UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 20202021
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to                     
Commission File Number 001-35638
WSFS FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware22-2866913
(State or other jurisdiction of Incorporation or organization)(I.R.S. Employer Identification Number)
Delaware22-2866913
(State or other jurisdiction of Incorporation or organization)(I.R.S. Employer Identification Number)
500 Delaware Ave,
Wilmington, Delaware, 19801
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (302) 792-6000
Not Applicable
(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareWSFSNasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files).    Yes  x    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging“emerging growth company"company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer x  Accelerated filer☐
Non-accelerated filer ☐  Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  x

Number of shares outstanding of the issuer's common stock, as of the latest practicable date: 50,660,20347,535,215 shares as of July 31, 2020.
2021.



WSFS FINANCIAL CORPORATION
FORM 10-Q
TABLE OF CONTENTS
 PART I. Financial InformationPage
Item 1.Financial Statements (Unaudited)
Consolidated Statements of Income( (LLoss) oIncomess) for the Three and Six Months Ended June 30, 20202021 and 20192020
5
Consolidated Statements of Comprehensive Income (Loss)Income for the Three and Six Months Ended June 30, 20202021 and 20192020
6
Consolidated Statements of Financial Condition as of June 30, 20202021 and December 31, 20192020
7
Consolidated Statements of Changes in Stockholders' Equity for the Three and Six Months Ended June 30, 20202021 and 20192020
8
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 20202021 and 20192020
10
Notes to the Consolidated Financial Statements for the Three and Six Months Ended June 30, 20202021
12
Item 2.
6053
Item 3.
7665
Item 4.
7665
PART II. Other Information
Item 1.
7666
Item 1A.
7766
Item 2.
7868
Item 3.
7968
Item 4.
7968
Item 5.
7968
Item 6.
7969

2
Table of Contents
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, and exhibits hereto, contains estimates, predictions, opinions, projections and other “forward-looking statements” as that phrase is defined in the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, references to the Company’s predictions or expectations of future business or financial performance as well as its goals and objectives for future operations, financial and business trends, business prospects and management’s outlook or expectations for earnings, revenues, expenses, capital levels, liquidity levels, asset quality or other future financial or business performance, strategies or expectations. The words “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project” and similar expressions, among others, generally identify forward-looking statements. Such forward-looking statements are based on various assumptions (some of which may be beyond the Company’s control) and are subject to risks and uncertainties (which change over time) and other factors which could cause actual results to differ materially from those currently anticipated. Such risks and uncertainties include, but are not limited to:
•difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the markets in which the Company operates and in which its loans are concentrated, including possible declines in housing markets, an increase in unemployment levels and slowdowns in economic growth, including as a result of the novel coronavirus or COVID-19,and its variants (COVID-19) pandemic;
•possible additional loan losses and impairment of the collectability of loans, particularly as a result of the COVID-19 pandemic and the policies and programs implemented by the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act,as amended (CARES Act), including its automatic loan forbearance provisions and ourthe Company's Paycheck Protection Program (PPP) lending activities;
•additional credit, fraud and litigation risks associated with our PPP lending activities;
•the economic and financial impact of federal, state and local emergency orders and other actions taken in response to the COVID-19 pandemic;
•the continuation of these conditions related to the COVID-19 pandemic, including whether due to a resurgence or additional waves of COVID-19 infections, particularly as the geographic areas in which we operate continue to re-open, and how quickly and to what extent normal economic and operating conditions can resume, especially as a vaccine becomes widely available;
•the Company’s level of nonperforming assets and the costs associated with resolving problem loans including litigation and other costs and complying with government-imposed foreclosure moratoriums;
•changes in market interest rates, which may increase funding costs and reduce earning asset yields and thus reduce margin;
•the impact of changes in interest rates and the credit quality and strength of underlying collateral and the effect of such changes on the market value of the Company’s investment securities portfolio;
•the credit risk associated with the substantial amount of commercial real estate, construction and land development and commercial and industrial loans in the Company's loan portfolio;
•the extensive federal and state regulation, supervision and examination governing almost every aspect of the Company’s operations and potential expenses associated with complying with such regulations;
•the Company’s ability to comply with applicable capital and liquidity requirements (including the finalized Basel III capital standards and the effect of the transition to the Current Expected Credit Losses (CECL) methodology for allowances and related adjustments), including its ability to generate liquidity internally or raise capital on favorable terms;
•possible changes in trade, monetary and fiscal policies and stimulus programs, laws and regulations and other activities of governments, agencies, and similar organizations, and the uncertainty of the short- and long-term impacts of such changes;
•any impairments of the Company's goodwill or other intangible assets;
•conditions in the financial markets, including the destabilized economic environment caused by the COVID-19 pandemic, that may limit the Company’s access to additional funding to meet its liquidity needs;
•the intention of the United Kingdom's Financial Conduct Authority (FCA) to cease support of London Inter-Bank Offered Rate (LIBOR) and the transition to an alternative reference interest rate;rate, such as the Secured Overnight Funding Rate (SOFR), including methodologies for calculating the rate that are different from the LIBOR methodology and changed language for existing and new floating or adjustable rate contracts;
•the success of the Company's growth plans, including its plans to grow the commercial small business leasing portfolio and residential mortgage, small business and Small Business Administration (SBA) portfolios following the acquisition of Beneficial Bancorp, Inc. (Beneficial);
•the successful integration of acquisitions;portfolios;
•the Company’s ability to successfully integrate and fully realize the cost savings and other benefits of its acquisitions, manage risks related to business disruption following those acquisitions, and post-acquisition Customer acceptance of the Company’s products and services and related Customer disintermediation;disintermediation, including its pending acquisition of Bryn Mawr Bank Corporation (Bryn Mawr);
3
Table of Contents
•the Company’s ability to complete the pending merger with Bryn Mawr on the terms proposed, which are subject to a number of conditions, risks and uncertainties, including the possibility that the proposed acquisition does not close when expected or at all because all conditions to closing are not received or satisfied on a timely basis or at all, the failure to close for any other reason, diversion of management time on merger-related issues, risks relating to the potential dilutive effect of shares of the Company’s common stock to be issued in the acquisition of Bryn Mawr, and the reaction to the acquisition of Bryn Mawr of the companies’ customers, employees and counterparties;
•negative perceptions or publicity with respect to the Company generally and, in particular, the Company’s trust and wealth management business;
•failure of the financial and operational controls of the Company’s Cash Connect® division;
•adverse judgments or other resolution of pending and future legal proceedings, and cost incurred in defending such proceedings;
•the Company's reliance on third parties for certain important functions, including the operation of its core systems, and any failures by such third parties;
•system failures or cybersecurity incidents or other breaches of the Company’s network security, particularly given widespread remote working arrangements;
•the Company’s ability to recruit and retain key employees;Associates;
•the effects of problems encountered by other financial institutions that adversely affect the Company or the banking industry generally;
•the effects of weather and natural disasters such as floods, droughts, wind, tornadoes and hurricanes as well as effects from geopolitical instability, public health crises and man-made disasters including terrorist attacks;
•the effects of regional or national civil unrest (including any resulting branch or ATM closures or damage);
•possible changes in the speed of loan prepayments by the Company’s Customers and loan origination or sales volumes;
•possible changes in the speed of prepayments of mortgage-backed securities due to changes in the interest rate environment, particularly as a result of the COVID-19 pandemic, and the related acceleration of premium amortization on prepayments in the event that prepayments accelerate;
•regulatory limits on the Company’s ability to receive dividends from its subsidiaries and pay dividends to its stockholders;
•any reputation, credit, interest rate, market, operational, litigation, legal, liquidity, regulatory and compliance risk resulting from developments related to any of the risks discussed above; and
•other risks and uncertainties, including those discussed herein under the heading “Risk Factors” and in other documents filed by the Company with the Securities and Exchange Commission (SEC) from time to time.
The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. The Company disclaims any duty to revise or update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company for any reason, except as specifically required by law.

As used in this Quarterly Report on Form 10-Q, the terms “WSFS”, “the Company”, “registrant”, “we”, “us”, and “our” mean WSFS Financial Corporation and its subsidiaries, on a consolidated basis, unless the context indicates otherwise.

The following are registered trademarks of the Company: Cash Connect®, Christiana Trust Company of Delaware®, NewLane Finance®, Powdermill® is the Company's registered trademark.Financial Solutions, West Capital Management®, WSFS Institutional Services®, WSFS Mortgage® and WSFS Wealth® Investments. Any other trademarks appearing in this Quarterly Report on Form 10-Q are the property of their respective holders.

4
Table of Contents

WSFS FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (LOSS) INCOME
 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
(Dollars in thousands, except per share and share data)(Unaudited)
Interest income:
Interest and fees on loans and leases$112,260  $129,001  $231,462  $216,118  
Interest on mortgage-backed securities12,549  12,229  25,768  22,695  
Interest and dividends on investment securities:
Taxable102  31  117  50  
Tax-exempt907  999  1,818  2,024  
Other interest income65  643  573  1,593  
125,883  142,903  259,738  242,480  
Interest expense:
Interest on deposits9,832  16,123  24,469  27,065  
Interest on Federal Home Loan Bank advances625  806  1,455  3,396  
Interest on senior debt1,180  1,180  2,359  2,359  
Interest on federal funds purchased1  805  471  1,592  
Interest on trust preferred borrowings484  717  1,070  1,443  
Interest on other borrowings5  40  8  79  
12,127  19,671  29,832  35,934  
Net interest income113,756  123,232  229,906  206,546  
Provision for credit losses94,754  12,195  151,400  19,849  
Net interest income after provision for credit losses19,002  111,037  78,506  186,697  
Noninterest income:
Credit/debit card and ATM income9,306  13,677  20,665  25,192  
Investment management and fiduciary income10,929  10,382  21,891  20,529  
Deposit service charges4,175  6,103  9,822  10,849  
Mortgage banking activities, net8,494  2,846  11,965  4,938  
Loan and lease fee income1,097  650  2,216  1,535  
Securities gains, net1,908  63  2,601  78  
Unrealized (losses) gains on equity investments, net(11) 1,033  657  4,831  
Realized gain on sale of equity investment22,052  —  22,052  —  
Bank owned life insurance income445  383  420  600  
Other income5,980  7,734  12,933  15,441  
64,375  42,871  105,222  83,993  
Noninterest expense:
Salaries, benefits and other compensation48,757  48,550  94,103  84,755  
Occupancy expense8,296  8,810  15,962  15,177  
Equipment expense5,759  5,444  10,723  9,433  
Data processing and operations expenses3,061  3,731  6,139  6,319  
Professional fees4,423  2,915  9,023  4,787  
Marketing expense1,215  1,947  2,166  3,537  
FDIC expenses305  1,042  251  1,662  
Loan workout and other credit costs4,587  1,419  5,040  1,690  
Corporate development expense2,801  13,946  4,142  40,573  
Restructuring expense—  1,881  —  6,243  
Other operating expense14,231  18,163  34,382  31,264  
93,435  107,848  181,931  205,440  
(Loss) income before taxes(10,058) 46,060  1,797  65,250  
Income tax (benefit) provision(2,247) 10,091  (959) 16,351  
Net (loss) income$(7,811) $35,969  $2,756  $48,899  
Less: Net loss attributable to noncontrolling interest(700) (231) (1,060) (324) 
Net (loss) income attributable to WSFS$(7,111) $36,200  $3,816  $49,223  
(Loss) earnings per share:
Basic$(0.14) $0.68  $0.08  $1.07  
Diluted$(0.14) $0.68  $0.07  $1.06  
Weighted average shares of common stock outstanding:
Basic50,655,154  53,253,455  50,870,735  46,103,264  
Diluted50,655,154  53,516,000  50,910,790  46,438,173  
(Unaudited)
 Three Months Ended June 30,Six Months Ended June 30,
(Dollars in thousands, except per share and share data)2021202020212020
Interest income:
Interest and fees on loans and leases$98,645 $112,260 $207,497 $231,462 
Interest on mortgage-backed securities12,506 12,549 23,210 25,768 
Interest and dividends on investment securities:
Taxable702 102 1,403 117 
Tax-exempt681 907 1,429 1,818 
Other interest income368 65 644 573 
112,902 125,883 234,183 259,738 
Interest expense:
Interest on deposits3,778 9,832 8,274 24,469 
Interest on Federal Home Loan Bank advances0 625 5 1,455 
Interest on senior debt2,053 1,180 4,319 2,359 
Interest on federal funds purchased0 1 0 471 
Interest on trust preferred borrowings317 484 641 1,070 
Interest on other borrowings5 5 10 8 
6,153 12,127 13,249 29,832 
Net interest income106,749 113,756 220,934 229,906 
(Recovery of) provision for credit losses(67,563)94,754 (87,723)151,400 
Net interest income after (recovery of) provision for credit losses174,312 19,002 308,657 78,506 
Noninterest income:
Credit/debit card and ATM income7,567 9,306 14,372 20,665 
Investment management and fiduciary income15,360 10,929 29,613 21,891 
Deposit service charges5,319 4,175 10,779 9,822 
Mortgage banking activities, net4,453 8,494 13,053 11,965 
Loan and lease fee income1,730 1,097 5,215 2,216 
Securities gains, net0 1,908 329 2,601 
Unrealized gains on equity investments, net5,261 (11)5,261 657 
Realized gain on sale of equity investment0 22,052 0 22,052 
Bank owned life insurance income695 445 900 420 
Other income8,633 5,980 17,318 12,933 
49,018 64,375 96,840 105,222 
Noninterest expense:
Salaries, benefits and other compensation52,408 48,757 105,546 94,103 
Occupancy expense8,083 8,296 16,543 15,962 
Equipment expense7,338 5,759 14,729 10,723 
Data processing and operations expenses3,444 3,061 6,829 6,139 
Professional fees3,401 4,423 7,257 9,023 
Marketing expense1,286 1,215 2,278 2,166 
Loss on debt extinguishment1,087 0 1,087 0 
FDIC expenses1,056 305 2,125 251 
Loan workout and other credit costs(552)4,587 568 5,040 
Corporate development expense2,543 2,801 4,638 4,142 
Restructuring expense(144)0 (409)0 
Other operating expense16,082 14,231 30,460 34,382 
96,032 93,435 191,651 181,931 
Income (loss) before taxes127,298 (10,058)213,846 1,797 
Income tax provision (benefit)31,687 (2,247)53,094 (959)
Net income (loss)$95,611 $(7,811)$160,752 $2,756 
Less: Net income (loss) attributable to noncontrolling interest(56)(700)3 (1,060)
Net income (loss) attributable to WSFS$95,667 $(7,111)$160,749 $3,816 
Earnings (loss) per share:
Basic$2.01 $(0.14)$3.38 $0.08 
Diluted$2.01 $(0.14)$3.37 $0.07 
Weighted average shares of common stock outstanding:
Basic47,529,143 50,655,154 47,519,229 50,870,735 
Diluted47,691,709 50,655,154 47,675,223 50,910,790 

The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.
5
Table of Contents
WSFS FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) INCOME
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
(Dollars in thousands)(Unaudited)(Unaudited)
Net (loss) income$(7,811) $35,969  $2,756  $48,899  
Less: Net loss attributable to noncontrolling interest(700) (231) (1,060) (324) 
Net (loss) income attributable to WSFS(7,111) 36,200  3,816  49,223  
Other comprehensive income:
Net change in unrealized gains on investment securities available-for-sale
Net unrealized gains arising during the period, net of tax expense of $1,169, $6,289, $15,707 and $11,831, respectively3,703  19,591  49,739  36,856  
Less: reclassification adjustment for net gains on sales realized in net income, net of tax expense of $458, $15, $624, and $19, respectively
(1,450) (48) (1,977) (59) 
2,253  19,543  47,762  36,797  
Net change in securities held-to-maturity
Amortization of unrealized gain on securities reclassified to held-to-maturity, net of tax expense of $18, $27, $38, and $56, respectively(57) (84) (122) (177) 
Net change in unfunded pension liability
Change in unfunded pension liability related to unrealized gain (loss), prior service cost and transition obligation, net of tax benefit of $8, $8, $7, and $17, respectively(26) (34) (22) (175) 
Pension settlement, net of tax expense of $67, $0, $67, and $0, respectively212  —  212  —  
186  (34) 190  (175) 
Net change in cash flow hedge
Net unrealized (loss) gain arising during the period, net of tax (benefit) expense of $(8), $323, $493, and $525, respectively(25) 1,007  1,560  1,637  
Amortization of unrealized gain on terminated cash flow hedges, net of tax benefit of $35, $0, $35, and $0, respectively(111) —  (111) —  
(136) 1,007  1,449  1,637  
Total other comprehensive income2,246  20,432  49,279  38,082  
Total comprehensive (loss) income$(4,865) $56,632  $53,095  $87,305  
Three Months Ended June 30,Six Months Ended June 30,
(Dollars in thousands)2021202020212020
Net income (loss)$95,611 $(7,811)$160,752 $2,756 
Less: Net (loss) income attributable to noncontrolling interest(56)(700)3 (1,060)
Net income (loss) attributable to WSFS95,667 (7,111)160,749 3,816 
Other comprehensive income (loss):
Net change in unrealized gains (losses) on investment securities available-for-sale
Net unrealized gains (losses) arising during the period, net of tax expense (benefit) of $7,615, 1,169, $(14,361), and 15,707, respectively24,104 3,703 (45,485)49,739 
Less: reclassification adjustment for net gains on sales realized in net income, net of tax expense of $0, $458, $79, and $624, respectively0 (1,450)(250)(1,977)
24,104 2,253 (45,735)47,762 
Net change in securities held-to-maturity
Amortization of unrealized gain on securities reclassified to held-to-maturity, net of tax expense of $9, $18, $14, and $38, respectively(28)(57)(44)(122)
Net change in unfunded pension liability
Change in unfunded pension liability related to unrealized loss, prior service cost and transition obligation, net of tax (benefit) expense of $(8), $8, $(13), and $7, respectively(24)(26)(40)(22)
Pension settlement, net of tax expense of $0, $67, $0, and $67, respectively0 212 0 212 
(24)186 (40)190 
Net change in cash flow hedge
Net unrealized (loss) gain arising during the period, net of tax expense of $0, $(8) $0, and $493 respectively0 (25)0 1,560 
Amortization of unrealized gain on terminated cash flow hedges, net of tax benefit of $35, $35, $70, and $35 respectively(112)(111)(223)(111)
(112)(136)(223)1,449 
Net change in equity method investments
Net change in other comprehensive income of equity method investments, net of tax expense of $0, $0, $86, and $0, respectively0 0 273 0 
Total other comprehensive income (loss)23,940 2,246 (45,769)49,279 
Total comprehensive income (loss)$119,607 $(4,865)$114,980 $53,095 
The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.
6
Table of Contents
WSFS FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
June 30, 2020December 31, 2019
(Dollars in thousands, except per share and share data)(Unaudited)
Assets:
Cash and due from banks$583,221  $164,021  
Cash in non-owned ATMs360,969  407,524  
Interest-bearing deposits in other banks including collateral of $11,110 at June 30, 2020 and $0 December 31, 2019, respectively11,577  207  
Total cash and cash equivalents955,767  571,752  
Investment securities, available-for-sale (amortized cost of $2,097,114 at June 30, 2020 and $1,909,483 at December 31, 20192,195,389  1,944,914  
Investment securities, held-to-maturity, net of allowance for credit losses of $8 at June 30, 2020 (fair value $132,198 at June 30, 2020 and $136,625 at December 31, 2019)127,601  133,601  
Other investments10,211  70,046  
Loans, held for sale at fair value109,453  83,872  
Loans and leases, net of allowance for credit losses of $232,192 at June 30, 2020 and $47,576 at December 31, 20199,120,288  8,424,464  
Bank owned life insurance30,391  30,294  
Stock in Federal Home Loan Bank of Pittsburgh at cost9,772  21,097  
Other real estate owned4,153  2,605  
Accrued interest receivable53,222  38,094  
Premises and equipment99,320  104,465  
Goodwill472,828  472,828  
Intangible assets89,687  95,917  
Other assets295,275  262,353  
Total assets$13,573,357  $12,256,302  
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Noninterest-bearing$3,188,046  $2,189,573  
Interest-bearing7,874,454  7,397,284  
Total deposits11,062,500  9,586,857  
Federal funds purchased—  195,000  
Federal Home Loan Bank advances106,395  112,675  
Trust preferred borrowings67,011  67,011  
Senior debt98,714  98,605  
Other borrowed funds23,673  15,997  
Accrued interest payable6,049  3,103  
Other liabilities387,221  327,563  
Total liabilities11,751,563  10,406,811  
Stockholders’ Equity:
Common stock $0.01 par value, 90,000,000 shares authorized; issued 57,533,236 at June 30, 2020 and 57,435,658 at December 31, 2019576  575  
Capital in excess of par value1,050,678  1,049,064  
Accumulated other comprehensive income72,780  23,501  
Retained earnings878,585  917,377  
Treasury stock at cost, 6,873,120 shares at June 30, 2020 and 5,868,772 shares at December 31, 2019(178,950) (140,211) 
Total stockholders’ equity of WSFS1,823,669  1,850,306  
Noncontrolling interest(1,875) (815) 
Total stockholders' equity1,821,794  1,849,491  
Total liabilities and stockholders' equity$13,573,357  $12,256,302  
(Unaudited)
(Dollars in thousands, except per share and share data)June 30, 2021December 31, 2020
Assets:
Cash and due from banks$1,944,059 $1,244,705 
Cash in non-owned ATMs470,157 402,339 
Interest-bearing deposits in other banks including collateral (restricted cash) of $6,110 at June 30, 2021 and $7,390 December 31, 20206,897 7,691 
Total cash, cash equivalents, and restricted cash2,421,113 1,654,735 
Investment securities, available-for-sale (amortized cost of $3,347,966 at June 30, 2021 and $2,450,265 at December 31, 20203,366,579 2,529,057 
Investment securities, held-to-maturity, net of allowance for credit losses of $5 at June 30, 2021 and $6 at December 31, 2020 (fair value $99,266 at June 30, 2021 and $116,421 at December 31, 2020)95,126 111,741 
Other investments15,648 9,541 
Loans, held for sale at fair value113,173 197,541 
Loans and leases, net of allowance for credit losses of $132,418 at June 30, 2021 and $228,804 at December 31, 20208,131,846 8,795,935 
Bank owned life insurance32,759 32,051 
Stock in Federal Home Loan Bank (FHLB) of Pittsburgh at cost6,090 5,771 
Other real estate owned1,044 3,061 
Accrued interest receivable40,275 44,335 
Premises and equipment92,559 96,556 
Goodwill472,828 472,828 
Intangible assets79,123 84,558 
Other assets280,698 296,204 
Total assets$15,148,861 $14,333,914 
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Noninterest-bearing$4,328,060 $3,415,021 
Interest-bearing8,398,785 8,441,643 
Total deposits12,726,845 11,856,664 
FHLB advances0 6,623 
Trust preferred borrowings67,011 67,011 
Senior debt147,823 246,617 
Other borrowed funds21,636 20,390 
Accrued interest payable1,977 1,450 
Other liabilities301,758 345,679 
Total liabilities13,267,050 12,544,434 
Stockholders’ Equity:
Common stock $0.01 par value, 90,000,000 shares authorized; issued 57,622,151 at June 30, 2021 and 57,575,783 at December 31, 2020577 576 
Capital in excess of par value1,054,276 1,053,022 
Accumulated other comprehensive income10,238 56,007 
Retained earnings1,126,284 977,414 
Treasury stock at cost, 10,086,936 shares at June 30, 2021 and 9,819,627 shares at December 31, 2020(307,321)(295,293)
Total stockholders’ equity of WSFS1,884,054 1,791,726 
Noncontrolling interest(2,243)(2,246)
Total stockholders' equity1,881,811 1,789,480 
Total liabilities and stockholders' equity$15,148,861 $14,333,914 

The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.
7
Table of Contents
WSFS FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
Six Months Ended June 30, 2021
(Dollars in thousands, except per share and share amounts)SharesCommon StockCapital in Excess of Par ValueAccumulated Other Comprehensive IncomeRetained EarningsTreasury StockTotal Stockholders' Equity of WSFSNon-controlling InterestTotal Stockholders' Equity
Balance, December 31, 202057,575,783 $576 $1,053,022 $56,007 $977,414 $(295,293)$1,791,726 $(2,246)$1,789,480 
Net income— — — — 160,749 — 160,749 3 160,752 
Other comprehensive loss— — — (45,769)— — (45,769)— (45,769)
Cash dividend, $0.25 per share— — — — (11,879)— (11,879)— (11,879)
Issuance of common stock including proceeds from exercise of common stock options46,368 1 175 — — — 176 — 176 
Stock-based compensation expense— — 2,262 — — — 2,262 — 2,262 
Repurchases of common stock (1)
— — (1,183)— — (12,028)(13,211)— (13,211)
Balance, June 30, 202157,622,151 $577 $1,054,276 $10,238 $1,126,284 $(307,321)$1,884,054 $(2,243)$1,881,811 
Three Months Ended June 30, 2021
(Dollars in thousands, except per share and share amounts)SharesCommon StockCapital in Excess of Par ValueAccumulated Other Comprehensive IncomeRetained EarningsTreasury StockTotal Stockholders' Equity of WSFSNon-controlling InterestTotal Stockholders' Equity
Balance, March 31, 202157,589,330 $576 $1,054,291 $(13,702)$1,036,797 $(307,321)$1,770,641 $(2,187)$1,768,454 
Net income (loss)— — — — 95,667 — 95,667 (56)95,611 
Other comprehensive income— — — 23,940 — — 23,940 — 23,940 
Cash dividend, $0.13 per share— — — — (6,180)— (6,180)— (6,180)
Issuance of common stock including proceeds from exercise of common stock options32,821 1 60 — — — 61 — 61 
Stock-based compensation expense— — 1,107 — — — 1,107 — 1,107 
Repurchases of common shares (1)
— — (1,182)— — 0 (1,182)— (1,182)
Balance, June 30, 202157,622,151 $577 $1,054,276 $10,238 $1,126,284 $(307,321)$1,884,054 $(2,243)$1,881,811 
Six Months Ended June 30, 2020
(Dollars in thousands, except per share and share amounts)SharesCommon StockCapital in Excess of Par ValueAccumulated Other Comprehensive IncomeRetained EarningsTreasury StockTotal Stockholders' Equity of WSFSNon-controlling InterestTotal Stockholders' Equity
Balance, December 31, 201957,435,658  $575  $1,049,064  $23,501  $917,377  $(140,211) $1,850,306  $(815) $1,849,491  
Cumulative change in accounting principle (Note 2)—  —  —  —  (30,368) —  (30,368) —  (30,368) 
Balance, January 1, 2020 (as adjusted for change in accounting principle)57,435,658  575  1,049,064  23,501  887,009  (140,211) 1,819,938  (815) 1,819,123  
Net income (loss)—  —  —  —  3,816  —  3,816  (1,060) 2,756  
Other comprehensive income—  —  —  49,279  —  —  49,279  —  49,279  
Cash dividend, $0.24 per share—  —  —  —  (12,240) —  (12,240) —  (12,240) 
Issuance of common stock including proceeds from exercise of common stock options97,578  1  990  —  —  —  991  —  991  
Stock-based compensation expense—  —  1,294  —  —  —  1,294  —  1,294  
Repurchases of common shares (1)
—  —  (670) —  —  (38,739) (39,409) —  (39,409) 
Balance, June 30, 202057,533,236  $576  $1,050,678  $72,780  $878,585  $(178,950) $1,823,669  $(1,875) $1,821,794  
Three Months Ended June 30, 2020
(Dollars in thousands, except per share and share amounts)SharesCommon StockCapital in Excess of Par ValueAccumulated Other Comprehensive IncomeRetained EarningsTreasury StockTotal Stockholders' Equity of WSFSNon-controlling InterestTotal Stockholders' Equity
Balance, March 31, 202057,506,298  $576  $1,050,658  $70,534  $891,776  $(178,950) $1,834,594  $(1,175) $1,833,419  
Net income (loss)—  —  —  —  (7,111) —  (7,111) (700) (7,811) 
Other comprehensive income—  —  —  2,246  —  —  2,246  —  2,246  
Cash dividend, $0.12 per share—  —  —  —  (6,080) —  (6,080) —  (6,080) 
Issuance of common stock including proceeds from exercise of common stock options26,938  —  —  —  —  —  —  —  —  
Stock-based compensation expense—  —  690  —  —  —  690  —  690  
Repurchases of common shares (1)
—  —  (670) —  —  —  (670) —  (670) 
Balance, June 30, 202057,533,236  $576  $1,050,678  $72,780  $878,585  $(178,950) $1,823,669  $(1,875) $1,821,794  
(1)Repurchase of common stock includes 267,309 shares repurchased in connection with the Company's share repurchase program approved by the Board of Directors, and 17,732 shares withheld to cover tax liabilities.
(1)
8
Table of Contents
Six Months Ended June 30, 2020
(Dollars in thousands, except per share and share amounts)SharesCommon StockCapital in Excess of Par ValueAccumulated Other Comprehensive IncomeRetained EarningsTreasury StockTotal Stockholders' Equity of WSFSNon-controlling InterestTotal Stockholders' Equity
Balance, December 31, 201957,435,658 $575 $1,049,064 $23,501 $917,377 $(140,211)$1,850,306 $(815)$1,849,491 
Cumulative change in accounting principle— — — — (30,368)— (30,368)— (30,368)
Balance, January 1, 2020 (as adjusted for change in accounting principle)57,435,658 575 1,049,064 23,501 887,009 (140,211)1,819,938 (815)1,819,123 
Net income (loss)— — — — 3,816 — 3,816 (1,060)2,756 
Other comprehensive income— — — 49,279 — — 49,279 — 49,279 
Cash dividend, $0.24 per share— — — — (12,240)— (12,240)— (12,240)
Issuance of common stock including proceeds from exercise of common stock options97,578 1 990 — — — 991 — 991 
Stock-based compensation expense— — 1,294 — — — 1,294 — 1,294 
Repurchases of common shares (2)
— — (670)— — (38,739)(39,409)— (39,409)
Balance, June 30, 202057,533,236 $576 $1,050,678 $72,780 $878,585 $(178,950)$1,823,669 $(1,875)$1,821,794 
Three Months Ended June 30, 2020
(Dollars in thousands, except per share and share amounts)SharesCommon StockCapital in Excess of Par ValueAccumulated Other Comprehensive IncomeRetained EarningsTreasury StockTotal Stockholders' Equity of WSFSNon-controlling InterestTotal Stockholders' Equity
Balance, March 31, 202057,506,298 $576 $1,050,658 $70,534 $891,776 $(178,950)$1,834,594 $(1,175)$1,833,419 
Net income (loss)— — — — (7,111)— (7,111)(700)(7,811)
Other comprehensive income— — — 2,246 — — 2,246 — 2,246 
Cash dividend, $0.12 per share— — — — (6,080)— (6,080)— (6,080)
Issuance of common stock including proceeds from exercise of common stock options26,938 0 0 — — — 0 — 0 
Stock-based compensation expense— — 690 — — — 690 — 690 
Repurchases of common shares (2)
— — (670)— — 0 (670)— (670)
Balance, June 30, 202057,533,236 $576 $1,050,678 $72,780 $878,585 $(178,950)$1,823,669 $(1,875)$1,821,794 
(2)Repurchase of common stock includes 1,004,348 shares repurchased in connection with the Company's share repurchase program approved by the Board of Directors and 22,531 shares withheld to cover tax liabilities.



8
Table of Contents

Six Months Ended June 30, 2019
(Dollars in thousands, except per share and share amounts)SharesCommon StockCapital in Excess of Par ValueAccumulated Other Comprehensive Income (Loss)Retained EarningsTreasury StockTotal Stockholders' Equity of WSFSNon-controlling InterestTotal Stockholders' Equity
Balance, December 31, 201856,926,978  $569  $349,810  $(15,394) $791,031  $(305,096) $820,920  $—  $820,920  
Net income (loss)—  —  —  —  49,223  —  49,223  (324) 48,899  
Other comprehensive income—  —  —  38,082  —  —  38,082  —  38,082  
Cash dividend, $0.23 per share—  —  —  —  (9,857) —  (9,857) —  (9,857) 
Issuance of common stock including proceeds from exercise of common stock options312,705  4  4,123  —  —  —  4,127  —  4,127  
Re-issuance of treasury stock in connection with the Beneficial merger and related items—  —  687,897  —  —  262,071  949,968  101  950,069  
Stock-based compensation expense—  —  1,235  —  —  —  1,235  —  1,235  
Repurchases of common shares (1)
—  —  —  —  —  (17,087) (17,087) —  (17,087) 
Balance, June 30, 201957,239,683  $573  $1,043,065  $22,688  $830,397  $(60,112) $1,836,611  $(223) $1,836,388  
Three Months Ended June 30, 2019
(Dollars in thousands, except per share and share amounts)SharesCommon StockCapital in Excess of Par ValueAccumulated Other Comprehensive IncomeRetained EarningsTreasury StockTotal Stockholders' Equity of WSFSNon-controlling InterestTotal Stockholders' Equity
Balance, March 31, 201956,941,493  $569  $1,038,494  $2,256  $800,511  $(52,078) $1,789,752  $(75) $1,789,677  
Net income (loss)—  —  —  —  36,200  —  36,200  (231) 35,969  
Other comprehensive income—  —  —  20,432  —  —  20,432  —  20,432  
Cash dividend, $0.12 per share—  —  —  —  (6,406) —  (6,406) —  (6,406) 
Issuance of common stock including proceeds from exercise of common stock options298,190  4  3,886  —  —  —  3,890  —  3,890  
Beneficial merger and related items—  —  —  —  92  —  92  83  175  
Stock-based compensation expense—  —  685  —  —  —  685  —  685  
Repurchases of common shares (2)
—  —  —  —  —  (8,034) (8,034) —  (8,034) 
Balance, June 30, 201957,239,683  $573  $1,043,065  $22,688  $830,397  $(60,112) $1,836,611  $(223) $1,836,388  
(1)Repurchase of common stock includes 271,340 shares repurchased in connection with the Company's share repurchase program approved by the Board of Directors, and 132,993 shares repurchased to cover taxes due on the consideration transferred in the Beneficial acquisition related to the vesting of unrestricted Beneficial stock awards.
(2)Repurchase of common stock includes 193,888 shares repurchased in connection with the Company's share repurchase program approved by the Board of Directors.


