non-bank ATMs and 11,900 smart safes nationwide. Cash Connect® provides related services such as online reporting and ATM cash management, predictive cash ordering and reconcilement services, armored carrier management, loss protection, and deposit safe cash logistics.
As of March 31, 2026, we service our clients primarily from 114 offices located in Pennsylvania (58), Delaware (38), New Jersey (14), Florida (2), Nevada (1) and Virginia (1), our ATM network, our website at www.wsfsbank.com and our mobile app.
Highlights and Other Notables Items for Three Months Ended March 31, 2026
•Three Months Ended March 31, 2026
◦Diluted EPS was $1.64 and ROA was 1.61%, compared to $1.12 and 1.29%, respectively, for the three months ended March 31, 2025.
◦Total deposits increased $826.0 million, or 4.7%, compared to December 31, 2025, primarily due to growth in Trust and Commercial. Noninterest deposits comprised 34% of total deposits at March 31, 2026.
◦Wealth and Trust noninterest income grew 25% compared to the three months ended March 31, 2025.
▪WSFS Institutional Services®, which consists of Corporate Trust and Global Capital Markets, grew 46%, and BMT-DE grew 27%
◦The Bank recognized a $15.7 million recovery of previously charged-off loans to a fund invested in office properties.
◦The Board of Directors approved an 18% increase in the quarterly cash dividend to $0.20 per share, along with an additional share repurchase authorization of 15% of our outstanding shares as of March 31, 2026.
◦WSFS repurchased 1,319,626 shares of common stock under the Company's share repurchase plans at an average price of $64.38 per share, for an aggregate purchase price of approximately $85.0 million, and paid quarterly dividends of $9.0 million, for a total capital return of $94.0 million.
◦The Bank and the Company continue to be above well-capitalized across all measures of regulatory capital, with total common equity Tier 1 capital of 14.01% and 13.91%, respectively, and total risk-based capital of 15.21% and 15.66%, respectively.
FINANCIAL CONDITION
Total assets increased $792.8 million to $22.1 billion at March 31, 2026 compared to December 31, 2025. This increase is primarily comprised of the following:
•Total cash and cash equivalents increased $772.4 million, primarily due to increases in deposits.
•Total investment securities increased $29.5 million:
◦Investment securities available-for-sale increased $39.6 million, primarily due to purchases of $154.3 million, partially offset by repayments, maturities and calls of $102.6 million and decreased market values of $11.5 million.
◦Investment securities held-to-maturity decreased $10.1 million, primarily due to repayments, maturities and calls of $13.5 million, partially offset by $3.3 million of amortization of net unrealized losses on available-for-sale securities transferred to held-to-maturity.
•Other real estate owned increased $12.5 million, due to the transfer of an existing nonperforming land development loan during the quarter.
•Other assets decreased $37.1 million, primarily due to a $25.4 million decrease in receivables due to the settlement timing of ACH payments and a $6.3 million decrease in derivatives from our Capital Markets business due to changes in fair value.
Total liabilities increased $806.9 million to $19.4 billion at March 31, 2026 compared to December 31, 2025. This increase is primarily comprised of the following:
•Client deposits increased $826.0 million primarily due to an increase in noninterest demand deposits, driven by growth in Trust and Commercial deposits.
•Other liabilities decreased $27.5 million, primarily due to a decrease of $49.3 million in our accrued expenses primarily related to incentive payments made in the first quarter of 2026, partially offset by increases of $13.9 million from collateral held on derivatives and derivative liabilities and an $8.9 million increase from commitments to fund lower income housing tax credit investments.
For further information, see "Notes to the Consolidated Financial Statements (Unaudited)."
