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 March 31, ~~2022~~2023


☐			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)

Delaware

22-2866913

(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 class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

WSFS

Nasdaq 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 growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

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: ~~64,676,475~~61,448,797 shares as of May ~~2, 2022.~~1, 2023.

WSFS FINANCIAL CORPORATION

FORM 10-Q

TABLE OF CONTENTS


	PART I. Financial Information	Page
Item 1.	Financial Statements (Unaudited)
	Consolidated Statements of Income for the Three Months Ended March 31, ~~2022~~2023 and ~~2021~~2022	5
	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, ~~2022~~2023 and ~~2021~~2022	6
	Consolidated Statements of Financial Condition as of March 31, ~~2022~~2023 and December 31, ~~2021~~2022	7
	Consolidated Statements of Changes in Stockholders' Equity for the Three Months Ended March 31, ~~2022~~2023 and ~~2021~~2022	8
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, ~~2022~~2023 and ~~2021~~2022	9
	Notes to the Consolidated Financial Statements for the Three Months Ended March 31, ~~2022~~2023	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5149
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6862
Item 4.	Controls and Procedures	6862
PART II. Other Information
Item 1.	Legal Proceedings	6862
Item 1A.	Risk Factors	6863
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6963
Item 3.	Defaults upon Senior Securities	6963
Item 4.	Mine Safety Disclosures	6963
Item 5.	Other Information	6963
Item 6.	Exhibits	6964

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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 in financial markets, particularly in the markets in which the Company operates and in which its loans are concentrated, including ~~possible declines in~~difficult and unfavorable conditions and trends related to housing markets, ~~an increase in~~costs of living, unemployment levels, interest rates, supply chain issues, ~~and~~ inflation, and ~~slowdowns in~~ economic ~~growth,~~growth;

•the impacts related to or resulting from recent bank failures and other economic and industry volatility, including ~~as a result of the novel coronavirus~~potential increased regulatory requirements and ~~its variants (COVID-19) pandemic;~~costs and potential impacts to macroeconomic conditions;

•possible additional loan losses and impairment of the collectability of loans;

•~~the economic and financial impact of federal, state and local emergency orders, vaccine mandates 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 or variants thereof, 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, and the potential waning of vaccine effectiveness or effects of low vaccination rates;

•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;~~regulations, and the effects of potential federal government shutdowns and delays;

•the Company’s ability to comply with applicable capital and liquidity requirements, 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, the changing interest rate environment and inflation, that may limit the Company’s access to additional funding to meet its liquidity needs;

•the discontinued publication of London Inter-Bank Offered Rate (LIBOR) and the transition to an alternative reference interest rate, such as the Secured Overnight Financing 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, residential, small business and Small Business Administration (SBA) portfolios and wealth management ~~business following its recent acquisition of Bryn Mawr Bank Corporation (BMBC or Bryn Mawr Trust);~~business;

•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, including its recent acquisition of BMBC (the BMBC Merger);~~disintermediation;

•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;

~~Table of Contents~~

•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 Associates;

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•the effects of problems encountered by other financial institutions that adversely affect the Company or the banking industry generally;

•the effects of weather, including climate change, and natural disasters such as floods, droughts, wind, tornadoes and hurricanes as well as effects from geopolitical instability, armed conflicts, 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);

•~~additional credit, fraud and litigation risks associated with our PPP lending activities;~~

•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 (MBS) due to changes in the interest rate environment 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;

•any compounding effects or unexpected interaction 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: Bryn Mawr Trust®, Cash Connect®, ~~Christiana Trust Company of Delaware~~®, NewLane Finance®, Powdermill® 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.

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WSFS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


		Three Months Ended March 31,				Three Months Ended March 31,
(Dollars in thousands, except per share and share data)	(Dollars in thousands, except per share and share data)	2022		2021			(Dollars in thousands, except per share and share data)	2023		2022

Interest income:	Interest income:						Interest income:
Interest and fees on loans and leases	Interest and fees on loans and leases	$	118,881	$	108,852		Interest and fees on loans and leases	$	193,724	$	118,881
Interest on mortgage-backed securities	Interest on mortgage-backed securities	23,113		10,704			Interest on mortgage-backed securities	27,526		23,113
Interest and dividends on investment securities:	Interest and dividends on investment securities:						Interest and dividends on investment securities:
Taxable	Taxable	702		701			Taxable	704		702
Tax-exempt	Tax-exempt	619		748			Tax-exempt	1,533		619
Other interest income	Other interest income	822		276			Other interest income	2,896		822
		144,137		121,281				226,383		144,137
Interest expense:	Interest expense:						Interest expense:
Interest on deposits	Interest on deposits	3,128		4,496			Interest on deposits	35,192		3,128
Interest on Federal Home Loan Bank advances	Interest on Federal Home Loan Bank advances	—		5			Interest on Federal Home Loan Bank advances	3,371		—
Interest on senior and subordinated debt	Interest on senior and subordinated debt	1,929		2,266			Interest on senior and subordinated debt	2,573		1,929

Interest on federal funds purchased							Interest on federal funds purchased	1,139		—
Interest on trust preferred borrowings	Interest on trust preferred borrowings	513		324			Interest on trust preferred borrowings	1,555		513
Interest on other borrowings	Interest on other borrowings	9		5			Interest on other borrowings	21		9
		5,579		7,096				43,851		5,579
Net interest income	Net interest income	138,558		114,185			Net interest income	182,532		138,558
Provision for (recovery of) credit losses		18,971		(20,160)
Net interest income after provision for (recovery of) credit losses		119,587		134,345
Provision for credit losses							Provision for credit losses	29,011		18,971
Net interest income after provision for credit losses							Net interest income after provision for credit losses	153,521		119,587
Noninterest income:	Noninterest income:						Noninterest income:
Credit/debit card and ATM income	Credit/debit card and ATM income	7,681		6,805			Credit/debit card and ATM income	13,361		7,681
Investment management and fiduciary income	Investment management and fiduciary income	30,181		14,253			Investment management and fiduciary income	30,476		30,181
Deposit service charges	Deposit service charges	5,825		5,460			Deposit service charges	6,039		5,825
Mortgage banking activities, net	Mortgage banking activities, net	2,898		8,600			Mortgage banking activities, net	1,122		2,898
Loan and lease fee income	Loan and lease fee income	1,334		3,485			Loan and lease fee income	1,372		1,334
Securities gains, net		—		329

Unrealized loss on equity investments, net	Unrealized loss on equity investments, net	(3)		—			Unrealized loss on equity investments, net	(4)		(3)

Bank owned life insurance income	Bank owned life insurance income	105		205			Bank owned life insurance income	1,510		105
Other income	Other income	12,553		8,685			Other income	9,251		12,553
		60,574		47,822				63,127		60,574
Noninterest expense:	Noninterest expense:						Noninterest expense:
Salaries, benefits and other compensation	Salaries, benefits and other compensation	70,930		53,138			Salaries, benefits and other compensation	72,849		70,930
Occupancy expense	Occupancy expense	10,792		8,460			Occupancy expense	10,408		10,792
Equipment expense	Equipment expense	10,373		7,391			Equipment expense	9,792		10,373
Data processing and operations expenses	Data processing and operations expenses	5,359		3,385			Data processing and operations expenses	4,724		5,359
Professional fees	Professional fees	3,451		3,856			Professional fees	4,439		3,451
Marketing expense	Marketing expense	1,266		992			Marketing expense	1,716		1,266

FDIC expenses	FDIC expenses	1,391		1,069			FDIC expenses	2,582		1,391
Loan workout and other credit costs	Loan workout and other credit costs	328		1,120			Loan workout and other credit costs	(55)		328
Corporate development expense	Corporate development expense	34,038		2,095			Corporate development expense	740		34,038
Restructuring expense	Restructuring expense	17,514		(265)			Restructuring expense	(761)		17,514

Other operating expense	Other operating expense	19,015		14,378			Other operating expense	26,611		19,015
		174,457		95,619				133,045		174,457
Income before taxes	Income before taxes	5,704		86,548			Income before taxes	83,603		5,704
Income tax provision	Income tax provision	1,737		21,407			Income tax provision	20,941		1,737
Net income	Net income	$	3,967	$	65,141		Net income	$	62,662	$	3,967
Less: Net income attributable to noncontrolling interest	Less: Net income attributable to noncontrolling interest	163		59			Less: Net income attributable to noncontrolling interest	258		163
Net income attributable to WSFS	Net income attributable to WSFS	$	3,804	$	65,082		Net income attributable to WSFS	$	62,404	$	3,804
Earnings per share:	Earnings per share:						Earnings per share:
Basic	Basic	$	0.06	$	1.37		Basic	$	1.01	$	0.06
Diluted	Diluted	$	0.06	$	1.36		Diluted	$	1.01	$	0.06
Weighted average shares of common stock outstanding:	Weighted average shares of common stock outstanding:						Weighted average shares of common stock outstanding:
Basic	Basic	64,942,593		47,509,205			Basic	61,510,714		64,942,593
Diluted	Diluted	65,127,000		47,792,108			Diluted	61,678,871		65,127,000

The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.

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WSFS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

Three Months Ended March 31,
(Dollars in thousands) 2022 2021
Net income $ 3,967 $ 65,141
Less: Net income attributable to noncontrolling interest 163 59
Net income attributable to WSFS 3,804 65,082
Other comprehensive (loss) income:
Net change in unrealized (losses) on investment securities available-for-sale
Net unrealized losses arising during the period, net of tax (benefit) of $(87,132) and $(21,972), respectively (275,918) (69,589)
Less: reclassification adjustment for net gains on sales realized in net income, net of tax expense of $0 and $79, respectively — (250)
(275,918) (69,839)
Net change in securities held-to-maturity
Amortization of unrealized gain on securities reclassified to held-to-maturity, net of tax expense of $9 and $5, respectively (28) (16)
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 of $9 and $5, respectively (27) (16)
(27) (16)
Net change in cash flow hedge
Net unrealized gain arising during the period, net of tax expense of $— and $— , respectively 1 —
Amortization of unrealized gain on terminated cash flow hedges, net of tax benefit of $13 and $35, respectively (40) (111)
(39) (111)
Net change in equity method investments
Net change in other comprehensive income of equity method investments, net of tax expense of $— and $86, respectively — 273
Total other comprehensive loss (276,012) (69,709)
Total comprehensive loss $ (272,208) $ (4,627)


	Three Months Ended March 31,
(Dollars in thousands)	2023		2022

Net income	$	62,662	$	3,967
Less: Net income attributable to noncontrolling interest	258		163
Net income attributable to WSFS	62,404		3,804
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 $16,740 and $(87,132), respectively	53,010		(275,918)



Net change in securities held-to-maturity
Amortization of unrealized losses (gains) on available-for-sale securities reclassified to held-to-maturity, net of tax (benefit) expense of $(1,315) and $9, respectively	4,165		(28)
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 of $11 and 9, respectively	(35)		(27)


Net change in cash flow hedge
Net unrealized gain arising during the period, net of tax expense of $105 and $—, respectively	332		1
Amortization of unrealized gain on terminated cash flow hedges, net of tax benefit of $13 and $13, respectively	(40)		(40)
	292		(39)
Net change in equity method investments
Net change in other comprehensive income of equity method investments, net of tax benefit of $1 and $—, respectively	(3)		—
Total other comprehensive income (loss)	57,429		(276,012)
Total comprehensive income (loss)	$	119,833	$	(272,208)

The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.

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WSFS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)


(Dollars in thousands, except per share and share data)	(Dollars in thousands, except per share and share data)	March 31, 2022		December 31, 2021		(Dollars in thousands, except per share and share data)	March 31, 2023		December 31, 2022

Assets:	Assets:					Assets:
Cash and due from banks	Cash and due from banks	$	1,784,460	$	1,046,992	Cash and due from banks	$	686,788	$	332,961
Cash in non-owned ATMs	Cash in non-owned ATMs	490,784		480,527		Cash in non-owned ATMs	409,265		499,017
Interest-bearing deposits in other banks including collateral (restricted cash) of $7,160 at March 31, 2022 and $5,050 at December 31, 2021		8,525		5,420
Interest-bearing deposits in other banks including collateral (restricted cash) of $6,650 at March 31, 2023 and $4,650 at December 31, 2022						Interest-bearing deposits in other banks including collateral (restricted cash) of $6,650 at March 31, 2023 and $4,650 at December 31, 2022	6,987		5,280
Total cash, cash equivalents, and restricted cash	Total cash, cash equivalents, and restricted cash	2,283,769		1,532,939		Total cash, cash equivalents, and restricted cash	1,103,040		837,258
Investment securities, available-for-sale (amortized cost of $5,903,550 at March 31, 2022 and $5,249,882 at December 31, 2021		5,495,929		5,205,311
Investment securities, held-to-maturity, net of allowance for credit losses of $4 at March 31, 2022 and $4 at December 31, 2021 (fair value $85,754 at March 31, 2022 and $94,131 at December 31, 2021)		84,898		90,642
Investment securities, available-for-sale (amortized cost of $4,758,199 at March 31, 2023 and $4,834,550 at December 31, 2022						Investment securities, available-for-sale (amortized cost of $4,758,199 at March 31, 2023 and $4,834,550 at December 31, 2022	4,086,459		4,093,060
Investment securities, held-to-maturity, net of allowance for credit losses of $9 at March 31, 2023 and $10 at December 31, 2022 (fair value $1,035,856 at March 31, 2023 and $1,040,104 at December 31, 2022)						Investment securities, held-to-maturity, net of allowance for credit losses of $9 at March 31, 2023 and $10 at December 31, 2022 (fair value $1,035,856 at March 31, 2023 and $1,040,104 at December 31, 2022)	1,094,799		1,111,619
Other investments	Other investments	13,651		10,518		Other investments	24,797		26,120
Loans, held for sale at fair value	Loans, held for sale at fair value	70,617		113,349		Loans, held for sale at fair value	39,734		42,985
Loans and leases, net of allowance for credit losses of $136,330 at March 31, 2022 and $94,507 at December 31, 2021		11,197,482		7,791,482
Loans and leases, net of allowance for credit losses of $169,162 at March 31, 2023 and $151,861 at December 31, 2022						Loans and leases, net of allowance for credit losses of $169,162 at March 31, 2023 and $151,861 at December 31, 2022	11,976,845		11,759,992
Bank owned life insurance	Bank owned life insurance	100,364		33,099		Bank owned life insurance	100,907		101,935
Stock in Federal Home Loan Bank (FHLB) of Pittsburgh at cost	Stock in Federal Home Loan Bank (FHLB) of Pittsburgh at cost	8,804		6,073		Stock in Federal Home Loan Bank (FHLB) of Pittsburgh at cost	42,122		24,116
Other real estate owned	Other real estate owned	1,818		2,320		Other real estate owned	1,131		833
Accrued interest receivable	Accrued interest receivable	53,241		41,596		Accrued interest receivable	77,356		74,448
Premises and equipment	Premises and equipment	122,722		87,295		Premises and equipment	112,129		115,603
Goodwill	Goodwill	887,165		472,828		Goodwill	883,637		883,637
Intangible assets	Intangible assets	145,024		74,403		Intangible assets	124,613		128,595
Other assets	Other assets	499,190		315,472		Other assets	651,721		714,554
Total assets	Total assets	$	20,964,674	$	15,777,327	Total assets	$	20,319,290	$	19,914,755
Liabilities and Stockholders’ Equity	Liabilities and Stockholders’ Equity					Liabilities and Stockholders’ Equity
Liabilities:	Liabilities:					Liabilities:
Deposits:	Deposits:					Deposits:
Noninterest-bearing	Noninterest-bearing	$	6,638,890	$	4,565,143	Noninterest-bearing	$	5,299,094	$	5,739,647
Interest-bearing	Interest-bearing	10,984,654		8,674,919		Interest-bearing	10,890,594		10,463,922