The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.
9
Table of Contents
WSFS FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30,
 20202019
(Dollars in thousands)(Unaudited)
Operating activities:
Net income$2,756  $48,899  
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses151,400  19,849  
Depreciation of premises and equipment, net7,933  7,203  
(Accretion) amortization of fees and discounts, net(27,442) 24,079  
Amortization of intangible assets5,528  5,658  
Amortization of right of use lease asset6,356  12,982  
Decrease in operating lease liability(7,008) (4,405) 
Income from mortgage banking activities, net(11,965) (4,938) 
Gain on sale of securities, net(2,601) (78) 
Loss on sale of other real estate owned and valuation adjustments, net10  63  
Stock-based compensation expense1,294  1,235  
Unrealized gain on equity investments, net(657) (4,831) 
Realized gain on sale of equity investment(22,052) —  
Deferred income tax (benefit) expense(38,596) 1,205  
Increase in accrued interest receivable(15,128) (1,284) 
(Increase) decrease in other assets(3,743) 23,060  
Origination of loans held for sale(404,036) (190,508) 
Proceeds from sales of loans held for sale377,786  154,508  
Increase in accrued interest payable2,946  5,164  
Increase (decrease) in other liabilities59,651  (3,411) 
Increase in value of bank owned life insurance(97) (632) 
Increase in capitalized interest, net(1,909) (1,808) 
Net cash provided by operating activities$80,426  $92,010  
Investing activities:
Repayments, maturities and calls of investment securities held-to-maturity9,675  8,235  
Sale of investment securities available-for-sale109,605  602,432  
Purchases of investment securities available-for-sale(535,146) (619,652) 
Repayments of investment securities available-for-sale232,426  90,009  
Net proceeds from sale of Visa Class B shares85,850  —  
Proceeds from bank-owned life insurance surrender—  59,711  
Net (increase) decrease in loans(839,620) (20,646) 
Net cash from business combinations—  76,072  
Purchases of stock of Federal Home Loan Bank of Pittsburgh(145,399) (95,750) 
Redemptions of stock of Federal Home Loan Bank of Pittsburgh156,724  122,317  
Sales of other real estate owned875  1,610  
Investment in premises and equipment(2,830) (5,510) 
Sales of premises and equipment45  71  
Net cash (used in) provided by investing activities$(927,795) $218,899  
(Unaudited)

Six Months Ended June 30,
(Dollars in thousands)20212020
Operating activities:
Net income$160,752 $2,756 
Adjustments to reconcile net income to net cash provided by operating activities:
(Recovery of) provision for credit losses(87,723)151,400 
Depreciation of premises and equipment, net6,575 7,933 
Accretion of fees and discounts, net(26,820)(27,442)
Amortization of intangible assets5,302 5,528 
Amortization of right of use lease asset5,988 6,356 
Decrease in operating lease liability(6,688)(7,008)
Income from mortgage banking activities, net(13,053)(11,965)
Gain on sale of securities, net(329)(2,601)
(Loss) gain on sale of other real estate owned and valuation adjustments, net(45)10 
Stock-based compensation expense2,262 1,294 
Unrealized gain on equity investments, net(5,261)(657)
Realized gain on sale of equity investment0 (22,052)
Deferred income tax expense (benefit)30,162 (38,596)
Decrease (increase) in accrued interest receivable4,060 (15,128)
Increase in other assets(8,046)(3,743)
Origination of loans held for sale(510,421)(404,036)
Proceeds from sales of loans held for sale569,341 377,786 
Increase in value of bank owned life insurance(708)(97)
Increase in capitalized interest, net(1,551)(1,909)
Increase in accrued interest payable527 2,946 
(Decrease) increase in other liabilities(35,248)59,651 
Net cash provided by operating activities$89,076 $80,426 
Investing activities:
Repayments, maturities and calls of investment securities held-to-maturity$16,240 $9,675 
Sale of investment securities available-for-sale9,332 109,605 
Purchases of investment securities available-for-sale(1,267,988)(535,146)
Repayments of investment securities available-for-sale354,265 232,426 
Net proceeds from sale of Visa Class B shares0 85,850 
Net decrease (increase) in loans826,059 (839,620)
Purchases of stock of Federal Home Loan Bank of Pittsburgh(585)(145,399)
Redemptions of stock of Federal Home Loan Bank of Pittsburgh266 156,724 
Sales of other real estate owned2,402 875 
Investment in premises and equipment(3,005)(2,830)
Sales of premises and equipment427 45 
Net cash used in investing activities$(62,587)$(927,795)
10
Table of Contents
Six Months Ended June 30,
20202019Six Months Ended June 30,
(Dollars in thousands)(Dollars in thousands)(Unaudited)(Dollars in thousands)20212020
Financing activities:Financing activities:Financing activities:
Net increase (decrease) in demand and saving deposits$1,580,924  $(75,871) 
(Decrease) increase in time deposits(128,170) 25,640  
Increase (decrease) in brokered deposits30,568  (81,028) 
Net increase in demand and saving depositsNet increase in demand and saving deposits$1,133,691 $1,580,924 
Decrease in time depositsDecrease in time deposits(106,803)(128,170)
(Decrease) increase in brokered deposits(Decrease) increase in brokered deposits(155,462)30,568 
Receipts from FHLB advancesReceipts from FHLB advances5,037,296  23,341,156  Receipts from FHLB advances0 5,037,296 
Repayments of FHLB advancesRepayments of FHLB advances(5,043,576) (23,553,946) Repayments of FHLB advances(6,623)(5,043,576)
Receipts from federal funds purchasedReceipts from federal funds purchased8,025,475  15,056,950  Receipts from federal funds purchased0 8,025,475 
Repayments of federal funds purchasedRepayments of federal funds purchased(8,220,475) (15,099,925) Repayments of federal funds purchased0 (8,220,475)
Dividends paid(12,240) (9,857) 
Issuance of common stock and exercise of common stock options991  4,127  
Cash dividendCash dividend(11,879)(12,240)
Issuance of common stock including proceeds from exercise of common stock optionsIssuance of common stock including proceeds from exercise of common stock options176 991 
Redemption of senior debtRedemption of senior debt(100,000)0 
Purchase of common stock(39,409) (17,087) 
Net cash provided by (used in) financing activities$1,231,384  $(409,841) 
Increase (decrease) in cash and cash equivalents384,015  (98,932) 
Cash and cash equivalents at beginning of period571,752  620,757  
Cash and cash equivalents at end of period$955,767  $521,825  
Repurchases of common sharesRepurchases of common shares(13,211)(39,409)
Net cash provided by financing activitiesNet cash provided by financing activities$739,889 $1,231,384 
Increase in cash, cash equivalents, and restricted cashIncrease in cash, cash equivalents, and restricted cash766,378 384,015 
Cash, cash equivalents, and restricted cash at beginning of periodCash, cash equivalents, and restricted cash at beginning of period1,654,735 571,752 
Cash, cash equivalents, and restricted cash at end of periodCash, cash equivalents, and restricted cash at end of period$2,421,113 $955,767 
Supplemental disclosure of cash flow information:Supplemental disclosure of cash flow information:Supplemental disclosure of cash flow information:
Cash paid during the period for:Cash paid during the period for:Cash paid during the period for:
Interest Interest$26,886  $30,771   Interest$12,722 $26,886 
Income taxes Income taxes3,610  15,987   Income taxes21,999 3,610 
Non-cash information:Non-cash information:Non-cash information:
Loans transferred to other real estate ownedLoans transferred to other real estate owned2,503  2,098  Loans transferred to other real estate owned606 2,503 
Loans transferred to portfolio from held-for-sale at fair valueLoans transferred to portfolio from held-for-sale at fair value11,065  14,846  Loans transferred to portfolio from held-for-sale at fair value24,782 11,065 
Fair value of assets acquired, net of cash received—  5,033,367  
Fair value of liabilities assumed—  5,109,931  
Impact of ASC 842 Adoption:
Right of use asset—  121,288  
Lease liability—  (132,346) 
Impact of ASC 326 Adoption (Note 2):
Impact of ASC 326 Adoption:Impact of ASC 326 Adoption:
Allowance for credit losses on held-to-maturity debt securitiesAllowance for credit losses on held-to-maturity debt securities(8) —  Allowance for credit losses on held-to-maturity debt securities0 (8)
Allowance for credit losses on loans and leasesAllowance for credit losses on loans and leases(35,855) —  Allowance for credit losses on loans and leases0 (35,855)
Deferred tax assetsDeferred tax assets8,461  —  Deferred tax assets0 8,461 
Allowance for credit losses on unfunded lending commitmentsAllowance for credit losses on unfunded lending commitments(2,966) —  Allowance for credit losses on unfunded lending commitments0 (2,966)
Retained earningsRetained earnings30,368  —  Retained earnings0 30,368 
The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.
11
Table of Contents
WSFS FINANCIAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 20202021
(UNAUDITED)
1. BASIS OF PRESENTATION
General
These unaudited Consolidated Financial Statements include the accounts of WSFS Financial Corporation (the Company or WSFS), Wilmington Savings Fund Society, FSB (WSFS Bank or the Bank), WSFS Wealth Management, LLC (Powdermill)(Powdermill®), WSFS Capital Management, LLC (West Capital), Cypress Capital Management, LLC (Cypress), Christiana Trust Company of Delaware® (Christiana Trust DE) and WSFS SPE Services, LLC. The Company also has 1 unconsolidated subsidiary, WSFS Capital Trust III. WSFS Bank has 32 wholly owned subsidiaries: Beneficial Equipment Finance Corporation (BEFC), WSFS Investment Group, Inc. (WSFS Wealth Investments), and 1832 Holdings, Inc., and 1 majority-owned subsidiary, NewLane Finance Company (NewLane Finance)Finance®).
Overview
Founded in 1832, the Bank is one of the ten oldest bank and trust companies continuously operating under the same name in the United States (U.S.). The Company provides residential and commercial real estate, commercial and consumer lending services, as well as retail deposit and cash management services. The core banking business is commercial lending funded primarily by customer-generated deposits. In addition, the Company offers a variety of wealth management and trust services to personal and corporate customers. The Federal Deposit Insurance Corporation (FDIC) insures the customers’ deposits to their legal maximums. The Company serves its customers primarily from 115112 offices located in Pennsylvania (5452), Delaware (43)42), New Jersey (16), Virginia (1) and Nevada (1), its ATM network, website at www.wsfsbank.com and mobile app. Information on the website is not incorporated by reference into this Quarterly Report on Form 10-Q.
The Company's leasing business is conducted by NewLane Finance.Finance®. 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.
Basis of Presentation
In preparing the unaudited Consolidated Financial Statements, the Company is required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Amounts subject to significant estimates include the allowance for credit losses (including loans and leases held for investment, investment securities available-for-sale and held-to-maturity), lending-related commitments, goodwill, intangible assets, post-retirement benefit obligations, the fair value of financial instruments, and income taxes. Among other effects, changes to these estimates could result in future impairments of investment securities, goodwill and intangible assets, the establishment of additional allowance and lending-related commitment reserves as well as increased post-retirement benefits expense.
The Company's accounting and reporting policies conform to Generally Accepted Accounting Principles in the U.S. (GAAP), prevailing practices within the banking industry for interim financial information and Rule 10-01 of SEC Regulation S-X (Rule 10-01). Rule 10-01 does not require us to include all information and notes that would be required in audited financial statements. Certain prior period amounts have been reclassified to conform with current period presentation. Operating results for the periods presented are not necessarily indicative of the results that may be expected for any future quarters or for the year ending December 31, 2020.2021. These unaudited, interim Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in the Annual Report on Form 10-K for the year ended December 31, 20192020 (the 20192020 Annual Report on Form 10-K) that was filed with the SEC on March 2, 20201, 2021 and is available at www.sec.gov or on the website at www.wsfsbank.com. All significant intercompany accounts and transactions were eliminated in consolidation.






12
Table of Contents
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES:
The significant accounting policies used in preparation of the Consolidated Financial Statements are disclosed in the Company's 20192020 Annual Report on Form 10-K. Those significant accounting policies remain unchanged at June 30, 2020, except as described below:2021.
LoansRECENT ACCOUNTING PRONOUNCEMENTS
Loans held for investment are recorded at amortized cost, net of allowance for credit losses. Amortized cost is the amount at which a financial asset is originated or acquired, adjusted for the amortization of premium and discount, net deferred fees or costs, collection of cash, and write-offs. Interest income on loans is recognized using the level yield method. Loan origination fees, commitment fees and direct loan origination costs are deferred and recognized over the life of the related loans using a level yield method over the period to maturity.
Allowance for Credit Losses - Loans and LeasesAccounting Guidance Adopted in 2021
ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes: In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The guidance adds new amendments to simplify income tax accounting and removes certain exceptions and modifies the accounting for certain income tax transactions. The guidance is effective for annual periods beginning after December 15, 2020. Early adoption is permitted. Adoption is required on a prospective, modified-retrospective or retrospective basis, depending on the amendment. The Company establishes its allowance in accordanceadopted this standard on January 1, 2021, on a prospective basis with guidance provided in ASC 326,no impact to the Consolidated Financial Statements at the time of adoption.

ASU No. 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815: Financial Instruments - Credit LossesIn January 2020, the FASB issued ASU No. 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) –Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The allowancenew guidance clarifies that observable transactions under the measurement alternative method (ASC 321) should be considered when applying or discontinuing the equity method of accounting (ASC 323). The guidance also clarifies that certain non-derivative forward contracts and purchase call options to acquire securities, should be measured at fair value before settlement or exercise. The guidance is effective for credit losses includes quantitative and qualitative factors that comprise management's current estimateannual periods beginning after December 15, 2020. Early adoption is permitted. Use of expected credit losses, including the Company's portfolio mix and segmentation, modeling methodology, historical loss experience, relevant available information from internal and external sources relatingprospective method is required. The Company adopted this standard on January 1, 2021, on a prospective basis with no impact to reasonable and supportable forecasts about future economic conditions, prepayment speeds, and qualitative adjustment factors.
The Company's portfolio segments, established based on similar risk characteristics and loss behaviors, are:
•Commercial and industrial, owner-occupied commercial, commercial mortgages, construction and commercial small business leases (collectively, commercial loans), andthe Consolidated Financial Statements at the time of adoption.
•Residential, equity secured lines and loans, installment loans, unsecured lines of credit and education loans (collectively, retail loans).
Expected credit losses are estimated overASU No. 2021-01, Reference Rate Reform (Topic 848): Scope: In January 2021, the contractual term, adjustedFASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope. The new guidance expands and clarifies the scope of ASU No. 2020-04 to include derivatives affected by changes in interest rates used for expected prepaymentsmargining, discounting, or contract price alignment, commonly referred to as the “discounting transaction.” Derivatives impacted by the discounting transaction will be eligible for certain optional expedients and recoveries.exceptions related to contract modifications and hedge accounting as defined in Topic 848. The contractual term excludes any extensions, renewalsguidance is effective upon issuance through December 31, 2022 and modifications unlessthere was no impact to the Company has reasonable expectations at the reporting date that it will result in a troubled debt restructuring (TDR) or they are not unconditionally cancellable. Expected recoveries do not exceedtime the aggregate of amounts previously charged-off and expected to be charged-off.
The allowance includes two primary components: (i) an allowance established on loans which share similar risk characteristics collectively evaluated for credit losses (collective basis) and (ii) an allowance established on loans which do not share similar risk characteristics with any loan segment and are individually evaluated for credit losses (individual basis).
Loans that share similar risk characteristics are collectively reviewed for credit loss and are evaluated based on historical loss experience, adjusted for current economic conditions and future economic forecasts. Estimated losses are determined differently for commercial and retail loans, and each portfolio segment is further segmented by internally assessed risk ratings.
guidance became effective. The Company uses a third-party economic forecastwill apply this guidance to adjust the calculated historical loss rates of the portfolio segments. The Company's economic forecast extends out 6 quarters (the forecast period) and reverts to the historical loss rates on a straight-line basis over 4 quarters (the reversion period) as it believes this to be reasonable and supportable in the current environment. The economic forecast and reversion periods will be evaluated periodicallyany derivatives affected by the Company and updated as appropriate.discounting transaction due to reference rate reform.
The historical loss rates for commercial loans are estimated by determining the probability of default (PD) and expected loss given default (LGD). The probability of default is calculated based on the historical rate of migration to an event of credit loss during the look-back period. The historical loss rates for retail loans is calculated based solely on average net loss rates over the same look-back period. The current look-back period is 38 quarters which ensures historical loss rates are adequately considering losses within a full credit cycle.
Loans that do not share similar risk characteristics with any loan segments are evaluated on an individual basis. These loans, which may include TDRs, are not included in the collective basis evaluation. When it is probable the Company will not collect all principal and interest due according to their contractual terms, which is assessed based on the credit characteristics of the loan and/or payment status, these loans are individually reviewed and measured for potential credit loss.There was no accounting guidance pending adoption at June 30, 2021.
The amount of the potential credit loss is measured using one of three methods: (i) the present value of expected future cash flows discounted at the loan’s effective interest rate; (ii) the fair value of collateral, if the loan is collateral dependent; or (iii) the loan’s observable market price. If the measured fair value of the loan is less than the amortized cost basis of the loan, an allowance for credit loss is recorded.



13
Table of Contents
For collateral dependent loans,3. NONINTEREST INCOME
Credit/debit card and ATM income
The following table presents the expected credit lossescomponents of credit/debit card and ATM income:
Three Months Ended June 30,Six Months Ended June 30,
(Dollars in thousands)2021202020212020
Bailment fees$3,320 $3,080 $6,379 $8,161 
Interchange fees3,485 5,631 6,540 11,247 
Other card and ATM fees762 595 1,453 1,257 
Total credit/debit card and ATM income$7,567 $9,306 $14,372 $20,665 
Credit/debit card and ATM income is composed of bailment fees, interchange fees, and other card and ATM fees. Bailment fees are earned from bailment arrangements with customers. Bailment arrangements are legal relationships in which property is delivered to another party without a transfer of ownership. The party who transferred the property (the bailor) retains ownership interest of the property. In the event that the bailee files for bankruptcy protection, the property is not included in the bailee's assets. The bailee pays an agreed-upon fee for the use of the bailor's property in exchange for the bailor allowing use of the assets at the individual asset levelbailee's site. Bailment fees are earned from cash that is made available for customers' use at an offsite location, such as cash located in an ATM at a customer's place of business. These fees are typically indexed to a market interest rate. This revenue stream generates fee income through monthly billing for bailment services.
Credit/debit card and ATM income also includes interchange fees. Interchange fees are paid by a merchant's bank to a bank that issued a debit or credit card used in a transaction to compensate the difference betweenissuing bank for the collateral's fair value (less costand benefit the merchant receives from accepting electronic payments. These revenue streams generate fee income at the time a transaction occurs and are recorded as revenue at the time of the transaction. Interchange income decreased due to sell)the impact of the Durbin Amendment on 2021 results. The Durbin Amendment is a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 that established a cap on interchange fees with respect to debit transactions for banks that, together with their affiliates, have over $10 billion in assets, and became effective for the amortized cost.Company on July 1, 2020.
Qualitative adjustment factors consider various internalInvestment management and external conditions which are allocated among loan segments and take into consideration:fiduciary income
•Current underwriting policies, staffThe following table presents the components of investment management and portfolio concentrations,fiduciary income:
Three Months Ended June 30,Six Months Ended June 30,
(Dollars in thousands)2021202020212020
Trust fees$10,808 $7,308 $20,572 $14,262 
Wealth management and advisory fees4,552 3,621 9,041 7,629 
Total investment management and fiduciary income$15,360 $10,929 $29,613 $21,891 
•Risk rating accuracy, creditInvestment management and administration,
•Internal risk emergence (including internal trendsfiduciary income is composed of delinquency,trust fees and criticized loans by segment),
•Economic forecastswealth management and conditions - locally and nationally (including market trends impacting collateral values), and
•Competitive environment, as it could impact loan structure and underwriting.
These factorsadvisory fees. Trust fees are based on their relative standing comparedrevenue earned from custody, escrow and trustee services on structured finance transactions; indenture trustee, administrative agent and collateral agent services to institutions and corporations; commercial domicile and independent director services; and investment and trustee services to families and individuals across the period in which historical lossesU.S. Most fees are used in quantitative reserve estimatesflat fees, except for a portion of personal and current directional trends, and reasonable and supportable forecasts. Qualitative factors incorporate trustee fees where the model can add to or subtract from quantitative reserves.
The Company's loan officers and risk managers meet at least quarterly to discuss and review the conditions and risks associated with individual problem loans. In addition, various regulatory agencies periodically review the Company's loan ratings and allowance for credit losses and the Bank's internal loan review department performs loan reviews.
Accrued interest receivable on loans is excluded from the estimate of credit losses and is included in Accrued interest receivableCompany earns a percentage on the Consolidated Statementsassets under management. This revenue stream primarily generates fee income through monthly, quarterly and annual billings for services provided.
Wealth management and advisory fees consists of Financial Condition.fees from Cypress, West Capital, Powdermill
For additional detail regarding the allowance for credit losses® and the provision for credit losses, see Note 7.
Past DueWSFS Wealth® Investments. Wealth management and Nonaccrual Loans
Past due loansadvisory fees are defined as loans contractually past due 30 days or more as to principal or interest payments but which remain in accrual status because theybased on revenue earned from services including asset management, financial planning, family office, and brokerage. The fees are considered well secured and in the process of collection.
Nonaccruing loans are those on which the accrual of interest has ceased. 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 loan is not well secured and in the process of collection. 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, dependingbased on the Company’s assessmentmarket value of the ultimate collectability of principal and interest. Loansassets, are returned to accrual status when the Company assesses that the borrower has the ability to make all principal and interest payments in accordance with the terms of the loan (i.e. a consistent repayment record, generally six consecutive payments, has been demonstrated).
Unless loans are well-secured and collection is imminent, for loans greater than 90 days past due their respective reserves are generally charged off once the loss has been confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged off and expected to be charged off.
A loan, for which the terms have been modified resulting in a concession to the borrower experiencing financial difficulty, is considered a TDR. Principal balances are generally not forgiven when a loan is modifiedassessed as a TDR. Nonaccruing restructured loans remain in nonaccrual status until there has been a period of sustained repayment performance demonstrated, as noted above,flat fee, or are brokerage commissions. This revenue stream primarily generates fee income through quarterly and repayment is reasonably assured.
On March 27, 2020,annual billing for the CARES Act was signed into law, which allows financial institutions to exclude eligible loan modifications from TDR reporting under its loan forbearance program. Eligible modifications must be related to the COVID-19 pandemic, executed on a loan that was not more than 30 days past due as of December 31, 2019 and executed between March 1, 2020 and the earlier of 60 days after the date of the termination of the national emergency or December 31, 2020. Management has elected to account and report eligible modifications under the provisions of the CARES Act.
For additional detail regarding past due and nonaccrual loans, see Note 7.services.

14
Table of Contents
Deposit service charges
The following table presents the components of deposit service charges:
Three Months Ended June 30,Six Months Ended June 30,
(Dollars in thousands)2021202020212020
Service fees$3,553 $2,919 $6,975 $6,130 
Return and overdraft fees1,504 1,134 3,082 3,466 
Other deposit service fees262 122 722 226 
Total deposit service charges$5,319 $4,175 $10,779 $9,822 
Deposit service charges includes revenue earned from core deposit products, certificates of deposit, and brokered deposits. The Company generates fee revenues from deposit service charges primarily through service charges and overdraft fees. Service charges consist primarily of monthly account maintenance fees, cash management fees, foreign ATM fees and other maintenance fees. All of these revenue streams generate fee income through service charges for monthly account maintenance and similar items, transfer fees, late fees, overlimit fees, and stop payment fees. Revenue is recorded at the time of the transaction.
Other income
The following table presents the components of other income:
Three Months Ended June 30,Six Months Ended June 30,
(Dollars in thousands)2021202020212020
Managed service fees$4,504 $3,724 $8,113 $7,755 
Currency preparation1,160 919��2,108 1,759 
ATM loss protection628 571 1,250 1,218 
Miscellaneous products and services2,341 766 5,847 2,201 
Total other income$8,633 $5,980 $17,318 $12,933 
Other income consists of managed service fees, which are primarily courier fees related to cash management, currency preparation, ATM loss protection and other miscellaneous products and services offered by the Bank. These fees are primarily generated through monthly billings or at the time of the transaction.
Arrangements with multiple performance obligations
The Company's contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines standalone selling prices based on the prices charged to customers.
Practical expedients and exemptions
The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed.

See Note 15 for further information about the disaggregation of noninterest income by segment.
15
Table of Contents
4. EARNINGS (LOSS) PER SHARE
The following table shows the computation of basic and diluted earnings per share:
Three Months Ended June 30,Six Months Ended June 30,
(Dollars and shares in thousands, except per share data)2021202020212020
Numerator:
Net income (loss) attributable to WSFS$95,667 $(7,111)$160,749 $3,816 
Denominator:
Weighted average basic shares47,529 50,655 47,519 50,871 
Dilutive potential common shares (1)
163 — 156 40 
Weighted average fully diluted shares47,692 50,655 $47,675 $50,911 
Earnings (loss) per share:
Basic$2.01 $(0.14)$3.38 $0.08 
Diluted$2.01 $(0.14)$3.37 $0.07 
Outstanding common stock equivalents having no dilutive effect0 48 1 15 
(1) For the three months ended June 30, 2020, the effect of 14 thousand dilutive potential common shares were excluded from the computation of diluted net loss per common share, as these shares would have been antidilutive due to the net loss reported in this period
Basic earnings per share is calculated by dividing Net income attributable to WSFS by the weighted-average basic shares outstanding. Diluted earnings per share is calculated by dividing Net income attributable to WSFS by the weighted-average fully diluted shares outstanding, using the treasury stock method. Fully diluted shares include the adjustment for the dilutive effect of common stock awards, which include outstanding stock options and unvested restricted stock units from the 2013 Incentive Plan and the 2018 Incentive Plan.
5. INVESTMENTS
Debt Securities
Investments in debt securities are classified into one of the following three categories and accounted for as follows:
•Securities purchased with the intent of selling them in the near future are classified as “trading” and reported at fair value, with unrealized gains and losses included in earnings.
•Securities purchased with the positive intent and ability to hold to maturity are classified as “held-to-maturity” and reported at amortized cost.
•Securities not classified as either trading or held-to-maturity are classified as “available-for-sale” and reported at fair value, with unrealized gains and losses excluded from earnings and reported, net of tax, as a separate component of stockholders’ equity in accumulated other comprehensive income (loss). Realized gains and losses on sales of investment and mortgage-backed securities (MBS) are determined using the specific identification method. All sales are made without recourse.
Debt securities mostly include mortgage-backed securities (MBS), municipal bonds, and U.S. government and agency securities. Premiums and discounts on MBS collateralized by residential 1-4 family loans are recognized in interest income using a level yield method over the period to expected maturity. Premiums and discounts on all other securities are recognized on a straight line basis over the period to expected maturity, with the exception of premiums on callable debt securities, which are recognized over the period to the earliest call date.
The fair value of debt securities is primarily obtained from third-party pricing services. Implicit in the valuation of MBS are estimated prepayments based on historical and current market conditions.
A debt security is placed on nonaccrual status at the time any principal or interest payments are contractually past due 90 days or more. Interest accrued but not received for a security placed on nonaccrual status is reversed against interest income.
The Company's investment portfolio is reviewed each quarter for indications of potential credit losses. Refer to the respective held-to-maturity and available-for-sale debt securities sections for management's discussion of the allowance for credit loss for each portfolio.
Allowance for Credit Losses - Held-to-Maturity Debt Securities
The Company follows Accounting Standards Codification (ASC) 326-20, Financial Instruments - Credit Loss - Measured at Amortized Cost, to measure expected credit losses on held-to-maturity debt securities on a collective basis by security investment grade. The estimate of expected credit losses considers historical credit loss information adjusted by a security's credit rating.
The Company classifies the held-to-maturity debt securities into the following major security types: state and political subdivisions, and foreign bonds. These securities are highly rated with a history of no credit losses, and are assigned ratings based on the most recent data from ratings agencies depending on the availability of data for the security. Credit ratings of held-to-maturity debt securities, which are a significant input in calculating the expected credit loss, are reviewed on a quarterly basis.
Accrued interest receivable on held-to-maturity debt securities is excluded from the estimate of credit losses and is included in Accrued interest receivable on the Consolidated Statements of Financial Condition.
Allowance for Credit Losses - Available-for-Sale Debt Securities
The Company follows ASC 326-30, Financial Instruments - Credit Loss - Available-for-Sale Debt Securities, which provides guidance related to the recognition of and expanded disclosure requirements for expected credit losses on available-for-sale debt securities. For available-for-sale debt securities in an unrealized loss position, the Company first evaluates whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either criteria is met, the security's amortized cost basis is reduced to fair value and recognized as a reduction to Noninterest income in the Consolidated Statements of Income.
For debt securities available-for-sale which the Company does not intend to sell, or it is not likely the security would be required to be sold before recovery, it evaluates whether a decline in fair value has resulted from credit losses or other adverse factors, such as a change in the security's credit rating. In assessing whether a credit loss exists, the Company compares the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance is recorded, limited to the fair value of the security.

15
Table of Contents
The Company performs this analysis on a quarterly basis to review the conditions and risks associated with the individual securities. Credit losses on an impaired security shall continue to be measured using the present value of expected future cash flows. Any impairment not recorded through an allowance for credit loss is included in other comprehensive income (loss), net of the tax effect. The Company is required to use its judgment in determining impairment in certain circumstances.
For additional detail regarding debt securities, see Note 5.
Unfunded Lending Commitments
For unfunded lending commitments, the Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The estimate includes consideration of the probability of default and utilization rate at default to calculate expected credit losses on commitments expected to be funded based on historical losses.
The allowance for credit losses for off-balance sheet exposures is included in Other liabilities on the Consolidated Statements of Financial Condition and the provision for credit losses for off-balance sheet exposure is included in Loan workout and other credit costs on the Consolidated Statements of Income.
For additional detail regarding the allowance for credit losses and the provision for credit losses, see Note 16.

RECENT ACCOUNTING PRONOUNCEMENTS
Accounting Guidance Adopted in 2020
ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). ASU 2016-13 replaces the incurred loss impairment methodology with the current expected credit losses (CECL) methodology which requires management consideration and judgment of a broader range of information to determine credit loss estimates.
In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, clarifying that operating lease receivables are not within the scope of Topic 326. In December 2018, federal regulators issued a final rule related to regulatory capital and CECL (Regulatory Capital Rule: Implementation and Transition of the Current Expected Credit Losses Methodology for Allowances and Related Adjustments to the Regulatory Capital Rule and Conforming Amendments to Other Regulations), intended to provide regulatory capital relief for entities transitioning to CECL. In May 2019, the FASB issued ASU No. 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief, providing entities the option to irrevocably elect the fair value option on eligible financial instruments, which excluded held-to-maturity debt securities. In November 2019, the FASB issued ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, clarifying guidance on expected recoveries for purchased credit deteriorated financial assets, accrued interest receivable and collateral maintenance provisions and providing transition relief for troubled debt restructurings. In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments, clarifying the contractual term of a net investment in a lease and the requirement to establish an allowance for credit loss when an entity regains control of sold financial assets.
While the CARES Act provided an option to defer implementation of the CECL methodology, the Company adopted this guidance on January 1, 2020, using the modified retrospective approach for financial assets recorded at amortized cost with the exception of purchase credit deteriorated (PCD) assets, which were previously classified as purchase credit impaired (PCI) accounted for under ASC 310-30, adopted using the prospective approach. The cumulative effect of the adoption resulted in a $30.4 million decrease to the beginning balance of retained earnings as of January 1, 2020. Results and disclosures for reporting periods beginning after January 1, 2020 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. For further details on the impact of the adoption, accounting policies, elections, and practical expedients applied, see updated Significant Accounting Policies and CECL disclosures throughout the Notes to the Consolidated Financial Statements.
16
Table of Contents
The following table illustrates the impact of ASC 326 on loans, leases, purchased financial assets, debt securities, other assets and unfunded lending commitments compared to the incurred loss approach, as disclosed prior to adoption on January 1, 2020.
January 1, 2020
As reported under ASC 326Pre-ASC 326 AdoptionImpact of ASC 326 Adoption
(Dollars in thousands)
Assets:
Investment securities, held-to-maturity
State and political subdivisions$(8) $—  $(8) 
Allowance for credit losses on held-to-maturity debt securities$(8) $—  $(8) 
Loans and leases
Commercial and industrial(1)
(42,596) (22,849) (19,747) 
Owner-occupied commercial(3,144) (4,616) 1,472  
Commercial mortgages(9,114) (7,452) (1,662) 
Construction(4,572) (3,891) (681) 
Residential(8,903) (1,381) (7,522) 
Consumer(15,102) (7,387) (7,715) 
Allowance for credit losses on loans and leases$(83,431) $(47,576) $(35,855) 
Other assets
Deferred tax assets18,452  9,991  8,461  
Liabilities:
Other liabilities
Allowance for credit losses on unfunded lending commitments(4,513) (1,547) (2,966) 
Total ASC 326 impact to retained earnings$30,368  
(1)Includes commercial small business leases.
ASU No. 2018-13, Fair Value Measurement Disclosure Framework: In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement Disclosure Framework, which amended ASC 820 - Fair Value Measurement. The new guidance modifies, adds and removes certain disclosures aimed to improve the overall usefulness of the disclosure requirements for fair value measurements. The guidance is effective in annual and interim periods in fiscal years beginning after December 15, 2019. Early adoption is permitted. Adoption is required on either a prospective or retrospective basis, depending on the amendment. The Company adopted this standard on January 1, 2020. See Note 13 for changes to financial statement disclosures resulting from the adoption of this standard.
ASU No. 2018-14, Compensation-Retirement Benefits - Defined Benefit Plans-General (Topic 715): In August 2018, the FASB issued ASU No. 2018-14, Compensation-Retirement Benefits - Defined Benefit Plans-General (Topic 715) which applies to all employers that provide defined benefit pension or other postretirement benefit plans for their employees. The new guidance modifies, adds and removes certain disclosures aimed to improve the overall usefulness of the disclosure requirements to financial statement users. The guidance is effective for annual periods beginning after December 15, 2020. Early adoption is permitted. Use of the retrospective method is required. The Company early adopted this standard on January 1, 2020. See Note 11 for changes to financial statement disclosures resulting from the adoption of this standard.
ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Topic 350):In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Topic 350). The new guidance provided clarity on capitalizing and expensing implementation costs for cloud computing arrangements in a service contract. If an implementation cost is capitalized, the cost should be recognized over the noncancellable term and periodically assessed for impairment. The guidance is effective in annual and interim periods in fiscal years beginning after December 15, 2019. Early adoption is permitted. Adoption can be applied retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted this standard on January 1, 2020, on a prospective basis with no impact to the Consolidated Financial Statements at the time of adoption.
17
Table of Contents
ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments: In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The new guidance amended ASU 2016-13 to address topics related to accrued interest receivables, recoveries, disclosures, and provides certain other clarifications. The new guidance also amended ASU 2017-12 to provide clarification on certain hedge accounting topics and transition requirements. Lastly, the new guidance amended ASU 2016-01, Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities, to add clarifying guidance when using the measurement alternative under ASC 820, among certain other clarifications. The guidance is effective for annual periods beginning after December 15, 2019. Early adoption is permitted. Adoption is required on a prospective, modified-retrospective or retrospective basis, depending on the amendment. The Company included the amendments related to ASU 2016-13 as part of its CECL guidance implementation and adoption at January 1, 2020. The Company adopted other amendments within this guidance on January 1, 2020 with no impact to the Consolidated Financial Statements at the time of adoption.

Accounting Guidance Pending Adoption at June 30, 2020

ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes: In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The guidance adds new amendments to simplify income tax accounting and removes certain exceptions and modifies the accounting for certain income tax transactions. The guidance is effective for annual periods beginning after December 15, 2020. Early adoption is permitted. Adoption is required on a prospective, modified-retrospective or retrospective basis, depending on the amendment. The Company does not expect the application of this guidance to have a material impact on the Consolidated Financial Statements.

ASU No. 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815: In January 2020, the FASB issued ASU No. 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) –Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The new guidance clarifies that observable transactions under the measurement alternative method (ASC 321) should be considered when applying or discontinuing the equity method of accounting (ASC 323). The guidance also clarifies that certain non-derivative forward contracts and purchase call options to acquire securities, should be measured at fair value before settlement or exercise. The guidance is effective for annual periods beginning after December 15, 2020. Early adoption is permitted. Use of the prospective method is required. The Company does not expect the application of this guidance to have a material impact on the Consolidated Financial Statements.

ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting: In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments provide optional guidance to entities for a limited period of time to ease the transition in accounting for and recognizing the effects of reference rate reform on financial reporting. Under the guidance, modifications of contracts due to reference rate reform will not require contract remeasurement or reassessment of a previous accounting determination. For hedge accounting, modification of critical terms of the hedge due to changes in reference rate reform will not affect hedge accounting or dedesignate the hedging relationship. The guidance also provides specific expedients for fair value hedges, cash flow hedges, and excluded components. Further, the guidance provides a one-time election to sell or transfer held to maturity debt securities that are affected by the reference rate change. The guidance is effective upon issuance through December 31, 2022. The Company will apply the guidance to any contracts modifications made due to reference rate reform.
18
Table of Contents
3. NONINTEREST INCOME
Credit/debit card and ATM income
The following table presents the components of credit/debit card and ATM income:
Three Months Ended June 30,Six Months Ended June 30,
(Dollars in thousands)2020201920202019
Bailment fees$3,080  $6,908  $8,161  $13,807  
Interchange fees5,631  6,452  11,247  10,839  
Other card and ATM fees595  317  1,257  546  
Total credit/debit card and ATM income$9,306  $13,677  $20,665  $25,192  
Credit/debit card and ATM income is composed of bailment fees, interchange fees, and other card and ATM fees are earned from bailment arrangements with customers. Bailment arrangements are legal relationships in which property is delivered to another party without a transfer of ownership. The party who transferred the property (the bailor) retains ownership interest of the property. In the event that the bailee files for bankruptcy protection, the property is not included in the bailee's assets. The bailee pays an agreed-upon fee for the use of the bailor's property in exchange for the bailor allowing use of the assets at the bailee's site. Bailment fees are earned from cash that is made available for customers' use at an offsite location, such as cash located in an ATM at a customer's place of business. These fees are typically indexed to a market interest rate. This revenue stream generates fee income through monthly billing for bailment services.
Credit/debit card and ATM income also includes interchange fees. Interchange fees are paid by a merchant's bank to a bank that issued a debit or credit card used in a transaction to compensate the issuing bank for the value and benefit the merchant receives from accepting electronic payments. These revenue streams generate fee income at the time a transaction occurs and are recorded as revenue at the time of the transaction.
Investment management and fiduciary income
The following table presents the components of investment management and fiduciary income:
Three Months Ended June 30,Six Months Ended June 30,
(Dollars in thousands)2020201920202019
Trust fees$7,308  $6,685  $14,262  $13,250  
Wealth management and advisory fees3,621  3,697  7,629  7,279  
Total investment management and fiduciary income$10,929  $10,382  $21,891  $20,529  
Investment management and fiduciary income is composed of trust fees and wealth management and advisory fees. Trust fees are based on revenue earned from custody, escrow and trustee services on structured finance transactions; indenture trustee, administrative agent and collateral agent services to institutions and corporations; commercial domicile and independent director services; and investment and trustee services to families and individuals across the U.S. Most fees are flat fees, except for a portion of personal and corporate trustee fees where the Company earns a percentage on the assets under management. This revenue stream primarily generates fee income through monthly, quarterly and annual billings for services provided.
Wealth management and advisory fees consists of fees from West Capital, Cypress, Powdermill and WSFS Wealth Investments. Wealth management and advisory fees are based on revenue earned from services including asset management, financial planning, family office, and brokerage. The fees are based on the market value of assets, are assessed as a flat fee, or are brokerage commissions. This revenue stream primarily generates fee income through quarterly and annual billing for the services.