LIQUIDITY AND CAPITAL RESOURCES
Capital Resources
Stockholders' equity of WSFS decreased $14.1 million to $2.7 billion at March 31, 2026 compared to December 31, 2025. This decrease was primarily due to $85.0 million for the repurchase of shares of common stock under our stock repurchase plan, the payment of dividends on our common stock of $9.0 million, and an increase of $8.5 million in accumulated other comprehensive loss driven by market value decreases on available-for-sale mortgage-backed securities, partially offset by $86.8 million of net income attributable to WSFS.
In April 2026, as part of our annual capital planning process, the Board of Directors approved an 18% increase in the quarterly cash dividend to $0.20 per share of common stock and an incremental share repurchase authorization of 15% of outstanding shares as of March 31, 2026. The dividend will be paid on May 22, 2026 to stockholders of record as of May 8, 2026.
Book value per share of common stock was $52.24 at March 31, 2026, an increase of $0.97 from $51.27 at December 31, 2025. Tangible book value per share of common stock (a non-GAAP financial measure) was $33.71 at March 31, 2026, an increase of $0.60 from $33.11 at December 31, 2025. We believe tangible book value per common share helps management and investors better understand and assess changes from period to period in stockholders' equity exclusive of changes in intangible assets. This non-GAAP measure should be considered in addition to results prepared in accordance with Generally Accepted Accounting Principles in the U.S. (GAAP), and is not a substitute for, or superior to, GAAP results. For a reconciliation of tangible book value per common share to book value per share in accordance with GAAP, see "Reconciliation of Non-GAAP Measure to GAAP Measure."
The table below compares the Bank's and the Company's consolidated capital position to the minimum regulatory requirements as of March 31, 2026:
Consolidated
Capital 		Minimum For Capital
Adequacy Purposes 		To be Well-Capitalized
Under Prompt Corrective
Action Provisions
(Dollars in thousands) Amount Percent Amount Percent Amount Percent
Total Capital (to Risk-Weighted Assets)
Wilmington Savings Fund Society, FSB $ 2,445,373 15.21 % $ 1,285,983 8.00 % $ 1,607,479 10.00 %
WSFS Financial Corporation 2,518,296 15.66 1,286,847 8.00 1,608,559 10.00
Tier 1 Capital (to Risk-Weighted Assets)
Wilmington Savings Fund Society, FSB 2,252,597 14.01 964,487 6.00 1,285,983 8.00
WSFS Financial Corporation 2,237,226 13.91 965,135 6.00 1,286,847 8.00
Common Equity Tier 1 Capital (to Risk-Weighted Assets)
Wilmington Savings Fund Society, FSB 2,252,597 14.01 723,366 4.50 1,044,861 6.50
WSFS Financial Corporation 2,237,226 13.91 723,852 4.50 1,045,563 6.50
Tier 1 Leverage Capital
Wilmington Savings Fund Society, FSB 2,252,597 10.58 851,246 4.00 1,064,058 5.00
WSFS Financial Corporation 2,237,226 10.51 851,849 4.00 1,064,811 5.00
Under the prompt corrective action regime, regulators have established five capital tiers: well-capitalized, adequately-capitalized, under-capitalized, significantly under-capitalized, and critically under-capitalized. A depository institution's capital tier depends on its capital levels in relation to various relevant capital measures, which include leverage and risk-based capital measures and certain other factors. Depository institutions that are not classified as well-capitalized are subject to various restrictions, which may include restrictions on capital distributions, payment of management fees, acceptance of brokered deposits and other operating activities.
Regulatory capital requirements for the Bank and the Company include a minimum common equity Tier 1 capital ratio of 4.50% of risk-weighted assets, a Tier 1 capital ratio of 6.00% of risk-weighted assets, a minimum total capital ratio of 8.00% of risk-weighted assets and a minimum Tier 1 leverage capital ratio of 4.00% of average assets. In order to avoid limits on capital distributions and discretionary bonus payments, the Bank and the Company must maintain a capital conservation buffer of 2.5% of common equity Tier 1 capital over each of the risk-based capital requirements. As of March 31, 2026, the Bank and the Company were in compliance with the regulatory capital requirements and met or exceeded the amounts required to be considered "well-capitalized" as defined in the regulations.