Total deposits	Total deposits	17,623,544		13,240,062		Total deposits	16,189,688		16,203,569

FHLB advances	FHLB advances	—		—		FHLB advances	800,000		350,000
Trust preferred borrowings	Trust preferred borrowings	90,295		67,011		Trust preferred borrowings	90,491		90,442
Senior and subordinated debt	Senior and subordinated debt	248,488		147,939		Senior and subordinated debt	218,227		248,169
Other borrowed funds	Other borrowed funds	33,619		24,527		Other borrowed funds	29,488		38,283
Accrued interest payable	Accrued interest payable	5,258		736		Accrued interest payable	15,135		5,174
Other liabilities	Other liabilities	445,653		360,036		Other liabilities	672,917		777,232
Total liabilities	Total liabilities	18,446,857		13,840,311		Total liabilities	18,015,946		17,712,869
Stockholders’ Equity:	Stockholders’ Equity:					Stockholders’ Equity:
Common stock $0.01 par value, 90,000,000 shares authorized; issued 75,832,292 at March 31, 2022 and 57,695,676 at December 31, 2021		758		577
Common stock $0.01 par value, 90,000,000 shares authorized; issued 75,958,600 at March 31, 2023 and 75,921,997 at December 31, 2022						Common stock $0.01 par value, 90,000,000 shares authorized; issued 75,958,600 at March 31, 2023 and 75,921,997 at December 31, 2022	759		759
Capital in excess of par value	Capital in excess of par value	1,967,972		1,058,997		Capital in excess of par value	1,977,757		1,974,210
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(313,780)		(37,768)		Accumulated other comprehensive loss	(618,415)		(675,844)
Retained earnings	Retained earnings	1,219,882		1,224,614		Retained earnings	1,464,392		1,411,243
Treasury stock at cost, 11,097,424 shares at March 31, 2022 and 10,086,936 shares at December 31, 2021		(354,369)		(307,321)
Treasury stock at cost, 14,572,085 shares at March 31, 2023 and 14,310,085 shares at December 31, 2022						Treasury stock at cost, 14,572,085 shares at March 31, 2023 and 14,310,085 shares at December 31, 2022	(518,131)		(505,255)
Total stockholders’ equity of WSFS	Total stockholders’ equity of WSFS	2,520,463		1,939,099		Total stockholders’ equity of WSFS	2,306,362		2,205,113
Noncontrolling interest	Noncontrolling interest	(2,646)		(2,083)		Noncontrolling interest	(3,018)		(3,227)
Total stockholders' equity	Total stockholders' equity	2,517,817		1,937,016		Total stockholders' equity	2,303,344		2,201,886
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	20,964,674	$	15,777,327	Total liabilities and stockholders' equity	$	20,319,290	$	19,914,755

The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.

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WSFS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)
Three Months Ended March 31, 2022
(Dollars in thousands, except per share and share amounts) Shares Common Stock Capital in Excess of Par Value Accumulated Other Comprehensive Loss Retained Earnings Treasury Stock Total Stockholders' Equity of WSFS Non-controlling Interest Total Stockholders' Equity
Balance, December 31, 2021 57,695,676 $ 577 $ 1,058,997 $ (37,768) $ 1,224,614 $ (307,321) $ 1,939,099 $ (2,083) $ 1,937,016
Net income — — — — 3,804 — 3,804 163 3,967
Other comprehensive loss — — — (276,012) — — (276,012) — (276,012)
Cash dividend, $0.13 per share — — — — (8,536) — (8,536) — (8,536)
Contributions from noncontrolling shareholders — — — — — — — 187 187
Issuance of common stock including proceeds from exercise of common stock options 19,768 — 428 — — — 428 — 428
Shares issued in acquisitions 18,116,848 181 907,835 — — — 908,016 — 908,016
Noncontrolling interest assumed in acquisition — — — — — — — (913) (913)
Stock-based compensation expense — — 1,334 — — — 1,334 — 1,334
Repurchases of common stock (1)
— — (622) — — (47,048) (47,670) — (47,670)
Balance, March 31, 2022 75,832,292 $ 758 $ 1,967,972 $ (313,780) $ 1,219,882 $ (354,369) $ 2,520,463 $ (2,646) $ 2,517,817


	Three Months Ended March 31, 2023
(Dollars in thousands, except per share and share amounts)	Shares	Common Stock		Capital in Excess of Par Value		Accumulated Other Comprehensive Loss		Retained Earnings		Treasury Stock		Total Stockholders' Equity of WSFS		Non-controlling Interest		Total Stockholders' Equity
Balance, December 31, 2022	75,921,997	$	759	$	1,974,210	$	(675,844)	$	1,411,243	$	(505,255)	$	2,205,113	$	(3,227)	$	2,201,886
Net income	—	—		—		—		62,404		—		62,404		258		62,662
Other comprehensive income	—	—		—		57,429		—		—		57,429		—		57,429
Cash dividend, $0.15 per share	—	—		—		—		(9,255)		—		(9,255)		—		(9,255)
Distributions to noncontrolling shareholders	—	—		—		—		—		—		—		(49)		(49)
Issuance of common stock including proceeds from exercise of common stock options	36,603	—		362		—		—		—		362		—		362


Stock-based compensation expense	—	—		3,185		—		—		—		3,185		—		3,185
Repurchases of common stock (1)	—	—		—		—		—		(12,876)		(12,876)		—		(12,876)
Balance, March 31, 2023	75,958,600	$	759	$	1,977,757	$	(618,415)	$	1,464,392	$	(518,131)	$	2,306,362	$	(3,018)	$	2,303,344

(1)Repurchase of common stock includes 262,000 shares repurchased in connection with the Company's share repurchase program approved by the Board of Directors, and 8,258 shares withheld to cover tax liabilities.


	Three Months Ended March 31, 2022
(Dollars in thousands, except per share and share amounts)	Shares	Common Stock		Capital in Excess of Par Value		Accumulated Other Comprehensive Loss		Retained Earnings		Treasury Stock		Total Stockholders' Equity of WSFS		Non-controlling Interest		Total Stockholders' Equity
Balance, December 31, 2021	57,695,676	$	577	$	1,058,997	$	(37,768)	$	1,224,614	$	(307,321)	$	1,939,099	$	(2,083)	$	1,937,016
Net income	—	—		—		—		3,804		—		3,804		163		3,967
Other comprehensive loss	—	—		—		(276,012)		—		—		(276,012)		—		(276,012)
Cash dividend, $0.13 per share	—	—		—		—		(8,536)		—		(8,536)		—		(8,536)
Contributions from noncontrolling shareholders	—	—		—		—		—		—		—		187		187
Issuance of common stock including proceeds from exercise of common stock options	19,768	—		428		—		—		—		428		—		428
Issuance of common stock in acquisition of BMT	18,116,848	181		907,835		—		—		—		908,016		—		908,016
Noncontrolling interest assumed in acquisition	—	—		—		—		—		—		—		(913)		(913)
Stock-based compensation expense	—	—		1,334		—		—		—		1,334		—		1,334
Repurchases of common stock (1)	—	—		(622)		—		—		(47,048)		(47,670)		—		(47,670)
Balance, March 31, 2022	75,832,292	$	758	$	1,967,972	$	(313,780)	$	1,219,882	$	(354,369)	$	2,520,463	$	(2,646)	$	2,517,817

(1)Repurchase of common stock includes 938,985 shares repurchased in connection with the Company's share repurchase program approved by the Board of Directors and 3,430 shares withheld to cover tax liabilities.

Three Months Ended March 31, 2021
(Dollars in thousands, except per share and share amounts) Shares Common Stock Capital in Excess of Par Value Accumulated Other Comprehensive Income (Loss) Retained Earnings Treasury Stock Total Stockholders' Equity of WSFS Non-controlling Interest Total Stockholders' Equity
Balance, December 31, 2020 57,575,783 $ 576 $ 1,053,022 $ 56,007 $ 977,414 $ (295,293) $ 1,791,726 $ (2,246) $ 1,789,480
Net income — — — — 65,082 — 65,082 59 65,141
Other comprehensive loss — — — (69,709) — — (69,709) — (69,709)
Cash dividend, $0.12 per share — — — — (5,699) — (5,699) — (5,699)
Issuance of common stock including proceeds from exercise of common stock options 13,547 — 115 — — — 115 — 115
Stock-based compensation expense — — 1,155 — — — 1,155 — 1,155
Repurchases of common shares (1)
— — (1) — — (12,028) (12,029) — (12,029)
Balance, March 31, 2021 57,589,330 $ 576 $ 1,054,291 $ (13,702) $ 1,036,797 $ (307,321) $ 1,770,641 $ (2,187) $ 1,768,454

~~(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 20 shares withheld to cover tax liabilities.

The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.

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WSFS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


		Three Months Ended March 31,					Three Months Ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2022		2021		(Dollars in thousands)	2023		2022

Operating activities:	Operating activities:					Operating activities:
Net income	Net income	$	3,967	$	65,141	Net income	$	62,662	$	3,967
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Provision for (recovery of) credit losses		18,971		(20,160)
Provision for credit losses						Provision for credit losses	29,011		18,971
Depreciation of premises and equipment, net	Depreciation of premises and equipment, net	11,062		3,090		Depreciation of premises and equipment, net	4,327		11,062
Accretion of fees and discounts, net	Accretion of fees and discounts, net	(1,642)		(16,472)		Accretion of fees and discounts, net	(6,358)		(1,642)
Amortization of intangible assets	Amortization of intangible assets	3,963		2,651		Amortization of intangible assets	3,845		3,963
Amortization of right of use lease asset		7,664		3,100
Amortization of right-of-use lease assets						Amortization of right-of-use lease assets	3,905		7,664
Decrease in operating lease liability	Decrease in operating lease liability	(5,030)		(4,113)		Decrease in operating lease liability	(3,170)		(5,030)
Income from mortgage banking activities, net	Income from mortgage banking activities, net	(2,898)		(8,600)		Income from mortgage banking activities, net	(1,122)		(2,898)
Gain on sale of securities, net		—		(329)
Loss on sale of other real estate owned and valuation adjustments, net		(54)		(45)

Gain on sale of other real estate owned and valuation adjustments, net						Gain on sale of other real estate owned and valuation adjustments, net	—		(54)
Stock-based compensation expense	Stock-based compensation expense	1,334		1,155		Stock-based compensation expense	3,185		1,334
Unrealized loss on equity investments, net	Unrealized loss on equity investments, net	3		—		Unrealized loss on equity investments, net	4		3

Deferred income tax (benefit) expense		(7,952)		11,052
(Increase) decrease in accrued interest receivable		(944)		1,176
Deferred income tax expense (benefit)						Deferred income tax expense (benefit)	1,484		(7,952)
Increase in accrued interest receivable						Increase in accrued interest receivable	(2,908)		(944)
Decrease in other assets	Decrease in other assets	41,368		1,569		Decrease in other assets	47,058		41,368
Origination of loans held for sale	Origination of loans held for sale	(174,612)		(246,127)		Origination of loans held for sale	(58,269)		(174,612)
Proceeds from sales of loans held for sale	Proceeds from sales of loans held for sale	190,520		275,181		Proceeds from sales of loans held for sale	36,986		190,520
Increase (decrease) in value of bank owned life insurance		260		(204)
Decrease in value of bank owned life insurance						Decrease in value of bank owned life insurance	1,028		260
Increase in capitalized interest, net	Increase in capitalized interest, net	(569)		(911)		Increase in capitalized interest, net	(315)		(569)
Increase in accrued interest payable	Increase in accrued interest payable	1,280		2,703		Increase in accrued interest payable	9,961		1,280
Decrease in other liabilities	Decrease in other liabilities	(28,500)		(207)		Decrease in other liabilities	(101,123)		(28,500)

Net cash provided by operating activities	Net cash provided by operating activities	$	58,191	$	69,650	Net cash provided by operating activities	$	30,191	$	58,191
Investing activities:	Investing activities:					Investing activities:

Repayments, maturities and calls of investment securities held-to-maturity	Repayments, maturities and calls of investment securities held-to-maturity	5,875		8,030		Repayments, maturities and calls of investment securities held-to-maturity	21,721		5,875
Sale of investment securities available-for-sale		—		9,332

Purchases of investment securities available-for-sale	Purchases of investment securities available-for-sale	(805,798)		(748,317)		Purchases of investment securities available-for-sale	(4,824)		(805,798)
Repayments, maturities and calls of investment securities available-for-sale	Repayments, maturities and calls of investment securities available-for-sale	649,279		185,002		Repayments, maturities and calls of investment securities available-for-sale	80,343		649,279