19
Table of Contents
Deposit service charges
The following table presents the components of deposit service charges:
Three Months Ended June 30,Six Months Ended June 30,
(Dollars in thousands)2020201920202019
Service fees$2,919  $3,179  $6,130  $5,895  
Return and overdraft fees1,134  2,696  3,466  4,544  
Other deposit service fees122  228  226  410  
Total deposit service charges$4,175  $6,103  $9,822  $10,849  
Deposit service charges includes revenue earned from core deposit products, certificates of deposit, and brokered deposits. The Company generates fee revenues from deposit service charges primarily through service charges and overdraft fees. Service charges consist primarily of monthly account maintenance fees, cash management fees, foreign ATM fees and other maintenance fees. All of these revenue streams generate fee income through service charges for monthly account maintenance and similar items, transfer fees, late fees, overlimit fees, and stop payment fees. Revenue is recorded at the time of the transaction.
Other income
The following table presents the components of other income:
Three Months Ended June 30,Six Months Ended June 30,
(Dollars in thousands)2020201920202019
Managed service fees$3,724  $3,624  $7,755  $6,566  
Currency preparation919  851  1,759  1,590  
ATM loss protection571  652  1,218  1,280  
Miscellaneous products and services766  2,607  2,201  6,005  
Total other income$5,980  $7,734  $12,933  $15,441  
Other income consists of managed service fees, which are primarily courier fees related to cash management, currency preparation, ATM loss protection and other miscellaneous products and services offered by the Bank. These fees are primarily generated through monthly billings or at the time of the transaction. Miscellaneous products and services include gains from the sale of SBA loans, which were higher during the three and six months ended June 30, 2019, and a non-recurring transfer of client accounts to a departing Wealth investment advisor in accordance with the buy-out provisions of the advisor's contract, which occurred during the six months ended June 30, 2019.
Arrangements with multiple performance obligations
The Company's contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines standalone selling prices based on the prices charged to customers.
Practical expedients and exemptions
The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed.

See Note 15 for further information about the disaggregation of noninterest income by segment.
20
Table of Contents
4. (LOSS) EARNINGS PER SHARE
The following table shows the computation of basic and diluted earnings per share:
Three Months Ended June 30,Six Months Ended June 30,
(Dollars and shares in thousands, except per share data)2020201920202019
Numerator:
Net (loss) income attributable to WSFS$(7,111) $36,200  $3,816  $49,223  
Denominator:
Weighted average basic shares50,655  53,253  50,871  46,103  
Dilutive potential common shares(1)
—  263  40  335  
Weighted average fully diluted shares$50,655  $53,516  $50,911  $46,438  
(Loss) earnings per share:
Basic$(0.14) $0.68  $0.08  $1.07  
Diluted$(0.14) $0.68  $0.07  $1.06  
Outstanding common stock equivalents having no dilutive effect48  1  15  1  

(1)For the three months ended June 30, 2020, the effect of 14 thousand dilutive potential common shares were excluded from the computation of diluted net loss per common share, as these shares would have been antidilutive due to the net loss reported in this period.
5. INVESTMENTS
Debt Securities
The following tables detail the amortized cost, allowance for credit losses and the estimated fair value of the Company's investments in available-for-sale and held-to-maturity debt securities. NaN of the Company's investments in debt securities are classified as trading.
June 30, 2020June 30, 2021
(Dollars in thousands)(Dollars in thousands)Amortized CostGross
Unrealized
Gain		Gross
Unrealized
Loss		Allowance for Credit LossesFair
Value		(Dollars in thousands)Amortized CostGross
Unrealized
 Gain		Gross
Unrealized
 Loss		Allowance for Credit LossesFair
Value
Available-for-Sale Debt SecuritiesAvailable-for-Sale Debt SecuritiesAvailable-for-Sale Debt Securities
CMO$343,725  $12,185  $89  $—  $355,821  
FNMA MBS1,326,940  67,158  63  —  1,394,035  
FHLMC MBS280,752  16,795  —  —  297,547  
GNMA MBS29,567  1,257  —  —  30,824  
GSE116,130  1,071  39  —  117,162  
Collateralized mortgage obligation (CMO)Collateralized mortgage obligation (CMO)$620,242 $7,532 $9,355 $0 $618,419 
Fannie Mae (FNMA) MBSFannie Mae (FNMA) MBS2,310,453 36,274 16,940 0 2,329,787 
Freddie Mac (FHLMC) MBSFreddie Mac (FHLMC) MBS163,691 8,529 222 0 171,998 
Ginnie Mae (GNMA) MBSGinnie Mae (GNMA) MBS21,713 736 47 0 22,402 
Government-sponsored enterprises (GSEs) agency notesGovernment-sponsored enterprises (GSEs) agency notes231,867 0 7,894 0 223,973 
$2,097,114  $98,466  $191  $—  $2,195,389  $3,347,966 $53,071 $34,458 $0 $3,366,579 
Held-to-Maturity Debt Securities(1)
Held-to-Maturity Debt Securities(1)
Held-to-Maturity Debt Securities(1)
State and political subdivisionsState and political subdivisions$127,108  $4,597  $—  $8  $131,697  State and political subdivisions$94,630 $4,140 $0 $5 $98,765 
Foreign bondsForeign bonds501  —  —  —  501  Foreign bonds501 0 0 0 501 
$127,609  $4,597  $—  $8  $132,198  $95,131 $4,140 $0 $5 $99,266 
(1)Held-to-maturity securities transferred from available-for-sale are included in held-to-maturity at amortized cost basis at the time of transfer. The amortized cost of transferred held-to-maturity securities included net unrealized gains of $0.5$0.3 million at June 30, 2020, related to securities transferred,2021, which are offset in Accumulated other comprehensive income. At the time of transfer, there was no allowance for credit loss on the available-for-sale securities. Subsequent to transfer, the securities were evaluated for credit loss. See Note 2 for updated Significant Accounting Policies on held-to-maturity debt securities.

2116
Table of Contents
December 31, 2019December 31, 2020
(Dollars in thousands)(Dollars in thousands)Amortized CostGross
Unrealized
Gain		Gross
Unrealized
Loss		Fair
Value		(Dollars in thousands)Amortized CostGross
Unrealized
 Gain		Gross
Unrealized
 Loss		Allowance for Credit LossesFair
Value
Available-for-Sale Debt SecuritiesAvailable-for-Sale Debt SecuritiesAvailable-for-Sale Debt Securities
CMOCMO$336,194  $4,578  $542  $340,230  CMO$461,819 $9,949 $443 $0 $471,325 
FNMA MBSFNMA MBS1,219,522  25,717  2,786  1,242,453  FNMA MBS1,544,105 55,747 882 0 1,598,970 
FHLMC MBSFHLMC MBS320,896  8,641  591  328,946  FHLMC MBS190,856 12,142 105 0 202,893 
GNMA MBSGNMA MBS32,871  477  63  33,285  GNMA MBS22,716 1,046 0 0 23,762 
GSE agency notesGSE agency notes230,769 1,987 649 0 232,107 
$1,909,483  $39,413  $3,982  $1,944,914  $2,450,265 $80,871 $2,079 $0 $2,529,057 
Held-to-Maturity Debt Securities(1)
Held-to-Maturity Debt Securities(1)
Held-to-Maturity Debt Securities(1)
State and political subdivisionsState and political subdivisions$131,600  $3,023  $—  $134,623  State and political subdivisions$111,246 $4,678 $0 $6 $115,918 
Foreign bondsForeign bonds2,001  1  —  2,002  Foreign bonds501 2 0 0 503 
$133,601  $3,024  $—  $136,625  $111,747 $4,680 $0 $6 $116,421 
(1)Held-to–maturity securities transferred from available-for-sale are included in held-to-maturity at fair value at the time of transfer. The amortized cost of transferred held-to-maturity securities included net unrealized gains of $0.6$0.4 million at December 31, 2019, related to securities transferred,2020, which are offset in Accumulated other comprehensive income. At the time of transfer, there was no allowance for credit loss on the available-for-sale securities. Subsequent to transfer, the securities were evaluated for credit loss.
The scheduled maturities of available-for-sale debt securities at June 30, 20202021 and December 31, 20192020 are presented in the table below:
 Available-for-Sale
 AmortizedFair
(Dollars in thousands)CostValue
June 30, 2021 (1)
Within one year$0 $0 
After one year but within five years70,221 73,851 
After five years but within ten years227,815 232,840 
After ten years3,049,930 3,059,888 
$3,347,966 $3,366,579 
December 31, 2020 (1)
Within one year$0 $0 
After one year but within five years37,852 39,985 
After five years but within ten years239,845 251,874 
After ten years2,172,568 2,237,198 
$2,450,265 $2,529,057 
 Available-for-Sale
 AmortizedFair
(Dollars in thousands)CostValue
June 30, 2020 (1)
Within one year$—  $—  
After one year but within five years33,142  34,759  
After five years but within ten years217,301  229,175  
After ten years1,846,671  1,931,455  
$2,097,114  $2,195,389  
December 31, 2019 (1)
Within one year$—  $—  
After one year but within five years22,136  22,207  
After five years but within ten years194,197  194,376  
After ten years1,693,150  1,728,331  
$1,909,483  $1,944,914  
(1)Actual maturities could differ from contractual maturities.










2217
Table of Contents
The scheduled maturities of held-to-maturity debt securities at June 30, 20202021 and December 31, 20192020 are presented in the table below:
 Held-to-Maturity
 AmortizedFair
(Dollars in thousands)CostValue
June 30, 2021 (1)
Within one year$1,126 $1,126 
After one year but within five years1,948 1,999 
After five years but within ten years40,620 42,066 
After ten years51,437 54,075 
$95,131 $99,266 
December 31, 2020 (1)
Within one year$1,144 $1,154 
After one year but within five years972 990 
After five years but within ten years35,967 37,317 
After ten years73,664 76,960 
$111,747 $116,421 
 Held-to-Maturity
 AmortizedFair
(Dollars in thousands)CostValue
June 30, 2020 (1)
Within one year$1,130  $1,131  
After one year but within five years5,197  5,286  
After five years but within ten years31,881  33,015  
After ten years89,401  92,766  
$127,609  $132,198  
December 31, 2019 (1)
Within one year$2,649  $2,653  
After one year but within five years4,239  4,270  
After five years but within ten years35,288  35,967  
After ten years91,425  93,735  
$133,601  $136,625  
(1)Actual maturities could differ from contractual maturities.
Mortgage-backed securities (MBS)MBS may have expected maturities that differ from their contractual maturities. These differences arise because issuers may have the right to call securities and borrowers may have the right to prepay obligations with or without prepayment penalty. The estimated weighted average duration of MBS was 1.34.6 years at June 30, 2020.2021.
The held-to-maturity debt securities are not collateral-dependent securities as these are general obligation bonds issued by cities, states, counties, or other local and foreign governments.
Investment securities with fair market values aggregating $1.4$1.8 billion and $1.1$1.3 billion were pledged as collateral for retail customer repurchase agreements, municipal deposits, and other obligations as of June 30, 20202021 and December 31, 2019,2020, respectively.
During the six months ended June 30, 2021, the Company sold $9.3 million of debt securities categorized as available-for-sale, resulting in $0.3 million of realized gains and 0 realized losses. During the six months ended June 30, 2020, the Company sold $109.6 million of debt securities categorized as available-for-sale resulting in $2.6 million of realized gains and 0 realized losses. During the six months ended June 30, 2019, the Company sold $602.5 million of debt securities categorized as available-for-sale, of which $578.8 million was related to the acquisition of Beneficial. The remaining $23.7 million resulted in realized gains of less than $0.1 million and 0 realized losses.
As of June 30, 20202021 and December 31, 2019,2020, the Company's debt securities portfolio had remaining unamortized premiums of $35.0$65.8 million and $15.1$60.4 million, respectively, and unaccreted discounts of $3.5$5.2 million and $4.1$2.6 million, respectively.
For debt securities within an unrealized lossesloss position and an allowance has not been recorded, the table below shows the gross unrealized losses and fair value by investment category and length of time that individual debt securities were in a continuous unrealized loss position at June 30, 2020.2021.
 Duration of Unrealized Loss Position  
 Less than 12 months12 months or longerTotal
 FairUnrealizedFairUnrealizedFairUnrealized
(Dollars in thousands)ValueLossValueLossValueLoss
Available-for-sale debt securities:
CMO$40,948  $89  $—  $—  $40,948  $89  
FNMA MBS45,453  60  4,403  3  49,856  63  
GSE18,351  39  —  —  18,351  39  
Total$104,752  $188  $4,403  $3  $109,155  $191  

 Duration of Unrealized Loss Position  
 Less than 12 months12 months or longerTotal
 FairUnrealizedFairUnrealizedFairUnrealized
(Dollars in thousands)ValueLossValueLossValueLoss
Available-for-sale debt securities:
CMO$240,709 $9,355 $0 $0 $240,709 $9,355 
FNMA MBS1,234,215 16,939 1,547 1 1,235,762 16,940 
FHLMC MBS10,340 214 3,152 8 13,492 222 
GNMA MBS2,204 47 0 0 2,204 47 
GSE agency notes223,973 7,894 0 0 223,973 7,894 
$1,711,441 $34,449 $4,699 $9 $1,716,140 $34,458 

2318
Table of Contents
For debt securities within an unrealized losses,loss position, the table below shows the gross unrealized losses and fair value by investment category and length of time that individual debt securities were in a continuous unrealized loss position at December 31, 2019.2020.
 Duration of Unrealized Loss Position  
 Less than 12 months12 months or longerTotal
 FairUnrealizedFairUnrealizedFairUnrealized
(Dollars in thousands)ValueLossValueLossValueLoss
Available-for-sale debt securities:
CMO$47,376  $481  $7,999  $61  $55,375  $542  
FNMA MBS310,312  2,681  6,522  105  316,834  2,786  
FHLMC MBS35,354  541  2,836  50  38,190  591  
GNMA MBS1,847  4  5,742  59  7,589  63  
Total temporarily impaired investments$394,889  $3,707  $23,099  $275  $417,988  $3,982  
Held-to-maturity debt securities:
State and political subdivisions (1)
$523  $—  $—  $—  $523  $—  
(1)State and political subdivisions with an unrealized loss position of less than twelve months had an unrealized loss of less than $1 thousand at December 31, 2019.
 Duration of Unrealized Loss Position  
 Less than 12 months12 months or longerTotal
 FairUnrealizedFairUnrealizedFairUnrealized
(Dollars in thousands)ValueLossValueLossValueLoss
Available-for-sale debt securities:
CMO$183,983 $443 $0 $0 $183,983 $443 
FNMA MBS289,338 879 4,355 3 293,693 882 
FHLMC MBS5,191 105 0 0 5,191 105 
GSE agency notes101,016 649 0 0 101,016 649 
$579,528 $2,076 $4,355 $3 $583,883 $2,079 
At June 30, 2020,2021, available-for-sale debt securities for which the amortized cost basis exceeded fair value totaled $109.2 million.$1.7 billion. Total unrealized losses on these securities were $0.2$34.5 million at June 30, 2020.2021. The Company does not have the intent to sell, nor is it more likely than not it will be required to sell these securities before it is able to recover the amortized cost basis. The unrealized losses are the result of changes in market interest rates subsequent to purchase, not credit loss, as these are highly rated agency securities with no expected credit loss, in the event of a default. As a result, there is no0 allowance for credit losses recorded for available-for-sale debt securities as of June 30, 2020.2021.
At June 30, 2021 and December 31, 2020, held-to-maturity debt securities had an amortized cost basis of $127.6 million.$95.1 million and $111.7 million, respectively. The held-to-maturity debt security portfolio primarily consists of highly rated municipal bonds. The Company monitors credit quality of its debt securities through credit ratings. The following table summarizes the amortized cost of debt securities held-to-maturity as of June 30, 2021, aggregated by credit quality indicator:
(Dollars in thousands)State and political subdivisionsForeign bonds
A+ rated or higher$94,504 $501 
Not rated126 0 
Ending balance$94,630 $501 

19
Table of Contents
The following table summarizes the amortized cost of debt securities held-to-maturity as of December 31, 2020, aggregated by credit quality indicator:
(Dollars in thousands)(Dollars in thousands)State and political subdivisionsForeign bonds(Dollars in thousands)State and political subdivisionsForeign bonds
AA-rated or higher$126,683  $501  
BBB-425  —  
A+ rated or higherA+ rated or higher$110,959 $501 
Not ratedNot rated287 0 
Ending balanceEnding balance$127,108  $501  Ending balance$111,246 $501 
As a result of the adoption of ASC 326 on January 1, 2020, theThe Company reviewed its held-to-maturity debt securities by major security type for potential credit losses. There was no activity in the allowance for credit losses for foreign bond debt securities for the six months ended June 30, 2021 and 2020. The following table presents the activity in the allowance for credit losses for state and political subdivisions debt securities held-to-maturity by major security type for the six months ended June 30, 2021 and 2020:
(Dollars in thousands)State and political subdivisionsForeign bonds
Allowance for credit losses:
Beginning balance$— $— 
Impact of adoption ASC 3268 — 
Provision for credit losses— — 
Charge-offs, net— — 
Ending balance$8 $— 
Three months ended June 30,Six months ended June 30,
(Dollars in thousands)2021202020212020
Allowance for credit losses:
Beginning balance$5 $0 $6 $0 
Impact of adoption ASC 3260 8 0 8 
Provision for credit losses0 0 (1)0 
Charge-offs, net0 0 0 0 
Ending balance$5 $8 $5 $8 
Accrued interest receivable of $1.3$1.0 million and $1.1 million as of June 30, 2021 and December 31, 2020, respectively, for held-to-maturity debt securities waswere excluded from the evaluation of allowance for credit losses. There were no nonaccrual or past due held-to-maturity debt securities as of June 30, 2021 and December 31, 2020.


24
Table of Contents
Equity Investments
The following tables detail the amortized cost, and the estimatedCompany had equity investments with a fair value of $15.6 million and $9.5 million as of June 30, 2021 and December 31, 2020, respectively. During the Company's equity investments, which are included in Other investments inthree and six months ended June 30, 2021, the unaudited Consolidated Statements of Financial Condition.
June 30, 2020
(Dollars in thousands)Amortized CostGross Unrealized GainGross Unrealized LossFair Value
Equity Investments
Visa Class B shares(1)
$618  $81  $—  $699  
Other equity investments(2)
11,158  —  1,646  9,512  
$11,776  $81  $1,646  $10,211  

December 31, 2019
(Dollars in thousands)Amortized CostGross Unrealized GainGross Unrealized LossFair Value
Equity Investments
Visa Class B shares(1)
$15,716  $45,565  $—  $61,281  
Other equity investments(2)
8,140  625  —  8,765  
$23,856  $46,190  $—  $70,046  
(1)The Company recorded an unrealized gain on its remaining investment in Visa Class B shares of $0.2 million and an unrealized gain of $5.1 million on its investment in Social Finance, Inc. (SoFi). During the three months ended June 30, 2020, the Company recorded a net realized gain on sale of Visa Class B shares of $22.1 million, during the three months ended June 30, 2020, which iswas recorded in Realized Realized gain on equity investment, net net in the Consolidated Statements of Income. TheDuring the six months ended June 30, 2020, the Company recorded unrealized gains on its remaining investment in Visa Class B shares of $0.1 million and $4.2an impairment loss of $2.3 million duringin the six months ended June 30, 2020 and 2019, respectivelyinvestment of Spring EQ LLC, which iswere recorded in Unrealized gain on equity investment, net in the Consolidated Statements of Income.
(2)The Company recorded an impairment loss of $2.3 million in the investment of Spring EQ during the six months ended June 30, 2020, which is recorded in Unrealized gain on equity investment, net in the Consolidated Statements of Income. There were 0 impairment losses recorded on the Company's equity investments during the six months ended June 30, 2019
2520
Table of Contents
6. LOANS
The following table shows the Company's loan and lease portfolio by category:  
(Dollars in thousands)June 30, 2021December 31, 2020
Commercial and industrial(1)
$2,088,040 $2,700,418 
Owner-occupied commercial1,360,681 1,332,727 
Commercial mortgages2,024,684 2,086,062 
Construction779,601 716,275 
Commercial small business leases291,657 248,885 
Residential(2)
614,432 774,455 
Consumer(3)
1,105,169 1,165,917 
8,264,264 9,024,739 
Less:
Allowance for credit losses132,418 228,804 
Net loans and leases$8,131,846 $8,795,935 
(Dollars in thousands)June 30, 2020December 31, 2019
Commercial and industrial(1)
$2,953,701  $2,046,798  
Owner-occupied commercial1,337,253  1,296,466  
Commercial mortgages2,165,547  2,222,976  
Construction638,504  581,082  
Commercial small business leases213,133  188,630  
Residential(2)
910,971  1,016,500  
Consumer(3)
1,133,371  1,128,731  
9,352,480  8,481,183  
Less:
Deferred fees, net(4)
—  9,143  
Allowance for credit losses232,192  47,576  
Net loans and leases$9,120,288  $8,424,464  
(1) Includes PPP loans of $945.1$222.9 million at June 30, 2021 and $751.2 million at December 31, 2020.
(2) Includes reverse mortgages at fair value of $16.1$8.4 million at June 30, 20202021 and $16.6$10.1 million at December 31, 2019.2020.
(3) Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.
(4) At June 30, 2020, deferred fees, net are included in portfolio segment totals to present the amortized cost basis in accordance with the adoption of CECL. At December 31, 2019, deferred fees, net are excluded from portfolio segment totals to present the unpaid principal balance under the incurred loss methodology.
Accrued interest receivable on loans and leases was $46.6$32.7 million and $31.5$37.6 million at June 30, 20202021 and December 31, 2019,2020, respectively. Accrued interest receivable on loans and leases was excluded from the evaluation of allowance for credit losses.

2621
Table of Contents

7. ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY INFORMATION
The following table providestables provide the activity of allowance for credit losses and loan balances for the three and six months ended June 30, 2020 under2021 and 2020. During the CECL modelfirst half of 2021, the decrease to the allowance for credit losses was primarily due to positive economic developments in accordanceour forecasts and improved credit quality metrics with ASC 326 (as adopted on January 1, 2020):declines in our problem assets, nonperforming assets and delinquencies.
(Dollars in thousands)(Dollars in thousands)
Commercial and Industrial(1)
Owner-occupied
Commercial		Commercial
Mortgages		Construction
Residential(2)
Consumer(3)
Total(Dollars in thousands)
Commercial and Industrial(1)
Owner-occupied
Commercial		Commercial
Mortgages		Construction
Residential(2)
Consumer(3)
Total
Three months ended June 30, 2020
Three months ended June 30, 2021Three months ended June 30, 2021
Allowance for credit lossesAllowance for credit lossesAllowance for credit losses
Beginning balanceBeginning balance$65,771  $9,541  $26,600  $5,198  $11,593  $20,370  $139,073  Beginning balance$125,870 $9,617 $30,545 $14,287 $5,702 $18,797 $204,818 
Charge-offsCharge-offs(2,072) (53) —  —  (32) (667) (2,824) Charge-offs(6,512)(45)0 0 0 (521)(7,078)
RecoveriesRecoveries968  —  3  —  24  194  1,189  Recoveries1,379 15 30 0 455 362 2,241 
Provision (credit)Provision (credit)79,558  (532) 11,794  4,928  (2,414) 1,420  94,754  Provision (credit)(33,534)(3,406)(14,476)(10,775)(2,864)(2,508)(67,563)
Ending balanceEnding balance$144,225  $8,956  $38,397  $10,126  $9,171  $21,317  $232,192  Ending balance$87,203 $6,181 $16,099 $3,512 $3,293 $16,130 $132,418 
Six months ended June 30, 2020
Six months ended June 30, 2021Six months ended June 30, 2021
Allowance for credit lossesAllowance for credit lossesAllowance for credit losses
Beginning balance, prior to adoption of ASC 326$22,849  $4,616  $7,452  $3,891  $1,381  $7,387  $47,576  
Impact of adopting ASC 326(4)
19,747  (1,472) 1,662  681  7,522  7,715  35,855  
Beginning balanceBeginning balance$150,875 $9,615 $31,071 $12,190 $6,893 $18,160 $228,804 
Charge-offsCharge-offs(5,136) (336) (51) —  (175) (1,581) (7,279) Charge-offs(11,564)(45)0 0 0 (945)(12,554)
RecoveriesRecoveries3,815  125  32  5  115  548  4,640  Recoveries2,519 105 44 0 595 628 3,891 
Provision (credit)Provision (credit)102,950  6,023  29,302  5,549  328  7,248  151,400  Provision (credit)(54,627)(3,494)(15,016)(8,678)(4,195)(1,713)(87,723)
Ending balanceEnding balance$144,225  $8,956  $38,397  $10,126  $9,171  $21,317  $232,192  Ending balance$87,203 $6,181 $16,099 $3,512 $3,293 $16,130 $132,418 
Period-end allowance allocated to:Period-end allowance allocated to:Period-end allowance allocated to:
Loans evaluated on an individual basisLoans evaluated on an individual basis$18  $—  $—  $—  $—  $—  $18  Loans evaluated on an individual basis$1 $0 $10 $0 $0 $0 $11 
Loans evaluated on a collective basisLoans evaluated on a collective basis144,207  8,956  38,397  10,126  9,171  21,317  232,174  Loans evaluated on a collective basis87,202 6,181 16,089 3,512 3,293 16,130 132,407 
Ending balanceEnding balance$144,225  $8,956  $38,397  $10,126  $9,171  $21,317  $232,192  Ending balance$87,203 $6,181 $16,099 $3,512 $3,293 $16,130 $132,418 
Period-end loan balances:Period-end loan balances:Period-end loan balances:
Loans evaluated on an individual basisLoans evaluated on an individual basis$15,634  $5,425  $4,470  $88  $5,452  $2,464  $33,533  Loans evaluated on an individual basis$14,446 $3,868 $3,962 $72 $4,994 $2,608 $29,950 
Loans evaluated on a collective basisLoans evaluated on a collective basis3,151,200  1,331,828  2,161,077  638,416  889,408  1,130,907  9,302,836  Loans evaluated on a collective basis2,365,251 1,356,813 2,020,722 779,529 601,064 1,102,561 8,225,940 
Ending balanceEnding balance$3,166,834  $1,337,253  $2,165,547  $638,504  $894,860  $1,133,371  $9,336,369  Ending balance$2,379,697 $1,360,681 $2,024,684 $779,601 $606,058 $1,105,169 $8,255,890 
(1)Includes commercial small business leases and PPP loans.
(2)Period-end loan balance excludes reverse mortgages at fair value of $16.1$8.4 million.
(3)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.
(4)The impact
22
Table of adopting ASC 326 includesContents
(Dollars in thousands)
Commercial and Industrial(1)
Owner -
occupied
Commercial		Commercial
Mortgages		Construction
Residential(2)
Consumer(3)
Total
Three months ended June 30, 2020
Allowance for credit losses
Beginning balance$65,771 $9,541 $26,600 $5,198 $11,593 $20,370 $139,073 
Charge-offs(2,072)(53)0 0 (32)(667)(2,824)
Recoveries968 0 3 0 24 194 1,189 
Provision (credit)79,558 (532)11,794 4,928 (2,414)1,420 94,754 
Ending balance$144,225 $8,956 $38,397 $10,126 $9,171 $21,317 $232,192 
Six months ended June 30, 2020
Allowance for loan losses
Beginning balance, prior to adoption of ASC 326$22,849 $4,616 $7,452 $3,891 $1,381 $7,387 $47,576 
Impact of adopting ASC 326(4)
19,747 (1,472)1,662 681 7,522 7,715 35,855 
Charge-offs(5,136)(336)(51)0 (175)(1,581)(7,279)
Recoveries3,815 125 32 5 115 548 4,640 
Provision102,950 6,023 29,302 5,549 328 7,248 151,400 
Ending balance$144,225 $8,956 $38,397 $10,126 $9,171 $21,317 $232,192 
Period-end allowance allocated to:
Loans evaluated on an individual basis$18 $0 $0 $0 $0 $0 $18 
Loans evaluated on a collective basis144,207 8,956 38,397 10,126 9,171 21,317 232,174 
Ending balance$144,225 $8,956 $38,397 $10,126 $9,171 $21,317 $232,192 
Period-end loan balances:
Loans evaluated on an individual basis$15,634 $5,425 $4,470 $88 $5,452 $2,464 $33,533 
Loans evaluated on a collective basis3,151,200 1,331,828 2,161,077 638,416 889,408 1,130,907 9,302,836 
Ending balance$3,166,834 $1,337,253 $2,165,547 $638,504 $894,860 $1,133,371 $9,336,369 
(1)Includes commercial small business leases and PPP loans.
(2)Period-end loan balance excludes reverse mortgages at fair value of $16.1 million.
(3)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.
(4)Includes $0.1 million for the initial allowance on loans purchased with credit deterioration.


2723
Table of Contents
The following table provides the activity of the allowance for loan and lease losses and loan balances for the three and six months ended June 30, 2019 under the incurred loss model:
(Dollars in thousands)
Commercial and Industrial(1)
Owner -
occupied
Commercial		Commercial
Mortgages		Construction
Residential(2)
ConsumerTotal
Three months ended June 30, 2019
Allowance for loan and lease losses
Beginning balance$21,016  $4,949  $6,679  $4,044  $1,401  $8,232  $46,321  
Charge-offs(13,002) (8) (153) (42) (163) (960) (14,328) 
Recoveries203  78  398  1  (2) 498  1,176  
Provision (credit)13,568  (526) (474) (1,013) 24  72  11,651  
Provision (credit) for acquired loans219  (13) 94  (6) 98  152  544  
Ending balance$22,004  $4,480  $6,544  $2,984  $1,358  $7,994  $45,364  
Six months ended June 30, 2019
Allowance for loan losses
Beginning balance$14,211  $5,057  $6,806  $3,712  $1,428  $8,325  $39,539  
Charge-offs(13,744) (8) (155) (42) (285) (1,644) (15,878) 
Recoveries561  81  427  2  (16) 799  1,854  
Provision (credit)20,691  (637) (630) (682) 75  329  19,146  
Provision (credit) for acquired loans285  (13) 96  (6) 156  185  703  
Ending balance$22,004  $4,480  $6,544  $2,984  $1,358  $7,994  $45,364  
Period-end allowance allocated to:
Individually evaluated for impairment$4,324  $—  $—  $—  $488  $183  $4,995  
Collectively evaluated for impairment17,679  4,401  6,496  2,976  828  7,810  40,190  
Acquired loans individually evaluated for impairment1  79  48  8  42  1  179  
Ending balance$22,004  $4,480  $6,544  $2,984  $1,358  $7,994  $45,364  
Period-end loan balances:
Individually evaluated for impairment(2)
$21,171  $8,753  $2,431  $—  $11,398  $7,383  $51,136  
Collectively evaluated for impairment1,575,810  1,168,864  765,268  324,307  134,235  848,396  4,816,880  
Acquired nonimpaired loans738,579  99,326  1,464,739  216,843  912,288  267,955  3,699,730  
Acquired impaired loans4,964  3,951  13,609  546  7,863  2,999  33,932  
Ending balance(3)
$2,340,524  $1,280,894  $2,246,047  $541,696  $1,065,784  $1,126,733  $8,601,678  
(1)Includes commercial small business leases.
(2)Period-end loan balance excludes reverse mortgages at fair value of $15.9 million.
(3)The difference between this amount and nonaccruing loans represents accruing troubled debt restructured loans of $14.2 million for the period ending June 30, 2019. Accruing troubled debt restructured loans are considered impaired loans.
(4)Ending loan balances do not include net deferred fees.

28
Table of Contents
The following table showstables show nonaccrual and past due loans presented at amortized cost at the date indicated under the CECL model:indicated:
June 30, 2021
(Dollars in thousands)30–89 Days
Past Due and
Still 
Accruing		Greater 
Than
90 Days
Past Due and
Still Accruing		Total Past
Due
And Still
Accruing		Accruing
Current
Balances
Nonaccrual Loans(1)
Total
Loans
Commercial and industrial(2)
$8,160 $482 $8,642 $2,356,794 $14,261 $2,379,697 
Owner-occupied commercial3,817 0 3,817 1,354,083 2,781 1,360,681 
Commercial mortgages3,000 0 3,000 2,020,069 1,615 2,024,684 
Construction7,383 0 7,383 772,218 0 779,601 
Residential(3)
1,260 1,093 2,353 600,979 2,726 606,058 
Consumer(4)
7,971 6,958 14,929 1,087,599 2,641 1,105,169 
Total$31,591 $8,533 $40,124 $8,191,742 $24,024 $8,255,890 
% of Total Loans0.38 %0.10 %0.48 %99.23 %0.29 %100 %
June 30, 2020
(Dollars in thousands)30–89 Days
Past Due and
Still 
Accruing		Greater 
Than
90 Days
Past Due and
Still Accruing		Total Past
Due
And Still
Accruing		Accruing
Current
Balances
Nonaccrual Loans(1)
Total
Loans
Commercial and industrial(2)
$7,577  $1,080  $8,657  $3,142,796  $15,381  $3,166,834  
Owner-occupied commercial5,198  197  5,395  1,327,646  4,212  1,337,253  
Commercial mortgages7,895  996  8,891  2,155,508  1,148  2,165,547  
Construction—  —  —  638,504  —  638,504  
Residential(3)
1,504  175  1,679  890,063  3,118  894,860  
Consumer(4)
5,473  6,153  11,626  1,119,429  2,316  1,133,371  
Total$27,647  $8,601  $36,248  $9,273,946  $26,175  $9,336,369  
% of Total Loans0.30 %0.09 %0.39 %99.33 %0.28 %100 %
(1)Nonaccrual loans with an allowance totaled $16$10 thousand.
(2)Includes commercial small business leases and PPP loans.
(3)Residential accruing current balances excludes reverse mortgages at fair value of $16.1$8.4 million.
(4)Includes $10.5$13.6 million of delinquent, but still accruing, U.S. government-guaranteed student loans that carry little risk of credit loss.
December 31, 2020
(Dollars in thousands)30–89 Days
Past Due and
Still 
Accruing		Greater 
Than
90 Days
Past Due and
Still Accruing		Total Past
Due
And Still
Accruing		Accruing
Current
Balances
Nonaccrual Loans(1)
Total
Loans
Commercial and industrial(2)
$7,313 $3,652 $10,965 $2,924,522 $13,816 $2,949,303 
Owner-occupied commercial3,120 892 4,012 1,323,355 5,360 1,332,727 
Commercial mortgages5,944 1,090 7,034 2,061,853 17,175 2,086,062 
Construction371 0 371 715,904 0 716,275 
Residential(3)
3,049 25 3,074 758,072 3,247 764,393 
Consumer(4)
8,355 11,035 19,390 1,144,217 2,310 1,165,917 
Total(4)
$28,152 $16,694 $44,846 $8,927,923 $41,908 $9,014,677 
% of Total Loans0.31 %0.19 %0.50 %99.04 %0.46 %100 %

(1)Nonaccrual loans with an allowance totaled $13 thousand
The following table shows nonaccrual and past due loans presented at unpaid principal balance at the date indicated under the incurred loss model:
December 31, 2019
(Dollars in thousands)30–89 Days
Past Due 
and
Still 
Accruing		Greater 
Than
90 Days
Past Due and
Still Accruing		Total Past
Due
And Still
Accruing		Accruing
Current
Balances		Acquired
Impaired
Loans		Nonaccrual
Loans		Total
Loans
Commercial and industrial(1)
$6,289  $2,038  $8,327  $2,214,506  $1,564  $11,031  $2,235,428  
Owner-occupied commercial1,498  831  2,329  1,283,320  6,757  4,060  1,296,466  
Commercial mortgages4,999  99  5,098  2,207,582  8,670  1,626  2,222,976  
Construction—  —  —  580,591  491  —  581,082  
Residential(2)
6,733  437  7,170  980,893  7,326  4,490  999,879  
Consumer(3)
13,164  12,745  25,909  1,098,980  2,127  1,715  1,128,731  
Total(3)
$32,683  $16,150  $48,833  $8,365,872  $26,935  $22,922  $8,464,562  
% of Total Loans0.39 %0.19 %0.58 %98.83 %0.32 %0.27 %100 %
(1)(2)Includes commercial small business leases.leases and PPP loans.
(2)(3)Residential accruing current balances excludes reverse mortgages, at fair value of $16.6$10.1 million.
(3)(4)Includes $22.3$18.2 million of delinquent, but still accruing, U.S. government-guaranteed student loans that carry little risk of credit loss.
(4)Balances in the table above include a total of $3.2 billion acquired non-impaired loans.
The following table presents the amortized cost basis of nonaccruing collateral-dependent loans by class at June 30, 2020 under the CECL model:2021 and December 31, 2020:
June 30, 2020June 30, 2021December 31, 2020
(Dollars in thousands)(Dollars in thousands)PropertyEquipment and other(Dollars in thousands)PropertyEquipment and otherPropertyEquipment and other
Commercial and industrial(1)
Commercial and industrial(1)
$11,008  $4,373  
Commercial and industrial(1)
$11,498 $2,763 $10,646 $3,170 
Owner-occupied commercialOwner-occupied commercial4,212  —  Owner-occupied commercial2,781 0 5,360 0 
Commercial mortgagesCommercial mortgages1,148  —  Commercial mortgages1,615 0 17,175 0 
ConstructionConstruction—  —  Construction0 0 0 0 
Residential(2)
Residential(2)
3,118  —  
Residential(2)
2,726 0 3,247 0 
Consumer(3)
Consumer(3)
2,316  —  
Consumer(3)
2,641 0 2,294 16 
TotalTotal$21,802  $4,373  Total$21,261 $2,763 $38,722 $3,186 
(1)Includes commercial small business leases.
(2)Excludes reverse mortgages at fair value.
(3)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.
Interest income recognized on individually reviewed loans was $0.2 million during the three months ended June 30, 2021 and 2020, respectively, and $0.4 million during the six months ended June 30, 2021 and 2020, respectively.
29
24
Table of Contents
The following table provides an analysis of the Company's impaired loans at December 31, 2019 under the incurred loss model:
December 31, 2019
(Dollars in thousands)Ending
Loan
Balances
Loans with
No Related
Reserve(1)
Loans with
Related
Reserve(2)
Related
Reserve
Contractual
Principal
Balances(2)
Average
Loan
Balances
Commercial and industrial$11,900  $9,979  $1,921  $1,185  $14,653  $17,033  
Owner-occupied commercial5,596  3,919  1,677  233  6,083  7,869  
Commercial mortgages4,888  1,753  3,135  65  5,215  4,607  
Construction435  —  435  24  488  1,686  
Residential14,119  8,858  5,261  557  16,721  12,031  
Consumer7,584  5,876  1,708  178  8,444  7,729  
Total$44,522  $30,385  $14,137  $2,242  $51,604  $50,955  
(1)Reflects loan balances at or written down to their remaining book balance.
(2)The above includes acquired impaired loans totaling $7.9 million in the ending loan balance and $9.0 million in the contractual principal balance.
Interest income of $0.2 million and $0.4 million was recognized on individually reviewed loans during the three and six months ended June 30, 2020. Interest income of $0.4 million and $0.6 million was recognized on impaired loans during the three and six months ended June 30, 2019.
As of June 30, 2020,2021, there were 2523 residential loans and 2023 commercial loans in the process of foreclosure. The total outstanding balance on these loans was $2.0$1.3 million and $6.2$11.8 million, respectively. As of December 31, 2019,2020, there were 3327 residential loans and 2923 commercial loans in the process of foreclosure. The total outstanding balance on these loans was $3.2$1.9 million and $9.5$12.8 million, respectively. Loan workout and OREO expenses were $1.1$0.2 million and $1.8$0.7 million during the three and six months ended June 30, 2020, respectively,2021, and $1.1 million and $1.3$1.8 million during three and six months ended June 30, 2019, respectively.2020. Loan workout and OREO expenses are included in Loan workout and other credit costs on the Consolidated Statement of Income.Income (Loss).
30
Table of Contents
Credit Quality Indicators
Below is a description of each of the risk ratings for all commercial loans:
 
•Pass. These borrowers currently show no indication of deterioration or potential problems and their loans are considered fully collectible.
•Special Mention. BorrowersThese borrowers have potential weaknesses that deserve management’s close attention. Borrowers in this category may be experiencing adverse operating trends, for example, declining revenues or margins, high leverage, tight liquidity, or increasing inventory without increasing sales. These adverse trends can have a potential negative effect on the borrower’s repayment capacity. These assets are not adversely classified and do not expose the Bank to significant risk that would warrant a more severe rating. Borrowers in this category may also be experiencing significant management problems, pending litigation, or other structural credit weaknesses.
•Substandard or Lower. BorrowersThese borrowers have well-defined weaknesses that require extensive oversight by management. Borrowers in this category may exhibit one or more of the following: inadequate debt service coverage, unprofitable operations, insufficient liquidity, high leverage, and weak or inadequate capitalization. Relationships in this category are not adequately protected by the sound financial worth and paying capacity of the obligor or the collateral pledged on the loan, if any. A distinct possibility exists that the Bank will sustain some loss if the deficiencies are not corrected. In addition, some borrowers in this category could have the added characteristic that the possibility of loss is extremely high. Current circumstances in the credit relationship make collection or liquidation in full highly questionable. Such impending events include: perfecting liens on additional collateral, obtaining collateral valuations, an acquisition or liquidation preceding, proposed merger, or refinancing plan.
Residential and Consumer Loans
The residential and consumer loan portfolios are monitored on an ongoing basis using delinquency information and loan type as credit quality indicators. These credit quality indicators are assessed in the aggregate in these relatively homogeneous portfolios. Loans that are greater than 90 days past due are generally considered nonperforming and placed on nonaccrual status.