Not included in the Bank's capital, the Company separately held $276.9 million in cash to support share repurchases, potential dividends, acquisitions, strategic growth plans and other general corporate purposes.
Liquidity
We manage our liquidity and funding needs through our Treasury function and our Asset/Liability Committee. We have a policy that separately addresses liquidity, and management monitors our adherence to policy limits. Also, liquidity risk management is a primary area of examination by the banking regulators.
Funding sources to support growth and meet our liquidity needs include cash from operations, commercial, consumer, wealth and trust deposits, loan repayments, FHLB borrowings, repurchase agreements, access to the Federal Reserve Discount Window, and access to the brokered deposit market as well as other wholesale funding avenues. In addition, we have a large portfolio of high-quality, liquid investments, primarily short-duration mortgage-backed securities, that provide a near-continuous source of cash flow to meet current cash needs, or can be sold to meet larger discrete needs for cash. We believe these sources are sufficient to meet our funding needs as well as maintain required and prudent levels of liquidity over the next twelve months and beyond.
As of March 31, 2026, the Company had $2.5 billion in cash, cash equivalents, and restricted cash. Our estimated uninsured deposits were $7.9 billion, or 43% of total client deposits, and our estimated unprotected deposits (uninsured and uncollateralized) were $6.5 billion, or 35% of total client deposits.
As of March 31, 2026, the Company had a readily available, secured borrowing capacity of $6.0 billion from the FHLB and $2.2 billion through the Federal Reserve Discount Window. In addition, the Company had $1.9 billion of cash deposited with the Federal Reserve Bank and $0.6 billion in unpledged securities that could be used to support additional borrowings.
Our primary cash contractual obligations relate to operating leases, long-term debt, credit obligations, and data processing. At March 31, 2026, we had $172.2 million in total contractual payments for ongoing leases that have remaining lease terms of less than one year to 19 years, which includes renewal options that are exercised at our discretion. For additional information on our operating leases, see Note 8 to the unaudited Consolidated Financial Statements. At March 31, 2026, we had obligations for principal payments on long-term debt including $67.0 million for our trust preferred borrowings, due June 1, 2035, $24.1 million for our trust preferred borrowings due December 15, 2034, and $200.0 million for our senior debt due December 15, 2035. We are also contractually obligated to make interest payments on our long-term debt through their respective maturities.
Commitments to extend credit provide for financing on predetermined terms as long as the client continues to meet specific criteria. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being completely drawn upon, the total commitment amounts do not necessarily represent future cash requirements. At March 31, 2026, the Company had total commitments to extend credit, including cancellable commitments, of $4.5 billion, which are generally one year commitments.
NONPERFORMING ASSETS
Nonperforming assets include nonaccruing loans and OREO. Nonaccruing loans are those on which we no longer accrue interest. Loans are placed on nonaccrual status immediately if, in the opinion of management, collection is doubtful, or when principal or interest is past due 90 days or more and the value of the collateral is insufficient to cover principal and interest. Interest accrued but not collected at the date a loan is placed on nonaccrual status is reversed and charged against interest income. In addition, the amortization of net deferred loan fees is suspended when a loan is placed on nonaccrual status. Subsequent cash receipts are applied either to the outstanding principal balance or recorded as interest income, depending on management's assessment of the ultimate collectability of principal and interest. Past due loans are defined as loans contractually past due 90 days or more as to principal or interest payments but which remain in accrual status because they are considered well secured and in the process of collection. Troubled loans are loans modified in the form of principal forgiveness, interest rate reduction, an other-than-insignificant payment delay, or a term extension to borrowers experiencing financial difficulty.