Proceeds from bank-owned life insurance death benefit	Proceeds from bank-owned life insurance death benefit	1,437		—		Proceeds from bank-owned life insurance death benefit	—		1,437

Net decrease in loans		120,204		536,272
Net (increase) decrease in loans						Net (increase) decrease in loans	(129,561)		120,204
Net cash from business combinations	Net cash from business combinations	573,745		—		Net cash from business combinations	—		573,745
Purchase of loans held-for-investment	Purchase of loans held-for-investment	(55,544)		(54,978)		Purchase of loans held-for-investment	(88,455)		(55,544)

Purchases of stock of Federal Home Loan Bank of Pittsburgh						Purchases of stock of Federal Home Loan Bank of Pittsburgh	(92,439)		—
Redemptions of stock of Federal Home Loan Bank of Pittsburgh	Redemptions of stock of Federal Home Loan Bank of Pittsburgh	1		265		Redemptions of stock of Federal Home Loan Bank of Pittsburgh	74,433		1
Sales of other real estate owned	Sales of other real estate owned	450		1,148		Sales of other real estate owned	—		450
Investment in premises and equipment	Investment in premises and equipment	(1,647)		(1,270)		Investment in premises and equipment	(856)		(1,647)
Sales of premises and equipment	Sales of premises and equipment	—		427		Sales of premises and equipment	3		—
Net cash provided by (used in) investing activities		$	488,002	$	(64,089)
Net cash used in investing activities						Net cash used in investing activities	$	(139,635)	$	488,002

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		Three Months Ended March 31,					Three Months Ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2022		2021		(Dollars in thousands)	2023		2022
Financing activities:						Financing activities:
Net (decrease) increase in demand and saving deposits						Net (decrease) increase in demand and saving deposits	$	(560,596)	$	281,843
Increase (decrease) in time deposits						Increase (decrease) in time deposits	350,922		(39,367)
Increase in brokered deposits						Increase in brokered deposits	186,718		17,752

Financing activities:
Net increase in demand and saving deposits		$	281,843	$	646,348
Decrease in time deposits		(39,367)		(64,861)
Increase (decrease) in brokered deposits		17,752		(153,386)

Receipts from FHLB advances						Receipts from FHLB advances	4,153,000		—
Repayments of FHLB advances	Repayments of FHLB advances	—		(6,623)		Repayments of FHLB advances	(3,703,000)		—

Receipts from federal funds purchased						Receipts from federal funds purchased	5,150,000		—
Repayments of federal funds purchased						Repayments of federal funds purchased	(5,150,000)		—
Contribution from noncontrolling shareholders	Contribution from noncontrolling shareholders	187		—		Contribution from noncontrolling shareholders	(49)		187
Cash dividend	Cash dividend	(8,536)		(5,699)		Cash dividend	(9,255)		(8,536)
Issuance of common stock including proceeds from exercise of common stock options	Issuance of common stock including proceeds from exercise of common stock options	428		115		Issuance of common stock including proceeds from exercise of common stock options	362		428

Redemption of senior and subordinated debt						Redemption of senior and subordinated debt	(30,000)		—

Repurchases of common shares	Repurchases of common shares	(47,670)		(12,029)		Repurchases of common shares	(12,876)		(47,670)
Net cash provided by financing activities		$	204,637	$	403,865
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	$	375,226	$	204,637
Increase in cash, cash equivalents, and restricted cash	Increase in cash, cash equivalents, and restricted cash	750,830		409,426		Increase in cash, cash equivalents, and restricted cash	265,782		750,830
Cash, cash equivalents, and restricted cash at beginning of period	Cash, cash equivalents, and restricted cash at beginning of period	1,532,939		1,654,735		Cash, cash equivalents, and restricted cash at beginning of period	837,258		1,532,939
Cash, cash equivalents, and restricted cash at end of period	Cash, cash equivalents, and restricted cash at end of period	$	2,283,769	$	2,064,161	Cash, cash equivalents, and restricted cash at end of period	$	1,103,040	$	2,283,769
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	$	1,057	$	4,393	Interest	$	33,890	$	1,057
Income taxes	Income taxes	3,370		2,572		Income taxes	455		3,370
Non-cash information:	Non-cash information:					Non-cash information:
Loans transferred to other real estate owned	Loans transferred to other real estate owned	—		376		Loans transferred to other real estate owned	$	298	$	—
Loans transferred to portfolio from held-for-sale at fair value	Loans transferred to portfolio from held-for-sale at fair value	6,321		5,149		Loans transferred to portfolio from held-for-sale at fair value	23,476		6,321
Available-for-sale securities purchased, not settled		—		34,929

Fair value of assets acquired, net of cash received	Fair value of assets acquired, net of cash received	4,712,341		—		Fair value of assets acquired, net of cash received	—		4,712,341
Fair value of liabilities assumed	Fair value of liabilities assumed	4,378,070		—		Fair value of liabilities assumed	—		4,378,070

The accompanying notes are an integral part of these unaudited Consolidated Financial Statements.

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WSFS FINANCIAL CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, ~~2022~~2023

(UNAUDITED)

1. BASIS OF PRESENTATION

General

These unaudited Consolidated Financial Statements include the accounts of WSFS Financial Corporation (WSFS, and together with its subsidiaries, the Company), and its consolidated subsidiaries. WSFS’ primary subsidiary is Wilmington Savings Fund Society, FSB (WSFS Bank or the Bank). As of March 31, ~~2022,~~2023, the other subsidiaries of WSFS include WSFS Wealth Management, LLC (Powdermill®), ~~WSFS~~Bryn Mawr Capital Management, LLC ~~(West Capital), Cypress Capital Management, LLC (Cypress), Christiana Trust Company of Delaware~~® ~~(Christiana Trust DE)~~(BMCM), WSFS SPE Services, LLC, The Bryn Mawr Trust Company of Delaware (BMT-DE), and 601 Perkasie, LLC. The Company also has 3three unconsolidated subsidiaries: WSFS Capital Trust III, Royal Bancshares Capital Trust I, and Royal Bancshares Capital Trust II. WSFS Bank has ~~5 wholly owned~~two wholly-owned subsidiaries: Beneficial Equipment Finance Corporation (BEFC), and 1832 Holdings, Inc., ~~BMT Insurance Advisors, Inc. (BMT Insurance Advisors), Bryn Mawr Equipment Finance, Inc. (BMEF), and KCMI Capital, Inc. (KCMI)~~, and 1one majority-owned subsidiary, NewLane Finance Company (NewLane Finance®).

~~Additionally, WSFS and the Bank acquired certain subsidiaries in the merger of Bryn Mawr Bank Corporation (BMBC) with and into WSFS on~~On January 1, 2022, and the merger of The Bryn Mawr Trust Company with and into the Bank (collectively, the BMBC Merger), pursuant to the agreement and plan of merger, by and between WSFS and BMBC, dated as of March 9, 2021 (the BMBC Merger Agreement) that are not named herein as they are not integral or significant to our business.

~~On April 1, 2022,~~2023, WSFS completed the merger and brand conversion of ~~Christiana Trust DE~~WSFS Capital Management, LLC (West Capital) and ~~The~~Cypress Capital Management, LLC and renamed the combined entity Bryn Mawr ~~Trust Company~~Capital Management, LLC. BMCM is registered as an investment advisor with the U.S. Securities and Exchange Commission and is a wholly-owned subsidiary of Delaware. The combined organization will retain and operate under the Bryn Mawr Trust Company of Delaware name. Additionally, BMEF merged with and into BEFC effective April 1, 2022. Effective April 29, 2022, KCMI, a WSFS Bank subsidiary acquired in the BMBC Merger, was sold to a third-party financial institution. KCMI specializes in providing non-traditional commercial mortgage loans to well-established small businesses throughout the United States. As of March 31, 2022, KCMI had $55.5 million of net loans. The sale does not have a material impact on our unaudited Consolidated Financial Statements and related disclosures. This sale and subsidiary mergers occurred during the second quarter of 2022 and are not included in our March 31, 2022 unaudited Consolidated Financial Statements, and does not have a material impact on our unaudited Consolidated Financial Statements and related disclosures.WSFS.

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~~consumer deposit and cash management services. The Company's 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~~individuals, institutions and ~~corporate customers.~~corporations. The Federal Deposit Insurance Corporation (FDIC) insures the customers’ deposits to their legal maximums. The Company serves its customers primarily from ~~122~~119 offices located in Pennsylvania (6361), Delaware (39), New Jersey (1817), 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.

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), fair values of assets acquired and liabilities assumed in acquisitions accounted for as business combinations using the acquisition method of accounting, 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, changes in the fair value of financial instruments, as well as increased post-retirement benefits and income tax expense.

~~Table of Contents~~

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, ~~2022.~~2023. 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, ~~2021~~2022 (the ~~2021~~2022 Annual Report on Form 10-K) that was filed with the SEC on ~~March 1, 2022~~February 28, 2023 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.

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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 ~~2021~~2022 Annual Report on Form 10-K. Those significant accounting policies remain unchanged at March 31, ~~2022.~~2023, except for the following:

Past Due and Nonaccrual Loans

Past due loans are defined as loans contractually past due 90 days or more as to principal or interest payments. Past due loans 90 days or more that remain in accrual status 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 the Company, 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, depending on the Company’s assessment of the ultimate collectability of principal and interest. Loans 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).

For loans greater than 90 days past due, unless loans are well-secured and collection is imminent, 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 in the current reporting period in the form of principal forgiveness, an interest rate reduction, an other than-insignificant payment delay, or a term extension to a borrower experiencing financial difficulty, is considered a troubled loan. The assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification.

Principal balances are generally not forgiven when a loan is modified as a troubled loan. Nonaccruing troubled loans remain in nonaccrual status until there has been a period of sustained repayment performance demonstrated and repayment is reasonably assured. Since the effect of most troubled loans are already included in the Company’s estimate of expected credit losses, a change to the allowance for credit losses is generally not recorded upon modification.

For additional detail regarding past due and nonaccrual loans, see Note 7.

Allowance for Credit Losses - Loans and Leases

The Company establishes its allowance in accordance with guidance provided in ASC 326, Financial Instruments - Credit Losses. The allowance for credit losses includes quantitative and qualitative factors that comprise the Company's current estimate 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 relating to qualitative adjustment factors, prepayment speeds and reasonable and supportable forecasts about future economic conditions.

The Company's portfolio segments, established based on similar risk characteristics and loss behaviors, are:

•Commercial Loans: Commercial and industrial - real estate secured, commercial and industrial - non-real estate secured, owner-occupied commercial, commercial mortgages, construction and commercial small business leases, and

•Residential and Consumer Loans: Residential mortgage, equity secured lines and loans, installment loans, unsecured lines of credit, originated education loans and previously acquired education loans.

Expected credit losses are net of expected recoveries and estimated over the contractual term, adjusted for expected prepayments. The contractual term excludes any extensions, renewals and modifications unless they are not unconditionally cancellable. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Expected prepayments are based on historical experience and considers adjustments for current and future economic conditions.

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).

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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 residential and consumer loans, and each portfolio segment is further segmented by internally assessed risk ratings.

The Company uses a single scenario third-party economic forecast to adjust the calculated historical loss rates of the portfolio segments to incorporate the effects of current and future economic conditions. The Company's economic forecast considers the general health of the economy, the interest rate environment, real estate pricing and market risk. The Company's 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 periodically by the Company and updated as appropriate.

The historical loss rates for commercial loans are estimated by determining the probability of default (PD) and expected loss given default (LGD) and are applied to the loans' exposure at default. 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 consumer loans is calculated based on average net loss rates over the same look-back period. The current look-back period is 49 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 troubled loans, 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.

The amount of the potential credit loss is measured using any of the following 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.

For collateral dependent loans, the expected credit losses at the individual asset level are the difference between the collateral's fair value (less cost to sell) and the amortized cost.

Qualitative adjustment factors consider various internal and external conditions which are allocated among loan segments and take into consideration:

•Current underwriting policies, staff and portfolio concentrations,

•Risk rating accuracy, credit and administration,

•Internal risk emergence (including internal trends of delinquency, and criticized loans by segment),

•Economic forecasts and conditions - locally and nationally (including market trends impacting collateral values), which is separate from or in addition to the third-party economic forecast described above, and

•Competitive environment, as it could impact loan structure and underwriting.

These factors are based on their relative standing compared to the period in which historical losses are used in quantitative reserve estimates and current directional trends, and reasonable and supportable forecasts. Qualitative factors 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 recurring loan reviews.

Accrued interest receivable on loans is excluded from the estimate of credit losses and is included in Accrued interest receivable on the unaudited Consolidated Statements of Financial Condition.

For additional detail regarding the allowance for credit losses and the provision for credit losses, see Note 7.

Table of Contents

RECENT ACCOUNTING PRONOUNCEMENTS

The following accounting pronouncement was adopted by the Company during the three months ended March 31, ~~2022, but is not expected to have a material impact on the unaudited Consolidated Financial Statements:~~

•~~ASU No. 2021-05,~~ ~~Leases (Topic 842), Lessors – Certain Leases with Variable Lease Payments~~

~~There were no other applicable material accounting pronouncements adopted by the Company since December 31, 2021.~~

~~Accounting guidance pending adoption at March 31, 2022~~2023:

ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures:In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The guidance eliminates the accounting guidance for troubled debt restructurings ~~(TDRs)~~ by creditors (ASC 310-40) while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The guidance also requires that an entity disclose current-period write-offs by year of origination for financing receivables and net investments in leases within the scope of Topic 326. The Company adopted this guidance prospectively on January 1, 2023. For further details on the impact of the adoption and accounting policies, see updated Significant Accounting Policies, as described above, and troubled loans disclosures in Note 7 - Allowance for Credit Losses and Credit Quality Information.

Accounting Guidance Pending Adoption as of March 31, 2023

ASU No. 2023-01, Leases (Topic 842) Common Control Agreements: In March 2023, the FASB issued ASU No. 2023-01, Leases (Topic 842) Common Control Agreements. The amendment clarifies the accounting for leasehold improvements associated with common control leases by allowing the lessee to amortize the leasehold improvements over the useful life of the common control group’s use of the underlying asset, regardless of the lease term. The guidance is effective for ~~annual periods~~fiscal years beginning after December 15, ~~2022.~~2023. Early adoption is permitted. Adoption is required on a modified retrospective basis, consistent with the Company's adoption of Topic 842. The Company does not expect this update to have a material impact on the Consolidated Financial Statements.