3125
Table of Contents
The following tables provide an analysis of loans by portfolio segment based on the credit quality indicators used to determine the allowance for credit losses as of June 30, 2020 under the CECL model.2021.
Term Loans Amortized Cost Basis by Origination YearTerm Loans Amortized Cost Basis by Origination Year
20202019201820172016PriorRevolving loans amortized cost basisRevolving loans converted to termTotal20212020201920182017PriorRevolving loans amortized cost basisRevolving loans converted to termTotal
(Dollars in thousands)(Dollars in thousands)(Dollars in thousands)
Commercial and industrial(1):
Commercial and industrial(1):
Commercial and industrial(1):
Risk RatingRisk RatingRisk Rating
Pass(2)
Pass(2)
$1,249,900  $568,960  $310,071  $207,981  $135,074  $176,408  $6,368  $137,064  $2,791,826  
Pass(2)
$270,308 $698,723 $347,351 $236,657 $144,007 $172,211 $5,500 $135,762 $2,010,519 
Special mentionSpecial mention1,106  24,940  17,372  7,703  4,699  31,935  —  16,089  103,844  Special mention13,738 659 28,717 10,786 943 15,035 0 51,343 121,221 
Substandard or LowerSubstandard or Lower58,854  68,996  58,303  44,712  9,854  24,370  31  6,044  271,164  Substandard or Lower12,307 25,261 65,445 49,864 49,931 36,968 27 8,154 247,957 
$1,309,860  $662,896  $385,746  $260,396  $149,627  $232,713  $6,399  $159,197  $3,166,834  $296,353 $724,643 $441,513 $297,307 $194,881 $224,214 $5,527 $195,259 $2,379,697 
Owner-occupied commercial:Owner-occupied commercial:Owner-occupied commercial:
Risk RatingRisk RatingRisk Rating
PassPass$95,721  $262,486  $112,582  $166,073  $144,973  $340,010  $—  $149,516  $1,271,361  Pass$145,214 $223,752 $207,609 $75,082 $131,905 $317,070 $0 $130,649 $1,231,281 
Special mentionSpecial mention—  311  —  11,585  —  1,266  —  1,848  15,010  Special mention763 1,124 3,138 482 10,692 10,418 0 14,105 40,722 
Substandard or LowerSubstandard or Lower1,818  9,282  7,188  8,952  9,209  9,645  —  4,788  50,882  Substandard or Lower0 7,157 13,918 14,330 19,617 25,676 0 7,980 88,678 
$97,539  $272,079  $119,770  $186,610  $154,182  $350,921  $—  $156,152  $1,337,253  $145,977 $232,033 $224,665 $89,894 $162,214 $353,164 $0 $152,734 $1,360,681 
Commercial mortgages:Commercial mortgages:Commercial mortgages:
Risk RatingRisk RatingRisk Rating
PassPass$163,925  $335,085  $291,054  $316,021  $317,738  $530,844  $—  $127,835  $2,082,502  Pass$264,232 $314,468 $238,420 $181,718 $224,772 $470,819 $0 $230,137 $1,924,566 
Special mentionSpecial mention20,041  6,276  —  15,857  1,901  4,570  —  1,870  50,515  Special mention0 8,168 1,751 885 21,004 6,179 0 1,849 39,836 
Substandard or LowerSubstandard or Lower140  1,306  1,394  4,157  2,650  20,604  —  2,279  32,530  Substandard or Lower0 13,190 22,470 2,217 1,562 19,797 0 1,046 60,282 
$184,106  $342,667  $292,448  $336,035  $322,289  $556,018  $—  $131,984  $2,165,547  $264,232 $335,826 $262,641 $184,820 $247,338 $496,795 $0 $233,032 $2,024,684 
Construction:Construction:Construction:
Risk RatingRisk RatingRisk Rating
PassPass$90,202  $204,676  $220,350  $38,300  $6,156  $4,201  $—  $55,891  $619,776  Pass$137,727 $208,583 $149,019 $142,891 $11,236 $9,283 $0 $93,945 $752,684 
Special mentionSpecial mention—  8,137  —  —  —  —  —  —  8,137  Special mention7,931 0 0 0 3,515 0 0 0 11,446 
Substandard or LowerSubstandard or Lower—  8,775  —  —  —  88  —  1,728  10,591  Substandard or Lower4,988 0 4,967 0 98 71 0 5,347 15,471 
$90,202  $221,588  $220,350  $38,300  $6,156  $4,289  $—  $57,619  $638,504  $150,646 $208,583 $153,986 $142,891 $14,849 $9,354 $0 $99,292 $779,601 
Residential(3):
Residential(3):
Residential(3):
Risk RatingRisk RatingRisk Rating
PerformingPerforming$12,967  $35,388  $92,212  $112,961  $173,609  $462,272  $—  $—  $889,409  Performing$11,589 $35,330 $17,243 $43,732 $61,268 $431,902 $0 $0 $601,064 
Nonperforming(4)
Nonperforming(4)
—  —  —  —  92  5,359  —  —  5,451  
Nonperforming(4)
0 112 0 0 63 4,819 0 0 4,994 
$12,967  $35,388  $92,212  $112,961  $173,701  $467,631  $—  $—  $894,860  $11,589 $35,442 $17,243 $43,732 $61,331 $436,721 $0 $0 $606,058 
Consumer(5):
Consumer(5):
Consumer(5):
Risk RatingRisk RatingRisk Rating
PerformingPerforming$85,834  $165,512  $287,173  $80,871  $57,913  $70,555  $375,483  $7,392  $1,130,733  Performing$65,016 $231,337 $98,951 $214,502 $47,934 $75,185 $362,142 $7,147 $1,102,214 
Nonperforming(6)
Nonperforming(6)
—  —  651  219  —  —  1,378  390  2,638  
Nonperforming(6)
0 361 33 619 193 0 1,351 398 2,955 
$85,834  $165,512  $287,824  $81,090  $57,913  $70,555  $376,861  $7,782  $1,133,371  $65,016 $231,698 $98,984 $215,121 $48,127 $75,185 $363,493 $7,545 $1,105,169 
(1)Includes commercial small business leases.
(2)Includes $945.1$222.9 million of PPP loans.
(3)Excludes reverse mortgages at fair value.
(4)Includes troubled debt restructured mortgages performing in accordance with the loans' modified terms and are accruing interest.
(5)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.
(6)Includes troubled debt restructured home equity installment loans performing in accordance with the loans' modified terms and are accruing interest.


32
26
Table of Contents
The following tables provide an analysis of loans by portfolio segment based on the credit quality indicators used to determine the allowance for loan and lease loss,credit losses, as of December 31, 2019 under the incurred loss model.2020.
Term Loans Amortized Cost Basis by Origination Year
20202019201820172016PriorRevolving loans amortized cost basisRevolving loans converted to termTotal
(Dollars in thousands)
Commercial and industrial(1):
Risk Rating
Pass(2)
$1,250,528 $448,704 $296,594 $157,359 $97,036 $125,361 $6,182 $136,110 $2,517,874 
Special mention3,040 26,470 28,636 8,482 2,577 16,993 0 34,403 120,601 
Substandard or Lower82,868 60,227 57,880 50,446 15,151 35,150 63 9,043 310,828 
$1,336,436 $535,401 $383,110 $216,287 $114,764 $177,504 $6,245 $179,556 $2,949,303 
Owner-occupied commercial:
Risk Rating
Pass$220,165 $225,766 $90,515 $135,903 $123,897 $271,086 $0 $123,194 $1,190,526 
Special mention1,525 5,885 1,838 17,578 4,125 1,997 0 14,467 47,415 
Substandard or Lower3,703 13,426 15,272 19,883 11,581 19,331 0 11,590 94,786 
$225,393 $245,077 $107,625 $173,364 $139,603 $292,414 $0 $149,251 $1,332,727 
Commercial mortgages:
Risk Rating
Pass$379,592 $283,004 $240,924 $257,809 $254,780 $375,473 $0 $148,210 $1,939,792 
Special mention8,324 1,774 21,762 21,269 1,274 6,507 0 1,870 62,780 
Substandard or Lower26,343 25,402 2,253 1,950 3,242 24,300 0 0 83,490 
$414,259 $310,180 $264,939 $281,028 $259,296 $406,280 $0 $150,080 $2,086,062 
Construction:
Risk Rating
Pass$189,257 $214,956 $208,981 $11,414 $7,414 $3,645 $0 $66,018 $701,685 
Special mention0 0 0 3,515 0 0 0 0 3,515 
Substandard or Lower0 8,648 0 0 0 79 0 2,348 11,075 
$189,257 $223,604 $208,981 $14,929 $7,414 $3,724 $0 $68,366 $716,275 
Residential(3):
Risk Rating
Performing$42,475 $26,309 $71,410 $85,277 $149,643 $383,358 $0 $0 $758,472 
Nonperforming(4)
113 0 0 0 283 5,525 0 0 5,921 
$42,588 $26,309 $71,410 $85,277 $149,926 $388,883 $0 $0 $764,393 
Consumer(5):
Risk Rating
Performing$235,948 $134,064 $251,087 $63,713 $44,700 $53,717 $371,842 $8,287 $1,163,358 
Nonperforming(6)
0 0 636 232 0 0 1,396 295 2,559 
$235,948 $134,064 $251,723 $63,945 $44,700 $53,717 $373,238 $8,582 $1,165,917 

(1)
Commercial Credit Exposure

December 31, 2019
Commercial
 and Industrial(1)
Owner-occupied
Commercial		Commercial
Mortgages		Construction
Total
Commercial(2)
(Dollars in thousands)Amount%
Risk Rating:
Special mention$12,287  $—  $40,478  $—  $52,765  
Substandard:
Accrual78,809  32,679  23,017  —  134,505  
Nonaccrual9,852  4,037  1,626  —  15,515  
Doubtful1,179  23  —  —  1,202  
Total Special Mention and Substandard102,127  36,739  65,121  —  203,987  3 %
Acquired impaired1,564  6,757  8,670  491  17,482  — %
Pass2,131,737  1,252,970  2,149,185  580,591  6,114,483  97 %
Total$2,235,428  $1,296,466  $2,222,976  $581,082  $6,335,952  100 %
(1)Includes commercial small business leases.
(2)Includes $2.2 billion$751.2 million of acquired non-impaired loans as of December 31, 2019.PPP loans.
Retail Credit Exposure(3)Excludes reverse mortgages at fair value.
Residential(2)
Consumer
Total Retail(3)
 December 31, 2019December 31, 2019December 31, 2019
(Dollars in thousands)AmountPercent
Nonperforming(1)
$12,858  $7,374  $20,232  1 %
Acquired impaired loans7,326  2,127  9,453  — %
Performing979,695  1,119,230  2,098,925  99 %
Total$999,879  $1,128,731  $2,128,610  100 %
(1)(4)Includes $14.0 million as of December 31, 2019 of troubled debt restructured mortgages and home equity installment loans that are performing in accordance with the loans’loans' modified terms and are accruing interest.
(2)Residential(5)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.
(6)Includes troubled debt restructured home equity installment loans performing loans excludes $16.6 million of reverse mortgages at fair value as of December 31, 2019.
(3)Total includes $1.1 billion in acquired non-impaired loans as of December 31, 2019.accordance with the loans' modified terms and are accruing interest.
3327
Table of Contents
Troubled Debt Restructurings (TDRs) 
The following table presents the balance of TDRs as of the indicated dates:
(Dollars in thousands)June 30, 2020December 31, 2019
Performing TDRs$14,550  $14,281  
Nonperforming TDRs4,284  5,896  
Total TDRs$18,834  $20,177  

(Dollars in thousands)June 30, 2021December 31, 2020
Performing TDRs$14,997 $15,539 
Nonperforming TDRs2,694 4,601 
Total TDRs$17,691 $20,140 
Approximately $0.8$0.2 million and $0.6less than $0.1 million in related reserves have been established for these loans at June 30, 20202021 and December 31, 2019,2020, respectively.
The following tables present information regarding the types of loan modifications made for the three and six months ended June 30, 20202021 and 2019:2020:
Three months ended June 30, 2020Six months ended June 30, 2020Three months ended June 30, 2021Six months ended June 30, 2021
Contractual payment reduction and term extensionMaturity Date ExtensionDischarged in bankruptcy
Other(1)
TotalContractual payment reduction and term extensionMaturity Date ExtensionDischarged in bankruptcy
Other(1)
TotalContractual payment reduction and term extensionMaturity Date ExtensionDischarged in bankruptcy
Other(1)
TotalContractual payment reduction and term extensionMaturity Date ExtensionDischarged in bankruptcy
Other(1)
Total
Commercial and industrialCommercial and industrial—  —  —  —  —  1  —  —  —  1  Commercial and industrial0 0 0 0 0 0 0 0 0 0 
Owner-occupied commercialOwner-occupied commercial2  —  —  —  2  3  —  —  —  3  Owner-occupied commercial0 0 0 0 0 0 0 0 0 0 
Commercial mortgagesCommercial mortgages—  —  —  —  —  —  1  —  —  1  Commercial mortgages0 0 0 0 0 0 0 0 0 0 
ConstructionConstruction—  —  —  —  —  —  —  —  —  —  Construction0 0 0 0 0 0 0 0 0 0 
ResidentialResidential—  —  3  1  4  —  —  4  2  6  Residential0 0 0 0 0 0 0 2 0 2 
ConsumerConsumer—  —  4  1  5  —  —  7  3  10  Consumer0 0 3 1 4 0 0 20 1 21 
TotalTotal2  —  7  2  11  4  1  11  5  21  Total0 0 3 1 4 0 0 22 1 23 
Three months ended June 30, 2020Six months ended June 30, 2020
Contractual payment reduction and term extensionMaturity Date ExtensionDischarged in bankruptcy
Other(1)
TotalContractual payment reduction and term extensionMaturity Date ExtensionDischarged in bankruptcy
Other(1)
Total
Commercial and industrial0 0 0 0 0 1 0 0 0 1 
Owner-occupied commercial2 0 0 0 2 3 0 0 0 3 
Commercial mortgages0 0 0 0 0 0 1 0 0 1 
Residential0 0 3 1 4 0 0 4 2 6 
Consumer0 0 4 1 5 0 0 7 3 10 
Total2 0 7 2 11 4 1 11 5 21 

Three months ended June 30, 2019Six months ended June 30, 2019
Contractual payment reduction and term extensionMaturity Date ExtensionDischarged in bankruptcy
Other(1)
TotalContractual payment reduction and term extensionMaturity Date ExtensionDischarged in bankruptcy
Other(1)
Total
Commercial and industrial—  1  —  2  3  —  1  —  2  3  
Owner-occupied commercial—  —  —  2  2  —  —  —  2  2  
Commercial mortgages—  —  —  1  1  1  —  —  1  2  
Construction—  —  —  —  —  —  —  —  —  —  
Residential3  —  —  —  3  4  —  1  —  5  
Consumer3  1  —  —  4  6  1  1  —  8  
Total6  2  —  5  13  11  2  2  5  20  
(1)Other includesIncludes underwriting exceptions.
Principal balances are generally not forgiven when a loan is modified as a TDR. Nonaccruing restructured loans remain in nonaccrual status until there has been a period of sustained repayment performance, which is typically six months, and repayment is reasonably assured.
34
Table of Contents
The following table presentstables present loans modified as TDRs during the three and six months ended June 30, 20202021 and 2019.2020.
Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
(Dollars in thousands)Pre ModificationPost ModificationPre ModificationPost ModificationPre ModificationPost ModificationPre ModificationPost Modification
Commercial$—  $—  $1,347  $1,347  $31  $31  $1,347  $1,347  
Owner-occupied commercial567  567  1,435  1,435  1,216  1,216  1,435  1,435  
Commercial mortgages—  —  483  483  104  104  514  514  
Construction—  —  —  —  —  —  —  —  
Residential905  905  321  321  1,126  1,126  423  423  
Consumer245  245  540  540  459  459  1,408  1,408  
Total$1,717  $1,717  $4,126  $4,126  $2,936  $2,936  $5,127  $5,127  



28
Table of Contents
Three Months Ended June 30, 2021Six Months Ended June 30, 2021
(Dollars in thousands)Pre ModificationPost ModificationPre ModificationPost Modification
Commercial$0 $0 $0 $0 
Owner-occupied commercial0 0 0 0 
Commercial mortgages0 0 0 0 
Residential0 0 166 166 
Consumer155 155 839 839 
Total(1)(2)
$155 $155 $1,005 $1,005 
(1)During the three and six months ended June 30, 2021, the TDRs set forth in the table above resulted in a less than $0.1 million increase in the allowance for credit losses for both periods, and 0 additional charge-offs in either period. During the three and six months ended June 30, 2021, 0 TDRs defaulted that had received troubled debt modification during the past twelve months.
(2)The TDRs set forth in the table above did not occur as a result of the loan forbearance program under the CARES Act.
Three Months Ended June 30, 2020Six Months Ended June 30, 2020
(Dollars in thousands)Pre ModificationPost ModificationPre ModificationPost Modification
Commercial$0 $0 $31 $31 
Owner-occupied commercial567 567 1,216 1,216 
Commercial mortgages0 0 104 104 
Residential905 905 1,126 1,126 
Consumer245 245 459 459 
Total(1)(2)
$1,717 $1,717 $2,936 $2,936 
(1)During the three and six months ended June 30, 2020 the TDRs set forth in the table above resulted in a less than $0.1 million increase and a $0.1 million increase in the allowance for credit losses, respectively, and 0 additional charge-offs in either period. ForDuring the three and six months ended June 30, 2019 the TDRs set forth in the table above resulted in a $0.1 million and $0.2 million decrease in the allowance for credit losses, respectively, and 0 additional charge-offs for either period.
During the three months ended June 30, 2020, 0 TDRs defaulted that had received troubled debt modification during the past twelve months, compared to 3 TDRs with a total loan amount of $1.2 million during the three months ended June 30, 2019. During the six months ended June 30, 2020, 0 TDRs defaulted that had received troubled debt modification during the past twelve months, compared with 4 TDRs with a total loan amount of $1.3 million during the six months ended June 30, 2019.months.
During the three months ended June 30, 2020, the Company began providing a number of customer relief programs in its commercial and retail portfolios, such as payment deferrals or interest only payments on loans and leases. (2)The TDRs set forth in the table above did not occur as a result of the loan forbearance program under the CARES Act. During the second quarter of 2020, the Company modified approximately $2.1 billion of loans and leases to provide its customers this monetary relief.


35
Table of Contents
8. LEASES
As a lessee, the Company enters into leases for its bank branches, corporate offices, and certain equipment. As a lessor, the Company primarily provides financing through its equipment leasing business.

Lessee

The Company's ongoing leases have remaining lease terms of less than 1 year to 4241 years, which includes renewal options that are exercised at its discretion. The Company's lease terms to calculate the lease liability and right of use asset include options to extend the lease when it is reasonably certain that the Company will exercise the option. The lease liability and right of use asset is included in Other liabilities and Other assets, respectively, in the unaudited Consolidated Statement of Financial Condition. Leases with an initial term of 12 months or less are not recorded on the balance sheet.unaudited Consolidated Statement of Financial Condition. Lease expense is recognized on a straight-line basis over the lease term. Operating lease expense is included in Occupancy expense in the unaudited Consolidated Statement of Income. The Company accounts for lease components separately from nonlease components. The Company subleases certain real estate to third parties.

The components of operating lease cost were as follows:
Three months endedSix months ended
(Dollars in thousands)June 30, 2021June 30, 2020June 30, 2021June 30, 2020
Operating lease cost (1)
$4,789 $4,950 $9,443 $9,500 
Sublease income(90)(93)(197)(186)
Net lease cost$4,699 $4,857 $9,246 $9,314 
Three months endedSix months ended
(Dollars in thousands)June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Operating lease cost (1) (2)
$4,950  $11,024  $9,500  $16,748  
Sublease income(93) (175) (186) (276) 
Net lease cost$4,857  $10,849  $9,314  $16,472  
(1)Includes variable lease cost and short-term lease cost.
(2)
29
Includes $5.9 million and $8.0 million for the three and six months ended June 30, 2019, respectively, in Corporate development expense in the unaudited Consolidated StatementTable of Income.Contents

Supplemental balance sheet information related to operating leases was as follows:
(Dollars in thousands)June 30, 2020December 31, 2019
Assets
Right of use assets$156,919  $166,221  
Total assets$156,919  $166,221  
Liabilities
Lease liabilities$171,612  $181,814  
Total liabilities$171,612  $181,814  
Lease term and discount rate
Weighted average remaining lease term (in years)
Operating leases19.3919.06
Weighted average discount rate
Operating leases4.25 %4.17 %
(Dollars in thousands)June 30, 2021December 31, 2020
Right of use assets$150,291 $150,985 
Lease liabilities$165,057 $166,451 
Lease term and discount rate
Weighted average remaining lease term (in years)19.1619.36
Weighted average discount rate4.26 %4.26 %

36
Table of Contents
Maturities of operating lease liabilities were as follows:
(Dollars in thousands)June 30, 2020
Remaining in 2020$8,724  
202117,182  
202217,146  
202317,263  
202416,095  
After 2024195,550  
Total lease payments271,960  
Less: Interest(100,348) 
Present value of lease liabilities$171,612  
(Dollars in thousands)June 30, 2021
Remaining in 2021$8,780 
202217,569 
202317,692 
202416,467 
202516,478 
After 2025183,244 
Total lease payments260,230 
Less: Interest(95,173)
Present value of lease liabilities$165,057 

(Dollars in thousands)December 31, 2019
2020$18,591  
202118,314  
202218,315  
202318,525  
202417,390  
After 2024197,203  
Total lease payments288,338  
Less: Interest(106,524) 
Present value of lease liabilities$181,814  

Supplemental cash flow information related to operating leases was as follows:
Six months ended
(Dollars in thousands)June 30, 2020June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$9,328  $7,941  
Right of use assets obtained in exchange for new operating lease liabilities (non-cash)—  61,693  
Six months ended
(Dollars in thousands)June 30, 2021June 30, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$9,074 $9,328 

Lessor Equipment Leasing

WSFSThe Company provides equipment and small business lease financing through its leasing subsidiary, NewLane Finance acquired in the Beneficial acquisition.®. Interest income from direct financing leases where the Company is a lessor is recognized in Interest and fees on loans and leases on the Consolidated Statements of Income. The allowance for credit losses on finance leases is included inProvision (Recovery of) provision for credit losses on the Consolidated Statements of Income.

The components of direct finance lease income are summarized in the table below:
Three months endedSix months ended
(Dollars in thousands)June 30, 2020June 30, 2019June 30, 2020June 30, 2019
Direct financing leases:
Interest income on lease receivable$3,813  $3,109  $7,379  $3,778  
Interest income on deferred fees and costs93  206  188  263  
Total direct financing lease income$3,906  $3,315  $7,567  $4,041  
Three months endedSix months ended
(Dollars in thousands)June 30, 2021June 30, 2020June 30, 2021June 30, 2020
Direct financing leases:
Interest income on lease receivable$5,102 $3,813 $9,726 $7,379 
Interest income on deferred fees and costs, net(438)93 (756)188 
Total direct financing lease net interest income$4,664 $3,906 $8,970 $7,567 

3730
Table of Contents
Equipment leasing receivables relate to direct financing leases. The composition of the net investment in direct financing leases was as follows:
(Dollars in thousands)June 30, 2020December 31, 2019
Lease receivables$241,570  $217,076  
Unearned income(31,279) (28,446) 
Deferred fees and costs2,842  1,962  
Net investment in direct financing leases$213,133  $190,592  
(Dollars in thousands)June 30, 2021December 31, 2020
Lease receivables$329,718 $281,601 
Unearned income(43,808)(36,669)
Deferred fees and costs5,747 3,953 
Net investment in direct financing leases$291,657 $248,885 

Future minimum lease payments to be received for direct financing leases were as follows:

(Dollars in thousands)June 30, 2020
Remaining in 2020$40,894  
202172,509  
202255,897  
202340,034  
202424,805  
After 20247,431  
Total lease payments$241,570  

(Dollars in thousands)(Dollars in thousands)December 31, 2019(Dollars in thousands)June 30, 2021
2020$71,067  
202158,337  
Remaining in 2021Remaining in 2021$53,731 
2022202242,274  202296,910 
2023202328,628  202378,809 
2024202414,450  202456,668 
After 20242,320  
2025202534,903 
After 2025After 20258,697 
Total lease paymentsTotal lease payments$217,076  Total lease payments$329,718 

3831
Table of Contents
9. GOODWILL AND INTANGIBLE ASSETS
In accordance with ASC 805, Business Combinations (ASC 805) and ASC 350, Intangibles - Goodwill and Other (ASC 350), all assets acquired and liabilities assumed in purchase acquisitions, including goodwill, indefinite-lived intangibles and other intangibles are recorded at fair value as of acquisition date.

WSFS performs its annual goodwill impairment test on October 1 or more frequently if events and circumstances indicate that the fair value of a reporting unit is less than its carrying value. In between annual tests, management performs a qualitative review of goodwill quarterly as part of the Company's review of the overall business to ensure no events or circumstances have occurred that would impact its goodwill evaluation. During the six months ended June 30, 2020,2021, management included considerations of the current economic environment caused by COVID-19 in its evaluation, and determined based on the totality of its qualitative assessment that it is not more likely than not that the fair values of our reporting units are less than their carrying value of goodwill is impaired.values. NaN goodwill impairment exists during the six months ended June 30, 2020.2021.

The following table shows the allocation of goodwill to the reportable operating segments for purposes of goodwill impairment testing:
 
(Dollars in thousands)(Dollars in thousands)WSFS
Bank		Cash
Connect		Wealth
Management		Consolidated
Company		(Dollars in thousands)WSFS
Bank		Cash
Connect		Wealth
Management		Consolidated
Company
December 31, 2019$452,629  $—  $20,199  $472,828  
December 31, 2020December 31, 2020$452,629 $0 $20,199 $472,828 
Goodwill adjustmentsGoodwill adjustments—  —  —  —  Goodwill adjustments0 0 0 0 
June 30, 2020$452,629  $—  $20,199  $472,828  
June 30, 2021June 30, 2021$452,629 $0 $20,199 $472,828 
ASC 350 requires that an acquired intangible asset be separately recognized if the benefit of the intangible asset is obtained through contractual or other legal rights, or if the asset can be sold, transferred, licensed, rented or exchanged, regardless of the acquirer’s intent to do so.
The following table summarizes the Company's intangible assets:
(Dollars in thousands)(Dollars in thousands)Gross
Intangible
Assets		Accumulated
Amortization		Net
Intangible
Assets		Amortization Period(Dollars in thousands)Gross
Intangible
Assets		Accumulated
Amortization		Net
Intangible
Assets		Amortization Period
June 30, 2020
June 30, 2021June 30, 2021
Core depositsCore deposits$95,711  $(18,033) $77,678  10 yearsCore deposits$93,811 $(25,469)$68,342 10 years
Customer relationshipsCustomer relationships17,561  (8,216) 9,345  7-15 yearsCustomer relationships15,281 (7,238)8,043 7-15 years
Non-compete agreementsNon-compete agreements221  (168) 53  5 yearsNon-compete agreements221 (212)9 5 years
Loan servicing rights(1)
Loan servicing rights(1)
4,605  (1,994) 2,611  10-25 years
Loan servicing rights(1)
5,639 (2,910)2,729 10-25 years
Total intangible assetsTotal intangible assets$118,098  $(28,411) $89,687  Total intangible assets$114,952 $(35,829)$79,123 
December 31, 2019
December 31, 2020December 31, 2020
Core depositsCore deposits$95,711  $(13,326) $82,385  10 yearsCore deposits$95,711 $(22,727)$72,984 10 years
Customer relationshipsCustomer relationships17,561  (7,416) 10,145  7-15 yearsCustomer relationships15,281 (6,600)8,681 7-15 years
Non-compete agreementsNon-compete agreements221  (146) 75  5 yearsNon-compete agreements221 (190)31 5 years
Loan servicing rights(2)
Loan servicing rights(2)
4,880  (1,568) 3,312  10-25 years
Loan servicing rights(2)
5,302 (2,440)2,862 10-25 years
Total intangible assetsTotal intangible assets$118,373  $(22,456) $95,917  Total intangible assets$116,515 $(31,957)$84,558 
(1)Includes impairment losses of $0.3$0.1 million and $0.4less than $0.1 million for the three and six months ended June 30, 2020, respectively.2021.
(2)Includes impairment losses of $0.5$0.2 million for the year ended December 31, 20192020
The Company recognized amortization expense on intangible assets of $2.7 million and $5.3 million for the three and six months ended June 30, 2021, compared to $2.8 million and $5.5 million for the three and six months ended June 30, 2020, respectively, compared to $2.8 million and $4.1 million for the three and six months ended June 30, 2019, respectively.2020.
The following table presents the estimated future amortization expense on intangible assets:
 
(Dollars in thousands)June 30, 2020
Remaining in 2020$5,747  
202111,194  
202210,991  
202310,847  
202410,685  
Thereafter40,223  
Total$89,687  
39
Table of Contents

10. DEPOSITS

The following table shows deposits by category:
(Dollars in thousands)June 30, 2020December 31, 2019
Noninterest-bearing:
Noninterest demand$3,188,046  $2,189,573  
Total noninterest-bearing$3,188,046  $2,189,573  
Interest-bearing:
Interest-bearing demand$2,302,484  $2,129,725  
Savings1,731,875  1,563,000  
Money market2,333,326  2,100,188  
Customer time deposits1,228,440  1,356,610  
Brokered deposits278,329  247,761  
Total interest-bearing7,874,454  7,397,284  
Total deposits$11,062,500  $9,586,857  
(Dollars in thousands)June 30, 2021
Remaining in 2021$5,647 
202211,132 
202310,980 
202410,800 
202510,544 
Thereafter30,020 
Total$79,123 

4032
Table of Contents
10. DEPOSITS

The following table shows deposits by category:
(Dollars in thousands)June 30, 2021December 31, 2020
Noninterest-bearing:
Noninterest demand$4,328,060 $3,415,021 
Total noninterest-bearing$4,328,060 $3,415,021 
Interest-bearing:
Interest-bearing demand$2,633,423 $2,635,740 
Savings1,927,627 1,774,332 
Money market2,722,868 2,654,439 
Customer time deposits1,052,042 1,158,845 
Brokered deposits62,825 218,287 
Total interest-bearing8,398,785 8,441,643 
Total deposits$12,726,845 $11,856,664 

33
Table of Contents
11. ASSOCIATE BENEFIT PLANS
Postretirement Medical Benefits
The Company shares certain costs of providing health and life insurance benefits to eligible retired Associates (employees) and their eligible dependents. Previously, all Associates were eligible for these benefits if they reached normal retirement age while working for the Company. Effective March 31, 2014, the Company changed the eligibility of this plan to include only those Associates who have achieved ten years of service as of March 31, 2014. The Company began to useuses the mortality table issued by the Office of the Actuary of the U.S. Bureau of Census in its calculation.
The Company accounts for its obligations under the provisions of ASC 715, Compensation - Retirement Benefits (ASC 715). ASC 715 requires the recognition of the costs of these benefits over an Associate’s active working career. Amortization of unrecognized net gains or losses resulting from experience different from that assumed and from changes in assumptions is included as a component of net periodic benefit cost over the remaining service period of active employees to the extent that such gains and losses exceed 10% of the accumulated postretirement benefit obligation, as of the beginning of the year. The Company recognizes its service cost in Salaries, benefits and other compensation and the other components of net periodic benefit cost in Other operating expenses in the unaudited Consolidated Statements of Income.
The following table presents the components of net periodic benefit cost related to postretirement medical benefits plan.
Three months ended June 30,Six months ended June 30,Three months ended June 30,Six months ended June 30,
(Dollars in thousands)(Dollars in thousands)2020201920202019(Dollars in thousands)2021202020212020
Service costService cost$15  $14  $30  $27  Service cost$17 $15 $34 $30 
Interest costInterest cost17  19  34  38  Interest cost13 17 26 34 
Prior service cost amortizationPrior service cost amortization(19) (19) (38) (38) Prior service cost amortization(19)(19)(38)(38)
Net gain recognitionNet gain recognition(9) (16) (18) (31) Net gain recognition(5)(9)(10)(18)
Net periodic cost (benefit)Net periodic cost (benefit)$4  $(2) $8  $(4) Net periodic cost (benefit)$6 $4 $12 $8 