The following table shows our nonperforming assets, past due loans, and troubled loans at the dates indicated:
(Dollars in thousands) March 31, 2026 December 31, 2025
Nonaccruing loans(1):
Commercial and industrial $ 21,123 $ 27,060
Owner-occupied commercial 19,434 6,581
Commercial mortgages 20,044 7,565
Construction 5,956 22,381
Residential 5,039 5,002
Consumer 3,516 3,309
Total nonaccruing loans 75,112 71,898
Other real estate owned 12,717 200
Total nonperforming assets $ 87,829 $ 72,098
Past due loans:
Commercial $ 2,008 $ 12,237
Residential 78 133
Consumer(2)
9,943 10,046
Total past due loans $ 12,029 $ 22,416
Troubled loans:
Commercial $ 107,644 $ 142,613
Residential 1,095 226
Consumer 1,847 1,428
Total troubled loans $ 110,586 $ 144,267
Ratio of allowance for credit losses to total loans and leases(3)
1.36 % 1.36 %
Ratio of nonaccruing loans to total gross loans and leases(4)
0.57 0.54
Ratio of nonperforming assets to total assets 0.40 0.34
Ratio of allowance for credit losses to nonaccruing loans 240 250
Ratio of allowance for credit losses to total nonperforming assets(5)
205 249
(1)Includes nonaccruing troubled loans.
(2)Includes U.S. government guaranteed student loans with little risk of credit loss.
(3)Reflects allowance for credit losses related to loans and leases over the amortized cost of the total portfolio.
(4)Total loans exclude loans held for sale and reverse mortgages.
(5)Excludes acquired purchase credit deteriorated loans.
Nonperforming assets increased $15.7 million between December 31, 2025 and March 31, 2026. This increase was primarily driven by the additions of an $11.2 million owner-occupied loan and a $6.6 million multifamily loan. The ratio of nonperforming assets to total assets increased from 0.34% at December 31, 2025 to 0.40% at March 31, 2026.
The following table summarizes the changes in nonperforming assets during the periods indicated:
Three Months Ended March 31,
(Dollars in thousands) 2026 2025
Beginning balance $ 72,098 $ 127,385
Additions 46,660 18,988
Collections (16,534) (2,486)
Transfers to accrual (264) (277)
Charge-offs (14,131) (26,731)
Ending balance $ 87,829 $ 116,879
The timely identification of problem loans is a key element in our strategy to manage our loan portfolio. Problem loans are all criticized, classified and nonperforming loans and other real estate owned. Timely identification enables us to take appropriate action and accordingly, minimize losses. An asset review system established to monitor the asset quality of our loans and investments in real estate portfolios facilitates the identification of problem assets. In general, this system uses guidelines established by federal regulation.
INTEREST RATE SENSITIVITY
Our primary objective in managing interest rate risk is to minimize the adverse impact of changes in interest rates on net interest income and capital, while maximizing the yield/cost spread on our asset/liability structure. Interest rates are partly a function of decisions by the Federal Open Market Committee (FOMC) on the target range for the federal funds rate, and these decisions are sometimes difficult to anticipate. In 2025, the FOMC lowered the federal funds target rate three times for a total of 75 basis points. In order to manage the risks associated with changes or possible changes in interest rates, we rely primarily on our asset/liability structure.
Our primary tool for achieving our asset/liability management strategies is to match maturities or repricing periods of interest rate-sensitive assets and liabilities to promote a favorable interest rate spread and mitigate exposure to fluctuations in interest rates. We regularly review our interest rate sensitivity and adjust the sensitivity within acceptable tolerance ranges. At March 31, 2026, interest-earning assets exceeded interest-bearing liabilities that mature or reprice within one year (interest-sensitive gap) by $2.5 billion. Our interest-sensitive assets as a percentage of interest-sensitive liabilities within the one-year window was 128.95% at March 31, 2026 compared with 120.45% at December 31, 2025. Likewise, the one-year interest-sensitive gap as a percentage of total assets was 11.50% at March 31, 2026 compared with 8.37% at December 31, 2025.