ASU No. 2023-02, Investments—Equity Method and Joint Ventures (Topic 323) Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method: In March 2023, The FASB issued ASU 2023-02, Investments—Equity Method and Joint Ventures (Topic 323) Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method. The amendments permit reporting entities to elect to account for any equity investments in a tax credit program using the proportional amortization method if certain conditions are met. The amendments are effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. Adoption is required on a prospective, modified retrospective, or retrospective basis ~~except for~~depending on the ~~transition method related to the recognition and measurement of TDRs where the entity as to apply on a modified-retrospective basis.~~amendment. The Company ~~is currently evaluating~~does not expect this update to have a material impact on the ~~impact upon adoption and will apply the guidance after completion of its assessment.~~

Consolidated Financial Statements.

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3. ~~BUSINESS COMBINATIONS~~

~~Bryn Mawr Bank Corporation.~~

On January 1, 2022, WSFS closed its acquisition of BMBC and acquired 100% of the outstanding common stock of BMBC. In accordance with the terms of the merger agreement, dated March 9, 2021, by and between WSFS and BMBC, each share of BMBC common stock was exchanged for 0.90 shares of WSFS common stock (with cash paid in lieu of fractional shares). The total value of consideration paid was $908.0 million based on 19,903,230 shares of BMBC common stock outstanding as of December 31, 2021, the vesting of 226,643 BMBC restricted stock awards, and the closing price per share of WSFS common stock of $50.12 on December 31, 2021. Results of the combined Company’s operations are included in the unaudited Consolidated Financial Statements since the date of the acquisition.

BMBC was the holding company for The Bryn Mawr Trust Company (Bryn Mawr Bank), a Pennsylvania chartered bank and wholly-owned subsidiary. BMBC and Bryn Mawr Bank were headquartered in Bryn Mawr, Pennsylvania, a western suburb of Philadelphia, and served primarily the Greater Philadelphia region. BMBC and its direct and indirect subsidiaries was a locally managed, premier financial services company providing retail and commercial banking; trust administration and wealth management; and insurance and risk management solutions. WSFS believes that following the BMBC Merger it will be the only bank in the Greater Philadelphia and Delaware region with distinct market-share advantages, including market knowledge, local decision-making, a full-service product suite and a balance sheet to compete with larger regional and national banks. The BMBC Merger also allows WSFS to accelerate our long-term strategic objectives, including scale to continue to invest in our delivery and talent transformations.

The acquisition of BMBC was accounted for as a business combination using the acquisition method of accounting and, accordingly, the assets acquired, liabilities assumed and consideration transferred were recorded at their estimated fair values as of the acquisition date. The excess of consideration transferred over the fair value of net assets acquired was recorded as goodwill, which is not amortizable nor deductible for tax purposes. The Company allocated goodwill to its WSFS Bank segment and Wealth Management segment. During the three months ended March 31, 2022, there were no remeasurement period adjustments made to the fair values of assets acquired and liabilities assumed.

~~The following table summarizes the consideration transferred and the fair values of identifiable assets acquired and liabilities assumed:~~


~~(Dollars in thousands)~~
~~Consideration Transferred:~~	~~Fair Value~~
~~Common shares issued (18,116,848)~~	$	~~908,016~~
~~Cash paid to BMBC stock and option holders~~	16
~~Value of consideration~~	~~908,032~~
~~Assets acquired:~~
~~Cash and due from banks~~	~~573,761~~
~~Investment securities~~	~~500,400~~
~~Loans and leases~~	~~3,456,748~~
~~Premises and equipment~~	~~44,842~~
~~Deferred income taxes~~	~~8,433~~
~~Bank owned life insurance~~	~~67,525~~
~~Intangible assets~~	~~74,565~~

~~Other assets~~	~~145,491~~
~~Total assets~~	~~4,871,765~~
~~Liabilities assumed:~~
~~Deposits~~	~~4,110,271~~
~~Other borrowings~~	~~145,512~~
~~Other liabilities~~	~~123,200~~
~~Noncontrolling interest~~	~~(913)~~
~~Total liabilities and noncontrolling interest~~	~~4,378,070~~
~~Net assets acquired:~~	~~493,695~~
~~Goodwill resulting from acquisition of BMBC~~	$	~~414,337~~

~~Table of Contents~~

While the valuation of acquired assets and liabilities is substantially completed, fair value estimates related to the assets and liabilities from BMBC are subject to adjustment for up to one year after the closing date of the acquisition as additional information becomes available. Valuations subject to adjustment include, but are not limited to, Wealth Management intangibles, loans, and deferred income taxes as management continues to review the estimated fair values and evaluate the assumed tax position. When the valuation is final, any changes to the preliminary valuation of acquired assets and liabilities could result in adjustments to identified intangibles and goodwill. The fair values of assets acquired and liabilities assumed is expected to be finalized during the remeasurement period, which ends one year from the closing date, or January 1, 2023.

The amount of goodwill recorded reflects the increased market share and related synergies that are expected to result from the acquisition, and represents the excess purchase price over the estimated fair value of the net assets acquired from BMBC.

The following is a description of the valuation methodologies used to estimate the fair values of major categories of assets acquired and liabilities assumed. In many cases, the fair values of the assets acquired and liabilities assumed were determined by estimating the cash flows expected to result from those assets and liabilities and applying the appropriate market discount rates.

~~Cash and due from banks: The estimated fair values of cash and due from banks approximate their stated value.~~

~~Investment Securities~~: The acquired investment portfolio had a fair value of $500.4 million, primarily consisting of short-term U.S. Treasury bills that matured subsequent to closing on January 6, 2022. The estimated fair value approximated the stated value at maturity.

~~Loans and Leases~~: The Company recorded $3.5 billion of acquired loans, which were initially recorded at their fair values as of the acquisition date. Fair value for loans was based on a discounted cash flow methodology that considered credit loss and prepayment expectations, market interest rates and other market factors, such as liquidity, from the perspective of a market participant. Loan cash flows were generated on an individual loan basis. The PD, LGD, exposure at default and prepayment assumptions are the key factors driving credit losses which are embedded into the estimated cash flows.

~~The table below presents information with respect to the fair value and unpaid principal balance of acquired loans and leases at the acquisition date.~~

January 1, 2022
(Dollars in thousands) Book Balance Fair Value
Commercial and industrial $ 613,197 $ 586,643
Owner-occupied commercial 513,267 503,182
Commercial mortgages 1,564,234 1,549,515
Construction 209,928 208,288
Commercial small business leases 125,770 119,119
Residential 310,092 315,454
Consumer 178,247 174,547
Total acquired loans and leases $ 3,514,735 $ 3,456,748

~~The table below presents the carrying amount of loans for which, at the date of acquisition, there was evidence of more than insignificant deterioration of credit quality since origination:~~


~~(Dollars in thousands)~~	~~January 1, 2022~~
~~Book balance of loans at acquisition~~	$	~~235,791~~
~~Allowance for credit losses at acquisition~~	~~(26,103)~~
~~Non-credit related discount~~	~~(1,421)~~
~~Total purchase credit deteriorated (PCD) loans acquired~~	$	~~208,267~~

The BMBC Merger resulted in the addition of $49.6 million in allowance for credit losses, including the $26.1 million identified in the table above for PCD loans, and $23.5 million for non-PCD loans recorded through the provision for credit losses at the date of acquisition.

~~Table of Contents~~

~~Deferred Income Taxes~~: The Company recorded a deferred income tax asset (DTA) of $8.4 million related to tax attributes of BMBC along with the effects of fair value adjustments resulting from acquisition accounting for the combination. The DTA’s recorded were based on the expected federal and state tax benefits of when the acquired tax attributes and purchase accounting adjustments will reverse. In recording the DTA, consideration was given to potential limitations on the realizability of such acquired tax attributes. There was no material change to the valuation allowance as a result of the BMBC Merger.

~~Trust preferred borrowings and subordinated debt~~: The fair value of trust preferred borrowings and subordinated debt were determined by present valuing the expected cash flows using current market rates for similar instruments. A fair value discount of $2.5 million was recognized for the trust preferred borrowings and will be recognized as an increase to interest expense over the remaining life of the borrowings. A fair value premium of $0.7 million was recognized for the subordinated debt and will be recognized as a decrease to interest expense over the remaining life of the debt.

~~Intangible Assets~~: The Company recorded $10.9 million of core deposit intangible (CDI) which is being amortized over ten years using a straight-line amortization methodology. The fair value of the core deposit intangible was determined using the cost savings approach. The cost savings approach is defined as the difference between cost of funds on deposits and the cost of an equal amount of funds from an alternative source. The CDI fair value was determined by projecting net cash flow benefits, including assumptions related to customer attrition, discount rates, deposit interest rates, and alternative costs of funds.

Certificates of deposit accounts were valued by segregating the portfolio into pools based on remaining maturity and comparing the contractual cost of the portfolio to an identical portfolio bearing current market rates. The valuation adjustment will be accreted or amortized to interest expense over the remaining maturities of the respective pools.

WSFS recorded $60.4 million of Wealth Management intangible assets that consisted of $57.1 million for customer relationships in our wealth management, trust and insurances lines of business, $2.8 million for the Bryn Mawr Trust tradename, and $0.5 million in non-compete agreements. Fair value for these Wealth Management intangible assets was based on a discounted cash flow methodology projecting net cash flow benefits, including assumptions related to customer attrition, discount rates, income projections and applicable growth rate assumptions.

~~Corporate development expenses~~ ~~and~~ ~~Restructuringexpenses~~

For acquisitions, the Company develops comprehensive integration plans under which it has incurred direct costs, which are expensed as incurred. These direct costs include costs are primarily related to: (i) terminated contracts, (ii) consolidated facilities (including lease termination expenses), (iii) severance, (iv) marketing, and (v) professional and legal fees. Costs related to the acquisition and restructuring are included in the ~~Corporate development expense~~ ~~and~~ ~~Restructuringexpense~~ ~~line items, respectively, on the unaudited Consolidated Statements of Income.~~

~~The following table details the costs identified and classified as corporate development and restructuring expenses, which are primarily related to the BMBC Merger:~~


	~~Three Months Ended March 31,~~
~~(dollars in thousands)~~	~~2022~~
~~Salaries, benefits and other compensation~~	$	~~10,043~~
~~Occupancy expense~~	~~10,239~~
~~Equipment expense~~	~~16,586~~
~~Professional fees~~	~~8,776~~
~~Data processing and operations expenses~~	29
~~Marketing expense~~	~~1,043~~

~~Other operating expense~~	~~4,836~~
~~Total corporate development and restructuring expenses~~	$	~~51,552~~

During the second quarter of 2021, WSFS announced a retail banking office optimization plan that included the planned consolidation of Bryn Mawr Trust and WSFS Bank banking offices. Most of the consolidations and rebranding of the banking offices were completed during the first quarter of 2022, which included 22 Bryn Mawr Trust and 12 WSFS Bank banking offices. Costs related to this plan are included in the ~~Corporate developmentexpense~~ ~~line item on the unaudited Consolidated Statements of Income. In addition, the Company had $11.8 million of premises and equipment as held-for-sale as of March 31, 2022, which is included in the~~ ~~Other assets~~ ~~line item on the unaudited Consolidated Statement of Financial Condition.~~

~~Table of Contents~~

~~Pro Forma Income Statement (unaudited)~~

The following pro forma income statement for the three months ended March 31, 2021 presents the pro forma results of operations of the combined institution (BMBC and the Corporation) as if the BMBC Merger occurred on January 1, 2021. The pro forma income statement adjustments are limited to the effects of fair value mark amortization and accretion and intangible asset amortization. No cost savings or additional merger expenses have been included in the pro forma results of operations.


	~~Three Months Ended March 31,~~
~~(dollars in thousands, except share and per share data)~~	~~2021~~
~~Net interest income~~	$	~~149,613~~
~~Provision for loan and lease losses~~	~~(1,634)~~
~~Net interest income after provision for loan and lease losses~~	~~151,247~~
~~Total noninterest income~~	~~67,663~~
~~Total noninterest expenses~~	~~133,856~~
~~Income before income taxes~~	~~85,054~~
~~Income tax expense~~	~~20,454~~
~~Net income~~	$	~~64,600~~
~~Per share data:~~
~~Weighted-average basic shares outstanding~~	~~65,426,291~~
~~Dilutive shares~~	~~411,480~~
~~Adjusted weighted-average diluted shares~~	~~65,837,770~~
~~Basic earnings per common share~~	$	~~0.99~~
~~Diluted earnings per common share~~	$	~~0.98~~

Due to the various conversions of BMBC systems since the date of acquisition, as well as other streamlining and continuing integration of BMBC's operating activities into those of the Company, reporting for revenue and net income of the former BMBC operations for the period subsequent to the acquisition is impracticable.

~~Table of Contents~~

4. NONINTEREST INCOME

Credit/debit card and ATM income

The following table presents the components of credit/debit card and ATM income:


		Three Months Ended March 31,				Three Months Ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2022		2021			(Dollars in thousands)	2023		2022
Bailment fees	Bailment fees	$	2,785	$	3,059		Bailment fees	$	8,684	$	2,785
Interchange fees	Interchange fees	4,099		3,055			Interchange fees	3,886		4,099
Other card and ATM fees	Other card and ATM fees	797		691			Other card and ATM fees	791		797
Total credit/debit card and ATM income	Total credit/debit card and ATM income	$	7,681	$	6,805		Total credit/debit card and ATM income	$	13,361	$	7,681

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 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 March 31,				Three Months Ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2022		2021			(Dollars in thousands)	2023		2022
Trust fees	Trust fees	$	19,090	$	9,764		Trust fees	$	20,516	$	19,090
Wealth management and advisory fees	Wealth management and advisory fees	11,091		4,489			Wealth management and advisory fees	9,960		11,091
Total investment management and fiduciary income	Total investment management and fiduciary income	$	30,181	$	14,253		Total investment management and fiduciary income	$	30,476	$	30,181

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, trustee and trustee related services on structured finance transactions; indenture trustee, administrative agent and collateral agent services to individuals, institutions and corporations; commercial domicile and independent director services; and investment and trustee services to families and individuals. 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 or assets held within a trust. 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 ~~Cypress, West Capital, Powdermill~~®, ~~WSFS Wealth~~® ~~Investments and legacy~~ Bryn Mawr Trust ~~Wealth Management~~ (excluding The Bryn Mawr Trust Company of Delaware)., BMCM, 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 monthly, quarterly and annual ~~billing~~billings for the services.