Alliance Associate Pension Plan

During the fourth quarter of 2015, the Company completed the acquisition of Alliance.Alliance Bancorp, Inc. of Pennsylvania (Alliance). At the time of the acquisition, the Company assumed the Alliance pension plan offered to its current Associates. In the first quarter of 2020, the Company received Internal Revenue Service and Pension Benefit Guaranty Corporation approval to terminate the plan. As of June 30, 2020, the Company completed the termination and contributed $0.5 million to the plan to settle the obligation.
The following table presents the components of net periodic benefit cost related to the Alliance Associate Pension Plan.
Three months ended June 30,Six months ended June 30,
(Dollars in thousands)2020201920202019
Service cost$7  $10  $17  $20  
Interest cost42  69  105  138  
Expected return on plan assets(79) (148) (196) (295) 
Prior service cost amortization—  —  —  —  
Net gain recognition—  —  —  —  
Plan settlement loss1,431  $—  1,431  $—  
Net periodic cost (benefit)$1,401  $(69) $1,357  $(137) 

During the fourth quarter of 2018, the Company notified the Alliance pension plan participants, the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC) of its intention to terminate the plan, and received IRS and PBGC approval in the first quarter of 2020. The Company completed the termination and contributed $0.5 million to the plan to settle the obligation There was no net periodic benefit cost during the three and six months ended June 30, 2020.2021.
Three months endedSix months ended
(Dollars in thousands)June 30, 2020June 30, 2020
Service cost$7 $17 
Interest cost42 105 
Expected return on plan assets(79)(196)
Plan settlement loss1,431 1,431 
Net periodic cost (benefit)$1,401 $1,357 


4134
Table of Contents
Beneficial Associate Pension and other postretirement benefits plans
On March 1, 2019, the Company closed its acquisition of Beneficial.Beneficial Bancorp, Inc. (Beneficial). At the time of the acquisition, the Company assumed the pension plan covering certain eligible Beneficial Associates. The plan was frozen in 2008.
The following table presents the components of net periodic benefit cost related to the Beneficial pension benefits and other postretirement benefit plans.
Three months ended June 30, 2020Six months ended June 30, 2020Three months ended June 30, 2021Six months ended June 30, 2021
(Dollars in thousands)(Dollars in thousands)Pension BenefitsOther Postretirement BenefitsPension BenefitsOther Postretirement Benefits(Dollars in thousands)Pension BenefitsOther Postretirement BenefitsPension BenefitsOther Postretirement Benefits
Service costService cost$—  $29  $—  $58  Service cost$0 $15 $0 $29 
Interest costInterest cost740  138  1,455  275  Interest cost530 77 1,060 154 
Expected return on plan assetsExpected return on plan assets(1,588) —  (3,182) —  Expected return on plan assets(1,705)0 (3,410)0 
Prior service cost amortizationPrior service cost amortization—  —  —  —  Prior service cost amortization0 (3)0 (6)
Net loss (gain) recognitionNet loss (gain) recognition1  (16) 2  (32) Net loss (gain) recognition7 0 13 0 
Net periodic (benefit) costNet periodic (benefit) cost$(847) $151  $(1,725) $301  Net periodic (benefit) cost$(1,168)$89 $(2,337)$177 

Three months ended June 30, 2019Six months ended June 30, 2019
(Dollars in thousands)Pension BenefitsOther Postretirement BenefitsPension BenefitsOther Postretirement Benefits
Service cost$—  $23  $—  $30  
Interest cost857  177  1,142  236  
Expected return on plan assets(1,442) —  (1,923) —  
Prior service cost amortization—  —  —  —  
Net loss (gain) recognition—  —  —  —  
Net periodic (benefit) cost$(585) $200  $(781) $266  




Three months ended June 30, 2020Six months ended June 30, 2020
(Dollars in thousands)Pension BenefitsOther Postretirement BenefitsPension BenefitsOther Postretirement Benefits
Service cost$0 $29 $0 $58 
Interest cost740 138 1,455 275 
Expected return on plan assets(1,588)0 (3,182)0 
Net (gain) loss recognition1 (16)2 (32)
Net periodic (benefit) cost$(847)$151 $(1,725)$301 

42
Table of Contents
12. INCOME TAXES
The Company accounts for income taxes in accordance with ASC 740, Income Taxes (ASC 740). ASC 740 requires the recording of deferred income taxes that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The company exercises significant judgment in the evaluation of the amount and timing of the recognition of the resulting tax assets and liabilities. The judgments and estimates required for the evaluation are updated based on changes in business factors and tax laws. If actual results differ from the assumptions and other considerations used in estimating the amount and timing of tax recognized, there can be no assurance that additional expenses will not be required in future periods.
ASC 740 prescribes a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized. The Company recognizes, when applicable, interest and penalties related to unrecognized tax benefits in the provision for income taxes in the financial statements. Assessment of uncertain tax positions under ASC 740 requires careful consideration of the technical merits of a position based on an analysis of tax regulations and interpretations.
There were 0 unrecognized tax benefits as of June 30, 2020.2021. The Company records interest and penalties on potential income tax deficiencies as income tax expense. The Company's federal and state tax returns for the 20162017 through 20192020 tax years are subject to examination as of June 30, 2020.2021. The Company does not expect to record or realize any material unrecognized tax benefits during 2020.2021.
As a result of the adoption of ASC 326 - Credit Losses on January 1, 2020, the tax impact relating to the incremental provision for expected credit losses from financial assets held at amortized cost has been reflected as a credit to retained earnings to reflect the tax impact of increased credit reserves. Accordingly, $8.5 million of such provision for credit lossesimpact has been reflected as an income tax credit and deferred tax asset on the Company's Consolidated Statements of Financial Condition.
As a result
Section 2303(b) of the CARES Act provides the Company with an opportunity to carry back net operating losses (NOLs) arising from 2018, 2019 and 2020 to the prior five tax years. The Company has such NOLs reflected on its balance sheet as a portion of its current tax receivables, which were previously valued at the federal corporate income tax rate of 21%. However, the provisions of the CARES Act provide for NOL carryback claims to be calculated based on a rate of 35%, which was the federal corporate tax rate in effect for the carryback years. Consequently, effective March 31, 2020, the Company has revalued the benefit from its NOLs to reflect a 35% tax rate, which resulted in the recognition of an additional $1.8$1.7 million income tax benefit and deferred tax asset was recognized on the Company's Consolidated Statements of Financial Condition. See "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" for details.
As a result of the adoption of ASU No. 2014-01,
Investments-Equity Method and Joint Ventures: Accounting for Investments in Qualified Affordable Housing Projects, the
The amortization of the low-income housing credit investments has been reflected as income tax expense. Accordingly,expense of $0.9 million and $0.8 million and $0.6 million of such amortization has been reflected as income tax expense for the three months ended June 30, 20202021 and 2019,2020, respectively, and $1.6$1.8 million and $1.3$1.6 million of such amortization has been reflected as income tax expense for the six months ended June 30, 2021 and 2020, and 2019, respectively.
The amount of affordable housing tax credits, amortization and tax benefits recorded as income tax expense for the six months ended June 30, 20202021 were $1.4$1.8 million, $1.6$1.8 million and $0.4$0.3 million, respectively. The carrying value of the investment in affordable housing credits is $28.2$24.8 million at June 30, 2020,2021, compared to $25.8$26.6 million at December 31, 2019.

2020.
4335
Table of Contents

13. FAIR VALUE DISCLOSURES OF FINANCIAL ASSETS AND LIABILITIES
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
ASC 820-10, Fair Value Measurement - Overall (ASC 820-10) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820-10 establishes a fair value hierarchy that prioritizes the use of inputs used in valuation methodologies into the following three levels:
•Level 1: Inputs to the valuation methodology are quoted prices, unadjusted, for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available.
•Level 2: Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; inputs to the valuation methodology include quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs to the valuation methodology that are derived principally from or can be corroborated by observable market data by correlation or other means.
•Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using discounted cash flow methodologies, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
4436
Table of Contents
The following tables present financial instruments carried at fair value as of June 30, 20202021 and December 31, 20192020 by level in the valuation hierarchy (as described above):
June 30, 2020June 30, 2021
(Dollars in thousands)(Dollars in thousands)Quoted
Prices in
Active
Markets for
Identical
Asset
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Total Fair
Value		(Dollars in thousands)Quoted
Prices in
Active
Markets for
Identical
Asset
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Total Fair
Value
Assets measured at fair value on a recurring basis:Assets measured at fair value on a recurring basis:Assets measured at fair value on a recurring basis:
Available-for-sale securities:Available-for-sale securities:Available-for-sale securities:
CMOCMO$—  $355,821  $—  $355,821  CMO$0 $618,419 $0 $618,419 
FNMA MBSFNMA MBS—  1,394,035  —  1,394,035  FNMA MBS0 2,329,787 0 2,329,787 
FHLMC MBSFHLMC MBS—  297,547  —  297,547  FHLMC MBS0 171,998 0 171,998 
GNMA MBSGNMA MBS—  30,824  —  30,824  GNMA MBS0 22,402 0 22,402 
GSE—  117,162  —  117,162  
GSE agency notesGSE agency notes0 223,973 0 223,973 
Other assetsOther assets—  15,243  —  15,243  Other assets0 8,606 0 8,606 
Total assets measured at fair value on a recurring basisTotal assets measured at fair value on a recurring basis$—  $2,210,632  $—  $2,210,632  Total assets measured at fair value on a recurring basis$0 $3,375,185 $0 $3,375,185 
Liabilities measured at fair value on a recurring basis:Liabilities measured at fair value on a recurring basis:Liabilities measured at fair value on a recurring basis:
Other liabilitiesOther liabilities$—  $9,017  $25,205  $34,222  Other liabilities$0 $4,464 $22,145 $26,609 
Assets measured at fair value on a nonrecurring basis:Assets measured at fair value on a nonrecurring basis:Assets measured at fair value on a nonrecurring basis:
Other investmentsOther investments$—  $—  $10,211  $10,211  Other investments$5,604 $0 $10,044 $15,648 
Other real estate ownedOther real estate owned—  —  4,153  4,153  Other real estate owned0 0 1,044 1,044 
Loans held for saleLoans held for sale—  109,453  —  109,453  Loans held for sale0 113,173 0 113,173 
Total assets measured at fair value on a nonrecurring basisTotal assets measured at fair value on a nonrecurring basis$—  $109,453  $14,364  $123,817  Total assets measured at fair value on a nonrecurring basis$5,604 $113,173 $11,088 $129,865 

December 31, 2019December 31, 2020
(Dollars in thousands)(Dollars in thousands)Quoted
Prices in
Active
Markets for
Identical
Asset
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Total Fair
Value		(Dollars in thousands)Quoted
Prices in
Active
Markets for
Identical
Asset
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Total Fair
Value
Assets measured at fair value on a recurring basis:Assets measured at fair value on a recurring basis:Assets measured at fair value on a recurring basis:
Available-for-sale securities:Available-for-sale securities:Available-for-sale securities:
CMOCMO$—  $340,230  $—  $340,230  CMO$0 $471,325 $0 $471,325 
FNMA MBSFNMA MBS—  1,242,453  —  1,242,453  FNMA MBS0 1,598,970 0 1,598,970 
FHLMC MBSFHLMC MBS—  328,946  —  328,946  FHLMC MBS0 202,893 0 202,893 
GNMA MBSGNMA MBS—  33,285  —  33,285  GNMA MBS0 23,762 0 23,762 
GSE agency notesGSE agency notes0 232,107 0 232,107 
Other assetsOther assets—  4,884  —  4,884  Other assets0 14,448 0 14,448 
Total assets measured at fair value on a recurring basisTotal assets measured at fair value on a recurring basis$—  $1,949,798  $—  $1,949,798  Total assets measured at fair value on a recurring basis$0 $2,543,505 $0 $2,543,505 
Liabilities measured at fair value on a recurring basis:Liabilities measured at fair value on a recurring basis:Liabilities measured at fair value on a recurring basis:
Other liabilitiesOther liabilities$—  $3,918  $—  $3,918  Other liabilities$0 $8,218 $24,039 $32,257 
Assets measured at fair value on a nonrecurring basisAssets measured at fair value on a nonrecurring basisAssets measured at fair value on a nonrecurring basis
Other investmentsOther investments$—  $—  $70,046  $70,046  Other investments$0 $0 $9,541 $9,541 
Other real estate ownedOther real estate owned—  —  2,605  2,605  Other real estate owned0 0 3,061 3,061 
Loans held for saleLoans held for sale—  83,872  —  83,872  Loans held for sale0 197,541 0 197,541 
Total assets measured at fair value on a nonrecurring basisTotal assets measured at fair value on a nonrecurring basis$—  $83,872  $72,651  $156,523  Total assets measured at fair value on a nonrecurring basis$0 $197,541 $12,602 $210,143 

4537
Table of Contents
Fair value is based on quoted market prices, where available. If such quoted market prices are not available, fair value is based on internally developed models or obtained from third parties that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include unobservable parameters. The Company's valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While the Company believes its valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.
Available-for-sale securities
Securities classified as available-for-sale are reported at fair value using Level 2 inputs. The Company believes that this Level 2 designation is appropriate under ASC 820-10, as these securities are federal agency MBSGSEs and GNMA securities with almost all fixed income securities, none are exchange traded, and all are priced by correlation to observed market data. For these securities the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, U.S. government and agency yield curves, live trading levels, trade execution data, market consensus prepayment speeds, credit information, and the security’s terms and conditions, among other factors.
Other investments
Other investments includes equity investments with and without readily determinable fair values and equity method investments, which are categorized as Level 1 and Level 3. The Company's equity investments with a readily determinable fair value are held at fair value. The Company’s equity investments without readily determinable fair values are held at cost, and are adjusted for any observable transactions during the reporting period.period and its equity method investments are initially recorded at cost based on the Company’s percentage ownership in the investee, and are adjusted to reflect the recognition of the Company’s proportionate share of income or loss of the investee based on the investee’s earnings.
Other real estate owned
Other real estate owned consists of loan collateral which has been repossessed through foreclosure or other measures. Initially, foreclosed assets are recorded at the fair value of the collateral less estimated selling costs. Subsequent to foreclosure, valuations are updated periodically and the assets may be marked down further, reflecting a new cost basis. The fair value of other real estate owned was estimated using Level 3 inputs based on appraisals obtained from third parties.
Loans held for sale
The fair value of loans held for sale is based on estimates using Level 2 inputs. These inputs are based on pricing information obtained from wholesale mortgage banks and brokers and applied to loans with similar interest rates and maturities.
Other assets
Other assets include the fair value of interest rate products and derivatives on the residential mortgage held for sale loan pipeline. Valuation of interest rate products is obtained from an independent pricing service and also from the derivative counterparty. Valuation of the derivative related to the residential mortgage held for sale loan pipeline is based on valuation of the loans held for sale portfolio as described above in Loans held for sale.
Other liabilities
Other liabilities include the fair value of interest rate products, derivatives on the residential mortgage held for sale loan pipeline and derivative related to the sale of certain Visa Class B common shares. Valuation of interest rate products is obtained from an independent pricing service and also from the derivative counterparty. Valuation of the derivative related to the residential mortgage held for sale loan pipeline is based on valuation of the loans held for sale portfolio as described above in Loans held for sale. Valuation of the derivative related to the sale of certain Visa Class B common shares is based on: (i) the agreed upon graduated fee structure; (ii) the length of time until the resolution of the Visa covered litigation; and (iii) the estimated impact of dilution in the conversion ratio of Class B shares resulting from changes in the Visa covered litigation.

4638
Table of Contents
FAIR VALUE OF FINANCIAL INSTRUMENTS
The reported fair values of financial instruments are based on a variety of factors. In certain cases, fair values represent quoted market prices for identical or comparable instruments. In other cases, fair values have been estimated based on assumptions regarding the amount and timing of estimated future cash flows that are discounted to reflect current market rates and varying degrees of risk. Accordingly, the fair values may not represent actual values of the financial instruments that could have been realized as of period-end or that will be realized in the future.
The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:
Cash, and cash equivalents, and restricted cash
For cash and short-term investment securities, including due from banks, federal funds sold or purchased under agreements to resell and interest-bearing deposits with other banks, the carrying amount is a reasonable estimate of fair value.
Investment securities
Investment securities include debt securities classified as held-to-maturity or available-for-sale. Fair value is estimated using quoted prices for similar securities, which the Company obtains from a third party vendor. The Company uses one of the largest providers of securities pricing to the industry and management periodically assesses the inputs used by this vendor to price the various types of securities owned by the Company to validate the vendor’s methodology as described above in available-for-sale securities.
Other investments
Other investments includes equity investments with and without readily determinable fair values (see discussion in “Fair Value of Financial Assets and Liabilities” section above).
Loans held for sale
Loans held for sale are carried at their fair value (see discussion in “Fair Value of Financial Assets and Liabilities” section above).
Loans and leases
Fair values are estimated for portfolios of loans with similar financial characteristics. Loans and leases are segregated by portfolio segments (see Note 2).segments. For loans that reprice frequently, the book value approximates fair value. The fair values of other types of loans, with the exception of reverse mortgages, are estimated by discounting expected cash flows using the current rates at which similar loans would be made to borrowers with comparable credit ratings and for similar remaining maturities. The fair values of reverse mortgages are based on the net present value of the expected cash flows using a discount rate specific to the reverse mortgages portfolio. The fair value of nonperforming loans is based on recent external appraisals of the underlying collateral, if the loan is collateral dependent. Estimated cash flows, discounted using a rate commensurate with current rates and the risk associated with the estimated cash flows, are used if appraisals are not available. This technique does contemplate an exit price.
Stock in the Federal Home Loan Bank (FHLB) of Pittsburgh
The fair value of FHLB stock is assumed to be equal to its cost basis, since the stock is non-marketable but redeemable at its par value.
Accrued interest receivable
The carrying amounts of interest receivable approximate fair value.

Other assets
Other assets include the fair value of interest rate swapsproducts and derivatives on the residential mortgage held for sale loan pipeline. Valuationpipeline (see discussion in “Fair Value of interest rate swaps is obtained from an independent pricing serviceFinancial Assets and also from the derivative counterparty. Valuation of the derivative related to the residential mortgage held for sale loan pipeline is based on valuation of the loans held for sale portfolio as described above in Loans held for saleLiabilities” section above).

4739
Table of Contents
Deposits
The fair value of deposits with no stated maturity, such as noninterest-bearing demand deposits, money market and interest-bearing demand deposits, is assumed to be equal to the amount payable on demand. The fair value of time deposits is based on the discounted value of contractual cash flows. The discount rate is estimated using rates currently offered for deposits with comparable remaining maturities.
Borrowed funds
Rates currently available to the Company for debt with similar terms and remaining maturities are used to estimate the fair value of existing debt.
Other liabilities
Other liabilities include the fair value of interest rate swaps, risk participation agreements and derivatives on the residential mortgage held for sale loan pipeline. Valuation of interest rate swaps and risk participation agreements is obtained from an independent pricing service and also from the derivative counterparty. Valuation of the derivative related to the residential mortgage held for sale loan pipeline is based on valuation of the loans held for sale portfolio as described above in Loans held for sale.
Off-balance sheet instruments
The fair value of off-balance sheet instruments, including swap guarantees of $13.0 million at June 30, 2021 and $12.8 million at December 31, 2020, respectively, and standby letters of credit, approximates the recorded net deferred fee amounts, which are not significant.amounts. Because letters of credit are generally not assignable by either the Company or the borrower, they only have value to the Company and the borrower. In determining the fair value of the swap guarantees, the Company assesses the underlying credit risk exposure for each borrower in a paying position to the third-party financial institution.
Accrued interest payable
The carrying amounts of interest payable approximate fair value.
Other liabilities
Other liabilities include the fair value of interest rate products, derivatives on the residential mortgage held for sale loan pipeline, and derivative related to the sale of certain Visa Class B common shares (see discussion in “Fair Value of Financial Assets and Liabilities” section above).
Assets measured at fair value using significant unobservable inputs (Level 3)
The following table provides a description of the valuation technique and significant unobservable inputs for the Company's assets classified as Level 3 and measured at fair value on a nonrecurring basis:
June 30, 2020
Financial InstrumentFair ValueValuation Technique(s)Unobservable InputRange (Weighted Average)
Other investments$10,211 Observed market comparable transactionsPeriod of observed transactionsMay 2020
Other real estate owned$4,153 Fair market value of collateralCosts to sell5.0% - 12.0% (10.0%)
Other liabilities$25,205 Discounted cash flowTiming of the resolution of the Visa litigation3 - 8 years (5.75 years or 4Q 2025)
June 30, 2021
Financial InstrumentFair ValueValuation Technique(s)Unobservable InputRange (Weighted Average)
Other investments$15,648 Observed market comparable transactionsPeriod of observed transactionsMay 2021
Other real estate owned1,044 Fair market value of collateralCosts to sell10.0%
Other liabilities22,145 Discounted cash flowTiming of Visa litigation resolution2.25 - 7.25 years (5.00 years or 4Q 2025)





4840
Table of Contents
The book value and estimated fair value of the Company's financial instruments are as follows:
June 30, 2021December 31, 2020
(Dollars in thousands)Fair Value
Measurement		Book ValueFair ValueBook ValueFair Value
Financial assets:
Cash, cash equivalents, and restricted cashLevel 1$2,421,113 $2,421,113 $1,654,735 $1,654,735 
Investment securities available-for-saleLevel 23,366,579 3,366,579 2,529,057 2,529,057 
Investment securities held-to-maturity, netLevel 295,126 99,266 111,741 116,421 
Other investmentsLevels 1, 315,648 15,648 9,541 9,541 
Loans, held for saleLevel 2113,173 113,173 197,541 197,541 
Loans and leases, net(1)
Level 38,131,846 8,208,084 8,795,935 9,130,003 
Stock in FHLB of PittsburghLevel 26,090 6,090 5,771 5,771 
Accrued interest receivableLevel 240,275 40,275 44,335 44,335 
Other assetsLevel 28,606 8,606 14,448 14,448 
Financial liabilities:
DepositsLevel 212,726,845 12,734,333 11,856,664 11,868,897 
Borrowed fundsLevel 2236,470 224,106 340,641 340,106 
Standby letters of creditLevel 3586 586 630 630 
Accrued interest payableLevel 21,977 1,977 1,450 1,450 
Other liabilitiesLevels 2, 326,609 26,609 32,257 32,257 
June 30, 2020December 31, 2019
(Dollars in thousands)Fair Value
Measurement		Book ValueFair ValueBook ValueFair Value
Financial assets:
Cash and cash equivalentsLevel 1$955,767  $955,767  $571,752  $571,752  
Investment securities available-for-saleLevel 22,195,389  2,195,389  1,944,914  1,944,914  
Investment securities held-to-maturity, netLevel 2127,601  132,198  133,601  136,625  
Other investmentsLevel 310,211  10,211  70,046  70,046  
Loans, held for saleLevel 2109,453  109,453  83,872  83,872  
Loans, net(1)
Level 39,120,288  9,386,635  8,424,464  8,580,015  
Stock in FHLB of PittsburghLevel 29,772  9,772  21,097  21,097  
Accrued interest receivableLevel 253,222  53,222  38,094  38,094  
Other assetsLevel 215,243  15,243  4,884  4,884  
Financial liabilities:
DepositsLevel 211,062,500  11,052,211  9,586,857  9,575,394  
Borrowed fundsLevel 2295,793  313,839  489,288  489,561  
Standby letters of creditLevel 3416  416  623  623  
Accrued interest payableLevel 26,049  6,049  3,103  3,103  
Other liabilitiesLevels 2, 334,222  34,222  3,918  3,918  
 (1) Includes reverse mortgage loans.
At June 30, 20202021 and December 31, 20192020 the Company had 0 commitments to extend credit measured at fair value.
4941
Table of Contents
14. DERIVATIVE FINANCIAL INSTRUMENTS
Risk Management Objective of Using Derivatives
The Company is exposed to certain risks arising from both economic conditions and its business operations. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities. The Company manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions.
Fair Values of Derivative Instruments
The table below presents the fair value of derivative financial instruments as well as their location on the unaudited Consolidated Statements of Financial Condition as of June 30, 2020.
Fair Values of Derivative Instruments
(Dollars in thousands)NotionalBalance Sheet LocationDerivatives
(Fair Value)
Derivatives not designated as hedging instruments:
Interest rate products$65,626  Other assets$6,579  
Interest rate products65,626  Other liabilities(7,404) 
Risk participation agreements4,449  Other liabilities(14) 
Interest rate lock commitments with customers287,204  Other assets8,218  
Interest rate lock commitments with customers20,260  Other liabilities(132) 
Forward sale commitments44,840  Other assets446  
Forward sale commitments232,570  Other liabilities(1,467) 
Financial derivatives related to
sales of certain Visa Class B shares		113,177  Other liabilities(25,205) 
Total derivatives$833,752  $(18,979) 
2021.

Fair Values of Derivative Instruments
(Dollars in thousands)NotionalBalance Sheet LocationDerivatives
(Fair Value)
Derivatives not designated as hedging instruments:
Interest rate products$57,781 Other assets$3,754 
Interest rate products57,781 Other liabilities(4,034)
Risk participation agreements4,293 Other liabilities(5)
Interest rate lock commitments with customers182,616 Other assets4,342 
Interest rate lock commitments with customers10,406 Other liabilities(202)
Forward sale commitments85,611 Other assets510 
Forward sale commitments82,268 Other liabilities(223)
Financial derivatives related to
sales of certain Visa Class B shares		113,177 Other liabilities(22,145)
Total derivatives$593,933 $(18,003)
The table below presents the fair value of derivative financial instruments as well as their location on the Consolidated Statements of Financial Condition as of December 31, 2019.2020.
Fair Values of Derivative Instruments
(Dollars in thousands)CountNotionalBalance Sheet LocationDerivatives
(Fair Value)
Derivatives designated as hedging instruments:
Interest rate products3$75,000  Other liabilities$(759) 
Total$75,000  $(759) 
Derivatives not designated as hedging instruments:
Interest rate products$71,804  Other assets$2,520  
Interest rate products71,804  Other liabilities(2,688) 
Risk participation agreements4,524  Other liabilities(4) 
Interest rate lock commitments with customers99,057  Other assets1,768  
Interest rate lock commitments with customers28,505  Other liabilities(191) 
Forward sale commitments61,301  Other assets596  
Forward sale commitments90,177  Other liabilities(276) 
Total$427,172  $1,725  
Total derivatives$502,172  $966  
Fair Values of Derivative Instruments
(Dollars in thousands)NotionalBalance Sheet LocationDerivatives
(Fair Value)
Derivatives not designated as hedging instruments:
Interest rate products$61,326 Other assets$5,369 
Interest rate products61,326 Other liabilities(5,851)
Risk participation agreements4,372 Other liabilities(10)
Interest rate lock commitments with customers244,037 Other assets8,496 
Interest rate lock commitments with customers8,413 Other liabilities(117)
Forward sale commitments50,705 Other assets583 
Forward sale commitments258,186 Other liabilities(2,240)
Financial derivatives related to
sales of certain Visa Class B shares		113,177 Other liabilities(24,039)
Total derivatives$801,542 $(17,809)

5042
Table of Contents
Derivatives Designated as Hedging Instruments:
Cash Flow Hedges of Interest Rate Risk
The Company's objectives in using interest rate derivatives are to add stability to interest income and to manage its exposure to interest rate movements. To accomplish this objective,these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of fixed amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without exchange of the underlying notional amount.
Changes to the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecast transaction affects earnings. During the six months ended June 30,first half of 2020, such derivatives were used to hedge the variable cash flows associated with a variable rate loan pool.
The Company has agreements with certain derivative counterparties that contain a provision under which, if it defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. The Company also has agreements with certain derivative counterparties that contain a provision where if it fails to maintain its status as a well-capitalized or adequately capitalized institution, then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements.
In April 2020, the Company terminated its three3 interest rate derivatives that were designated as cash flow hedges for a net gain of $1.3 million. At this point, hedge accounting was discontinued, and the net gain wasmillion, recognized in accumulated other comprehensive income (loss). Once a cash flow hedge isHedge accounting was discontinued, and the net gain or loss that remains in accumulated comprehensive income (loss) is reclassified into earnings when the transaction affects earnings. As the underlying hedged transaction continues to be probable, the $1.3 million net gain will be recognized into earnings on a straight-line basis over each derivative's original contract term. During the next twelve months, the Company estimates that $0.6$0.3 million will be reclassified as an increase to interest income. During the three and six months ended June 30, 2020,2021, $0.1 million and $0.3 million, respectively, was reclassified into interest income for both periods.

income.
The table below presents the effect of the derivative financial instrumentscash flow hedges on the unaudited Consolidated Statements of Income for the three and six months ended June 30, 2020 and June 30, 2019.2020.
Amount of (Loss) or Gain Recognized in OCI on Derivative (Effective Portion)Amount of (Loss) or Gain Recognized in OCI on Derivative (Effective Portion)Location of (Loss) or Gain Reclassified from Accumulated OCI into Income (Effective Portion)
(Dollars in thousands)Three Months Ended June 30,Six Months Ended June 30,
Derivatives in Cash Flow Hedging Relationships2020201920202019
Interest Rate Products$(25) $1,007  $1,560  $1,637  Interest income
Total$(25) $1,007  $1,560  $1,637  
Amount of Gain or (Loss) Recognized in IncomeAmount of Gain or (Loss) Recognized in IncomeLocation of Gain or (Loss) Recognized in Income
(Dollars in thousands)Three Months Ended June 30,Six Months Ended June 30,
Derivatives Not Designated as a Hedging Instrument2020201920202019
Interest Rate Lock Commitments$3,178  $542  $6,227  $1,174  Mortgage banking activities, net
Forward Sale Commitments(2,439) (487) (6,484) $(721) Mortgage banking activities, net
Total$739  $55  $(257) $453  
Amount of Gain Recognized in OCI on Derivative (Effective Portion)Amount of Gain Recognized in OCI on Derivative (Effective Portion)Location of Gain Reclassified from Accumulated OCI into Income (Effective Portion)
(Dollars in thousands)Three Months Ended June 30,Six Months Ended June 30,
Derivatives in cash flow hedging relationships20202020
Interest rate products$(25)$1,560 Interest income
Total$(25)$1,560 

Derivatives Not Designated as Hedging Instruments:
Back-to-Back Swap Transactions
The Company has minimum collateral posting thresholdsentered into agreements with certain of its derivative counterparties, and has posted collateral of $9.0 million against its obligations under these agreements. Iftwo unrelated financial institutions whereby the Company had breached any of these provisions at June 30, 2020, it could have been required to settle its obligations under the agreements at the termination value.
51
Table of Contents
15. SEGMENT INFORMATION
As defined in ASC 280, Segment Reporting (ASC 280),enters into an operating segment is a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the enterprise’s chief operating decision makers to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. The Company evaluates performance based on pretax net income relative to resources used, and allocate resources based on these results. The accounting policies applicable to the Company's segments are those that apply to its preparation of the accompanying unaudited Consolidated Financial Statements. Based on these criteria, the Company has identified 3 segments: WSFS Bank, Cash Connect®, and Wealth Management.
The WSFS Bank segment provides financial products to commercial and retail customers. Retail and Commercial Banking, Commercial Real Estate Lending and other banking business units are operating departments of WSFS Bank. These departments share the same regulator, the same market, many of the same customers and provide similar products and services through the general infrastructure of the Bank. Accordingly, these departments are not considered discrete segments and are appropriately aggregated in the WSFS Bank segment in accordance with ASC 280.
The Company's Cash Connect® segment provides ATM vault cash, smart safe 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 retail safes nationwide. The balance sheet category Cash in non-owned ATMs includes cash from which fee income is earned through bailment arrangements with customers of Cash Connect®.
The Wealth Management 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 through multiple integrated businesses. WSFS Wealth Investments provides financial advisory services along with insurance and brokerage products. Cypress, a registered investment adviser, is a fee-only wealth management firm managing a “balanced” investment style portfolio focused on preservation of capital and generating current income. West Capital, a registered investment adviser, is a fee-only wealth management firm operating under a multi-family office philosophy to provide customized solutions to institutions and high-net-worth individuals. The institutional trust division of WSFS, WSFS Institutional Services, provides trustee, agency, bankruptcy administration, custodial and commercial domicile services to institutional and corporate clients. Christiana Trust DE, a subsidiary of WSFS, provides personal trust and fiduciary services to families and individuals across the U.S. Powdermill is a multi-family office specializing in providing independent solutions to high-net-worth individuals, families and corporate executives through a coordinated, centralized approach. WSFS Wealth Client Management serves high-net-worth clients by delivering credit and deposit products and partnering with other Wealth Management units to provide comprehensive solutions to clients.