Market risk is the risk of loss from adverse changes in market prices and rates. Our market risk arises primarily from interest rate risk inherent in our lending, investing, and funding activities. To that end, we actively monitor and manage our interest rate risk exposure. One measure evaluates the impact of an immediate change in interest rates in 100 basis point increments on the economic value of equity ratio. The economic value of the equity ratio is defined as the economic value of the estimated cash flows from assets and liabilities as a percentage of economic value of cash flows from total assets.
The following table shows the estimated impact of immediate changes in interest rates on our net interest margin and economic value of equity ratio at the specified levels at March 31, 2026 and December 31, 2025:
March 31, 2026 December 31, 2025
% Change in Interest Rate (Basis Points)
% Change in Net
Interest Margin(1)
Economic Value of Equity(2)(3)
% Change in Net
Interest Margin(1)
Economic Value of Equity(2)(3)
+300 19.8% 20.60% 19.7% 19.98%
+200 13.0% 20.65% 13.4% 20.20%
+100 6.2% 20.63% 7.0% 20.36%
+50 2.9% 20.57% 4.1% 20.39%
+25 1.4% 20.50% 2.7% 20.37%
- -% 20.44% -% 19.92%
-25 (0.8)% 20.38% (0.7)% 19.90%
-50 (1.6)% 20.26% (1.3)% 19.81%
-100 (3.1)% 20.00% (2.5)% 19.60%
'-200
(6.3)% 19.20% (5.1)% 18.90%
'-300
(9.4)% 17.80% (7.5)% 17.60%
(1)The percentage difference between net interest margin in a stable interest rate environment and net interest margin as projected under the various rate change environments.
(2)The economic value of equity ratio in a stable interest rate environment and the economic value of equity ratio as projected under the various rate change environments.
(3)During the first quarter of 2026, the Company revised its economic value of equity methodology to exclude goodwill and intangible assets to better reflect the Company's underlying interest rate risk profile.
We also engage in other business activities that are sensitive to changes in interest rates. For example, mortgage banking revenues and expenses can fluctuate with changing interest rates. These fluctuations are difficult to model and estimate.
RESULTS OF OPERATIONS
Net Interest Income
The following tables provide information concerning the average balances, yields and rates on interest-earning assets and interest-bearing liabilities during the periods indicated:
Three months ended March 31,
2026 2025
(Dollars in thousands) Average
Balance 		Interest
Yield/
Rate(1)
Average
Balance 		Interest
Yield/
Rate(1)
Assets:
Interest-earning assets:
Loans:(2)
Commercial loans $ 4,701,069 $ 70,169 6.07 % $ 4,598,599 $ 73,154 6.45 %
Commercial real estate loans(3)
4,968,948 76,339 6.23 4,881,873 79,095 6.57
Commercial leases 588,782 12,850 8.73 636,912 13,958 8.77
Residential loans 1,089,151 14,638 5.38 965,624 12,802 5.30
Consumer loans 1,871,601 29,847 6.47 2,061,803 36,649 7.21
Loans held for sale
66,760 1,400 8.50 50,929 1,094 8.71
Total loans and leases 13,286,311 205,243 6.27 13,195,740 216,752 6.67
Mortgage-backed securities(4)
4,191,264 25,242 2.41 4,179,692 24,745 2.37
Investment securities(4)
368,318 2,171 2.72 363,678 2,186 2.74
Other interest-earning assets 1,793,908 16,553 3.74 640,424 7,195 4.56
Total interest-earning assets $ 19,639,801 $ 249,209 5.16 % $ 18,379,534 $ 250,878 5.55 %
Allowance for credit losses (184,109) (196,480)
Cash and due from banks 175,052 188,138
Cash in non-owned ATMs 351,909 379,115
Bank-owned life insurance 37,289 36,202
Other noninterest-earning assets 1,855,211 1,947,736
Total assets $ 21,875,153 $ 20,734,245