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Deposit service charges

The following table presents the components of deposit service charges:


		Three Months Ended March 31,				Three Months Ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2022		2021			(Dollars in thousands)	2023		2022
Service fees	Service fees	$	3,884	$	3,422		Service fees	$	4,136	$	3,884
Return and overdraft fees	Return and overdraft fees	1,775		1,578			Return and overdraft fees	1,647		1,775
Other deposit service fees	Other deposit service fees	166		460			Other deposit service fees	256		166
Total deposit service charges	Total deposit service charges	$	5,825	$	5,460		Total deposit service charges	$	6,039	$	5,825

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 March 31,				Three Months Ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2022		2021			(Dollars in thousands)	2023		2022
Managed service fees	Managed service fees	$	3,838	$	3,609		Managed service fees	$	4,799	$	3,838
Currency preparation	Currency preparation	871		948			Currency preparation	1,282		871
ATM loss protection	ATM loss protection	608		622			ATM loss protection	648		608
Capital market revenue		1,508		—
Insurance commissions		1,295		—
Miscellaneous products and services		4,433		3,506
Capital markets revenue							Capital markets revenue	2,879		1,508
Miscellaneous products and services(1)							Miscellaneous products and services(1)	(357)		5,728
Total other income	Total other income	$	12,553	$	8,685		Total other income	$	9,251	$	12,553

(1)Includes commissions income from BMTIA in 2022. The BMTIA business was sold during the second quarter of 2022.

Other income consists of managed service fees, which are primarily courier fees related to cash management, currency preparation, ATM loss protection, capital markets revenue, 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. Capital markets revenue consists of fees related to interest rate swaps, risk participation agreements, foreign exchange contracts, letters of credit, and trade finance products and services offered by the Bank. Through its subsidiary ~~BMT Insurance Advisors,~~BMTIA, the Bank ~~earns~~earned commissions from the sale of insurance policies, which are generally calculated as a percentage of the policy premium, and contingent income, which is calculated based on the volume and performance of the policies held by each carrier. Obligations for the sale of insurance policies are generally satisfied at the point in time which the policy is executed and are recognized at the point in time in which the amounts are known and collection is reasonably assured. Performance metrics for contingent income are generally satisfied over time, not exceeding one year, and are recognized at the point in time in which the amounts are known and collection is reasonably assured.

~~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 1614 for further information about the disaggregation of noninterest income by segment.

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5.4. EARNINGS PER SHARE

The following table shows the computation of basic and diluted earnings per share:


		Three Months Ended March 31,				Three Months Ended March 31,
(Dollars and shares in thousands, except per share data)	(Dollars and shares in thousands, except per share data)	2022		2021			(Dollars and shares in thousands, except per share data)	2023		2022
Numerator:	Numerator:						Numerator:
Net income attributable to WSFS	Net income attributable to WSFS	$	3,804	$	65,082		Net income attributable to WSFS	$	62,404	$	3,804
Denominator:	Denominator:						Denominator:
Weighted average basic shares	Weighted average basic shares	64,943		47,509			Weighted average basic shares	61,511		64,943
Dilutive potential common shares	Dilutive potential common shares	184		283			Dilutive potential common shares	168		184
Weighted average fully diluted shares	Weighted average fully diluted shares	65,127		47,792			Weighted average fully diluted shares	61,679		65,127
Earnings per share:	Earnings per share:						Earnings per share:
Basic	Basic	$	0.06	$	1.37		Basic	$	1.01	$	0.06
Diluted	Diluted	$	0.06	$	1.36		Diluted	$	1.01	$	0.06
Outstanding common stock equivalents having no dilutive effect	Outstanding common stock equivalents having no dilutive effect	14		3			Outstanding common stock equivalents having no dilutive effect	6		14

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 under the 2013 Incentive Plan and the 2018 Incentive Plan.

~~6. INVESTMENTS~~5. INVESTMENT SECURITIES

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. None of the Company's investments in debt securities are classified as trading.


		March 31, 2022											March 31, 2023
(Dollars in thousands)	(Dollars in thousands)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Allowance for Credit Losses		Fair Value		(Dollars in thousands)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Allowance for Credit Losses		Fair Value
Available-for-Sale Debt Securities	Available-for-Sale Debt Securities											Available-for-Sale Debt Securities
Collateralized mortgage obligation (CMO)	Collateralized mortgage obligation (CMO)	$	607,150	$	187	$	44,247	$	—	$	563,090	Collateralized mortgage obligation (CMO)	$	598,648	$	—	$	92,512	$	—	$	506,136
Fannie Mae (FNMA) mortgage-backed securities (MBS)	Fannie Mae (FNMA) mortgage-backed securities (MBS)	4,921,188		2,549		336,759		—		4,586,978		Fannie Mae (FNMA) mortgage-backed securities (MBS)	3,755,800		—		519,977		—		3,235,823
Freddie Mac (FHLMC) MBS	Freddie Mac (FHLMC) MBS	128,918		871		3,383		—		126,406		Freddie Mac (FHLMC) MBS	133,514		—		11,425		—		122,089
Ginnie Mae (GNMA) MBS	Ginnie Mae (GNMA) MBS	16,356		99		396		—		16,059		Ginnie Mae (GNMA) MBS	42,869		4		2,631		—		40,242
Government-sponsored enterprises (GSE) agency notes	Government-sponsored enterprises (GSE) agency notes	229,938		—		26,542		—		203,396		Government-sponsored enterprises (GSE) agency notes	227,368		—		45,199		—		182,169
		$	5,903,550	$	3,706	$	411,327	$	—	$	5,495,929		$	4,758,199	$	4	$	671,744	$	—	$	4,086,459
Held-to-Maturity Debt Securities(1)	Held-to-Maturity Debt Securities(1)											Held-to-Maturity Debt Securities(1)
FNMA MBS												FNMA MBS	$	902,774	$	—	$	60,122	$	—	$	842,652
State and political subdivisions	State and political subdivisions	$	84,102	$	875	$	18	$	4	$	84,955	State and political subdivisions	192,034		2,023		844		9		193,204
Foreign bonds		800		—		1		—		799
		$	84,902	$	875	$	19	$	4	$	85,754
													$	1,094,808	$	2,023	$	60,966	$	9	$	1,035,856

(1)Held-to-maturity securities transferred from available-for-sale are included in held-to-maturity at ~~amortized cost~~fair value basis at the time of transfer. The amortized cost of transferred held-to-maturity securities included net unrealized ~~gains~~losses of ~~$0.2~~$137.3 million at March 31, ~~2022,~~2023, which are offset in Accumulated other comprehensive ~~(loss) income~~loss. 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.

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		December 31, 2021											December 31, 2022
(Dollars in thousands)	(Dollars in thousands)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Allowance for Credit Losses		Fair Value		(Dollars in thousands)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Allowance for Credit Losses		Fair Value
Available-for-Sale Debt Securities	Available-for-Sale Debt Securities											Available-for-Sale Debt Securities
CMO	CMO	$	586,830	$	3,569	$	14,633	$	—	$	575,766	CMO	$	608,834	$	—	$	102,454	$	—	$	506,380
FNMA MBS	FNMA MBS	4,275,307		24,170		53,793		—		4,245,684		FNMA MBS	3,823,036		—		572,778		—		3,250,258
FHLMC MBS	FHLMC MBS	139,708		6,336		516		—		145,528		FHLMC MBS	135,554		—		13,555		—		121,999
GNMA MBS	GNMA MBS	17,456		551		71		—		17,936		GNMA MBS	39,116		—		2,978		—		36,138
GSE agency notes	GSE agency notes	230,581		—		10,184		—		220,397		GSE agency notes	228,010		—		49,725		—		178,285
		$	5,249,882	$	34,626	$	79,197	$	—	$	5,205,311		$	4,834,550	$	—	$	741,490	$	—	$	4,093,060
Held-to-Maturity Debt Securities(1)	Held-to-Maturity Debt Securities(1)											Held-to-Maturity Debt Securities(1)
FNMA MBS												FNMA MBS	$	909,498	$	—	$	68,677	$	—	$	840,821
State and political subdivisions	State and political subdivisions	$	90,146	$	3,489	$	—	$	4	$	93,631	State and political subdivisions	201,631		532		3,372		10		198,781
Foreign bonds	Foreign bonds	500		—		—		—		500		Foreign bonds	500		2		—		—		502
		$	90,646	$	3,489	$	—	$	4	$	94,131		$	1,111,629	$	534	$	72,049	$	10	$	1,040,104

(1)~~Held-to–maturity~~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~~losses of ~~$0.2~~$142.8 million at December 31, ~~2021,~~2022, which are offset in Accumulated other comprehensive ~~income~~loss. 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 March 31, ~~2022~~2023 and December 31, ~~2021~~2022 are presented in the table below:


		Available-for-Sale					Available-for-Sale
		Amortized		Fair			Amortized		Fair
(Dollars in thousands)	(Dollars in thousands)	Cost		Value		(Dollars in thousands)	Cost		Value
March 31, 2022 (1)
March 31, 2023 (1)						March 31, 2023 (1)
Within one year	Within one year	$	2,744	$	2,744	Within one year	$	2,562	$	2,465
After one year but within five years	After one year but within five years	104,877		103,153		After one year but within five years	80,148		75,722
After five years but within ten years	After five years but within ten years	241,045		224,031		After five years but within ten years	555,909		476,621
After ten years	After ten years	5,554,884		5,166,001		After ten years	4,119,580		3,531,651
		$	5,903,550	$	5,495,929		$	4,758,199	$	4,086,459
December 31, 2021 (1)
December 31, 2022 (1)						December 31, 2022 (1)
Within one year	Within one year	$	—	$	—	Within one year	$	—	$	—
After one year but within five years	After one year but within five years	103,960		107,009		After one year but within five years	83,014		77,499
After five years but within ten years	After five years but within ten years	204,186		204,289		After five years but within ten years	465,777		398,607
After ten years	After ten years	4,941,736		4,894,013		After ten years	4,285,759		3,616,954
		$	5,249,882	$	5,205,311		$	4,834,550	$	4,093,060

(1)Actual maturities could differ from contractual maturities.

As of March 31, ~~2022,~~2023, the Company’s ~~available for sale~~available-for-sale investment securities consisted of ~~1,089~~959 securities, ~~934~~953 of which were in an unrealized loss position.

As of March 31, ~~2022,~~2023, substantially all of the Corporation’s ~~available for sale~~available-for-sale investment securities were mortgage-backed securities or collateral mortgage obligations which were issued or guaranteed by U.S. government-sponsored entities and agencies.

As of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholders’ equity.

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The scheduled maturities of held-to-maturity debt securities at March 31, ~~2022~~2023 and December 31, ~~2021~~2022 are presented in the table below:
Held-to-Maturity
Amortized Fair
(Dollars in thousands) Cost Value
March 31, 2022 (1)
Within one year $ 1,031 $ 1,031
After one year but within five years 2,674 2,689
After five years but within ten years 38,696 39,217
After ten years 42,501 42,817
$ 84,902 $ 85,754
December 31, 2021 (1)
Within one year $ 232 $ 234
After one year but within five years 2,675 2,736
After five years but within ten years 44,137 45,404
After ten years 43,602 45,757
$ 90,646 $ 94,131


	Held-to-Maturity
	Amortized		Fair
(Dollars in thousands)	Cost		Value
March 31, 2023 (1)
Within one year	$	231	$	230
After one year but within five years	9,015		8,998
After five years but within ten years	41,627		41,803
After ten years	1,043,935		984,825
	$	1,094,808	$	1,035,856
December 31, 2022 (1)
Within one year	$	731	$	732
After one year but within five years	9,530		9,476
After five years but within ten years	46,170		45,944
After ten years	1,055,198		983,952
	$	1,111,629	$	1,040,104

(1)Actual maturities could differ from contractual maturities.

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 ~~5.5~~6.0 years at March 31, ~~2022.~~2023.

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 ~~$2.7~~$3.5 billion and ~~$2.2~~$2.8 billion were pledged as collateral for ~~retail customer~~investment sweep repurchase agreements, municipal deposits, and other obligations as of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively.

During the three months ended March 31, 2023 and 2022, the Company had no sales of debt securities categorized as available-for-sale, resulting in no realized gains and no realized losses. During the three months ended March 31, 2021, the Company sold $9.3 million of debt securities categorized as available-for-sale resulting in $0.3 million of realized gains and no realized losses.available-for-sale.

As of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company's debt securities portfolio had remaining unamortized premiums of ~~$66.9~~$64.1 million and ~~$69.4~~$66.6 million, respectively, and unaccreted discounts of ~~$18.0~~$24.1 million and ~~$12.7~~$25.2 million, respectively.

For debt securities in an unrealized loss 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 March 31, ~~2022.~~2023.


		Duration of Unrealized Loss Position													Duration of Unrealized Loss Position
		Less than 12 months				12 months or longer				Total					Less than 12 months				12 months or longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized			Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	(Dollars in thousands)	Value		Loss		Value		Loss		Value		Loss		(Dollars in thousands)	Value		Loss		Value		Loss		Value		Loss
Available-for-sale debt securities:	Available-for-sale debt securities:													Available-for-sale debt securities:
CMO	CMO	$	356,589	$	19,874	$	177,496	$	24,373	$	534,085	$	44,247	CMO	$	52,883	$	2,417	$	453,253	$	90,095	$	506,136	$	92,512
FNMA MBS	FNMA MBS	3,765,435		264,082		652,705		72,677		4,418,140		336,759		FNMA MBS	356,825		17,485		2,878,998		502,492		3,235,823		519,977
FHLMC MBS	FHLMC MBS	70,215		2,064		9,168		1,319		79,383		3,383		FHLMC MBS	53,125		2,697		68,958		8,728		122,083		11,425
GNMA MBS	GNMA MBS	8,377		212		2,023		184		10,400		396		GNMA MBS	30,087		1,497		9,659		1,134		39,746		2,631
GSE agency notes	GSE agency notes	38,880		4,178		164,516		22,364		203,396		26,542		GSE agency notes	—		—		182,169		45,199		182,169		45,199
		$	4,239,496	$	290,410	$	1,005,908	$	120,917	$	5,245,404	$	411,327		$	492,920	$	24,096	$	3,593,037	$	647,648	$	4,085,957	$	671,744

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For debt securities in an unrealized 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, ~~2021.~~2022.