52
Table of Contents
The following tables show segment results for the three and six months ended June 30, 2020 and 2019:
 Three Months Ended June 30, 2020Three Months Ended June 30, 2019
(Dollars in thousands)WSFS Bank
Cash
Connect®
Wealth
Management		TotalWSFS Bank
Cash
Connect®
Wealth
Management		Total
Statements of Income
External customer revenues:
Interest income$123,710  $—  $2,173  $125,883  $140,231  $—  $2,672  $142,903  
Noninterest income44,304  9,008  11,063  64,375  18,870  13,355  10,646  42,871  
Total external customer revenues168,014  9,008  13,236  190,258  159,101  13,355  13,318  185,774  
Inter-segment revenues:
Interest income937  237  2,442  3,616  3,345  —  4,052  7,397  
Noninterest income3,542  188  347  4,077  2,156  192  211  2,559  
Total inter-segment revenues4,479  425  2,789  7,693  5,501  192  4,263  9,956  
Total revenue172,493  9,433  16,025  197,951  164,602  13,547  17,581  195,730  
External customer expenses:
Interest expense11,659  —  468  12,127  18,282  —  1,389  19,671  
Noninterest expenses79,789  6,413  7,233  93,435  91,415  8,893  7,540  107,848  
Provision for credit losses93,819  —  935  94,754  12,239  —  (44) 12,195  
Total external customer expenses185,267  6,413  8,636  200,316  121,936  8,893  8,885  139,714  
Inter-segment expenses:
Interest expense2,679  131  806  3,616  4,052  2,203  1,142  7,397  
Noninterest expenses535  899  2,643  4,077  403  698  1,458  2,559  
Total inter-segment expenses3,214  1,030  3,449  7,693  4,455  2,901  2,600  9,956  
Total expenses188,481  7,443  12,085  208,009  126,391  11,794  11,485  149,670  
(Loss) income before taxes$(15,988) $1,990  $3,940  $(10,058) $38,211  $1,753  $6,096  $46,060  
Income tax (benefit) provision(2,247) 10,091  
Consolidated net (loss) income(7,811) 35,969  
Net loss attributable to noncontrolling interest(700) (231) 
Net (loss) income attributable to WSFS(7,111) 36,200  


53
Table of Contents

Six Months Ended June 30, 2020Six Months Ended June 30, 2019
(Dollars in thousands)WSFS Bank
Cash
Connect®
Wealth
Management		TotalWSFS Bank
Cash
Connect®
Wealth
Management		Total
Statements of Income
External customer revenues:
Interest income$255,019  $—  $4,719  $259,738  $237,177  $—  $5,303  $242,480  
Noninterest income62,376  20,687  22,159  105,222  36,134  25,757  22,102  83,993  
Total external customer revenues317,395  20,687  26,878  364,960  273,311  25,757  27,405  326,473  
Inter-segment revenues:
Interest income2,880  237  5,291  8,408  7,137  —  8,057  15,194  
Noninterest income6,449  417  520  7,386  4,039  369  397  4,805  
Total inter-segment revenues9,329  654  5,811  15,794  11,176  369  8,454  19,999  
Total revenue326,724  21,341  32,689  380,754  284,487  26,126  35,859  346,472  
External customer expenses:
Interest expense28,406  —  1,426  29,832  33,418  —  2,516  35,934  
Noninterest expenses152,874  14,636  14,421  181,931  173,992  16,923  14,525  205,440  
Provision for credit losses148,853  —  2,547  151,400  19,525  —  324  19,849  
Total external customer expenses330,133  14,636  18,394  363,163  226,935  16,923  17,365  261,223  
Inter-segment expenses:
Interest expense5,528  1,085  1,795  8,408  8,057  4,761  2,376  15,194  
Noninterest expenses937  1,640  4,809  7,386  766  1,243  2,796  4,805  
Total inter-segment expenses6,465  2,725  6,604  15,794  8,823  6,004  5,172  19,999  
Total expenses336,598  17,361  24,998  378,957  235,758  22,927  22,537  281,222  
(Loss) income before taxes$(9,874) $3,980  $7,691  $1,797  $48,729  $3,199  $13,322  $65,250  
Income (benefit) tax provision(959) 16,351  
Consolidated net income2,756  48,899  
Net loss attributable to noncontrolling interest(1,060) (324) 
Net income attributable to WSFS3,816  49,223  

The following table shows significant components of segment net assets as of June 30, 2020 and December 31, 2019:
 June 30, 2020December 31, 2019
(Dollars in thousands)WSFS Bank
Cash
Connect®
Wealth
Management		TotalWSFS Bank
Cash
Connect®
Wealth
Management		Total
Statements of Financial Condition
Cash and cash equivalents$591,518  $356,785  $7,464  $955,767  $202,792  $357,494  $11,466  $571,752  
Goodwill452,629  —  20,199  472,828  452,629  —  20,199  472,828  
Other segment assets11,914,250  5,171  225,341  12,144,762  10,982,681  6,555  222,486  11,211,722  
Total segment assets$12,958,397  $361,956  $253,004  $13,573,357  $11,638,102  $364,049  $254,151  $12,256,302  
Capital expenditures for the period ended$2,437  $256  $137  $2,830  $11,806  $2,120  $272  $14,198  


54
Table of Contents
16. COMMITMENTS AND CONTINGENCIES
Secondary Market Loan Sales
Given the current interest rate environmentswap transaction with the customer and the Company's overall asset and liability management approach, the Company typically sells newly originated residential mortgage loans in the secondary marketoffsets that transaction with another counterparty. Derivative financial instruments related to mortgage loan aggregators and on a more limited basis, to government sponsored entities (GSEs) such as FHLMC, FNMA, and the FHLB. Loans held for saleback-to-back swaps are reflected on the unaudited Consolidated Statements of Financial Conditionrecorded at fair value with changes in the value reflected in the unaudited Consolidated Statements of Income. Gains and losses are recognized at the time of sale. The Company periodically retains the servicing rights on residential mortgage loans sold which results in monthly service fee income. The mortgage servicing rights are included in intangible assets in the unaudited Consolidated Statements of Financial Condition. Otherwise, the Company sells loans with servicing released on a nonrecourse basis. Rate-locked loan commitments that the Company intends to sell in the secondary market are accounted fornot designated as derivatives under ASC 815, Derivatives and Hedging (ASC 815).accounting hedges.
The Company does not sell loans with recourse, except for standard loan sale contract provisions covering violations of representations and warranties and, under certain circumstances, early payment default by the borrower. These are customary repurchase provisions in the secondary market for residential mortgage loan sales. These provisions may include either an indemnification from loss or the repurchase of the loans. Repurchases and losses have been rare and 0 provision is made for losses at the time of sale. There were 0 repurchases during the six months ended June 30, 2020 as compared to 1 repurchase for $0.2 million during the six months ended June 30, 2019.
Swap Guarantees
The Company entered into agreements with 4 unrelated financial institutions whereby those financial institutions entered into interest rate derivative contracts (interest rate swap transactions) directly with customers referred to them by the Company. Under the terms of the agreements, those financial institutions have recourse to us for any exposure created under each swap transaction, only in the event that the customer defaults on the swap agreement and the agreement is in a paying position to the third-party financial institution. This is a customary arrangement that allows us to provide access to interest rate swap transactions for our customers without creating the swap ourselves. These swap guarantees are accounted for as credit derivatives.
At June 30, 20202021 and December 31, 2019,2020, there were 213248 and 172234 variable-rate to fixed-rate swap transactions between the third-party financial institutions and the Company's customers, respectively. The initial notional aggregate amount was approximately $1.1 billion at both June 30, 2020 compared to $941.0 million at2021 and December 31, 2019.2020. At June 30, 2020,2021, the swap transactions remaining maturities ranged from under 1 year to 1514 years. The aggregate net market value of these swaps to the customers was a liability of $91.7 million at June 30, 2020 and a liability of $26.4 million at December 31, 2019. At June 30, 2020, 2112021, 206 of these customer swaps with a liability of $93.0 million, were in a paying positionsposition to third parties for $50.2 million, with our swap guarantees having a fair value of $13.0 million. At December 31, 2020, 231 of these customer swaps were in a paying position to third party; however,parties for $81.6 million, with the Company's swap guarantees having a fair value of $12.8 million. However, for both periods, none of the Company's customers were in default of the swap agreements. There were no payments made by


43
Table of Contents
Derivative Financial Instruments from Mortgage Banking Activities
Derivative financial instruments related to mortgage banking activities are recorded at fair value and are not designated as accounting hedges. This includes commitments to originate certain fixed-rate residential mortgage loans to customers, also referred to as interest rate lock commitments. The Company may also enter into forward sale commitments to sell loans to investors at a fixed price at a future date and trade asset-backed securities to mitigate interest rate risk.
The table below presents the Company undereffect of the agreementsderivative financial instruments on the unaudited Consolidated Statements of Income for the three and six months ended June 30, 20202021 and June 30, 2019.2020.
Amount of (Loss) or Gain Recognized in IncomeAmount of (Loss) Recognized in IncomeLocation of Gain or (Loss) Recognized in Income
(Dollars in thousands)Three Months Ended June 30,Six Months Ended June 30,
Derivatives not designated as hedging instruments2021202020212020
Interest rate lock commitments with customers$(823)$3,178 $(4,087)$6,227 Mortgage banking activities, net
Forward sale commitments(2,742)(2,439)3,382 $(6,484)Mortgage banking activities, net
Total$(3,565)$739 $(705)$(257)

Credit-risk-related Contingent Features
The Company has agreements with certain derivative counterparties that contain a provision under which, if it defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.
The Company has minimum collateral posting thresholds with certain of its derivative counterparties, and has posted collateral of $6.5 million in securities and $6.1 million in cash against its obligations under these agreements. If the Company had breached any of these provisions at June 30, 2021, it could have been required to settle its obligations under the agreements at the termination value.
44
Table of Contents
15. SEGMENT INFORMATION
As defined in ASC 280, Segment Reporting (ASC 280), an operating segment is a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the enterprise’s chief operating decision makers to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. The Company evaluates performance based on pretax net income relative to resources used, and allocate resources based on these results. The accounting policies applicable to the Company's segments are those that apply to its preparation of the accompanying unaudited Consolidated Financial Statements. Based on these criteria, the Company has identified 3 segments: WSFS Bank, Cash Connect®, and Wealth Management.
The WSFS Bank segment provides financial products to commercial and retail customers. Retail and Commercial Banking, Commercial Real Estate Lending and other banking business units are operating departments of WSFS Bank. These departments share the same regulator, the same market, many of the same customers and provide similar products and services through the general infrastructure of the Bank. Accordingly, these departments are not considered discrete segments and are appropriately aggregated in the WSFS Bank segment.
The Company's Cash Connect® segment provides ATM vault cash, smart safe 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 retail safes nationwide. The balance sheet category Cash in non-owned ATMs includes cash from which fee income is earned through bailment arrangements with customers of Cash Connect®.
The Wealth Management 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 through multiple integrated businesses. WSFS Wealth® Investments provides financial advisory services along with insurance and brokerage products. Cypress, a registered investment adviser, is a fee-only wealth management firm managing a “balanced” investment style portfolio focused on preservation of capital and generating current income. West Capital, a registered investment adviser, is a fee-only wealth management firm operating under a multi-family office philosophy to provide customized solutions to institutions and high-net-worth individuals. The trust division of WSFS, comprised of WSFS Institutional Services® and Christiana Trust DE, provides trustee, agency, bankruptcy administration, custodial and commercial domicile services to institutional and corporate clients. Christiana Trust DE also provides personal trust and fiduciary services to families and individuals across the U.S. Powdermill® is a multi-family office specializing in providing independent solutions to high-net-worth individuals, families and corporate executives through a coordinated, centralized approach. WSFS Wealth Client Management serves high-net-worth clients by delivering credit and deposit products and partnering with other Wealth Management units to provide comprehensive solutions to clients.





45
Table of Contents
The following tables show segment results for the three and six months ended June 30, 2021 and 2020:
 Three Months Ended June 30, 2021Three Months Ended June 30, 2020
(Dollars in thousands)WSFS Bank
Cash
Connect®
Wealth
Management		TotalWSFS Bank
Cash
Connect®
Wealth
Management		Total
Statements of Income
External customer revenues:
Interest income$110,725 $0 $2,177 $112,902 $123,710 $0 $2,173 $125,883 
Noninterest income22,282 11,213 15,523 49,018 44,304 9,008 11,063 64,375 
Total external customer revenues133,007 11,213 17,700 161,920 168,014 9,008 13,236 190,258 
Inter-segment revenues:
Interest income842 328 3,031 4,201 937 237 2,442 3,616 
Noninterest income3,790 316 515 4,621 3,542 188 347 4,077 
Total inter-segment revenues4,632 644 3,546 8,822 4,479 425 2,789 7,693 
Total revenue137,639 11,857 21,246 170,742 172,493 9,433 16,025 197,951 
External customer expenses:
Interest expense5,983 0 170 6,153 11,659 0 468 12,127 
Noninterest expenses80,480 7,288 8,264 96,032 79,789 6,413 7,233 93,435 
(Recovery of) provision for credit losses(66,385)0 (1,178)(67,563)93,819 0 935 94,754 
Total external customer expenses20,078 7,288 7,256 34,622 185,267 6,413 8,636 200,316 
Inter-segment expenses:
Interest expense3,359 207 635 4,201 2,679 131 806 3,616 
Noninterest expenses831 1,104 2,686 4,621 535 899 2,643 4,077 
Total inter-segment expenses4,190 1,311 3,321 8,822 3,214 1,030 3,449 7,693 
Total expenses24,268 8,599 10,577 43,444 188,481 7,443 12,085 208,009 
Income (loss) before taxes$113,371 $3,258 $10,669 $127,298 $(15,988)$1,990 $3,940 $(10,058)
Income tax provision (benefit)31,687 (2,247)
Consolidated net income (loss)95,611 (7,811)
Net loss attributable to noncontrolling interest(56)(700)
Net income (loss) attributable to WSFS$95,667 $(7,111)
Supplemental Information
Capital expenditures for the period ended$1,735 $0 $0 $1,735 $155 $45 $99 $299 

46
Table of Contents
Six Months Ended June 30, 2021Six Months Ended June 30, 2020
(Dollars in thousands)WSFS Bank
Cash
Connect®
Wealth
Management		TotalWSFS Bank
Cash
Connect®
Wealth
Management		Total
Statements of Income
External customer revenues:
Interest income$229,856 $0 $4,327 $234,183 $255,019 $0 $4,719 $259,738 
Noninterest income45,630 20,915 30,295 96,840 62,376 20,687 22,159 105,222 
Total external customer revenues275,486 20,915 34,622 331,023 317,395 20,687 26,878 364,960 
Inter-segment revenues:
Interest income1,686 597 5,726 8,009 2,880 237 5,291 8,408 
Noninterest income7,485 602 916 9,003 6,449 417 520 7,386 
Total inter-segment revenues9,171 1,199 6,642 17,012 9,329 654 5,811 15,794 
Total revenue284,657 22,114 41,264 348,035 326,724 21,341 32,689 380,754 
External customer expenses:
Interest expense12,887 0 362 13,249 28,406 0 1,426 29,832 
Noninterest expenses161,024 14,586 16,041 191,651 152,874 14,636 14,421 181,931 
(Recovery of) provision for credit losses(85,978)0 (1,745)(87,723)148,853 0 2,547 151,400 
Total external customer expenses87,933 14,586 14,658 117,177 330,133 14,636 18,394 363,163 
Inter-segment expenses:
Interest expense6,323 387 1,299 8,009 5,528 1,085 1,795 8,408 
Noninterest expenses1,518 2,191 5,294 9,003 937 1,640 4,809 7,386 
Total inter-segment expenses7,841 2,578 6,593 17,012 6,465 2,725 6,604 15,794 
Total expenses95,774 17,164 21,251 134,189 336,598 17,361 24,998 378,957 
Income (loss) before taxes$188,883 $4,950 $20,013 $213,846 $(9,874)$3,980 $7,691 $1,797 
Income tax provision (benefit)53,094 (959)
Consolidated net income160,752 2,756 
Net income (loss) attributable to noncontrolling interest3 (1,060)
Net income attributable to WSFS160,749 3,816 
Supplemental Information
Capital expenditures for the period ended$3,005 $0 $0 $3,005 $2,437 $256 $137 $2,830 

The following table shows significant components of segment net assets as of June 30, 2021 and December 31, 2020:
 June 30, 2021December 31, 2020
(Dollars in thousands)WSFS Bank
Cash
Connect®
Wealth
Management		TotalWSFS Bank
Cash
Connect®
Wealth
Management		Total
Statements of Financial Condition
Cash and cash equivalents$1,945,167 $465,667 $10,279 $2,421,113 $1,246,394 $397,878 $10,463 $1,654,735 
Goodwill452,629 0 20,199 472,828 452,629 0 20,199 472,828 
Other segment assets12,007,263 5,845 241,812 12,254,920 11,963,345 6,997 236,009 12,206,351 
Total segment assets$14,405,059 $471,512 $272,290 $15,148,861 $13,662,368 $404,875 $266,671 $14,333,914 

47
Table of Contents
16. COMMITMENTS AND CONTINGENCIES
Secondary Market Loan Sales
The Company typically sells newly originated residential mortgage loans in the secondary market to mortgage loan aggregators and on a more limited basis, to GSEs such as FHLMC, FNMA, and the FHLB. Loans held for sale are reflected on the unaudited Consolidated Statements of Financial Condition at fair value with changes in the value reflected in the unaudited Consolidated Statements of Income. Gains and losses are recognized at the time of sale. The Company periodically retains the servicing rights on residential mortgage loans sold which results in monthly service fee income. The mortgage servicing rights are included in Intangible assets in the unaudited Consolidated Statements of Financial Condition. Otherwise, the Company sells loans with servicing released on a nonrecourse basis. Rate-locked loan commitments that the Company intends to sell in the secondary market are accounted for as derivatives under ASC 815, Derivatives and Hedging (ASC 815).
The Company does not sell loans with recourse, except for standard loan sale contract provisions covering violations of representations and warranties and, under certain circumstances, early payment default by the borrower. These are customary repurchase provisions in the secondary market for residential mortgage loan sales. These provisions may include either an indemnification from loss or the repurchase of the loans. Repurchases and losses have been rare and 0 provision is made for losses at the time of sale. There were 0 repurchases during the six months ended June 30, 2021 and 2020.
Unfunded Lending Commitments
At June 30, 20202021 and December 31, 2019,2020, the allowance for credit losses of unfunded lending commitments were $7.8$8.1 million and $1.5$8.2 million, respectively. The balance atA provision release of $0.8 million and $0.2 million was recognized during the three and six months ended June 30, 2020 was determined using the CECL methodology, which included2021, respectively, and a $3.0 million adjustment to retained earnings at the time of adoption. A provision expense for unfunded lending commitments of $3.4 million and $3.3 million was recognized during the three and six months ended June 30, 2020, respectively, and a provision for unfunded lending commitments of $0.3 million and $0.4 million was recognized during the three and six months ended June 30, 2019, respectively.
5548
Table of Contents
17. CHANGE IN ACCUMULATED OTHER COMPREHENSIVE INCOME
Accumulated other comprehensive income includes unrealized gains and losses on available-for-sale investments, unrealized gains and losses on cash flow hedges, as well as unrecognized prior service costs, transition costs, and actuarial gains and losses on defined benefit pension plans. Changes to accumulated other comprehensive income are presented, net of tax, as a component of stockholders’ equity. Amounts that are reclassified out of accumulated other comprehensive income are recorded on the unaudited Consolidated Statement of Income either as a gain or loss.
Changes to accumulated other comprehensive income by component are shown, net of taxes, in the following tables for the period indicated:
(Dollars in thousands)Net change in
investment
securities
available-for-sale		Net change
in investment securities
held-to-maturity		Net
change in
defined
benefit
plan		Net change in
fair value of
derivatives
used for cash
flow hedges		Total
Balance, March 31, 2020$72,436  $403  $(3,313) $1,008  $70,534  
Other comprehensive income (loss) before reclassifications3,703  —  7  (25) 3,685  
Less: Amounts reclassified from accumulated other comprehensive income (loss)(1,450) (57) 179  (111) (1,439) 
Net current-period other comprehensive income (loss)2,253  (57) 186  (136) 2,246  
Balance, June 30, 2020$74,689  $346  $(3,127) $872  $72,780  
Balance, March 31, 2019$2,701  $686  $693  $(1,824) $2,256  
Other comprehensive income before reclassifications19,591  —  10  1,007  20,608  
Less: Amounts reclassified from accumulated other comprehensive income(48) (84) (44) —  (176) 
Net current-period other comprehensive income (loss)19,543  (84) (34) 1,007  20,432  
Balance, June 30, 2019$22,244  $602  $659  $(817) $22,688  
(Dollars in thousands)Net change in
investment
securities
available for sale		Net change
in investment securities
held to
maturity		Net
change in
defined
benefit
plan		Net change in
fair value of
derivatives
used for cash
flow hedges		Total
Balance, December 31, 2019$26,927  $468  $(3,317) $(577) $23,501  
Other comprehensive income before reclassifications49,739  —  43  1,560  51,342  
Less: Amounts reclassified from accumulated other comprehensive income(1,977) (122) 147  (111) (2,063) 
Net current-period other comprehensive income (loss)47,762  (122) 190  1,449  49,279  
Balance, June 30, 2020$74,689  $346  $(3,127) $872  $72,780  
Balance, December 31, 2018$(14,553) $779  $834  $(2,454) $(15,394) 
Other comprehensive income (loss) before reclassifications36,856  (2) (89) 1,637  38,402  
Less: Amounts reclassified from accumulated other comprehensive income (loss)(59) (175) (86) —  (320) 
Net current-period other comprehensive income (loss)36,797  (177) (175) 1,637  38,082  
Balance, June 30, 2019$22,244  $602  $659  $(817) $22,688  


(Dollars in thousands)Net change in
investment
securities
available-for-sale		Net change
in investment securities
held-to-maturity		Net
change in
defined
benefit
plan
Net change in
fair value of
derivatives
used for cash
flow hedges (1)
Net change in equity method investmentsTotal
Balance, March 31, 2021$(9,957)$260 $(4,804)$535 $264 $(13,702)
Other comprehensive income (loss) before reclassifications24,104 0 (9)0 0 24,095 
Less: Amounts reclassified from accumulated other comprehensive income0 (28)(15)(112)0 (155)
Net current-period other comprehensive income (loss)24,104 (28)(24)(112)0 23,940 
Balance, June 30, 2021$14,147 $232 $(4,828)$423 $264 $10,238 
Balance, March 31, 2020$72,436 $403 $(3,313)$1,008 $0 $70,534 
Other comprehensive income (loss) before reclassifications3,703 0 7 (25)0 3,685 
Less: Amounts reclassified from accumulated other comprehensive loss(1,450)(57)179 (111)0 (1,439)
Net current-period other comprehensive income (loss)2,253 (57)186 (136)0 2,246 
Balance, June 30, 2020$74,689 $346 $(3,127)$872 $0 $72,780 
(1)Cash flow hedges were terminated as of April 1, 2020
(Dollars in thousands)Net change in
investment
securities
available for sale		Net change
in investment securities
held to
maturity		Net
change in
defined
benefit
plan
Net change in
fair value of
derivatives
used for cash
flow hedges (1)
Net change in equity method investmentsTotal
Balance, December 31, 2020$59,882 $276 $(4,788)$646 $(9)$56,007 
Other comprehensive (loss) income before reclassifications(45,485)0 (9)0 273 (45,221)
Less: Amounts reclassified from accumulated other comprehensive income(250)(44)(31)(223)0 (548)
Net current-period other comprehensive (loss) income(45,735)(44)(40)(223)273 (45,769)
Balance, June 30, 2021$14,147 $232 $(4,828)$423 $264 $10,238 
Balance, December 31, 2019$26,927 $468 $(3,317)$(577)$0 $23,501 
Other comprehensive income before reclassifications49,739 0 43 1,560 0 51,342 
Less: Amounts reclassified from accumulated other comprehensive (loss) income(1,977)(122)147 (111)0 (2,063)
Net current-period other comprehensive income (loss)47,762 (122)190 1,449 0 49,279 
Balance, June 30, 2020$74,689 $346 $(3,127)$872 $0 $72,780 
(1)Cash flow hedges were terminated as of April 1, 2020
5649
Table of Contents
The unaudited Consolidated Statements of Income were impacted by components of other comprehensive income (loss) as shown in the tables below:
Three Months Ended June 30,Affected line item in unaudited Consolidated Statements of IncomeThree Months Ended June 30,Affected line item in unaudited Consolidated Statements of Income
(Dollars in thousands)(Dollars in thousands)20202019Affected line item in unaudited Consolidated Statements of Income20212020
Securities available for sale:Securities available for sale:
Realized gains on securities transactionsRealized gains on securities transactions$(1,908) $(63) Securities gains, netRealized gains on securities transactions$0 $(1,908)Securities gains, net
Income taxesIncome taxes458  15  Income tax provisionIncome taxes0 458 Income tax provision
Net of taxNet of tax$(1,450) $(48) Net of tax$0 $(1,450)
Net unrealized holding gains on securities transferred between available-for-sale and held-to-maturity:Net unrealized holding gains on securities transferred between available-for-sale and held-to-maturity:Net unrealized holding gains on securities transferred between available-for-sale and held-to-maturity:
Amortization of net unrealized gains to income during the periodAmortization of net unrealized gains to income during the period$(75) $(111) Interest and dividends on investment securitiesAmortization of net unrealized gains to income during the period$(37)$(75)Interest and dividends on investment securities
Income taxesIncome taxes18  27  Income tax provisionIncome taxes9 18 Income tax provision
Net of taxNet of tax$(57) $(84) Net of tax$(28)$(57)
Amortization of defined benefit pension plan-related items:Amortization of defined benefit pension plan-related items:Amortization of defined benefit pension plan-related items:
Prior service creditsPrior service credits$(19) $(19) Prior service credits$(22)$(19)
Actuarial gains(24) (16) 
Actuarial losses (gains)Actuarial losses (gains)2 (24)
Total before taxTotal before tax$(43) $(35) Salaries, benefits and other compensationTotal before tax$(20)$(43)Salaries, benefits and other compensation
Income taxesIncome taxes10  (9) Income tax provisionIncome taxes5 10 Income tax provision
Net of taxNet of tax$(33) $(44) Net of tax$(15)$(33)
Defined benefit pension plan settlement:Defined benefit pension plan settlement:Defined benefit pension plan settlement:
Realized losses on plan settlementRealized losses on plan settlement$279  $—  Other operating expenseRealized losses on plan settlement$0 $279 Other operating expense
Income taxesIncome taxes(67) —  Income tax provisionIncome taxes0 (67)Income tax provision
Net of taxNet of tax$212  $—  Net of tax$0 $212 
Net unrealized gains on terminated cash flow hedges:Net unrealized gains on terminated cash flow hedges:Net unrealized gains on terminated cash flow hedges:
Amortization of net unrealized gains to income during the periodAmortization of net unrealized gains to income during the period$(146) $—  Interest and fees on loans and leasesAmortization of net unrealized gains to income during the period$(147)$(146)Interest and fees on loans and leases
Income taxesIncome taxes35  —  Income tax provisionIncome taxes35 35 Income tax provision
Net of taxNet of tax$(111) $—  Net of tax$(112)$(111)
Total reclassificationsTotal reclassifications$(1,439) $(176) Total reclassifications$(155)$(1,439)
5750
Table of Contents
Six Months EndedAffected line item in unaudited Consolidated
Statements of Operations		 Six Months Ended June 30,Affected line item in unaudited Consolidated Statements of Operations
June 30,Affected line item in unaudited Consolidated Statements of Operations
20202019  20212020 
Securities available-for-sale:Securities available-for-sale:Securities available-for-sale:
Realized gains on securities transactionsRealized gains on securities transactions$(2,601) $(78) Securities gains, netRealized gains on securities transactions$(329)$(2,601)Securities gains, net
Income taxesIncome taxes624  19  Income tax provisionIncome taxes79 624 Income tax provision
Net of taxNet of tax$(1,977) $(59) Net of tax$(250)$(1,977)
Net unrealized holding gains on securities transferred between available-for-sale and held-to-maturity:Net unrealized holding gains on securities transferred between available-for-sale and held-to-maturity:Net unrealized holding gains on securities transferred between available-for-sale and held-to-maturity:
Amortization of net unrealized gains to income during the periodAmortization of net unrealized gains to income during the period$(160) $(231) Interest and dividends on investment securitiesAmortization of net unrealized gains to income during the period$(58)$(160)Interest and dividends on investment securities
Income taxesIncome taxes38  56  Income tax provisionIncome taxes14 38 Income tax provision
Net of taxNet of tax$(122) $(175) Net of tax$(44)$(122)
Amortization of defined benefit pension plan-related items:Amortization of defined benefit pension plan-related items:Amortization of defined benefit pension plan-related items:
Prior service creditsPrior service credits$(38) $(38) Prior service credits$(44)$(38)
Actuarial gainsActuarial gains(48) (31) Actuarial gains3 (48)
Total before taxTotal before tax$(86) $(69) Salaries, benefits and other compensationTotal before tax$(41)$(86)Salaries, benefits and other compensation
Income taxesIncome taxes21  (17) Income tax provisionIncome taxes10 21 Income tax provision
Net of taxNet of tax$(65) $(86) Net of tax$(31)$(65)
Defined benefit pension plan settlement:Defined benefit pension plan settlement:Defined benefit pension plan settlement:
Realized losses on plan settlementRealized losses on plan settlement$279  $—  Other operating expenseRealized losses on plan settlement$0 $279 Other operating expense
Income taxesIncome taxes(67) —  Income tax provisionIncome taxes0 (67)Income tax provision
Net of taxNet of tax$212  $—  Net of tax$0 $212 
Net unrealized gains on terminated cash flow hedges:Net unrealized gains on terminated cash flow hedges:Net unrealized gains on terminated cash flow hedges:
Amortization of net unrealized gains to income during the periodAmortization of net unrealized gains to income during the period$(146) $—  Interest and fees on loans and leasesAmortization of net unrealized gains to income during the period$(293)$(146)Interest and fees on loans and leases
Income taxesIncome taxes35  —  Income tax provisionIncome taxes70 35 Income tax provision
Net of taxNet of tax$(111) $—  Net of tax$(223)$(111)
Total reclassificationsTotal reclassifications$(2,063) $(320) Total reclassifications$(548)$(2,063)

5851
Table of Contents
18. RELATED PARTY TRANSACTIONS
In the ordinary course of business, from time to time the Company enters into transactions with related parties, including, but not limited to, its officers and directors. These transactions are made on substantially the same terms and conditions, including interest rates and collateral requirements, as those prevailing at the same time for comparable transactions with other customers. They do not, in the opinion of management, involve greater than normal credit risk or include other features unfavorable to the Company. Any related party loans exceeding $0.5 million require review and approval by the Board of Directors. During the three and six months ended June 30, 2021, there were 0 loans originated to related parties exceeding $0.5 million. During the three and six months ended June 30, 2020, there were 2 loans originated to related parties exceeding $0.5 million, both of which were sold during the second quarter. During the three and six months ended June 30, 2019, there were 0 loans originated to related parties exceeding $0.5 million.quarter of 2020.
The outstanding balances of loans to related parties at June 30, 20202021 and December 31, 20192020 were $0.3$0.4 million and $1.0$0.2 million, respectively. Total deposits from related parties at June 30, 20202021 and December 31, 20192020 were $6.1$6.7 million and $4.9$8.3 million, respectively. During the second quarter of 2020,2021, there were 20 new loansloan and credit line advances to related parties totaling $1.1 million and repayments were $0.7less than $0.1 million.
19. LEGAL AND OTHER PROCEEDINGS
In accordance with the current accounting standards for loss contingencies, the Company establishes reserves for litigation-related matters that arise in the ordinary course of its business activities when it is probable that a loss associated with a claim or proceeding has been incurred and the amount of the loss can be reasonably estimated. Litigation claims and proceedings of all types are subject to many uncertain factors that generally cannot be predicted with assurance. In addition, the Company's defense of litigation claims may result in legal fees, which it expenses as incurred.
As previously disclosed, on February 27, 2018, the Company entered into a settlement agreement with Universitas Education, LLC (Universitas) to resolve arbitration claims related to services provided by Christiana Bank and Trust Company (CB&T) prior to its acquisition by WSFS in December 2010. In accordance with the litigation settlement, the Company paid Universitas $12.0 million to fully settle the claims. During the third quarter of 2018, WSFS recovered $7.9 million in settlement and legal costs from insurance carriers that provided coverage relating to the Universitas matter. WSFS is pursuing all of its rights and remedies to recover the remaining amounts relating to the Universitas proceeding, including the Universitas settlement payment, legal fees and related costs, by enforcing the indemnity right in the 2010 purchase agreement by which WSFS acquired CB&T. During the second quarter of 2021, the court hearing WSFS' claim for indemnification granted WSFS' motion for summary judgement on the issue of liability against the counterparty to the purchase agreement. The court has not yet scheduled trial on damages owed to WSFS.
In March 2017, Nature’s Healing Trust (NHT) filed a complaint against WSFS Bank in the Delaware Court of Chancery. NHT asserts that WSFS Bank failed to provide timely notice concerning the possible lapse of two life settlement policies (aggregate face amount of $6.3 million) held in the trust. NHT asserts claims against WSFS Bank for breach of contract, breach of fiduciary duty, and negligence, and seeks the face value of the policies. WSFS Bank disputesdisputed the factual allegations and deniesdenied liability. WSFS Bank has, in accordance with its normal procedures, notified its insurance carriers of a possible claim. WSFS Bank is vigorously defending itself in this matter and believes it has valid factual and legal defenses.
There were 0 material changes or additions to other significant pending legal or other proceedings involving the Company other than those arising out of routine operations.
20. SUBSEQUENT EVENTS
The Company evaluated subsequent events in accordance with ASC Topic 855 and determined that the following qualifies as a non-recognized subsequent event:
Resolution of NHT Legal Proceeding
On August 5, 2021, WSFS Bank reached a settlement with NHT. Under the settlement, WSFS will pay no damages, and the parties have agreed to dismiss and release all of their claims against each other. The parties will bear their own attorney's fees and costs.
59
52
Table of Contents
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
WSFS Financial Corporation (the Company or WSFS) 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 in the United States (U.S.). At $13.6name. With $15.1 billion in assets and $20.8$26.7 billion in assets under management (AUM) and assets under administration (AUA), at June 30, 2021, WSFS Bank is also the oldest and largest locally-managed bank and trust company headquartered in the Delaware Valley.and Greater Philadelphia region. As a federal savings bank whichthat was formerly chartered as a state mutual savings bank, theWSFS Bank enjoys a broader scope of permissible activities than most other types of financial institutions. A fixture in the community, we have been in operation for more than 188189 years. In addition to our focus on stellar customer service,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 is simple: “We Stand for Service.” Our strategy of “Engaged Associates, living our culture, making a better life for all we serve” focuses on exceeding customer expectations, delivering stellar experiences and building customer advocacy through highly-trained, relationship-oriented, friendly, knowledgeable and empowered Associates.
We have six consolidated subsidiaries: WSFS Bank, WSFS Wealth Management, LLC (Powdermill)(Powdermill®), WSFS Capital Management, LLC (West Capital), Cypress Capital Management, LLC (Cypress), Christiana Trust Company of Delaware® (Christiana Trust DE) and WSFS SPE Services, LLC. We also have one unconsolidated subsidiary, WSFS Capital Trust III. WSFS Bank has threetwo wholly owned subsidiaries: Beneficial Equipment Finance Corporation (BEFC), WSFS Investment Group, Inc. (WSFS Wealth Investments), and 1832 Holdings, Inc., and one majority-owned subsidiary, NewLane Finance Company (NewLane Finance)Finance®).
Our banking business had a total loan and lease portfolio of $9.4$8.3 billion as of June 30, 2020,2021, which was funded primarily through commercial relationships and retail and customer generated deposits. We have built a $7.3$6.5 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, retail securities and insurance brokerage through our retail branches, andin addition to mortgage and title services through our branches and WSFS Mortgage. WSFS Mortgage is a®, our mortgage banking company specializing in a variety of residential mortgage and refinancing solutions.
Our leasing business, is conducted by NewLane Finance. 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® business 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 U.S.ATM industry. Cash Connect®services non-bank and WSFS-branded ATMs and retail safes nationwide, Cash Connect® manages over $1.4approximately $1.8 billion in total cash and services approximately 27,90028,100 non-bank ATMs and approximately 4,1005,800 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, ATM processing equipment sales and deposit safe cash logistics. Cash Connect® also supports 571614 branded ATMs for WSFS Bank Customers, which hasis one of the largest branded ATM networks in our market.
Our Wealth Management business provides a broad array of planning and advisory services, investment management, trust services, and credit and deposit products to individual, corporate, and institutional clients through multiple integrated businesses. Combined, these businesses had $20.826.7 billion of AUM and AUA at June 30, 2020.2021. WSFS Wealth® Investments provides financial advisory services along with insurance and brokerage products. Cypress, a registered investment adviser, is a fee-only wealth management firm managing a “balanced” investment style portfolio focused on preservation of capital and generating current income. West Capital, a registered investment adviser, is a fee-only wealth management firm operating under a multi-family office philosophy to provide customized solutions to institutions and high-net-worth individuals. The institutional trust division of WSFS, comprised of WSFS Institutional Services® and Christiana Trust DE, provides trustee, agency, bankruptcy administration, custodial and commercial domicile services to institutional and corporate clients. Christiana Trust DE a subsidiary of WSFS,also provides personal trust and fiduciary services to families and individuals across the U.S. Powdermill® is a multi-family office specializing in providing independent solutions to high-net-worth individuals, families and corporate executives through a coordinated, centralized approach. WSFS Wealth Client Management serves high-net-worth clients by delivering credit and deposit products and partnering with other Wealth Management unitsbusinesses to provide comprehensive solutions to clients.
60
Table of Contents
As of June 30, 2020,2021, we service our customers primarily from 115112 offices located in Pennsylvania (54)(52), Delaware (43)(42), New Jersey, (16), Virginia (1) and Nevada (1), our ATM network, our website at www.wsfsbank.com and our mobile app.
53

Table of Contents
Recent DevelopmentsHighlights for Second Quarter and Business OutlookFirst Six Months of 2021
Our results during the first half of 2020 were significantly impacted by the COVID-19 pandemic and its impact on the economic forecasts that drive the estimates we use to determine the provision for credit losses. Contributing to the magnitude of the pandemic's effect is our adoption, as of January 1, 2020, of, the Current Expected Credit Loss (CECL) method of accounting, which considers forward-looking information when establishing reserves for credit losses. Results during the first half of 2020 and other notable items include the following:
•On March 9, 2021, WSFS signed an Agreement and Plan of Merger (the Merger Agreement) with Bryn Mawr, a Pennsylvania corporation and the parent holding company of The Bryn Mawr Trust Company, a Pennsylvania chartered bank and wholly owned subsidiary of Bryn Mawr (Bryn Mawr Bank). On June 10, 2021, the stockholders of both WSFS and Bryn Mawr approved the Merger. On July 21, 2021, we received a key regulatory approval from the Office of the Comptroller of the Currency. The Merger is subject to customary conditions and the remaining required regulatory approval, and is currently expected to close early in the fourth quarter of 2021. We recorded $2.4 million of corporate development and restructuring expense primarily related to the pending Merger during the second quarter of 2021.
•The COVID-19 pandemic resultedOn June 15, 2021, WSFS completed the redemption of $100.0 million in acute deteriorationaggregate principal amount of our 4.50% fixed-to-floating rate senior notes due 2026 (the 2026 Notes). We recorded a $1.1 million loss of debt extinguishment to recognize the remaining unamortized debt issue costs associated with these notes.
•We recorded a reduction in the economic forecast used in our CECL modeling, resulting in additional provision for credit losses of $94.8 million and $151.4 million for the three and six months ended June 30, 2020, and an increase of $93.1 million and $184.6 million to the allowance for credit losses (ACL) of $72.4 million and $96.4 million during the three and six months ended June 30, 2020. During the three months ended June 30, 2020, we also recorded $1.9 million of other COVID-19 related costs.
•WSFS recorded net realized gains on our equity investments of $22.1 million from the sale of 360,000 Visa Class B shares. Since our adoption of ASU 2016-01 in 1Q 2018, cumulative realized and unrealized gains and dividends on Visa Class B shares total $78.0 million.
•WSFS made a $3.0 million grant to the WSFS Community Foundation to address the impacts of COVID-19 on the communities we serve and provide long-term support for education, health and human services, and economic development in our communities.
•We began participating in some of the regulatory relief programs offered2021, respectively, as a result of the Coronavirus Aid, Relief,continued improving credit trends and Economic Security (CARES) Act, including the Paycheck Protection Program (PPP). During the second quarter of 2020, we provided nearly $1.0 billion in PPP loans for more than 5,400 new and existing WSFS Customers, supporting an estimated 100,000 jobs in our region. During the six months ended June 30, 2020, we also recorded $1.8 million of PPP related costs. See "Recent Regulatory Developments" for further details.
•During March 2020, we began a phased approach to our retail office closures and our retail branch offices only accepted drive-thru services. During the second quarter of 2020, nearly two-thirds of our retail offices were servicing customers. The retail office closures have not significantly impacted our financial condition and results of operations, as our customer deposits remain intact and the fees and costs associated with our customer deposits remain under normal business operations. We continue to serve Customers through drive-thru locations and have begun a carefully planned and phased approach to opening previously closed office and banking locations that aligns with Federal, State and local guidance.economic forecasts.
•During the second quarter, we recorded a $5.1 million unrealized gain on our investment in Social Finance, Inc. (SoFi), which was subsequently liquidated at a realized gain of 2020, and subsequent to June 30, 2020, Cash Connect® expanded its ATM network by adding over 150 ATMs to serve Delaware and the greater Philadelphia region. The number of owned and branded ATMs increased to 571 as of June 30, 2020, and to approximately 640$4.4 million in the third quarter of 2020, through the date of this Quarterly Report on Form 10-Q.
For a discussion of additional risk factors relating to COVID-19, see "Item 1A. Risk Factors."

