WSFS Financial Expands Net Interest Income on Lower Deposit Costs
Net interest income rose 4% sequentially to $192.5 million as the bank leveraged a shift toward noninterest deposits.
Net interest income for WSFS Financial (WSFS), a regional commercial bank, increased 4% sequentially to $192.5 million and 7% year-over-year compared to the second quarter of 2025. The growth followed a combination of higher average loan balances and increased yields on investment securities.
Net interest margin expanded 4 bps sequentially to 3.87% from 3.83%. The margin remained 2 bps lower than the 3.89% reported in the second quarter of 2025, as interest rate cuts during the prior year weighed on results.
Deposit costs fell 4 bps sequentially to 1.29% and decreased 34 bps year-over-year. Total client deposits rose 3% sequentially and 11% year-over-year to $19.0 billion. Noninterest demand deposits drove much of this growth, increasing 10% sequentially and 32% year-over-year.
Loan growth remained modest, with gross loans and leases rising 1% sequentially and 3% year-over-year to $13.5 billion. Commercial and industrial loans grew 2% sequentially to $4.94 billion.
Core fee revenue rose 2% sequentially to $92.2 million and 5% year-over-year. Wealth and Trust fees increased 17% year-over-year, supported by 34% growth in Institutional Services and 20% growth in BMT of DE.
The bank reported a CET1 capital ratio of 13.76% as of June 30, 2026. Total capital return for the quarter reached $76.6 million, which included $66.2 million in common stock repurchases representing 1.8% of outstanding shares.
Credit quality metrics improved on a yearly basis, as problem assets fell 31% year-over-year to $472.9 million and nonperforming assets decreased 24% year-over-year to $81.0 million. However, the provision for credit losses shifted to a build of $5.0 million in the second quarter, following a recovery of $2.0 million in the first quarter.
The core efficiency ratio improved to 58.3% from 59.6% in the second quarter of 2025. This improvement occurred despite a 4% year-over-year increase in core noninterest expense to $166.2 million, attributed to higher salaries, benefits, and external fraud losses.