		Duration of Unrealized Loss Position													Duration of Unrealized Loss Position
		Less than 12 months				12 months or longer				Total					Less than 12 months				12 months or longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized			Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	(Dollars in thousands)	Value		Loss		Value		Loss		Value		Loss		(Dollars in thousands)	Value		Loss		Value		Loss		Value		Loss
Available-for-sale debt securities:	Available-for-sale debt securities:													Available-for-sale debt securities:
CMO	CMO	$	411,347	$	12,730	$	35,638	$	1,903	$	446,985	$	14,633	CMO	$	158,449	$	13,855	$	347,931	$	88,599	$	506,380	$	102,454
FNMA MBS	FNMA MBS	3,018,606		41,021		356,665		12,772		3,375,271		53,793		FNMA MBS	1,237,560		145,752		2,012,698		427,026		3,250,258		572,778
FHLMC MBS	FHLMC MBS	11,227		348		1,917		168		13,144		516		FHLMC MBS	102,321		9,268		19,671		4,287		121,992		13,555
GNMA MBS	GNMA MBS	4,847		71		—		—		4,847		71		GNMA MBS	32,076		2,265		4,030		713		36,106		2,978
GSE agency notes	GSE agency notes	64,509		1,918		155,888		8,266		220,397		10,184		GSE agency notes	—		—		178,285		49,725		178,285		49,725
		$	3,510,536	$	56,088	$	550,108	$	23,109	$	4,060,644	$	79,197		$	1,530,406	$	171,140	$	2,562,615	$	570,350	$	4,093,021	$	741,490

At March 31, ~~2022, available-for-sale~~2023, debt securities for which the amortized cost basis exceeded fair value totaled ~~$5.2~~$4.1 billion. Total unrealized losses on these securities were ~~$411.3~~$671.7 million at March 31, ~~2022.~~2023. 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 no allowance for credit losses recorded for available-for-sale debt securities as of March 31, ~~2022.~~2023.

At March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, held-to-maturity debt securities had an amortized cost basis of ~~$84.9 million and $90.6 million, respectively.~~$1.1 billion. The held-to-maturity debt security portfolio primarily consists of mortgage-backed securities which were issued or guaranteed by U.S. government-sponsored entities and agencies and 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 March 31, ~~2022,~~2023, aggregated by credit quality indicator:


(Dollars in thousands)	(Dollars in thousands)	State and political subdivisions		Foreign bonds		(Dollars in thousands)	FNMA MBS		State and political subdivisions
A+ rated or higher	A+ rated or higher	$	84,102	$	800	A+ rated or higher	$	—	$	192,034
Not rated	Not rated	—		—		Not rated	902,774		—
Ending balance	Ending balance	$	84,102	$	800	Ending balance	$	902,774	$	192,034

The following table summarizes the amortized cost of debt securities held-to-maturity as of December 31, ~~2021,~~2022, aggregated by credit quality indicator:


(Dollars in thousands)	(Dollars in thousands)	State and political subdivisions		Foreign bonds		(Dollars in thousands)	FNMA MBS		State and political subdivisions		Foreign bonds
A+ rated or higher	A+ rated or higher	$	90,146	$	500	A+ rated or higher	$	—	$	201,631	$	500
Not rated	Not rated	—		—		Not rated	909,498		—		—
Ending balance	Ending balance	$	90,146	$	500	Ending balance	$	909,498	$	201,631	$	500

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The 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 FNMA MBS and foreign bond debt securities for the three months ended March 31, ~~2022~~2023 and ~~2021.~~2022. The following table presents the activity in the allowance for credit losses for state and political subdivisions debt securities for the three months ended March 31, ~~2022~~2023 and ~~2021:~~2022:


		Three months ended March 31,				Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2022		2021			(Dollars in thousands)	2023		2022
Allowance for credit losses:	Allowance for credit losses:						Allowance for credit losses:
Beginning balance	Beginning balance	$	4	$	6		Beginning balance	$	10	$	4

Provision for credit losses	Provision for credit losses	—		(1)			Provision for credit losses	(1)		—

Charge-offs, net		—		—

Ending balance	Ending balance	$	4	$	5		Ending balance	$	9	$	4

Accrued interest receivable of ~~$0.7~~$1.9 million and ~~$0.9~~$2.4 million as of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively, for held-to-maturity debt securities were excluded from the evaluation of allowance for credit losses. There were no nonaccrual or past due held-to-maturity debt securities as of March 31, ~~2022~~2023 and December 31, ~~2021.~~2022.

Equity Investments

The Company had equity investments with a fair value of ~~$13.7~~$24.8 million and ~~$10.5~~$26.1 million as of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively.

During the three months ended March 31, ~~2022, total~~2023, the Company recognized net ~~loss on~~losses related to our equity method investments of ~~$3 thousand was recorded driven by an unrealized loss on Visa Shares presented~~$1.3 million within ~~Unrealized (loss) gain~~Other income on ~~equity investment, net~~ in the unaudited Consolidated Statements of Income.

During the three months ended March 31, ~~2021, there were no unrealized gains or losses recorded on~~2022, the ~~Company's~~Company recognized net income related to our equity ~~investments.~~method investments of $0.4 million.

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7.6. LOANS AND LEASES

The following table shows the Company's loan and lease portfolio by category:


(Dollars in thousands)	(Dollars in thousands)	March 31, 2022		December 31, 2021		(Dollars in thousands)	March 31, 2023		December 31, 2022
Commercial and industrial~~(1)~~	Commercial and industrial~~(1)~~	$	2,493,528	$	1,918,043	Commercial and industrial~~(1)~~	$	2,568,742	$	2,575,345
Owner-occupied commercial	Owner-occupied commercial	1,872,827		1,341,707		Owner-occupied commercial	1,846,661		1,809,582
Commercial mortgages	Commercial mortgages	3,361,242		1,881,510		Commercial mortgages	3,473,083		3,351,084
Construction	Construction	923,890		687,213		Construction	1,023,711		1,044,049
Commercial small business leases	Commercial small business leases	490,599		352,276		Commercial small business leases	576,584		558,981
Residential~~(2)~~(1)	Residential~~(2)~~(1)	809,610		546,667		Residential~~(2)~~(1)	788,799		761,882
Consumer~~(3)~~(2)	Consumer~~(3)~~(2)	1,382,116		1,158,573		Consumer~~(3)~~(2)	1,868,427		1,810,930
		11,333,812		7,885,989			12,146,007		11,911,853
Less:	Less:					Less:

Allowance for credit losses	Allowance for credit losses	136,330		94,507		Allowance for credit losses	169,162		151,861
Net loans and leases	Net loans and leases	$	11,197,482	$	7,791,482	Net loans and leases	$	11,976,845	$	11,759,992

(1)~~Includes Paycheck Protection Program (PPP) loans of $8.5 million at March 31, 2022 and $31.5 million at December 31, 2021.~~

~~(2)~~ Includes reverse mortgages at fair value of ~~$4.3~~$2.7 million at March 31, ~~2022~~2023 and ~~$3.9~~$2.4 million at December 31, ~~2021.~~2022.

~~(3)~~(2) Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.

Accrued interest receivable on loans and leases was ~~$40.8~~$61.7 million and ~~$31.6~~$59.3 million at March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. Accrued interest receivable on loans and leases was excluded from the evaluation of allowance for credit losses.

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8.7. ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY INFORMATION

The following tables provide the activity of allowance for credit losses and loan balances for the three months ended March 31, ~~2022~~2023 and ~~2021.~~2022. The increase was primarily due to ~~an initial ACL of $49.6 million recorded in connection with~~ the BMBC Merger. The initial $49.6 million ACL recorded includes $23.5 million related to non-PCD loans, or the initial provision for credit loss recorded, and $26.1 million related to PCD loans, which does not have an initial income statement impact, but adjusts the amortized cost basisimpacts of the ~~loans at acquisition (i.e., a balance sheet gross-up).~~economic uncertainty and forecast and net loan growth.


(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 March 31, 2022
Three months ended March 31, 2023																Three months ended March 31, 2023
Allowance for credit losses	Allowance for credit losses															Allowance for credit losses
Beginning balance	Beginning balance	$	49,967	$	4,574	$	11,623	$	1,903	$	3,352	$	23,088	$	94,507	Beginning balance	$	59,394	$	6,019	$	21,473	$	6,987	$	4,668	$	53,320	$	151,861
Initial allowance on acquired PCD loans		22,614		595		2,684		71		61		78		26,103

Charge-offs	Charge-offs	(3,639)		(179)		(37)		—		(186)		(810)		(4,851)		Charge-offs	(9,462)		—		—		—		—		(4,204)		(13,666)
Recoveries	Recoveries	601		126		121		—		386		366		1,600		Recoveries	1,216		5		2		530		43		159		1,955
(Credit) provision(4)		(3,827)		1,009		8,714		1,171		1,343		10,561		18,971
Provision																Provision	11,561		32		8,639		2,155		616		6,009		29,012
Ending balance	Ending balance	$	65,716	$	6,125	$	23,105	$	3,145	$	4,956	$	33,283	$	136,330	Ending balance	$	62,709	$	6,056	$	30,114	$	9,672	$	5,327	$	55,284	$	169,162

Period-end allowance allocated to:	Period-end allowance allocated to:															Period-end allowance allocated to:
Loans evaluated on an individual basis	Loans evaluated on an individual basis	$	6,987	$	—	$	5	$	—	$	—	$	—	$	6,992	Loans evaluated on an individual basis	$	4,562	$	91	$	—	$	—	$	—	$	—	$	4,653
Loans evaluated on a collective basis	Loans evaluated on a collective basis	58,729		6,125		23,100		3,145		4,956		33,283		129,338		Loans evaluated on a collective basis	58,147		5,965		30,114		9,672		5,327		55,284		164,509

Ending balance	Ending balance	$	65,716	$	6,125	$	23,105	$	3,145	$	4,956	$	33,283	$	136,330	Ending balance	$	62,709	$	6,056	$	30,114	$	9,672	$	5,327	$	55,284	$	169,162
Period-end loan balances:	Period-end loan balances:															Period-end loan balances:
Loans evaluated on an individual basis	Loans evaluated on an individual basis	$	27,735	$	1,023	$	7,106	$	5,556	$	6,424	$	2,322	$	50,166	Loans evaluated on an individual basis	$	22,443	$	1,907	$	7,343	$	760	$	6,522	$	1,916	$	40,891
Loans evaluated on a collective basis	Loans evaluated on a collective basis	2,956,392		1,871,804		3,354,136		918,334		798,902		1,379,794		11,279,362		Loans evaluated on a collective basis	3,122,883		1,844,754		3,465,740		1,022,951		779,538		1,866,511		12,102,377

Ending balance	Ending balance	$	2,984,127	$	1,872,827	$	3,361,242	$	923,890	$	805,326	$	1,382,116	$	11,329,528	Ending balance	$	3,145,326	$	1,846,661	$	3,473,083	$	1,023,711	$	786,060	$	1,868,427	$	12,143,268

(1)Includes commercial small business ~~leases~~leases.

(2)Period-end loan balance excludes reverse mortgages at fair value of $2.7 million.

(3)Includes home equity lines of credit, installment loans, unsecured lines of credit and ~~PPP~~education loans.


(Dollars in thousands)	Commercial and Industrial(1)		Owner - occupied Commercial		Commercial Mortgages		Construction		Residential(2)		Consumer(3)		Total
Three months ended March 31, 2022
Allowance for credit losses
Beginning balance	$	49,967	$	4,574	$	11,623	$	1,903	$	3,352	$	23,088	$	94,507
Initial allowance on acquired PCD loans	22,614		595		2,684		71		61		78		26,103
Charge-offs	(3,639)		(179)		(37)		—		(186)		(810)		(4,851)
Recoveries	601		126		121		—		386		366		1,600
(Credit) provision(4)	(3,827)		1,009		8,714		1,171		1,343		10,561		18,971
Ending balance	$	65,716	$	6,125	$	23,105	$	3,145	$	4,956	$	33,283	$	136,330







Period-end allowance allocated to:
Loans evaluated on an individual basis	$	6,987	$	—	$	5	$	—	$	—	$	—	$	6,992
Loans evaluated on a collective basis	58,729		6,125		23,100		3,145		4,956		33,283		129,338
Ending balance	$	65,716	$	6,125	$	23,105	$	3,145	$	4,956	$	33,283	$	136,330
Period-end loan balances:
Loans evaluated on an individual basis	$	27,735	$	1,023	$	7,106	$	5,556	$	6,424	$	2,322	$	50,166
Loans evaluated on a collective basis	2,956,392		1,871,804		3,354,136		918,334		798,902		1,379,794		11,279,362
Ending balance	$	2,984,127	$	1,872,827	$	3,361,242	$	923,890	$	805,326	$	1,382,116	$	11,329,528

(1)Includes commercial small business leases.

(2)Period-end loan balance excludes reverse mortgages at fair value of $4.3 million.

(3)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.

(4)Includes $23.5 million initial provision for credit losses on non-PCD loans.