July 2021.
Looking ahead, the continuation•Taking a portion of the economic effects of COVID-19 and actions taken in responseSoFi proceeds, we contributed $1.0 million to it, including the impacts of loan forbearances and other provisions of theWSFS CARES Act and other federal and state measures, may adversely impact our business and results of operations and the operations of our borrowers, customers and business partners.The uncertainty regarding the duration of the pandemic and the resulting economic disruption has caused increased market volatility and has ledFoundation to an economic recession and a significant decrease in consumer confidence and business generally.The continuation of these conditions (including whether due to a resurgence or a second wave of COVID-19 infections, particularly as the geographic areas in which we operate begin to re-open) and their ultimate impact of these factors is highly uncertain at this time and we do not yet know the full extent of the impacts on our business, our operations or the global economy as a whole. However, the decline in economic conditions generally and a prolonged negative impact on small to medium sized businesses, in particular, due to COVID-19 may result in an adverse effectfurther fund support to our business, financial condition and results of operations.For more information about these risks and uncertainties, see “Item 1A. Risk Factors.”
61
Table of Contents

expanded communities.
FINANCIAL CONDITION, CAPITAL RESOURCES AND LIQUIDITY
Financial Condition
Total assets increased $1.3 billion$814.9 million to $13.6$15.1 billion at June 30, 20202021 compared to December 31, 2019.2020. This increase is primarily comprised of the following (in descending order of magnitude):following:
•Net loans, excluding loans held for sale,Investment securities, available-for-sale increased $695.8 million which included:
◦An increase of $945.1 million from PPP loans and growth across CRE, construction, commercial small business leases, and home equity installment loans originated through our partnership with Spring EQ.
◦A decline during the year of $371.0 million in non-relationship run-off portfolios primarily acquired from the Beneficial Bancorp, Inc. (Beneficial) acquisition; and
◦Total provision for credit losses of $151.4$837.5 million during the six months ended June 30, 20202021 primarily due to the impact$1.3 billion in purchases partially offset by repayments of the COVID-19 pandemic, significant deterioration in economic forecasts$354.3 million, decreased market-values on available-for-sale securities of $45.7 million and portfolio credit migration.sales of $9.3 million.
•Cash and cash equivalents increased $384.0$766.4 million, primarily reflecting the continuation of excess cash held due to increased deposits related to PPP loans, additional government stimulus and CARES Act payments, offset by a declinereduced levels of $46.6 million from improved cash optimization at Cash Connect® due to an increased use of external funding sources to supportcustomer spending during the bailment, cash management and smart safe lines of business offset by changes in seasonality.COVID-19 pandemic.
•Investment securities increased $244.5Net loans and leases, excluding loans held for sale, decreased $664.1 million, reflecting a $612.4 million decline in commercial and industrial loans that included a $528.3 million decrease due to forgiveness of PPP loans, a $221.4 million decline in residential and commercial real estate loans, largely due to non-relationship run-off portfolios acquired through the Beneficial acquisition, and lower commercial loan demand resulting from higher levels of borrower liquidity. Partially offsetting these decreases was $134.1 million of growth across our owner-occupied, construction and commercial small business lease portfolios, and a decrease of $96.4 million in our allowance for credit losses due to positive developments in our economic forecasts and continued stable and improved credit quality metrics with notable declines in our problem assets, nonperforming assets and delinquencies.
•Loans held for sale decreased $84.4 million during the six months ended June 30, 2020 primarily due to $535.1 million2021 driven by a large commercial loan sale and a combination of lower origination volume and higher loans sales in purchases and favorable market-value changes on available-for-sale securities of $47.8 million, partially offset by repayments of $232.4 million and sales of $107.0 million.
•Other investments decreased $59.8 millionour mortgage banking business during the six months ended June 30, 2020 as we sold 360,000 Visa Class B shares.2021.
Total liabilities increased $1.3$722.6 million to $13.3 billion to $11.8 billion during the six months endedat June 30, 20202021 compared to December 31, 2019. These increases are2020. This increase is primarily comprised of the following (in descending order of magnitude):following:
•Total deposits increased by $1.5 billion, primarily$870.2 million, due to:
◦Anto an increase of $1.4 billion in customer funding, reflecting an estimated $0.7 billion ofcontinued elevated deposits from our Customers who received PPP loans, the impact of government stimulus checks delayed tax payment and lessreduced levels of customer spending during the COVID-19 pandemic. The increase also reflects a $476.3 million increase in core deposits from our Trust business. The ratio of net loans and leases (including loans held for sale) to customer deposits was 86%65% at June 30, 20202021 reflecting significant liquidity capacity; and
◦An increase of $30.6 million in brokered deposits.capacity.
•Federal funds purchasedSenior debt decreased $195.0$98.8 million due to the increase in customer funding,redemption of the 2026 Notes, as described above.
54
Table of Contents
•Other liabilities decreased $43.9 million primarily due to $35.7 million in lower accrued expenses, reflecting the timing of settlement for debt security trades, payment of Associate incentives and taxes in 2021, and a $3.1 million release of the unfunded commitments reserve, which is consistent with reductions in ACL based upon our stable and improving credit quality metrics.
•FHLB advances decreased $6.6 million due to maturities during the first quarter of 2021.
For further information, see "Notes to the unaudited Consolidated Financial Statements.Statements (Unaudited)."

62
Table of Contents
Capital Resources
Share Repurchases: During the first quarter of 2020, we repurchased $38.7 million, or 1,004,348 shares of common stock at an average price of $38.53 per share, completing our share repurchase program approved by the Board of Directors in the fourth quarter of 2018.  Also in the first quarter, the Board of Directors approved a new share purchase authorization of 7,594,977 shares, or 15% of outstanding shares. However, in the first quarter of 2020, we temporarily suspended all share repurchases until we have a clearer long-term view of the impact of COVID-19 on the economy and our performance.
Stockholders’ equity of WSFS decreased $26.6increased $92.3 million between December 31, 20192020 and June 30, 2020.2021. This decreaseincrease was primarily due to $38.7 million for repurchases of common stock under the previously announced stock repurchase plan, a $30.4 million impact to retained earnings due to the adoption of CECL, and the payment of dividends on our common stock of $12.2 million, partially offset by $47.8 million from the effect of market-value changes on available-for-sale securities and $3.8$160.7 million of income attributable to WSFS for the six months ended June 30, 2020.2021, partially offset by $45.7 million from the effect of decreased market-values on available-for-sale securities, $12.0 million for the repurchases of 267,309 shares of common stock under our stock repurchase plan in January 2021, and the payment of dividends on our common stock of $11.9 million.
OurDuring the second quarter of 2021, our Board of Directors approved a quarterly cash dividend of $0.12$0.13 per share of common stock. This dividend will be paid on August 20, 202019, 2021 to stockholders of record as of August 6, 2020.5, 2021.
Book value per share of common stock was $36.00$39.63 at June 30, 2020,2021, an increase of $0.12$2.11 from $35.88$37.52 at December 31, 2019.2020. Tangible book value per share of common stock (a non-GAAP financial measure) was $24.89$28.02 at June 30, 2020,2021, an increase of $0.04$2.17 from $24.85$25.85 at December 31, 2019.2020. These increases are due to the same drivers of the increase in stockholders' equity of WSFS described above. 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 datameasure 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 June 30, 2020:2021:
Consolidated
Capital		For Capital
Adequacy Purposes		To be Well-Capitalized
Under Prompt Corrective
Action Provisions		 Consolidated
Capital		Minimum For Capital
Adequacy Purposes		To be Well-Capitalized
Under Prompt Corrective
Action Provisions
(Dollars in thousands)(Dollars in thousands)AmountPercentAmountPercentAmountPercent(Dollars in thousands)AmountPercentAmountPercentAmountPercent
Total Capital (to Risk-Weighted Assets)Total Capital (to Risk-Weighted Assets)Total Capital (to Risk-Weighted Assets)
Wilmington Savings Fund Society, FSBWilmington Savings Fund Society, FSB$1,419,261  13.93 %$815,140  8.00 %$1,018,925  10.00 %Wilmington Savings Fund Society, FSB$1,561,568 15.41 %$810,934 8.00 %$1,013,667 10.00 %
WSFS Financial CorporationWSFS Financial Corporation1,424,634  13.95 %817,201  8.00 %1,021,501  10.00 %WSFS Financial Corporation1,542,475 15.14 814,845 8.00 1,018,556 10.00 
Tier 1 Capital (to Risk-Weighted Assets)Tier 1 Capital (to Risk-Weighted Assets)Tier 1 Capital (to Risk-Weighted Assets)
Wilmington Savings Fund Society, FSBWilmington Savings Fund Society, FSB1,291,896  12.68 %611,355  6.00 %815,140  8.00 %Wilmington Savings Fund Society, FSB1,440,393 14.21 608,200 6.00 810,934 8.00 
WSFS Financial CorporationWSFS Financial Corporation1,296,947  12.70 %612,901  6.00 %817,201  8.00 %WSFS Financial Corporation1,421,301 13.95 611,134 6.00 814,845 8.00 
Common Equity Tier 1 Capital (to Risk-Weighted Assets)Common Equity Tier 1 Capital (to Risk-Weighted Assets)Common Equity Tier 1 Capital (to Risk-Weighted Assets)
Wilmington Savings Fund Society, FSBWilmington Savings Fund Society, FSB1,291,896  12.68 %458,516  4.50 %662,301  6.50 %Wilmington Savings Fund Society, FSB1,440,393 14.21 456,150 4.50 658,884 6.50 
WSFS Financial CorporationWSFS Financial Corporation1,231,947  12.06 %459,676  4.50 %663,976  6.50 %WSFS Financial Corporation1,356,301 13.32 458,350 4.50 662,062 6.50 
Tier 1 Leverage CapitalTier 1 Leverage CapitalTier 1 Leverage Capital
Wilmington Savings Fund Society, FSBWilmington Savings Fund Society, FSB1,291,896  10.40 %496,826  4.00 %621,032  5.00 %Wilmington Savings Fund Society, FSB1,440,393 10.11 569,876 4.00 506,834 5.00 
WSFS Financial CorporationWSFS Financial Corporation1,296,947  10.44 %497,092  4.00 %621,365  5.00 %WSFS Financial Corporation1,421,301 9.96 570,601 4.00 713,251 5.00 
55
Table of Contents
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 leveraged and risk-based capital measures and certain other factors. Depository institutions that are not classified as well-capitalized are subject to various restrictions, regardingwhich 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. PPP loans receiveIn order to avoid limits on capital distributions and discretionary bonus payments, the Bank and the Company must maintain a zero percent risk weighting undercapital conservation buffer of 2.5% of common equity Tier 1 capital over each of the regulators'risk-based capital rules.requirements. As of June 30, 2021, 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.
63
Table of ContentsNot included in the Bank’s capital, the Company separately held
$112.3 million in cash to support share repurchases, potential dividends, acquisitions, strategic growth plans and other general corporate purposes.
As part of our adoption of CECL in 2020, we elected the Implementation and Transition of the Current Expected Credit Losses Methodology for Allowances and Related Adjustments to the Regulatory Capital Rule and Conforming Amendments to Other Regulations, which permits the Company to phase in the day-one adverse effects on regulatory capital that may result from the adoption of CECL over a three-year period. In addition, the final rule revises the agencies' regulatory capital rule, stress testing rules, and regulatory disclosure requirements to reflect CECL, and makes conforming amendments to other regulations that reference allowance for credit losses.
As shown in the table above, as of June 30, 2020, the Bank and the Company were in compliance with regulatory capital requirements and 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 $97.2 million in cash to support share repurchases, potential dividends, acquisitions, strategic growth plans and other general corporate purposes.

As a result of the three-year period phase-in related to our CECL adoption, the impact (by bps) to our capital ratios were as follows:
June 30, 2020
(Dollars in thousands)As Reported
Proforma(1)
CECL Impact
Total Capital (to Risk-Weighted Assets)
Wilmington Savings Fund Society, FSB13.93 %14.01 %(0.08)%
WSFS Financial Corporation13.95 %14.02 %(0.07)%
Tier 1 Capital (to Risk-Weighted Assets)
Wilmington Savings Fund Society, FSB12.68 %12.76 %(0.08)%
WSFS Financial Corporation12.70 %12.77 %(0.07)%
Common Equity Tier 1 Capital (to Risk-Weighted Assets)
Wilmington Savings Fund Society, FSB12.68 %12.76 %(0.08)%
WSFS Financial Corporation12.06 %12.14 %(0.08)%
Tier 1 Leverage Capital
Wilmington Savings Fund Society, FSB10.40 %10.46 %(0.06)%
WSFS Financial Corporation10.44 %10.49 %(0.05)%
(1) Excludes the phase-in impact of CECL.



64
Table of Contents
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, retail deposit programs, 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.
During the six months ended June 30, 2020,2021, cash, and cash equivalents and restricted cash increased $384.0$766.4 million to $955.8 million$2.4 billion from $571.8 million$1.7 billion as of December 31, 2019.2020. Cash provided by operating activities was $80.4$89.1 million, primarily reflecting the cash impact of earnings and gains of $24.7 million from the sale of debt and equity securities (including Visa Class B shares), offset by a $26.3$58.9 million increase infrom the net activity for loans held for sale during the six months ended June 30, 2020. Additionally, to avoid limitations on capital distributions2021. These increases were partially offset by a decrease of $35.2 million in other liabilities from the settlement for debt security trades and discretionary bonus payments, the Bankpayment of Associate incentives and the Company must maintain a capital conservation buffer of 2.5% of common equity tier 1 capital on top of each of the risk-based capital ratios.taxes, as described above. Cash used in investing activities was $0.9 billion$62.6 million primarily due to $839.6net purchases of available-for-sale debt securities of $913.7 million, partially offset by $826.1 million from increaseddecreased lending activity related to PPP loansloan forgiveness, $16.2 million in repayments, maturities and net purchasescalls of held-to-maturity debt securities, of $302.7 million, offset byand proceeds of $109.6$9.3 million from sales of available-for-sale debt securities and net proceeds of $85.9 million from the sale of Visa Class B shares.securities. Cash provided inby financing activities was $1.2 billion,$739.9 million, primarily due to a $1.5 billion$871.4 million net increase in deposits, as a result of the increase in customer funding discussed above, partially offset by $195.0$100.0 million for repaymentthe redemption of federal funds purchased, $38.7the 2026 Notes, $13.2 million for repurchases of common stock under the previously announced stock repurchase plan, and common stock dividends of $12.2 million.$11.9 million and $6.6 million for repayment of FHLB advances.

6556
Table of Contents
NONPERFORMING ASSETS
Nonperforming assets include nonaccruing loans, OREOother real estate owned (OREO) and restructured loans. 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.
The following table shows our nonperforming assets and past due loans at the dates indicated, which presents the portfolio segment totals at the amortized cost in accordance with our adoption of CECL at June 30, 2020, and at the unpaid principal balance under the incurred loss methodology at December 31, 2019:indicated:
(Dollars in thousands)(Dollars in thousands)June 30, 2020December 31, 2019(Dollars in thousands)June 30, 2021December 31, 2020
Nonaccruing loans:Nonaccruing loans:Nonaccruing loans:
Commercial and industrialCommercial and industrial$15,381  $11,031  Commercial and industrial$14,261 $13,816 
Owner-occupied commercialOwner-occupied commercial4,212  4,060  Owner-occupied commercial2,781 5,360 
Commercial mortgagesCommercial mortgages1,148  1,626  Commercial mortgages1,615 17,175 
ResidentialResidential3,118  4,490  Residential2,726 3,247 
ConsumerConsumer2,316  1,715  Consumer2,641 2,310 
Total nonaccruing loansTotal nonaccruing loans26,175  22,922  Total nonaccruing loans24,024 41,908 
Other real estate ownedOther real estate owned4,153  2,605  Other real estate owned1,044 3,061 
Restructured loans(1)(6)
Restructured loans(1)(6)
14,550  14,281  
Restructured loans(1)(6)
14,997 15,539 
Total nonperforming assetsTotal nonperforming assets$44,878  $39,808  Total nonperforming assets$40,065 $60,508 
Past due loans:Past due loans:Past due loans:
CommercialCommercial$2,273  $2,968  Commercial$482 $5,634 
ResidentialResidential175  437  Residential1,093 25 
Consumer (2)
Consumer (2)
6,153  12,745  
Consumer (2)
6,958 11,035 
Total past due loansTotal past due loans$8,601  $16,150  Total past due loans$8,533 $16,694 
Ratio of allowance for credit losses to total loans and leases(3)
Ratio of allowance for credit losses to total loans and leases(3)
2.45 %0.56 %
Ratio of allowance for credit losses to total loans and leases(3)
1.59 %2.51 %
Ratio of nonaccruing loans to total gross loans and leases(4)
Ratio of nonaccruing loans to total gross loans and leases(4)
0.28  0.27  
Ratio of nonaccruing loans to total gross loans and leases(4)
0.29 0.46 
Ratio of nonperforming assets to total assetsRatio of nonperforming assets to total assets0.33  0.32  Ratio of nonperforming assets to total assets0.26 0.42 
Ratio of allowance for credit losses to nonaccruing loansRatio of allowance for credit losses to nonaccruing loans887  208  Ratio of allowance for credit losses to nonaccruing loans551 546 
Ratio of allowance for credit losses to total nonperforming assets(5)
Ratio of allowance for credit losses to total nonperforming assets(5)
517  120  
Ratio of allowance for credit losses to total nonperforming assets(5)
331 378 
(1)Accruing loans only, which includes acquired nonimpaired loans. Nonaccruing Troubled Debt Restructurings (TDRs) are included in their respective categories of nonaccruing loans.
(2)Includes U.S. government guaranteed student loans with little risk of credit loss.
(3)Represents amortized cost basis for loans, leases and held-to-maturity securities.
(4)Total loans exclude loans held for sale and reverse mortgages.
(5)Excludes acquired impaired loans.
(6)Balance excludes COVID-19 modifications of $120.4 million at June 30, 2021 and $114.8 million at December 31, 2020.

Nonperforming assets increased $5.1decreased $20.4 million between December 31, 20192020 and June 30, 2020.2021. This increasedecrease was primarily due to $24.3 million of collection activity during the result ofperiod, which included the movepayoff of one commercial real estate relationship totalingof approximately $7.3$15.1 million to non-accrual,during the first quarter of 2021. The decrease was partially offset by collection efforts, which includes both continued monthly paymentsthe transfer to non-accrual of approximately $3.0 million (net of charge-offs) in small commercial and a few modest payoffs.retail loans and the move to non-accrual of one large commercial relationship during the first quarter of 2021 that was fully charged-off by June 30, 2021. The ratio of nonperforming assets to total assets was relatively flat as compared todecreased from 0.42% at December 31, 2019.2020 to 0.26% at June 30, 2021.

6657
Table of Contents
The following table summarizes the changes in nonperforming assets during the periods indicated:
Six Months Ended June 30,
(Dollars in thousands)20202019
Beginning balance$39,808  $47,675  
Additions18,155  40,142  
Collections(8,171) (16,637) 
Transfers to accrual—  (1,120) 
Charge-offs(4,914) (14,518) 
Ending balance$44,878  $55,542  
Six Months Ended June 30,
(Dollars in thousands)20212020
Beginning balance$60,508 $39,808 
Additions14,790 18,155 
Collections(24,286)(8,171)
Transfers to accrual(28)— 
Charge-offs(10,919)(4,914)
Ending balance$40,065 $44,878 
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.
In response to the COVID-19 pandemic, the CARES Act was enacted to provide certain measures to support individuals and businesses in maintaining solvency through monetary relief, including in the form

58
Table of financing and automatic forbearance. During the second quarter of 2020, through the date of this Quarterly Report on Form 10-Q, we modified approximately $2.1 billion of loans and leases to provide our customers this monetary relief, most of which was short-term in duration. These modified loans are not reflected in our nonperforming assets described above.Contents
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. WeInterest 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 response to the pandemic, in March 2020 the FOMC lowered the range 150 basis points to 0 to 1/4 percent. The FOMC recently indicated that the target range will remain at this level for some time, but the FOMC is not locked into this result. In order to manage the risks associated with changes or possible changes in interest rates, we rely primarily on our asset/liability structure to control interest rate risk.structure.

The matching ofOur 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 is our primary tool for achieving our asset/liability management strategies.rates. We regularly review our interest rate sensitivity and adjust the sensitivity within acceptable tolerance ranges. At June 30, 2020,2021, interest-earning assets exceeded interest-bearing liabilities that mature or reprice within one year (interest-sensitive gap) by $942.9 million.$2.2 billion. Our interest-sensitive assets as a percentage of interest-sensitive liabilities within the one-year window was 117.92%140.47% at June 30, 20202021 compared with 95.02%133.10% at December 31, 2019.2020. Likewise, the one-year interest-sensitive gap as a percentage of total assets was 6.95%14.38% at June 30, 20202021 compared with (2.06)%13.07% at December 31, 2019.2020.

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, which we are required to perform by federal regulation, measures 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.

67
Table of Contents
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 June 30, 20202021 and December 31, 2019:2020:
June 30, 2021December 31, 2020
% Change in Interest Rate (Basis Points)
% Change in Net
Interest Margin(1)
Economic Value of Equity(2)
% Change in Net
Interest Margin(1)
Economic Value of Equity(2)
+30024.2%19.92%19.7%19.10%
+20016.0%19.45%13.1%18.69%
+1007.9%18.90%6.5%18.05%
+503.8%18.06%3.2%17.59%
+251.9%17.96%1.5%17.32%
——%17.83%—%17.04%
-25(1.8)%17.56%(1.5)%16.62%
-50(2.4)%17.21%(2.1)%16.20%
-100(3.6)%16.38%(2.8)%15.16%
'-200(3)
NMFNMFNMFNMF
-300(3)
NMFNMFNMFNMF
June 30, 2020December 31, 2019
% Change in Interest Rate (Basis Points)
% Change in Net
Interest Margin(1)
Economic Value of Equity(2)
% Change in Net
Interest Margin(1)
Economic Value of Equity(2)
+30012.3%17.83%5.8%18.97%
+2008.1%17.32%4.0%19.18%
+1003.9%16.51%2.0%19.23%
+501.9%15.99%1.0%19.14%
+251.0%15.70%0.5%19.06%
——%15.41%—%18.97%
-25(0.9)%15.08%(0.5)%18.85%
-50(1.0)%14.89%(0.9)%18.72%
-100(1.0)%14.83%(2.4)%18.30%
'-200(3)
NMFNMFNMFNMF
-300(3)
NMFNMFNMFNMF
(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)Sensitivity indicated by a decrease of 200 and 300 basis points is not deemed meaningful (NMF) given the low absolute level of interest rates in the periods presented.
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.

6859
Table of Contents
RESULTS OF OPERATIONS
Three months ended June 30, 2020:2021: ForNet income for the three months ended June 30, 2020, there2021 was a$95.7 million, compared to net loss of $7.1 million compared to net income of $36.2 million for the three months ended June 30, 2019.2020.
•Net interest income decreased $9.5$7.0 million during the three months ended June 30, 20202021 compared to the three months ended June 30, 2019,2020, primarily due to a lower interest rate environment and a decrease in purchase accounting accretion and the purposeful run-off of acquired non-relationship loan portfolios, partially offset by the positive impact of PPP income. See “Net Interest Income” for further information.
•Our (recovery of) provision for credit losses for the three months ended June 30, 2020 increased $82.62021 decreased $162.3 million compared to the three months ended June 30, 2019,2020, primarily due to the positive economic outlook from our ACL modeling and improved credit quality metrics reflecting overall declines in problem assets, nonperforming assets and delinquencies, as compared to ACL reserve builds required during 2020 as a result of the economic uncertainty associated with the COVID-19 pandemic and its continued impact on the economic forecast used in our CECL modeling. The main drivers for the increased provision for the three months ended June 30, 2020 were loan migrationat that occurred during the quarter in several specific portfolios as well as additional deterioration in our economic forecast model.time. See “Provision/Allowance“Allowance for Credit Losses” for further information.
•Noninterest income for the three months ended June 30, 2020 increased $21.52021 decreased $15.4 million compared to the three months ended June 30, 2019,2020, primarily due to the gain recognized on theyear-over-year impact from of sale of Visa Class B shares.shares in the prior year, a decline in our mortgage banking business and lower interchange fees from the impact of the Durbin Amendment on the second quarter of 2021 results, partially offset by unrealized gain in equity investments driven by our SoFi investment and higher revenues generated through our trust services in the current period compared to the prior period. See “Noninterest (Fee) Income” for further information.
•Noninterest expense decreased $14.4increased $2.6 million during the three months ended June 30, 20202021 compared to the three months ended June 30, 2019, as net corporate development2020 due to increases in salaries and restructuringbenefits, other operating expenses, equipment expense, and debt extinguishments costs related tofrom our acquisition of Beneficial decreased by $13.0 million2026 Notes, partially offset loan workout and other operating costs (which includes occupancy, equipment, data processing and operations expenses) decreased by $4.8 million, partially offset by an increase of $3.2 million for unfunded commitment reserves.credit costs. See “Noninterest Expense” for further information.
•Income tax provision (benefit) for the three months ended June 30, 2021 increased $33.9 million compared to the three months ended June 30, 2020, primarily due to the $137.4 million increase in pre-tax income.
Six months ended June 30, 2020:2021: ForNet income for the six months ended June 30, 2020, net income2021 was $3.8$160.7 million, compared to $49.2net income of $3.8 million for the six months ended June 30, 2019.2020.
•Net interest income increased $23.4decreased $9.0 million during the six months ended June 30, 20202021 compared to the six months ended June 30, 2019,2020, primarily due to lower loan volumes relating to purposeful run-off of acquired non-relationship loan portfolios, a full six month impact of the Beneficial acquisitionlower interest rate environment and a decrease in the current period, in addition to the positive impact ofpurchase accounting accretion, partially offset by favorable customer funding and PPP loans in the current quarter.income. See “Net Interest Income” for further information.
•Our (recovery of) provision for credit losses for the six months ended June 30, 2020 increased $131.62021 decreased $239.1 million compared to the six months ended June 30, 2019, primarily2020, due to the COVID-19 pandemic and its continued impact on the economic forecast used in our CECL modeling.reasons described above. See “Provision/Allowance“Allowance for Credit Losses” for further information.
•Noninterest income for the six months ended June 30, 2020 increased $21.22021 decreased $8.4 million compared to the six months ended June 30, 2019,2020, primarily due to the sale of our Visa Class B shares, as described above,sale in 2020 and growth across most of our business lines withlower interchange fees from the full impact of the Beneficial acquisition duringDurbin Amendment on the six months ended June 30, 2020,first half of 2021 results as described above. These decreases were offset by lower netthe higher revenues generated through our trust services, the unrealized gains of $4.2 million on ourgain in equity investments duringfrom SoFi, and higher traditional banking fees in the six months ended June 30, 2020 ascurrent period compared to the six months ended June 30, 2019.prior period. See “Noninterest (Fee) Income” for further information.
•Noninterest expense decreased $23.5increased $9.7 million during the six months ended June 30, 20202021 compared to the six months ended June 30, 2019,2020 due to increases in salaries and benefits, equipment expense and debt extinguishment costs, as net corporate development and restructuring costs related to our acquisition of Beneficial decreased by $42.7 million,described above, partially offset by $9.3 million of higher employee-relatedlower loan workout and other credit costs to support organic and merger-related growth, $5.0 million increase in other operating costs (which includes occupancy, equipment, data processing and operations expenses, and the contribution to WSFS Community Foundation) and $4.2 million of higher professional fees.expenses. See “Noninterest Expense” for further information.
•Income tax provision for the six months ended June 30, 2021 increased $54.1 million compared to the six months ended June 30, 2020, primarily due to the $212.0 million increase in pre-tax income.
69
60
Table of Contents
Net Interest Income
The following tables provide information concerning the balances, yields and rates on interest-earning assets and interest-bearing liabilities during the periods indicated:
Three months ended June 30, Three months ended June 30,
20202019 20212020
(Dollars in thousands)(Dollars in thousands)Average
Balance		Interest
Yield/
Rate(1)
Average
Balance		Interest
Yield/
Rate(1)
(Dollars in thousands)Average
Balance		Interest
Yield/
Rate(1)
Average
Balance		Interest
Yield/
Rate(1)
Assets:Assets:Assets:
Interest-earning assets:Interest-earning assets:Interest-earning assets:
Loans:(2)
Loans:(2)
Loans:(2)
Commercial loans and leasesCommercial loans and leases$3,900,612 $46,039 4.74 %$4,291,301 $53,390 5.01 %
Commercial real estate loansCommercial real estate loans$2,841,231  $31,230  4.42 %$2,857,091  $45,458  6.38 %Commercial real estate loans2,791,438 28,277 4.06 2,841,231 31,230 4.42 
Residential loansResidential loans933,854  13,679  5.86  1,102,362  15,359  5.57  Residential loans647,442 11,271 6.96 933,854 13,679 5.86 
Commercial loans and leases4,291,301  53,390  5.01  3,571,559  51,798  5.83  
Consumer loansConsumer loans1,124,742  13,065  4.67  1,126,385  15,958  5.68  Consumer loans1,123,440 11,950 4.27 1,124,742 13,065 4.67 
Loans held for saleLoans held for sale92,252  896  3.91  37,728  428  4.55  Loans held for sale131,460 1,108 3.38 92,252 896 3.91 
Total loans and leasesTotal loans and leases9,283,380  112,260  4.87  8,695,125  129,001  5.96  Total loans and leases8,594,392 98,645 4.61 9,283,380 112,260 4.87 
Mortgage-backed securities(3)
Mortgage-backed securities(3)
2,048,357  12,549  2.45  1,653,582  12,229  2.96  
Mortgage-backed securities(3)
2,978,331 12,506 1.68 2,048,357 12,549 2.45 
Investment securities(3)
Investment securities(3)
130,671  1,009  3.82  146,064  1,030  3.39  
Investment securities(3)
318,415 1,383 1.97 130,671 1,009 3.82 
Other interest-earning assetsOther interest-earning assets220,801  65  0.12  89,145  643  2.89  Other interest-earning assets1,414,264 368 0.10 220,801 65 0.12 
Total interest-earning assetsTotal interest-earning assets11,683,209  $125,883  4.34 %10,583,916  $142,903  5.43 %Total interest-earning assets$13,305,402 $112,902 3.41 %$11,683,209 $125,883 4.34 %
Allowance for credit lossesAllowance for credit losses(156,576) (46,719) Allowance for credit losses(194,211)(156,576)
Cash and due from banksCash and due from banks108,463  112,657  Cash and due from banks176,015 108,463 
Cash in non-owned ATMsCash in non-owned ATMs319,154  364,236  Cash in non-owned ATMs468,136 319,154 
Bank-owned life insuranceBank-owned life insurance29,965  56,332  Bank-owned life insurance32,329 29,965 
Other noninterest-earning assetsOther noninterest-earning assets1,036,500  1,052,544  Other noninterest-earning assets998,948 1,036,500 
Total assetsTotal assets$13,020,715  $12,122,966  Total assets$14,786,619 $13,020,715 
Liabilities and Stockholders’ Equity:Liabilities and Stockholders’ Equity:Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:Interest-bearing liabilities:Interest-bearing liabilities:
Interest-bearing deposits:Interest-bearing deposits:Interest-bearing deposits:
Interest-bearing demandInterest-bearing demand$2,213,369  $882  0.16 %$2,029,361  $2,163  0.43 %Interest-bearing demand$2,560,283 $531 0.08 %$2,213,369 $882 0.16 %
SavingsSavings1,922,342 149 0.03 1,681,587 877 0.21 
Money marketMoney market2,262,737  2,311  0.41  1,936,112  4,932  1.02  Money market2,754,895 801 0.12 2,262,737 2,311 0.41 
Savings1,681,587  877  0.21  1,657,790  2,009  0.49  
Customer time depositsCustomer time deposits1,242,730  4,954  1.60  1,476,763  5,100  1.39  Customer time deposits1,078,296 1,842 0.69 1,242,730 4,954 1.60 
Total interest-bearing customer depositsTotal interest-bearing customer deposits7,400,423  9,024  0.49  7,100,026  14,204  0.80  Total interest-bearing customer deposits8,315,816 3,323 0.16 7,400,423 9,024 0.49 
Brokered certificates of deposit286,655  808  1.13  307,514  1,919  2.50  
Brokered depositsBrokered deposits63,407 455 2.88 286,655 808 1.13 
Total interest-bearing depositsTotal interest-bearing deposits7,687,078  9,832  0.51  7,407,540  16,123  0.87  Total interest-bearing deposits8,379,223 3,778 0.18 7,687,078 9,832 0.51 
Federal Home Loan Bank advancesFederal Home Loan Bank advances106,694  625  2.36  134,151  806  2.41  Federal Home Loan Bank advances— — — 106,694 625 2.36 
Trust preferred borrowingsTrust preferred borrowings67,011  484  2.90  67,011  717  4.29  Trust preferred borrowings67,011 317 1.90 67,011 484 2.90 
Senior debtSenior debt98,681  1,180  4.78  98,464  1,180  4.79  Senior debt228,260 2,053 3.60 98,681 1,180 4.78 
Other borrowed funds(4)
Other borrowed funds(4)
25,580  6  0.09  161,903  845  2.09  
Other borrowed funds(4)
21,661 5 0.09 25,580 6 0.09 
Total interest-bearing liabilitiesTotal interest-bearing liabilities7,985,044  $12,127  0.61 %7,869,069  $19,671  1.00 %Total interest-bearing liabilities$8,696,155 $6,153 0.28 %$7,985,044 $12,127 0.61 %
Noninterest-bearing demand depositsNoninterest-bearing demand deposits2,882,999  2,126,640  Noninterest-bearing demand deposits3,963,476 2,882,999 
Other noninterest-bearing liabilitiesOther noninterest-bearing liabilities311,697  315,108  Other noninterest-bearing liabilities329,341 311,697 
Stockholders’ equityStockholders’ equity1,842,525  1,812,302  Stockholders’ equity1,799,839 1,842,525 
Noncontrolling interestNoncontrolling interest(1,550) (153) Noncontrolling interest(2,192)(1,550)
Total liabilities and stockholders’ equityTotal liabilities and stockholders’ equity$13,020,715  $12,122,966  Total liabilities and stockholders’ equity$14,786,619 $13,020,715 
Excess of interest-earning assets over interest-bearing liabilitiesExcess of interest-earning assets over interest-bearing liabilities$3,698,165  $2,714,847  Excess of interest-earning assets over interest-bearing liabilities$4,609,247 $3,698,165 
Net interest and dividend incomeNet interest and dividend income$113,756  $123,232  Net interest and dividend income$106,749 $113,756 
Interest rate spreadInterest rate spread3.73 %4.43 %Interest rate spread3.13 %3.73 %
Net interest marginNet interest margin3.93 %4.68 %Net interest margin3.23 %3.93 %
(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 securities available-for-sale at fair value.
(4)Includes federal funds purchased.