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing demand $ 2,828,403 $ 6,055 0.87 % $ 2,854,258 $ 7,343 1.04 %
Savings 1,395,028 1,163 0.34 1,457,440 1,596 0.44
Money market 5,817,813 36,876 2.57 5,432,622 41,033 3.06
Time deposits 1,962,289 15,403 3.18 2,112,467 21,132 4.06
Total interest-bearing client deposits 12,003,533 59,497 2.01 11,856,787 71,104 2.43
Federal Home Loan Bank advances 44,444 439 4.01 83,818 938 4.54
Trust preferred borrowings 91,055 1,355 6.04 90,854 1,523 6.80
Senior and subordinated debt 196,919 2,766 5.62 206,984 2,074 4.01
Other borrowed funds(5)
21,868 16 0.30 31,701 23 0.29
Total interest-bearing liabilities $ 12,357,819 $ 64,073 2.10 % $ 12,270,144 $ 75,662 2.50 %
Noninterest-bearing demand deposits 6,105,690 5,040,032
Other noninterest-bearing liabilities 652,541 797,098
Stockholders' equity of WSFS 2,769,574 2,637,354
Noncontrolling interest (10,471) (10,383)
Total liabilities and stockholders' equity $ 21,875,153 $ 20,734,245
Excess of interest-earning assets over interest-bearing liabilities $ 7,281,982 $ 6,109,390
Net interest income $ 185,136 $ 175,216
Interest rate spread 3.06 % 3.05 %
Net interest margin 3.83 % 3.88 %
(1)Weighted average yields for tax-exempt securities and loans have been computed on a tax-equivalent basis.
(2)Average balances are net of unearned income and include nonperforming loans.
(3)Includes commercial mortgage and commercial construction loans.
(4)Includes securities available-for-sale at fair value.
(5)Includes federal funds purchased.
Three months ended March 31, 2026: During the three months ended March 31, 2026, net interest income increased $9.9 million from the three months ended March 31, 2025 primarily driven by higher cash balances from growth in deposits, lower deposit costs, and higher average loan balances, partially offset by lower loan yields. Net interest margin was 3.83% for the first quarter of 2026, a 5 basis point decrease compared to 3.88% for the first quarter of 2025. The decrease was primarily due to the impact of the three interest rate cuts that occurred in 2025.
Allowance for Credit Losses
We maintain the allowance for credit losses at an appropriate level based on our assessment of estimable and expected losses related to various portfolios subject to credit risk. Our allowance for credit losses is based on our historical loss experience that includes the inherent risk of our loans and leases, HTM securities, and other account receivables, along with various other factors including but not limited to, collateral values, trends in asset quality, level of delinquent loans and concentrations, consideration of past events, current conditions, and reasonable and supportable forecasts. Further, regional and national economic forecasts are considered in our expected credit losses on loans and leases. Our evaluation is based on a review of the portfolio and requires significant, complex and difficult judgments.
During the three months ended March 31, 2026, we recorded a release of credit losses of $2.0 million, a decrease of $19.3 million, compared to the provision for credit losses of $17.4 million for the three months ended March 31, 2025. The current year release of credit losses as well as the decrease compared to the prior year were both primarily driven by a recovery of C&I loans to a fund invested in office properties that were charged-off in the first quarter of 2025.
The total allowance for credit losses increased to $182.9 million at March 31, 2026 from $182.5 million at December 31, 2025. The ratio of allowance for credit losses to total loans and leases remained flat at 1.36% at March 31, 2026 and December 31, 2025.