(Dollars in thousands)
Commercial and Industrial(1)
Owner -
occupied
Commercial Commercial
Mortgages Construction
Residential(2)
Consumer(3)
Total
Three months ended March 31, 2021
Allowance for credit losses
Beginning balance $ 150,875 $ 9,615 $ 31,071 $ 12,190 $ 6,893 $ 18,160 $ 228,804
Charge-offs (5,052) — — — — (424) (5,476)
Recoveries 1,140 90 14 — 140 266 1,650
(Credit) provision (21,093) (88) (540) 2,097 (1,331) 795 (20,160)
Ending balance $ 125,870 $ 9,617 $ 30,545 $ 14,287 $ 5,702 $ 18,797 $ 204,818
Period-end allowance allocated to:
Loans evaluated on an individual basis $ 1 $ — $ 11 $ — $ — $ — $ 12
Loans evaluated on a collective basis 125,869 9,617 30,534 14,287 5,702 18,797 204,806
Ending balance $ 125,870 $ 9,617 $ 30,545 $ 14,287 $ 5,702 $ 18,797 $ 204,818
Period-end loan balances:
Loans evaluated on an individual basis $ 20,902 $ 5,118 $ 4,280 $ 72 $ 5,649 $ 2,313 $ 38,334
Loans evaluated on a collective basis 2,642,570 1,328,871 1,971,686 784,029 665,931 1,137,721 8,530,808
Ending balance $ 2,663,472 $ 1,333,989 $ 1,975,966 $ 784,101 $ 671,580 $ 1,140,034 $ 8,569,142

~~(1)Includes commercial small business leases and PPP loans.~~

~~(2)Period-end loan balance excludes reverse mortgages at fair value of $9.4 million.~~

~~(3)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.~~

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The following tables show nonaccrual and past due loans presented at amortized cost at the date indicated:


		March 31, 2022																			March 31, 2023
(Dollars in thousands)	(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			(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 With No Allowance			Nonaccrual Loans With An Allowance			Total Loans
Commercial and industrial~~(2)~~(1)	Commercial and industrial~~(2)~~(1)	$	4,778		$	42		$	4,820		$	2,971,375		$	7,932		$	2,984,127		Commercial and industrial~~(2)~~(1)		$	31,426		$	915		$	32,341		$	3,092,524		$	3,749		$	16,712		$	3,145,326
Owner-occupied commercial	Owner-occupied commercial	779			—			779			1,871,551			497			1,872,827			Owner-occupied commercial		5,326			304			5,630			1,840,450			377			204			1,846,661
Commercial mortgages	Commercial mortgages	3,288			—			3,288			3,354,338			3,616			3,361,242			Commercial mortgages		8,187			687			8,874			3,458,076			6,133			—			3,473,083
Construction	Construction	3,785			—			3,785			914,549			5,556			923,890			Construction		6,332			—			6,332			1,016,619			760			—			1,023,711
Residential~~(3)~~(2)	Residential~~(3)~~(2)	1,925			—			1,925			800,226			3,175			805,326			Residential~~(3)~~(2)		4,136			—			4,136			779,860			2,064			—			786,060
Consumer~~(4)~~(3)	Consumer~~(4)~~(3)	14,067			11,581			25,648			1,354,157			2,311			1,382,116			Consumer~~(4)~~(3)		11,361			11,659			23,020			1,843,389			2,018			—			1,868,427
Total	Total	$	28,622		$	11,623		$	40,245		$	11,266,196		$	23,087		$	11,329,528		Total		$	66,768		$	13,565		$	80,333		$	12,030,918		$	15,101		$	16,916		$	12,143,268
% of Total Loans	% of Total Loans	0.26		%	0.10		%	0.36		%	99.44		%	0.20		%	100		%	% of Total Loans		0.55		%	0.11		%	0.66		%	99.08		%	0.12		%	0.14		%	100		%

(1)~~Nonaccrual loans with an allowance totaled less than $0.1 million.~~

~~(2)~~Includes commercial small business ~~leases and PPP loans.~~leases.

~~(3)~~(2)Residential accruing current balances excludes reverse mortgages at fair value of ~~$4.3~~$2.7 million.

~~(4)~~(3)Includes ~~$23.5~~$15.5 million of delinquent, but still accruing, U.S. government-guaranteed student loans that carry little risk of credit loss.


		December 31, 2021																	December 31, 2022
(Dollars in thousands)	(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			(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)	Commercial and industrial(2)	$	5,007		$	547		$	5,554		$	2,256,554		$	8,211		$	2,270,319		Commercial and industrial(2)	$	10,767		$	311		$	11,078		$	3,116,478		$	6,770		$	3,134,326
Owner-occupied commercial	Owner-occupied commercial	741			—			741			1,340,155			811			1,341,707			Owner-occupied commercial	3,500			474			3,974			1,805,222			386			1,809,582
Commercial mortgages	Commercial mortgages	3,525			810			4,335			1,875,105			2,070			1,881,510			Commercial mortgages	2,137			237			2,374			3,343,551			5,159			3,351,084
Construction	Construction	7,933			—			7,933			679,268			12			687,213			Construction	—			—			—			1,038,906			5,143			1,044,049
Residential(3)	Residential(3)	1,856			—			1,856			537,752			3,125			542,733			Residential(3)	2,563			—			2,563			753,703			3,199			759,465
Consumer(4)	Consumer(4)	10,227			8,634			18,861			1,137,332			2,380			1,158,573			Consumer(4)	12,263			15,513			27,776			1,781,009			2,145			1,810,930
Total(4)	Total(4)	$	29,289		$	9,991		$	39,280		$	7,826,166		$	16,609		$	7,882,055		Total(4)	$	31,230		$	16,535		$	47,765		$	11,838,869		$	22,802		$	11,909,436
% of Total Loans	% of Total Loans	0.37		%	0.13		%	0.50		%	99.29		%	0.21		%	100		%	% of Total Loans	0.26		%	0.14		%	0.40		%	99.41		%	0.19		%	100		%

(1)~~Nonaccrual~~There were no nonaccrual loans with an allowance ~~totaled less than $0.1 million~~as of December 31, 2022.

(2)Includes commercial small business ~~leases and PPP loans.~~leases.

(3)Residential accruing current balances excludes reverse mortgages, at fair value of ~~$3.9~~$2.4 million.

(4)Includes ~~$17.0~~$21.1 million of delinquent, but still accruing, U.S. government-guaranteed student loans that carry little risk of credit loss.

The following table presents the amortized cost basis of nonaccruing collateral-dependent loans by class at March 31, ~~2022~~2023 and December 31, ~~2021:~~2022:


		March 31, 2022		December 31, 2021				March 31, 2023				December 31, 2022
(Dollars in thousands)	(Dollars in thousands)	Property		Equipment and other		Property			Equipment and other		(Dollars in thousands)	Property		Equipment and other		Property		Equipment and other
Commercial and industrial(1)	Commercial and industrial(1)	$	5,037	$	2,895	$	4,199		$	4,012	Commercial and industrial(1)	$	14,362	$	6,100	$	3,848	$	2,922
Owner-occupied commercial	Owner-occupied commercial	497		—		811			—		Owner-occupied commercial	581		—		386		—
Commercial mortgages	Commercial mortgages	3,616		—		2,070			—		Commercial mortgages	6,133		—		5,159		—
Construction	Construction	5,556		—		12			—		Construction	760		—		5,143		—
Residential(2)	Residential(2)	3,175		—		3,125			—		Residential(2)	2,064		—		3,199		—
Consumer(3)	Consumer(3)	2,264		47		2,380			—		Consumer(3)	2,017		—		2,145		—
Total	Total	$	20,145	$	2,942	$	12,597		$	4,012	Total	$	25,917	$	6,100	$	19,880	$	2,922

(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 March 31, 2022 and 2021.~~

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As of March 31, ~~2022,~~2023, there were 2242 residential loans and 1614 commercial loans in the process of foreclosure. The total outstanding balance on these loans was ~~$2.2~~$5.0 million and ~~$4.3~~$3.2 million, respectively. As of December 31, ~~2021,~~2022, there were 2845 residential loans and 98 commercial loans in the process of foreclosure. The total outstanding balance on these loans was ~~$2.5~~$6.7 million and ~~$3.2~~$1.6 million, respectively. Loan workout and other real estate owned (OREO) (recoveries) expenses were ~~$0.3~~$0.2 million during the three months ended March 31, ~~2022,~~2023, and ~~$0.5~~$0.3 million during three months ended March 31, ~~2021.~~2022, respectively. Loan workout and OREO expenses are included in Loan workout and other credit costs on the unaudited Consolidated ~~Statement~~Statements of Income.

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. These 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. These 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.

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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 March 31, ~~2022.~~2023.


		Term Loans Amortized Cost Basis by Origination Year																			Term Loans Amortized Cost Basis by Origination Year
		2022		2021		2020		2019		2018		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total			2023		2022		2021		2020		2019		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
(Dollars in thousands)	(Dollars in thousands)																			(Dollars in thousands)
Commercial and industrial(1):	Commercial and industrial(1):																			Commercial and industrial(1):
Risk Rating	Risk Rating																			Risk Rating
Pass(2)		$	199,414	$	739,112	$	519,388	$	326,303	$	337,575	$	307,901	$	8,089	$	207,778	$	2,645,560
Pass																				Pass	$	238,635	$	1,101,434	$	413,315	$	348,477	$	169,308	$	425,851	$	8,520	$	242,258	$	2,947,798
Special mention	Special mention	—		40,972		24,202		27,509		1,034		1,601		—		20,136		115,454		Special mention	649		4,971		26,581		—		576		1,808		—		2,060		36,645
Substandard or Lower	Substandard or Lower	10,888		18,354		16,651		81,012		32,660		54,604		125		8,819		223,113		Substandard or Lower	19,542		32,951		15,912		11,249		32,297		42,405		—		6,527		160,883
		$	210,302	$	798,438	$	560,241	$	434,824	$	371,269	$	364,106	$	8,214	$	236,733	$	2,984,127		$	258,826	$	1,139,356	$	455,808	$	359,726	$	202,181	$	470,064	$	8,520	$	250,845	$	3,145,326
Current-period gross writeoffs																				Current-period gross writeoffs	$	—	$	1,212	$	2,080	$	730	$	2,751	$	2,689	$	—	$	—	$	9,462
Owner-occupied commercial:	Owner-occupied commercial:																			Owner-occupied commercial:
Risk Rating	Risk Rating																			Risk Rating
Pass	Pass	$	55,073	$	403,732	$	312,617	$	268,920	$	131,476	$	472,999	$	—	$	132,633	$	1,777,450	Pass	$	83,580	$	288,375	$	309,616	$	237,499	$	216,853	$	430,955	$	—	$	164,335	$	1,731,213
Special mention	Special mention	—		3,449		2,921		2,526		1,298		6,813		—		47		17,054		Special mention	—		528		4,404		—		8,793		1,577		—		3,321		18,623
Substandard or Lower	Substandard or Lower	—		5,265		19,340		6,314		11,978		20,237		—		15,189		78,323		Substandard or Lower	—		16,559		—		16,890		2,911		41,785		—		18,680		96,825
		$	55,073	$	412,446	$	334,878	$	277,760	$	144,752	$	500,049	$	—	$	147,869	$	1,872,827		$	83,580	$	305,462	$	314,020	$	254,389	$	228,557	$	474,317	$	—	$	186,336	$	1,846,661
Current-period gross writeoffs																				Current-period gross writeoffs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial mortgages:	Commercial mortgages:																			Commercial mortgages:
Risk Rating	Risk Rating																			Risk Rating
Pass	Pass	$	70,519	$	719,997	$	568,289	$	615,715	$	275,125	$	791,959	$	—	$	186,784	$	3,228,388	Pass	$	191,579	$	549,453	$	589,605	$	521,373	$	527,593	$	792,548	$	—	$	236,709	$	3,408,860
Special mention	Special mention	—		2,996		15,918		12,596		10,547		39,958		—		2,086		84,101		Special mention	9,255		—		73		—		6,040		2,519		—		—		17,887
Substandard or Lower	Substandard or Lower	—		2,892		8,618		7,066		13,189		16,988		—		—		48,753		Substandard or Lower	10,542		17,862		1,210		10,074		1,637		4,448		—		563		46,336
		$	70,519	$	725,885	$	592,825	$	635,377	$	298,861	$	848,905	$	—	$	188,870	$	3,361,242		$	211,376	$	567,315	$	590,888	$	531,447	$	535,270	$	799,515	$	—	$	237,272	$	3,473,083
Current-period gross writeoffs																				Current-period gross writeoffs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction:	Construction:																			Construction:
Risk Rating	Risk Rating																			Risk Rating
Pass	Pass	$	101,402	$	354,624	$	186,593	$	69,089	$	80,948	$	15,091	$	—	$	96,818	$	904,565	Pass	$	145,220	$	416,869	$	271,834	$	72,292	$	3,474	$	29,816	$	—	$	74,513	$	1,014,018
Special mention	Special mention	—		602		—		—		—		—		—		—		602		Special mention	—		—		—		—		—		—		—		—		—
Substandard or Lower	Substandard or Lower	2,025		13,126		1,621		218		—		88		—		1,645		18,723		Substandard or Lower	—		—		—		8,933		178		—		—		582		9,693
		$	103,427	$	368,352	$	188,214	$	69,307	$	80,948	$	15,179	$	—	$	98,463	$	923,890		$	145,220	$	416,869	$	271,834	$	81,225	$	3,652	$	29,816	$	—	$	75,095	$	1,023,711
Residential(3):
Current-period gross writeoffs																				Current-period gross writeoffs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Residential(2):																				Residential(2):
Risk Rating	Risk Rating																			Risk Rating
Performing	Performing	$	8,102	$	107,827	$	68,665	$	42,279	$	63,215	$	508,814	$	—	$	—	$	798,902	Performing	$	41,181	$	70,948	$	106,801	$	59,743	$	35,200	$	465,665	$	—	$	—	$	779,538
Nonperforming(4)		—		—		111		1,027		—		5,286		—		—		6,424
Nonperforming																				Nonperforming	—		171		848		495		994		4,014		—		—		6,522
		$	8,102	$	107,827	$	68,776	$	43,306	$	63,215	$	514,100	$	—	$	—	$	805,326		$	41,181	$	71,119	$	107,649	$	60,238	$	36,194	$	469,679	$	—	$	—	$	786,060
Consumer(5):
Current-period gross writeoffs																				Current-period gross writeoffs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer(3):																				Consumer(3):
Risk Rating	Risk Rating																			Risk Rating
Performing	Performing	$	100,753	$	239,198	$	151,851	$	64,709	$	224,593	$	105,028	$	488,139	$	5,125	$	1,379,396	Performing	$	47,316	$	660,218	$	184,966	$	120,731	$	51,660	$	267,492	$	529,652	$	4,476	$	1,866,511
Nonperforming(6)		—		—		189		—		526		—		1,521		484		2,720
Nonperforming																				Nonperforming	—		—		—		237		45		131		1,179		324		1,916
		$	100,753	$	239,198	$	152,040	$	64,709	$	225,119	$	105,028	$	489,660	$	5,609	$	1,382,116		$	47,316	$	660,218	$	184,966	$	120,968	$	51,705	$	267,623	$	530,831	$	4,800	$	1,868,427
Current-period gross writeoffs																				Current-period gross writeoffs	$	220	$	2,793	$	994	$	59	$	79	$	59	$	—	$	—	$	4,204

(1)Includes commercial small business leases.