61

70
Table of Contents

 Six months ended June 30,
 20212020
(Dollars in thousands)Average
Balance		Interest
Yield/
Rate(1)
Average
Balance		Interest
Yield/
Rate(1)
Assets:
Interest-earning assets:
Loans:(2)
Commercial loans and leases$4,018,667 $98,659 4.96 %$3,912,464 $109,084 5.62 %
Commercial real estate loans2,797,375 57,468 4.14 2,825,049 65,522 4.66 
Residential loans690,776 24,135 6.99 963,131 27,219 5.65 
Consumer loans1,141,414 24,786 4.38 1,127,483 28,000 4.99 
Loans held for sale146,291 2,449 3.38 81,068 1,637 4.06 
Total loans and leases8,794,523 207,497 4.76 8,909,195 231,462 5.23 
Mortgage-backed securities(3)
2,744,420 23,210 1.69 2,003,997 25,768 2.57 
Investment securities327,363 2,832 1.97 130,896 1,935 3.61 
Other interest-earning assets1,259,806 644 0.10 148,578 573 0.78 
Total interest-earning assets$13,126,112 $234,183 3.61 %$11,192,666 $259,738 4.68 %
Allowance for credit losses(210,471)(120,816)
Cash and due from banks145,568 124,129 
Cash in non-owned ATMs431,226 327,314 
Bank-owned life insurance32,242 30,059 
Other noninterest-earning assets998,202 1,036,767 
Total assets$14,522,879 $12,590,119 
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing demand$2,566,271 $1,149 0.09 %$2,149,299 $2,779 0.26 %
Savings1,876,815 299 0.03 1,627,901 2,621 0.32 
Money market2,718,758 1,655 0.12 2,207,861 6,400 0.58 
Customer time deposits1,097,636 4,219 0.78 1,274,081 10,610 1.67 
Total interest-bearing customer deposits8,259,480 7,322 0.18 7,259,142 22,410 0.62 
Brokered deposits99,979 952 1.92 258,539 2,059 1.60 
Total interest-bearing deposits8,359,459 8,274 0.20 7,517,681 24,469 0.65 
Federal Home Loan Bank advances366 5 2.75 138,376 1,455 2.11 
Trust preferred borrowings67,011 641 1.93 67,011 1,070 3.21 
Senior debt237,406 4,319 3.64 98,654 2,359 4.78 
Other borrowed funds(4)
20,664 10 0.10 86,918 479 1.11 
Total interest-bearing liabilities$8,684,906 $13,249 0.31 %$7,908,640 $29,832 0.76 %
Noninterest-bearing demand deposits3,728,459 2,524,755 
Other noninterest-bearing liabilities325,838 318,941 
Stockholders’ equity1,785,907 1,839,013 
Noncontrolling interest(2,231)(1,230)
Total liabilities and stockholders’ equity$14,522,879 $12,590,119 
Excess of interest-earning assets over interest-bearing liabilities$4,441,206 $3,284,026 
Net interest and dividend income$220,934 $229,906 
Interest rate spread3.30 %3.92 %
Net interest margin3.40 %4.14 %
 Six months ended June 30,
 20202019
(Dollars in thousands)Average
Balance		Interest
Yield/
Rate(1)
Average
Balance		Interest
Yield/
Rate(1)
Assets:
Interest-earning assets:
Loans:(2)
Commercial real estate loans$2,825,049  $65,522  4.66 %$2,416,011  $73,978  6.17 %
Residential loans963,131  27,219  5.65  817,109  22,958  5.62  
Commercial loans and leases3,912,464  109,084  5.62  3,214,989  91,032  5.72  
Consumer loans1,127,483  28,000  4.99  985,248  27,425  5.61  
Loans held for sale81,068  1,637  4.06  29,153  725  5.01  
Total loans and leases8,909,195  231,462  5.23  7,462,510  216,118  5.85  
Mortgage-backed securities(3)
2,003,997  25,768  2.57  1,545,968  22,695  2.94  
Investment securities(3)
130,896  1,935  3.61  147,587  2,074  3.40  
Other interest-earning assets148,578  573  0.78  84,108  1,593  3.82  
Total interest-earning assets11,192,666  $259,738  4.68 %9,240,173  $242,480  5.31 %
Allowance for credit losses(120,816) (43,593) 
Cash and due from banks124,129  110,231  
Cash in non-owned ATMs327,314  395,920  
Bank-owned life insurance30,059  45,754  
Other noninterest-earning assets1,036,767  870,940  
Total assets$12,590,119  $10,619,425  
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing demand$2,149,299  $2,779  0.26 %$1,708,010  $3,899  0.46 %
Money market2,207,861  6,400  0.58  1,792,371  8,771  0.99  
Savings1,627,901  2,621  0.32  1,304,443  2,881  0.45  
Customer time deposits1,274,081  10,610  1.67  1,226,003  8,364  1.38  
Total interest-bearing customer deposits7,259,142  22,410  0.62  6,030,827  23,915  0.80  
Brokered certificates of deposit258,539  2,059  1.60  260,854  3,150  2.44  
Total interest-bearing deposits7,517,681  24,469  0.65  6,291,681  27,065  0.87  
Federal Home Loan Bank advances138,376  1,455  2.11  268,311  3,396  2.55  
Trust preferred borrowings67,011  1,070  3.21  67,011  1,443  4.34  
Senior debt98,654  2,359  4.78  98,437  2,359  4.79  
Other borrowed funds(4)
86,918  479  1.11  167,547  1,671  2.01  
Total interest-bearing liabilities7,908,640  $29,832  0.76 %6,892,987  $35,934  1.05 %
Noninterest-bearing demand deposits2,524,755  1,948,594  
Other noninterest-bearing liabilities318,941  288,703  
Stockholders’ equity1,839,013  1,489,241  
Noncontrolling interest(1,230) (100) 
Total liabilities and stockholders’ equity$12,590,119  $10,619,425  
Excess of interest-earning assets over interest-bearing liabilities$3,284,026  $2,347,186  
Net interest and dividend income$229,906  $206,546  
Interest rate spread3.92 %4.26 %
Net interest margin4.14 %4.52 %
(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 securities available-for-sale at fair value.
(4)Includes federal funds purchased.

7162
Table of Contents
Three months ended June 30, 2020: 2021:During the three months ended June 30, 2020,2021, net interest income decreased $9.5$7.0 million from the three months ended June 30, 20192020 primarily due to the lower rate environment and a $3.7$4.9 million decrease in purchase accounting accretion and a $3.0 million reduction, excluding PPP loans, primarily from lower loan balances due to purposeful run-off of acquired non-relationship loans. These decreases were partially offset by $4.8$0.9 million of net interest income fromhigher PPP loans which included $3.1 million of fee accretion.income. Net interest margin was 3.23% for the second quarter of 2021, a 70 basis point decrease compared to 3.93% for the second quarter of 2020 reflecting 45 bps from the short-term liquidity increase in customer deposits, a 75 basis points decrease compared to 4.68% for the second quarter of 2019 due to19 bps net decline from the lower interest rate environment and balance sheet mix, and 22 bps from lower purchase accounting accretion, partially offset by a 16 bps increase from the impact of PPP loans and asset mix from the significant short-term liquidity increase in customer deposits.loans.
Six months ended June 30, 2020: 2021:During the six months ended June 30, 2020,2021, net interest income increased $23.4decreased $9.0 million from the six months ended June 30, 20192020. This decrease included a $26.1 million reduction from lower loan volumes due to a full six monthpurposeful run-off of acquired non-relationship loans and the net impact of the Beneficial acquisitiona lower interest rate environment, and a $7.8 million decrease in the current yearpurchase accounting accretion. This was partially offset by a favorable increase of $15.1 million from lower customer funding and the impact$10.2 million of net interest income from PPP loans described above.loans. Net interest margin was 3.40% for the six months ended June 30, 2021, a 74 basis point decrease compared to 4.14% for the six months ended June 30, 2020 a 38 basis points decrease compared to 4.52% forreflecting 70 bps net decline from the six months ended June 30, 2019 due to higherlower interest rate environment and balance sheet mix, 28 bps from the significant short-term liquidity increase in customer deposits, and 20 bps from lower purchase accounting accretion, partially offset by a 29 bps increase from the current significantly lower interest rate environmentfavorable impact from customer funding and expected margin compression due to Beneficial's lower-margin balance sheet.a 14 bps increase from the impact of PPP loans.
Provision/
Allowance for Credit Losses
During the six months ended June 30, 2020, we adopted the CECL method of accounting for loans and leases, and our held-to-maturity debt securities portfolio, which considers forward-looking information when establishing reserves for credit losses. We maintain the allowance for credit losses at an appropriate level based on our assessment of estimable and expected losses in the loan portfolio. Our allowance for credit losses is based on our historical loss experience that includes the inherent risk of our loans and various other factors including but not limited to, collateral values, trends in asset quality, level of delinquent loans and concentrations. Further, regional and national economic forecasts are considered in our expected credit losses. Our evaluation is based on a review of the portfolio and requires significant, complex and difficult judgments.
TheDuring the three months ended June 30, 2021, we recorded a recovery of credit losses of $67.6 million, a net change of $162.3 million as compared with the provision for credit losses wasof $94.8 million for the three months ended June 30, 2020, an increase of $82.6 million from the three months ended June 30, 2019. For2020. During the six months ended June 30, 2020,2021, we recorded a recovery of credit losses of $87.7 million, a net change of $239.1 million as compared with the provision for credit losses wasof $151.4 million an increase of $131.6 million fromfor the six months ended June 30, 2019.2020. These increases were primarily due to acute deteriorationimprovements reflect the continued positive economic outlook from our ACL modeling and improved credit quality metrics reflecting overall declines in the economic forecast used in our CECL models related to the COVID-19 pandemic,problem assets, nonperforming assets and loan migration that occurred during the quarter in several specific portfolios, mainly in the accommodation and food service industries.delinquencies.
The allowance for credit losses increaseddecreased to $232.2$132.4 million at June 30, 20202021 from $47.6$228.8 million at December 31, 2019. Of this increase, $35.9 million was due to our adoption of CECL as of January 1, 2020, and $151.4 million wasprimarily due to the additional provision for$87.7 million recovery of credit losses during the six months ended June 30, 2020.2021, as described above. The ratio of allowance for credit losses to total loans and leases was 2.45%1.59% at June 30, 20202021 and 0.56%2.51% at December 31, 2019.2020. Net charge-offs were $4.8 million and $8.7 million during the three and six months ended June 30, 2021, respectively, and were primarily driven by one commercial relationship, as described above in Nonperforming Assets.
When compared to the three and six months ended June 30, 2020, net charge-offs increased by $3.2 million and $6.0 million, respectively. The ratio of net charge-offs to average gross loans net of unearned income, which excludes loans held for sale and reverse mortgages, was 0.06%0.20% (annualized) and 0.22%0.09% at June 30, 20202021 and December 31, 2019,2020, respectively. The allowance for credit losses was 887% of nonaccruing loans at June 30, 2020, compared to 121% at June 30, 2019.
See Note 7 to the unaudited Consolidated Financial Statements and Nonperforming Assets above for further information.
Noninterest (Fee) Income
Three months ended June 30, 2020:2021: During the three months ended June 30, 2020,2021, noninterest (fee) income was $64.4$49.0 million, an increasea decrease of $21.5$15.4 million from $42.9$64.4 million during the three months ended June 30, 2019, and2020. This decrease includes an increasethe impact of $21.0a $22.1 million gain on sale of Visa Class B shares that occurred in June 2020, a $4.0 million decrease in mortgage banking activities from the expected decline in pipeline volume compared to the historically higher levels in the amountprior period, and a $1.7 million decrease in Credit/debit card and ATM income, which included a reduction in interchange fees of net realized and$3.4 million resulting from the Durbin amendment (effective for us on July 1, 2020). Partially offsetting these decreases were $5.3 million of unrealized gains on equity investments as described above. Excluding this increase, noninterest income increased $0.5 million primarily due todriven by our investment in SoFi and an increase of $5.6$4.4 million in mortgage banking activities, partially offsetInvestment management and fiduciary revenue driven by a $4.4 million decrease in Cash Connectour trust services.®
63
due to the impactTable of a lower interest rate environment, and a $1.2 million decrease in traditional banking-related fee income as a result of lower fees due to the higher average customer balances.Contents
Six months ended June 30, 2020:2021: During the six months ended June 30, 2020,2021, noninterest (fee) income was $105.2$96.8 million, an increasea decrease of $21.2$8.4 million from $84.0$105.2 million during the six months ended June 30, 2019,2020. This decrease includes the $22.1 million gain on sale of Visa Class B shares as described above, and includesa $6.3 million decrease in Credit/debit card and ATM income primarily due to a reduction in interchange fees resulting from the Durbin Amendment, offset by an increase of $17.9$7.7 million in the amountInvestment management and fiduciary revenue driven by trust services revenue, $4.6 million of net realized and unrealized gaingains on equity investments as described above. Excluding this increase, noninterestdriven primarily from the gains associated with SoFi, $4.0 million from higher traditional banking fees, and $4.4 million from other income, increased $3.4driven primarily by $2.0 million primarily due to an increase of $7.0 million in mortgage banking activities, a $2.5 million increase in securities gains, net,from Cash Connect® and a $1.4 million increase in fiduciary and investment management income. These increases were partially offset by a $4.5 million decrease in Cash Connect®, as described above, a $2.5 million decrease in other income, and a $1.0 million decrease in deposit service charges due to lower transaction volume in the current period as a result of the COVID-19 pandemic.from gains on SBA loans.
For further information, see Note 3 to the unaudited Consolidated Financial Statements.
72
Table of Contents
Noninterest Expense
Three months ended June 30, 2020:2021: Noninterest expense forDuring the three monthsmonth ended June 30, 20202021, noninterest expense was $93.4$96.0 million, a decreasean increase of $14.4$2.6 million from $107.8$93.4 million for the three months ended June 30, 2019. Excluding2020. The increase was primarily due to a decrease$3.7 million increase in Salaries, benefits and other compensation as a result of $13.0higher salaries and incentive compensation due to continued franchise growth, a $1.9 million increase in net corporate development and restructuring costsOther operating expenses that included a $1.0 million contribution to the WSFS CARES Foundation, a $1.6 million increase in Equipment expense including higher third-party software expenses related to our acquisition of Beneficial, noninterest expense decreased $1.4ongoing delivery transformation initiatives, and $1.1 million in debt extinguishment costs from the three months ended June 30, 2019. Thisrepayment of our 2026 Notes. These increases were partially offset by a $5.1 million decrease includes $4.8 million of lower operatingin Loan workout and other credit costs and occupancy costs, including spend on travel and entertainment due to COVID-19, offset by an increasesthe release of $3.2 million inreserves on our unfunded commitment reserve expense and the COVID-19 and PPP related costs described above.commitments.
Six months ended June 30, 2020:2021: Noninterest expense forDuring the six months ended June 30, 20202021, noninterest expense was $181.9$191.7 million, a decreasean increase of $23.5$9.7 million from $205.4$181.9 million for the six months ended June 30, 2019. Excluding a decrease of $42.7 million in net corporate development and restructuring costs related to our acquisition of Beneficial, and a $3.0 million contribution to the WSFS Community Foundation during the first quarter of 2020, noninterest expense increased $16.2 million compared to the six months ended June 30, 2019. This2020. The increase was primarily due to a $9.3$11.4 million increase in salaries,Salaries, benefits and other compensation as a $4.2result of higher salaries and incentive compensation due to franchise growth, a $4.0 million increase in professional fees,Equipment expense including our ongoing delivery transformation initiatives as described above, and an increase of $3.4$1.1 million in unfunded commitment reserve expensedebt extinguishment costs. These increases were partially offset by a $4.5 million decrease in Loan workout and other credit costs and $3.9 million decrease in Other operating expenses primarily due to $2.0 million in lower contributions to the WSFS CARES Foundation (formerly the WSFS Community Foundation) when compared to the prior year and $1.4 million of plan settlement loss incurred from the termination of the Alliance Pension Plan in June 2020.

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 benefitexpense of $2.2$31.7 million and $1.0$53.1 million during the three and six months ended June 30, 2020,2021, respectively, compared to income tax expensebenefit of $10.1$2.2 million and $16.4$1.0 million for the same periods in 2019.2020.
Our effective tax rate was 22.3%24.9% and (53.4)%24.8% for the three and six months ended June 30, 2020,2021, respectively, compared to 21.9%22.3% and 25.1%53.4% for the same periods in 2019.2020. The effective tax rate for the six months ended June 30, 2020 decreased2021 increased primarily due to nondeductible expenses associated with the acquisition of Beneficial incurred during the first quarter of 2019. Nondeductible acquisition costs of $8.2 million were recognized during the first quarter of 2019, whereas none were incurred in the comparable period in 2020. In addition, we recognized $1.8$1.7 million in tax benefits recognized during the six months ended June 30, 2020 related to tax law changes contained in the CARES Act, (see "Recent Regulatory Developments"), related to the ability to carry back certain acquired net operating losses to prior years where the statutory tax rate was higher than the current statutory tax rate. Finally, theFurther, we incurred $0.2 million and $0.6 million of tax benefitexpense related to stock-based compensation activitynondeductible acquisition costs during the six months ended June 30, 2020 pursuant to ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, Compensation - Stock Compensation (Topic 718), decreased compared to the prior year. During the three and six months ended June 30, 2020, a $0.2 million tax expense and a less than $0.1 million tax benefit was recognized, respectively, compared to a tax benefit of $1.2 million and $1.3 million for2021 whereas none were incurred in the samecomparable periods in 2019.2020.
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, 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, nondeductible acquisition costs 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.

Contractual Obligations
Our contractual obligations at June 30, 20202021 did not significantly change from our contractual obligations at December 31, 2019,2020, which are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019.


2020.
7364
Table of Contents
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)June 30, 2020December 31, 2019
Stockholders’ equity$1,823,669  $1,850,306  
Less: Goodwill and other intangible assets562,515  568,745  
Tangible common equity (numerator)$1,261,154  $1,281,561  
Shares of common stock outstanding (denominator)50,660  51,567  
Book value per share of common stock$36.00  $35.88  
Goodwill and other intangible assets11.11  11.03  
Tangible book value per share of common stock$24.89  $24.85  

(Dollars and share amounts in thousands, except per share amounts)June 30, 2021December 31, 2020
Stockholders’ equity of WSFS$1,884,054 $1,791,726 
Less: Goodwill and other intangible assets551,951 557,386 
Tangible common equity (numerator)$1,332,103 $1,234,340 
Shares of common stock outstanding (denominator)47,535 47,756 
Book value per share of common stock$39.63 $37.52 
Goodwill and other intangible assets11.61 11.67 
Tangible book value per share of common stock$28.02 $25.85 
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 usedrelated to determine 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 2020,2021, 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 June 30, 20202021 did not significantly change from our critical accounting estimates at MarchDecember 31, 2020, and December 31, 2019, which are disclosed in our Quarterly Report on Form 10-Q for the period ended March 31, 2020, and Annual Report on Form 10-K for the year ended December 31, 2019, respectively.2020.

74
Table of Contents
RECENT REGULATORY DEVELOPMENTS
Recent regulatory developments at June 30, 20202021 did not significantly change from our recent regulatory developments at December 31, 2019,2020 and March 31, 2021, which are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019, except as noted below.
Coronavirus Aid, Relief,2020 and Economic Security (CARES) Act
On March 27, 2020, the CARES Act was enacted, providing wide ranging economic relief for individuals and businesses impacted by COVID-19. Among other things, the statute created the Paycheck Protection Program (PPP) and funded it with $349 billion. The PPP is a stimulus response to the potential economic impacts of COVID-19, and its purpose is to provide forgivable loans to smaller businesses that use the proceeds of the loans for payroll and certain other qualifying expenses. The Small Business Administration (SBA) manages and backs the PPP. If a loan is fully forgiven, SBA will repay the lending bank in full. If a loan is partially forgiven or not forgiven at all, a bank must look to the borrower for repayment of unforgiven principal and interest. If the borrower defaults, the loan is guaranteed by SBA.

On April 6, 2020, WSFS Bank began participating in the PPP, We processed PPP loan applications until April 16, 2020, when the SBA announced that it had exhausted the $349 billion appropriated in the CARES Act, and stopped accepting PPP applications. On April 24, 2020, the President signed into law the Paycheck Protection Program and Health Care Enhancement Act, which supplemented certain programs established by the CARES Act and provided $310 billion in additional fundingour Quarterly Report on Form 10-Q for the PPP. During the second quarter of 2020, we provided nearly $1.0 billion in PPP loans for more than 5,400 new and existing WSFS Customers. The statute did not change the PPP loan application deadline of June 30, 2020, set by the CARES Act.quarterly period ending March 31, 2021.

We are also providing a number of customer relief programs in our commercial and retail portfolios, such as payment deferrals or interest only payments on loans and leases, disaster assistance, and waiving minimum deposit balance and direct deposit requirements as well as early withdrawal penalties for CDs or IRAs. Additionally, we are offering new lines of credit or increases to existing lines of credit and increased remote deposit limits for those individuals and businesses impacted by COVID-19. During the second quarter of 2020, we have modified approximately $2.1 billion of loans and leases to provide our customers this monetary relief.

The CARES Act also provides us with an opportunity to carry back net operating losses (NOLs) arising from 2018, 2019 and 2020 to the prior five tax years. We have such NOLs reflected on our balance sheet as a portion of our current tax receivables, which were previously valued at the federal corporate income tax rate of 21%. However, the provisions of the CARES Act provide for NOL carryback claims to be calculated based on a rate of 35%, which was the federal corporate tax rate in effect for the carryback years. Consequently, effective June 30, 2020, we have revalued the benefit from its NOLs to reflect a 35% tax rate.

Transition from London Inter-Bank Offered Rate (LIBOR)

In 2014, a committee of private-market derivative participants and their regulators, the Alternative Reference Rate Committee (ARRC), was convened by the Federal Reserve to identify an alternative reference interest rate to replace LIBOR. In June 2017, the ARRC announced the Secured Overnight Funding Rate (SOFR), a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities, as its preferred alternative to LIBOR. In July 2017, the Chief Executive of the United Kingdom Financial Conduct Authority, which regulates LIBOR, announced its intention to stop persuading or compelling banks to submit rates for the calculation of LIBOR to the administrator of LIBOR after 2021. In April 2018, the Federal Reserve Bank of New York began to publish SOFR rates on a daily basis, and the ARRC and other institutions continue to take steps to advance SOFR as an alternative benchmark.

Given LIBOR’s extensive use across financial markets, the transition away from LIBOR presents various risks and challenges to financial markets and institutions, including to the Company. The Company’s commercial and consumer businesses issue, trade, and hold various products that are indexed to LIBOR. As of June 30, 2020, the Company had approximately $1.7 billion of loans and $901.2 million of derivatives that are utilized for customer guarantees, indexed to LIBOR, that mature after 2021. In addition, the Company had approximately $167.0 million of debt securities outstanding that are indexed to LIBOR (either currently or in the future) as of June 30, 2020. The Company has one investment security totaling $0.5 million, and no repurchase and resale agreements or FHLB advances indexed to LIBOR as of June 30, 2020.

Due to the uncertainty surrounding the future of LIBOR, it is expected that the transition will span several reporting periods through, and potentially beyond, the end of 2021. A cross-functional team from Finance, Lending, Risk and IT is leading our efforts to monitor this activity and evaluate the related risks and potential process changes arising from the transition from LIBOR. We have completed our initial assessment efforts, including our internal risk assessment procedures, and the cross-functional team is working towards the migration of our existing contracts and system implementation.
75
Table of Contents
Item 3.     Quantitative and Qualitative Disclosures About Market Risk
The information required by this Item is incorporated herein by reference to the information provided in Item 2 Part I (Interest Rate Sensitivity) of this Quarterly Report on Form 10-Q.
Item 4.     Controls and Procedures
 
(a)Evaluation of disclosure controls and procedures. Based on their evaluation of our disclosure controls and procedures (as defined in RulesRule 13a-15(e) under the Securities Exchange Act of 1934), our principal executive officer and principal financial officer have concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q such disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

(b)Changes in internal control over financial reporting. During the three months ended June 30, 2020,2021, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

65

Table of Contents
Part II. OTHER INFORMATION
Item 1.    Legal Proceedings
The information required by this Item is incorporated herein by reference to the information provided in Note 19 – Legal and Other Proceedings to the unaudited Consolidated Financial Statements.
76
Table of Contents


Item 1A. Risk Factors
There have not been any material changes to the risk factors previously disclosed under Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019,2020, previously filed with the Securities and Exchange Commission, except noted as below.
The novel coronavirus (“COVID-19”) pandemicStrategic Risk
Failure of the Merger to be completed, the termination of the Merger Agreement or a significant delay in the consummation of the Merger could negatively impact the Company and Bryn Mawr.
Although we anticipate closing the Merger during the fourth quarter of 2021, the Merger Agreement is subject to a number of conditions which must be fulfilled in order to complete the Merger. These conditions to the consummation of the Merger may not be fulfilled and, accordingly, the Merger may not be completed. In addition, if the Merger is not completed by March 9, 2022, either the Company or Bryn Mawr may choose to terminate the Merger Agreement at any time after that date if the failure to consummate the transactions contemplated by the Merger Agreement is not caused by any breach of the Merger Agreement by the party electing to terminate the Merger Agreement. Further, the outcomes of several lawsuits filed by stockholders of the Company and Bryn Mawr against the Company, Bryn Mawr and their respective boards of directors with respect to the Merger during the second quarter of 2021 are uncertain and could result in significant costs, management distraction, and/or a delay of or injunction against the Merger.
If the Merger is not consummated, the ongoing business, financial condition and results of operations of the Company may be adversely affected and the impactmarket price of actionsour common stock may decline significantly, particularly to mitigate the spreadextent that the current market price reflects a market assumption that the Merger will be consummated. If the consummation of the virus could adversely affectMerger is delayed, including by the receipt of a competing acquisition proposal, our business, financial condition and results of operations.operations may be adversely affected.
Federal, state and local governments have enacted various restrictions in an attempt to limit the spread of COVID-19. Such measures have disrupted economic activity and contributed to job losses and reductions in consumer and business spending. In response to the economic and financial effects of COVID-19, the Federal Reserve Board has sharply reduced interest rates and instituted quantitative easing measures as well as domestic and global capital market support programs. In addition, we have incurred and will incur substantial expenses in connection with the Trump Administration, Congress, various federal agenciesnegotiation and state governments have taken measures to address the economic and social consequencescompletion of the pandemic,transactions contemplated by the Merger Agreement. If the Merger is not completed, we would have to recognize these expenses without realizing the expected benefits of the Merger. Any of the foregoing, or other risks arising in connection with the failure of or delay in consummating the Merger, including the passagediversion of management attention from pursuing other opportunities and the constraints in the Merger Agreement on the ability to make significant changes to our ongoing business during the pendency of the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act.
The CARES Act, among other things, provides certain measures to support individuals and businesses in maintaining solvency through monetary relief, including in the form of financing, loan forgiveness and automatic forbearance. Beginning April 6, 2020, we began processing loan applications under the Paycheck Protection Program (PPP) created under the CARES Act. All of the federal banking regulatory agenciesMerger, could have encouraged lenders to extend additional loans, and the federal government is considering additional stimulus and support legislation focused on providing aid to various sectors, including small businesses. We are also making a high level of loan modifications under our deferred payment program. The full impact on our lending and other business activities as a result of new government and regulatory policies, programs and guidelines, as well as regulators’ reaction to such activities, remains uncertain.
The continuation of the economic effects of the COVID-19 pandemic have had a destabilizing effect on financial markets, key market indices and overall economic activity. The uncertainty regarding the duration of the pandemic and the resulting economic disruption has caused increased market volatility and has led to an economic recession and a significant decrease in consumer confidence and business generally. The continuation of these conditions (including whether due to a resurgence or a second wave of COVID-19 infections, particularly as the geographic areas in which we operate begin to re-open), as well as the impacts of the CARES Act and other federal and state measures, specifically with respect to loan forbearances, has adversely affected our results of operations and financial condition, and have and can be expected to further adversely impact our businesses and results of operations and the operations of our borrowers, customers and business partners. In particular, these events have had, and/or can be expected to continue to have, the following effects, among other things:
•impair the ability of borrowers to repay outstanding loans or other obligations, resulting in increases in delinquencies and modifications to loans;
•impair the value of collateral securing loans (particularly with respect to real estate);
•impair the value of our assets, including our securities portfolio, goodwill and intangible assets;
•require an increase in our allowance for credit losses, particularly in light of our adoption of CECL in the first quarter of 2020;
•adversely affect the stability of our deposit base or otherwise impair our liquidity;
•reduce our revenues from fee-based services, including wealth management and the demand for our products and services;
•negatively impact our self-insurance healthcare costs;
•create stress on our operations and systems associated with our participation in the PPP as a result of high demand and volume of applications;
•result in increased compliance risk as we become subject to new regulatory and other requirements, including new and changing guidance, associated with the PPP and other new programs in which we participate;
•impair the ability of loan guarantors to honor commitments;
•negatively impact our regulatory capital ratios;
•negatively impact the productivity and availability of key personnel and other Associates necessary to conduct our business, and of third-party service providers who perform critical services for us, or otherwise cause operational failures due to changes in our normal business practices necessitated by the pandemic and related governmental actions; and
77
Table of Contents
•increase cyber and payment fraud risk and other operational risks, given increased online and remote activity, which may adversely affect the realization of the anticipated benefits of our Delivery Transformation initiative.
Prolonged measures by health or other governmental authorities encouraging or requiring significant restrictions on travel, assembly or other core business practices could further harm our business and those of our customers, in particular our small to medium sized business customers. Although we have business continuity plans and other safeguards in place, there is no assurance that they will be effective.
Our loan portfolio includes loans that are in forbearance but which are not classified as TDRs because they were current at the time forbearance began. When the forbearance periods end, we may be required to classify a substantial portion of these loans as problem loans.
Our results of operations have been adversely affected by the factors described above. For example, in the quarter ended June 30, 2020 these factors caused a substantial increase in our provision for credit losses and the amount of our problem loans. While the ultimate impact of these factors over the longer term is uncertain and we do not yet know the full extent of the impacts on our business, our operations or the global economy as a whole, nor the pace of economic recovery when the COVID-19 pandemic subsides, the decline in economic conditions generally and a prolonged negative impact on small to medium sized businesses, in particular, due to COVID-19 is likely to result in anmaterial adverse effect on our business, financial condition and results of operations in future periods,operations.
Additionally, if the Merger is not completed, our business may have been adversely impacted by the failure to pursue other beneficial opportunities due to the focus of management on the Merger, without realizing any of the anticipated benefits of completing the Merger, and may heighten manythe market price of our known risks describedcommon stock might decline to the extent that the current market price reflects a market assumption that the Merger will be completed. If the Merger Agreement is terminated and we seek another Merger or business combination, you cannot be certain that we will be able to find a party willing to engage in a transaction on more attractive terms than the Merger.
Combining the Company's and Bryn Mawr's businesses may be more difficult, costly or time consuming than expected and the anticipated benefits and cost savings of the Merger may not be fully realized.
The success of the Merger will depend on, among other things, the combined company’s ability to combine the businesses of the Company and Bryn Mawr. If the combined company is not able to successfully achieve this objective, the anticipated benefits of the Merger may not be realized fully, or at all, or may take longer to realize than expected.
The Company and Bryn Mawr have operated and, until the completion of the Merger, will continue to operate, independently. The success of the Merger, including anticipated benefits and cost savings, will depend, in part, on the successful combination of the businesses of the Company and Bryn Mawr. To realize these anticipated benefits and cost savings, after the completion of the Merger, the Company expects to integrate Bryn Mawr’s business into its own. It is possible that the integration process could result in the “Risk Factors” sectionloss of our Annual Reportkey employees, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the combined company’s ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of the Merger. The loss of key employees could have an adverse effect on Form 10-Kthe companies’ financial results and the value of their common stock.
66
Table of Contents
In addition, the impacts of the COVID-19 pandemic may make it more costly or more difficult to integrate the businesses of WSFS and Bryn Mawr. If the Company experiences difficulties with the integration process, the anticipated benefits of the Merger may not be realized fully, or at all, or may take longer to realize than expected. As with any merger of financial institutions, there also may be business disruptions that cause Bryn Mawr or the Company to lose current customers or cause current customers to remove their accounts from Bryn Mawr or the Company and move their business to competing financial institutions. Integration efforts between the two companies will also divert management attention and resources. These integration matters could have an adverse effect on each of Bryn Mawr and the Company during this transition period and on the Company for an undetermined period after consummation of the Merger.
The Company expects to incur substantial expenses related to the Merger.
The Company expects to incur substantial expenses in connection with consummation of the Merger and combining the business, operations, networks, systems, technologies, policies and procedures of the two companies. Although the Company and Bryn Mawr have assumed that a certain level of transaction and combination expenses would be incurred, there are a number of factors beyond their control that could affect the total amount or the timing of their combination expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. Due to these factors, the transaction and combination expenses associated with the Merger could, particularly in the near term, exceed the savings that the combined company expects to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings related to the combination of the businesses following the consummation of the Merger. As a result of these expenses, both the Company and Bryn Mawr expect to take charges against their earnings before and after the completion of the Merger. The charges taken in connection with the Merger are expected to be significant, although the aggregate amount and timing of such charges are uncertain at present.
Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or cannot be met.
Before the transactions contemplated by the Merger Agreement, including the Merger, may be completed, various approvals must be obtained from bank regulatory authorities. In determining whether to grant these approvals, the applicable regulatory authorities consider a variety of factors, including the competitive impact of the proposal in the relevant geographic markets; financial, managerial and other supervisory considerations of each party; convenience and needs of the communities to be served and the record of the insured depository institution subsidiaries under the Community Reinvestment Act of 1977 and the regulations promulgated thereunder; effectiveness of the parties in combating money laundering activities; and the extent to which the proposal would result in greater or more concentrated risks to the stability of the United States banking or financial system. These regulatory authorities may impose conditions on the granting of such approvals. Such conditions or changes and the process of obtaining regulatory approvals could have the effect of delaying completion of the Merger or of imposing additional costs or limitations on the combined company following the Merger. The regulatory approvals may not be received at all, may not be received in a timely fashion, or may contain conditions on the completion of the Merger that are not anticipated or cannot be met. Furthermore, such conditions or changes may constitute a burdensome condition that may allow WSFS to terminate the Merger Agreement and WSFS may exercise its right to terminate the Merger Agreement. If the consummation of the Merger is delayed, including by a delay in receipt of necessary regulatory approvals, the business, financial condition and results of operations of each of WSFS and Bryn Mawr may also be adversely affected.
WSFS will be subject to business uncertainties and contractual restrictions while the Merger is pending.
Uncertainty about the effect of the Merger on employees, customers (including depositors and borrowers), suppliers and vendors may have an adverse effect on the business, financial condition and results of operations of WSFS and Bryn Mawr. These uncertainties may impair WSFS’s and Bryn Mawr’s ability to attract, retain and motivate key personnel and customers (including depositors and borrowers) pending the consummation of the Merger, as such personnel and customers may experience uncertainty about their future roles and relationships following the consummation of the Merger. Additionally, these uncertainties could cause customers (including depositors and borrowers), suppliers, vendors and others who deal with WSFS and/or Bryn Mawr to seek to change existing business relationships with WSFS and/or Bryn Mawr or fail to extend an existing relationship with WSFS and/or Bryn Mawr. In addition, competitors may target each party’s existing customers by highlighting potential uncertainties and integration difficulties that may result from the Merger. The pursuit of the Merger and the preparation for the year ended December 31, 2019.integration may place a burden on each company’s management and internal resources. Any significant diversion of management attention away from ongoing business concerns and any difficulties encountered in the transition and integration process could have a material adverse effect on each company’s business, financial condition and results of operations. In addition, the Merger Agreement restricts each party from taking certain actions without the other party’s consent while the Merger is pending. These restrictions could have a material adverse effect on each party’s business, financial condition and results of operations.



67
Table of Contents
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
During the fourthfirst quarter of 2018,2020, the Board of Directors of the Company approved a stockshare repurchase program that enables us toauthorizing the repurchase up to 3,136,978of 7,594,977 shares of common stock, after the closingor 15% of our acquisitionits outstanding shares as of Beneficial, which occurred on March 1, 2019.31, 2020. Under the program, repurchases may be made from time to time in the open market or through negotiated transactions, subject to market conditions and other factors, and in accordance with applicable securities laws. The program is consistent with our intent to return a minimum of 25% of annual net income to stockholders through dividends and share repurchases while maintaining capital ratios in excess of “well-capitalized” regulatory benchmarks.

During the first quarter of 2020, the Board of Directors approved a new share repurchase program authorizing the repurchase of 7,594,977 shares, or 15% of outstanding shares as of March 31, 2020; however, we have temporarily suspended all share repurchases until we have a clearer long-term view on the impact of COVID-19 on the economy and our performance. During the three months ended June 30, 2020,2021, no repurchases of shares of common stock were made under the Company's new share repurchase program. All share repurchases were temporarily suspended upon the announcement of the Company signing the Merger Agreement with Bryn Mawr on March 10, 2021, and we expect the repurchases will continue to be suspended until the close of the Merger, which is currently anticipated to close early in the fourth quarter of 2021.
(1)


78
Table of Contents
Item 3.    Defaults upon Senior Securities
None.

Item 4.    Mine Safety Disclosures
Not applicable.

Item 5.    Other Information
None.




















68
Table of Contents

Item 6.     Exhibits
Exhibit
Number		  Description of Document
2.1
3.1  
3.2  
10.1
31.1  
31.2  
32  
101.INS  XBRL Instance Document **
101.SCH  XBRL Schema Document **
101.CAL  XBRL Calculation Linkbase Document **
101.LAB  XBRL Labels Linkbase Document **
101.PRE  XBRL Presentation Linkbase Document **
101.DEF  XBRL Definition Linkbase Document **
104The cover page of this Quarterly Report on Form 10-Q for the quarter ended June 30, 2020,2021, filed with the SEC on August 7, 2020,6, 2021, is formatted in Inline XBRL.
* Schedules to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby agrees to furnish aA copy of any omitted schedulesschedule will be furnished supplementally to the SEC upon request; provided, however, that the parties may request confidential treatment pursuant to Rule 24b-2 of the Securities and Exchange Commission upon request.Act of 1934, as amended, for any document so furnished.
** Submitted as Exhibits 101 to this Quarterly Report on Form 10-Q are documents formatted in XBRL (Extensible Business Reporting Language). Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability.
7969
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 WSFS FINANCIAL CORPORATION
Date: August 7, 20206, 2021 /s/ Rodger Levenson
 Rodger Levenson
 Chairman, President and Chief Executive Officer
 (Principal Executive Officer)
Date: August 7, 20206, 2021 /s/ Dominic C. Canuso
 Dominic C. Canuso
 Executive Vice President and
 Chief Financial Officer
 (Principal Financial and Accounting Officer)

8070