The following tables detail the allocation of the ACL related to loans and leases and show our net charge-offs (recoveries) by portfolio category:
(Dollars in thousands) Commercial and Industrial Owner-
occupied
Commercial 		Commercial
Mortgages 		Construction Commercial Small Business Leases
Residential(1)
Consumer(2)
Total
As of March 31, 2026
Allowance for credit losses $ 51,312 $ 8,168 $ 48,816 $ 13,870 $ 15,840 $ 7,330 $ 34,675 $ 180,011
% of ACL to total ACL 28 % 5 % 27 % 8 % 9 % 4 % 19 % 100 %
Loan portfolio balance $ 2,877,188 $ 1,934,366 $ 3,882,159 $ 1,033,823 $ 587,783 $ 1,088,054 $ 1,853,618 $ 13,256,991
% to total loans and leases 22 % 15 % 29 % 8 % 4 % 8 % 14 % 100 %
Three months ended March 31, 2026
Charge-offs $ (5,748) $ (298) $ - $ (3,735) $ (2,920) $ - $ (1,666) $ (14,367)
Recoveries 16,303 11 2 - 846 45 617 17,824
Net recoveries (charge-offs) $ 10,555 $ (287) $ 2 $ (3,735) $ (2,074) $ 45 $ (1,049) $ 3,457
Average loan balance $ 2,767,595 $ 1,933,474 $ 3,905,895 $ 1,063,053 $ 588,782 $ 1,085,472 $ 1,871,601 $ 13,215,872
Ratio of net (recoveries) charge-offs to average gross loans (1.55) % 0.06 % 0.00% 1.42 % 1.43 % (0.02) % 0.23 % (0.11) %
(1)Excludes reverse mortgages.
(2)Includes home equity lines of credit, installment loans unsecured lines of credit and education loans.
(Dollars in thousands) Commercial and Industrial Owner-
occupied
Commercial 		Commercial
Mortgages 		Construction Commercial Small Business Leases
Residential(1)
Consumer(2)
Total
As of December 31, 2025
Allowance for credit losses $ 52,927 $ 7,626 $ 48,047 $ 13,264 $ 16,449 $ 6,764 $ 34,570 $ 179,647
% of ACL to total ACL 30 % 4 % 27 % 7 % 9 % 4 % 19 % 100 %
Loan portfolio balance $ 2,796,654 $ 1,937,339 $ 3,916,159 $ 1,023,911 $ 603,321 $ 1,086,102 $ 1,894,460 $ 13,257,946
% to total loans and leases 20 % 15 % 30 % 8 % 5 % 8 % 14 % 100 %
Year ended December 31, 2025
Charge-offs $ (32,120) $ (215) $ (4,583) $ (4,900) $ (14,386) $ - $ (18,863) $ (75,067)
Recoveries 4,894 19 622 - 2,959 188 6,980 15,662
Net (charge-offs) recoveries $ (27,226) $ (196) $ (3,961) $ (4,900) $ (11,427) $ 188 $ (11,883) $ (59,405)
Average loan balance $ 2,671,383 $ 1,944,563 $ 3,940,590 $ 918,878 $ 623,005 $ 993,870 $ 1,965,557 $ 13,057,846
Ratio of net charge-offs (recoveries) to average gross loans 1.02 % 0.01 % 0.10 % 0.53 % 1.83 % (0.02) % 0.60 % 0.45 %
(1)Excludes reverse mortgages.
(2)Includes home equity lines of credit, installment loans unsecured lines of credit and education loans.
See Note 7 to the unaudited Consolidated Financial Statements and "Nonperforming Assets" above for further information.
Noninterest Income
Three months ended March 31, 2026: During the three months ended March 31, 2026, noninterest income was $90.1 million, an increase of $9.2 million from $80.9 million during the three months ended March 31, 2025. The increase was driven by double-digit growth across several of our fee-based businesses, including WSFS Institutional Services®, BMT-DE, Capital Markets, and WSFS Home Lending. These increases were partially offset by a $2.7 million decrease in Cash Connect®, primarily due to the impact of interest rates and lower ATM volumes.
Noninterest Expense
Three months ended March 31, 2026: During the three months ended March 31, 2026, noninterest expense was $162.8 million, an increase of $11.0 million from $151.8 million for the three months ended March 31, 2025. The increase was primarily due to an increase of $9.4 million from salaries and benefits from the impact of lower incentive payments made in the first quarter of 2025, higher salaries due to annual merit-based increases, and higher medical costs. Additionally, restructuring expenses increased $2.5 million, due to a loss on a property sale and a write-down of held-for-sale real estate, and loan workout and other credit costs increased $1.9 million. These increases were partially offset by a $3.9 million decrease in other operating expenses, primarily related to a decrease in Cash Connect® external funding costs, driven by lower ATM volumes and rates.
Income Taxes
We and our subsidiaries file a consolidated federal income tax return and separate state income tax returns. Income taxes are accounted for in accordance with ASC 740, Income Taxes, which requires the recording of deferred income taxes for tax consequences of temporary differences. We recorded income tax expense of $27.6 million during the three months ended March 31, 2026 compared to income tax expense of $21.1 million for the same period in 2025. The increase for the three months ended March 31, 2026 compared to the same period in 2025 was primarily due to higher income before taxes in 2026.
Our effective tax rate was 24.1% for the three months ended March 31, 2026 compared to 24.3% for the three months ended March 31, 2025. The reduction was primarily due to increased federal tax credits.
The effective tax rate reflects the recognition of certain tax benefits in the financial statements including those benefits from tax-exempt interest income, federal low-income housing tax credits, solar tax credits, research and development tax credits, and excess tax benefits from recognized stock compensation. These tax benefits are offset by the tax effect of stock-based compensation expense related to incentive stock options, tax deficiencies from recognized stock compensation, and a provision for state income tax expense. We frequently analyze our projections of taxable income and make adjustments to our provision for income taxes accordingly.
RECONCILIATION OF NON-GAAP MEASURE TO GAAP MEASURE
The following table provides a reconciliation of tangible book value per share of common stock to book value per share of common stock, the most directly comparable GAAP financial measure. We believe this measure helps management and investors better understand and assess changes from period to period in stockholders' equity exclusive of changes in intangible assets. This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results.
(Dollars and share amounts in thousands, except per share amounts) March 31, 2026 December 31, 2025
Stockholders' equity of WSFS $ 2,724,493 $ 2,738,545
Less: Goodwill and other intangible assets 966,388 969,903
Tangible common equity (numerator) $ 1,758,105 $ 1,768,642
Shares of common stock outstanding (denominator) 52,149 53,410
Book value per share of common stock $ 52.24 $ 51.27
Goodwill and other intangible assets 18.53 18.16
Tangible book value per share of common stock $ 33.71 $ 33.11
CRITICAL ACCOUNTING ESTIMATES
The preparation of the unaudited Consolidated Financial Statements in accordance with U.S. GAAP requires us to make estimates and assumptions affecting the reported amounts of assets, liabilities, revenue and expenses. We regularly evaluate these estimates and assumptions including those related to the allowance for credit losses, business combinations, deferred taxes, fair value measurements and goodwill and other intangible assets. We base our estimates on historical experience and various other factors and assumptions that are believed to be reasonable under the circumstances. These form the basis for making judgments on the carrying value of certain assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Although our current estimates contemplate current economic conditions and how we expect them to change in the future, for the remainder of 2026, it is possible that actual conditions may be worse than anticipated in those estimates, which could materially affect our results of operations and financial condition. Actual results may differ from these estimates under different assumptions or conditions.
Critical accounting estimates at March 31, 2026 did not significantly change from our critical accounting estimates at December 31, 2025, which are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
RECENT LEGISLATIVE AND REGULATORY DEVELOPMENTS
Recent legislative and regulatory developments at March 31, 2026 did not significantly change from our recent legislative and regulatory developments at December 31, 2025, which are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
WSFS Financial Corporation published this content on May 04, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 04, 2026 at 21:19 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]