(2)~~Includes $8.5 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 accruing interest.~~

~~(5)~~(3)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 accruing interest.~~

2826

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 December 31, ~~2021.~~2022.


		Term Loans Amortized Cost Basis by Origination Year																			Term Loans Amortized Cost Basis by Origination Year
		2021		2020		2019		2018		2017		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total			2022		2021		2020		2019		2018		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
(Dollars in thousands)	(Dollars in thousands)																			(Dollars in thousands)
Commercial and industrial(1):	Commercial and industrial(1):																			Commercial and industrial(1):
Risk Rating	Risk Rating																			Risk Rating
Pass(2)		$	556,896	$	420,698	$	329,354	$	273,345	$	139,800	$	148,809	$	5,551	$	176,006	$	2,050,459
Pass																				Pass	$	1,123,803	$	501,761	$	387,225	$	211,310	$	153,713	$	276,588	$	8,099	$	250,486	$	2,912,985
Special mention	Special mention	35,910		949		3,052		1,057		429		15,299		—		17,545		74,241		Special mention	28,672		27,689		7,585		9,451		347		1,010		—		2,596		77,350
Substandard or Lower	Substandard or Lower	12,533		14,408		53,655		29,046		19,114		6,921		29		9,913		145,619		Substandard or Lower	32,362		16,162		6,943		37,534		37,133		6,768		—		7,089		143,991
		$	605,339	$	436,055	$	386,061	$	303,448	$	159,343	$	171,029	$	5,580	$	203,464	$	2,270,319		$	1,184,837	$	545,612	$	401,753	$	258,295	$	191,193	$	284,366	$	8,099	$	260,171	$	3,134,326
Owner-occupied commercial:	Owner-occupied commercial:																			Owner-occupied commercial:
Risk Rating	Risk Rating																			Risk Rating
Pass	Pass	$	305,156	$	189,128	$	172,503	$	67,526	$	136,697	$	262,629	$	—	$	128,188	$	1,261,827	Pass	$	280,898	$	325,388	$	258,177	$	226,717	$	106,390	$	363,420	$	—	$	132,942	$	1,693,932
Special mention	Special mention	938		5,359		2,561		891		—		7,019		—		10,543		27,311		Special mention	17,376		—		—		—		—		2,166		—		3,351		22,893
Substandard or Lower	Substandard or Lower	3,192		13,736		4,138		9,418		5,580		11,039		—		5,466		52,569		Substandard or Lower	2,981		1,500		23,284		4,401		11,864		35,311		—		13,416		92,757
		$	309,286	$	208,223	$	179,202	$	77,835	$	142,277	$	280,687	$	—	$	144,197	$	1,341,707		$	301,255	$	326,888	$	281,461	$	231,118	$	118,254	$	400,897	$	—	$	149,709	$	1,809,582
Commercial mortgages:	Commercial mortgages:																			Commercial mortgages:
Risk Rating	Risk Rating																			Risk Rating
Pass	Pass	$	416,149	$	280,889	$	217,311	$	134,477	$	229,863	$	368,527	$	—	$	187,396	$	1,834,612	Pass	$	516,783	$	600,226	$	526,312	$	549,788	$	276,414	$	594,024	$	—	$	210,550	$	3,274,097
Special mention	Special mention	—		4,185		—		861		11,588		1,385		—		2,097		20,116		Special mention	1,450		75		3,848		6,121		9,596		32,014		—		—		53,104
Substandard or Lower	Substandard or Lower	2,438		1,624		3,789		2,114		2,254		14,085		—		478		26,782		Substandard or Lower	1,861		1,210		12,552		2,909		3,573		1,209		—		569		23,883
		$	418,587	$	286,698	$	221,100	$	137,452	$	243,705	$	383,997	$	—	$	189,971	$	1,881,510		$	520,094	$	601,511	$	542,712	$	558,818	$	289,583	$	627,247	$	—	$	211,119	$	3,351,084
Construction:	Construction:																			Construction:
Risk Rating	Risk Rating																			Risk Rating
Pass	Pass	$	248,053	$	195,269	$	84,868	$	39,585	$	2,223	$	11,297	$	—	$	88,839	$	670,134	Pass	$	448,581	$	299,619	$	115,667	$	9,319	$	26,553	$	7,539	$	—	$	122,116	$	1,029,394

Special mention	Special mention	—		—		—		—		—		—		—		—		—		Special mention	—		—		—		—		—		—		—		581		581
Substandard or Lower	Substandard or Lower	12,922		—		2,422		—		90		—		—		1,645		17,079		Substandard or Lower	—		4,200		8,930		183		—		—		—		761		14,074
		$	260,975	$	195,269	$	87,290	$	39,585	$	2,313	$	11,297	$	—	$	90,484	$	687,213		$	448,581	$	303,819	$	124,597	$	9,502	$	26,553	$	7,539	$	—	$	123,458	$	1,044,049
Residential(3):
Residential(2):																				Residential(2):
Risk Rating	Risk Rating																			Risk Rating
Performing	Performing	$	59,977	$	28,426	$	12,526	$	32,871	$	44,969	$	358,964	$	—	$	—	$	537,733	Performing	$	64,500	$	110,508	$	60,625	$	36,118	$	45,859	$	434,175	$	—	$	—	$	751,785
Nonperforming(4)		—		112		1,044		—		63		3,781		—		—		5,000
Nonperforming																				Nonperforming	—		729		502		999		1,218		4,232		—		—		7,680
		$	59,977	$	28,538	$	13,570	$	32,871	$	45,032	$	362,745	$	—	$	—	$	542,733		$	64,500	$	111,237	$	61,127	$	37,117	$	47,077	$	438,407	$	—	$	—	$	759,465
Consumer(5):
Consumer(3):																				Consumer(3):
Risk Rating	Risk Rating																			Risk Rating
Performing	Performing	$	219,918	$	169,922	$	74,048	$	203,519	$	39,113	$	60,952	$	382,718	$	5,364	$	1,155,554	Performing	$	595,158	$	195,397	$	126,456	$	54,449	$	220,039	$	71,478	$	540,308	$	5,232	$	1,808,517
Nonperforming(6)		—		147		—		600		71		—		1,655		546		3,019
Nonperforming																				Nonperforming	—		—		350		—		479		—		1,255		329		2,413
		$	219,918	$	170,069	$	74,048	$	204,119	$	39,184	$	60,952	$	384,373	$	5,910	$	1,158,573		$	595,158	$	195,397	$	126,806	$	54,449	$	220,518	$	71,478	$	541,563	$	5,561	$	1,810,930

(1)Includes commercial small business leases.

(2)~~Includes $31.5 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 accruing interest.~~

~~(5)~~(3)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 accruing interest.~~

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Troubled Loans

The following table shows the amortized cost basis at the end of the reporting period of troubled loans, disaggregated by portfolio segment and type of concession granted.


	March 31, 2023
(Dollars in thousands)	Term Extension		More-Than-Insignificant Payment Delay		Combination- Term Extension and Payment Delay		Combination- Term Extension and Interest Rate Reduction		Combination - Payment Delay and Interest Rate Reduction		Total		% of Total Loan Category
Commercial and industrial(1)	$	12,837	$	—	$	—	$	—	$	—	$	12,837	0.41	%

Owner-occupied commercial	—		—		—		148		—		148		0.01	%

Commercial mortgages	2,057		—		—		—		—		2,057		0.06	%





Consumer(2)	803		162		1,777		158		119		3,019		0.16	%

Total	$	15,697	$	162	$	1,777	$	306	$	119	$	18,061	0.15	%

(1)Includes commercial small business leases.

(2)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.

The following table describes the financial effect of the modifications made to troubled loans as of March 31, 2023:


	Term Extension(1)	Interest Rate Reduction(2)	More-Than-Insignificant Payment Delay(3)
Commercial and industrial	0.91	—%	—
Owner-occupied commercial	0.96	2.56	—
Commercial mortgages	0.48	—	—


Consumer	6.71	2.07	77.76%

(1)Represents the weighted-average increase in the life of modified loans measured in years, which reduces monthly payment amounts for borrowers.

(2)Represents the weighted-average decrease in the contractual interest rate on the modified loans.

(3)Represents the weighted-average percentage monthly payments were reduced during the period of modification.

As of March 31, 2023, the Company had commitments to extend credit of $1.5 million to borrowers experiencing financial difficulty whose terms had been modified.

Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. There were no loans that had a payment default during the period and were modified in the 12 months before default to borrowers experiencing financial difficulty.

The Company closely monitors the performance of troubled loans to understand the effectiveness of its modification efforts. The following table shows the performance of loans that have been modified in the last 12 months:


	March 31, 2023
(Dollars in thousands)	30-89 Days Past Due and Still Accruing		90+ Days Past Due and Still Accruing		Accruing Current Balances		Total
Commercial and industrial(1)	$	—	$	—	$	12,837	$	12,837
Owner-occupied commercial	—		—		148		148
Commercial mortgages	1,016		1,041		—		2,057


Consumer(2)	25		—		2,994		3,019
Total	$	1,041	$	1,041	$	15,979	$	18,061

(1)Includes commercial small business leases.

(2)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.

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Troubled Debt Restructurings (TDRs) under ASC 326 for periods prior to adoption of ASU 2022-02

The following table presents the balance of TDRs as of the indicated ~~dates:~~date:

(Dollars in thousands) March 31, 2022 December 31, 2021
Performing TDRs $ 12,933 $ 14,204
Nonperforming TDRs 706 756
Total TDRs $ 13,639 $ 14,960



(Dollars in thousands)	December 31, 2022
Performing TDRs	$	19,737
Nonperforming TDRs	2,006
Total TDRs	$	21,743

Approximately ~~$0.1 million and $0.2~~$0.6 million in related reserves have been established for these loans at ~~March 31, 2022 and~~ December 31, ~~2021, respectively.~~2022.

The following ~~tables present~~table presents information regarding the types of loan modifications made for the three months ended March 31, ~~2022 and 2021:~~2022:


	Three months ended March 31, 2022
	Contractual payment reduction and term extension	Maturity Date Extension	Discharged in bankruptcy	Other(1)	Total
Commercial and industrial	1	—	—	—	1



Residential	1	—	—	—	1
Consumer	1	—	2	1	4
Total	3	—	2	1	6

Three months ended March 31, 2021
Contractual payment reduction and term extension Maturity Date Extension Discharged in bankruptcy
Other(1)
Total
Residential — — 2 — 2
Consumer — — 19 — 19
Total — — 21 — 21

(1)Other includes interest rate reduction, forbearance, and interest only ~~payments..~~payments.

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. The following ~~tables present~~table presents loans modified as TDRs during the three months ended March 31, ~~2022 and 2021.~~2022.


		Three Months Ended March 31, 2022
						Three Months Ended March 31, 2022
(Dollars in thousands)	(Dollars in thousands)	Pre Modification		Post Modification			(Dollars in thousands)	Pre Modification		Post Modification
Commercial	Commercial	$	(8)	$	(8)		Commercial	$	(8)	$	(8)

Residential	Residential	6		6			Residential	$	6	$	6
Consumer	Consumer	258		258			Consumer	258		258
Total(1)(2)	Total(1)(2)	$	256	$	256		Total(1)(2)	$	256	$	256

(1)During the three months ended March 31, 2022 the TDRs set forth in the table above resulted in a $0.1 million increase in the allowance for credit losses, and no additional charge-offs. During the three months ended March 31, 2022, no 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 ~~Coronavirus Aid, Relief, and Economic Security (CARES)~~CARES Act.

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Three Months Ended March 31, 2021
(Dollars in thousands) Pre Modification Post Modification
Residential 167 167
Consumer 830 830
Total(1)(2)
$ 997 $ 997

~~(1)~~During the three months ended March 31, 2021 the TDRs set forth in the table above resulted in a less than $0.1 million increase in the allowance for credit losses, and no additional charge-offs. During the three months ended March 31, 2021, no 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.~~

9.8. 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 one year to 4039 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~~right-of-use asset is included in Other liabilities and Other assets, respectively, in the unaudited Consolidated ~~Statement~~Statements of Financial Condition. Leases with an initial term of 12 months or less are not recorded on the unaudited Consolidated ~~Statement~~Statements 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~~Statements 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 ended				Three months ended
(Dollars in thousands)	(Dollars in thousands)	March 31, 2022		March 31, 2021			(Dollars in thousands)	March 31, 2023		March 31, 2022
Operating lease cost (1)	Operating lease cost (1)	$	5,350	$	4,654		Operating lease cost (1)	$	4,793	$	5,350
Sublease income	Sublease income	(86)		(107)			Sublease income	(49)		(86)
Net lease cost	Net lease cost	$	5,264	$	4,547		Net lease cost	$	4,744	$	5,264

(1)Includes variable lease cost and short-term lease cost.

Supplemental balance sheet information related to operating leases was as follows:
(Dollars in thousands) March 31, 2022 December 31, 2021
Right of use assets $ 150,218 $ 144,134
Lease liabilities $ 171,204 $ 159,526
Lease term and discount rate
Weighted average remaining lease term (in years) 17.82 19.17
Weighted average discount rate 4.23 % 4.27 %

~~Table of Contents~~


(Dollars in thousands)	March 31, 2023			December 31, 2022

Right-of-use assets	$	129,642		$	138,182



Lease liabilities	$	150,162		$	158,269


Lease term and discount rate

Weighted average remaining lease term (in years)	17.86			17.91

Weighted average discount rate	4.25		%	4.25		%

Maturities of operating lease liabilities were as follows:
(Dollars in thousands) March 31, 2022
Remaining in 2022 $ 15,393
2023 20,769
2024 19,442
2025 19,441
2026 15,785
After 2026 184,134
Total lease payments 274,964
Less: Interest (103,760)
Present value of lease liabilities $ 171,204


(Dollars in thousands)	March 31, 2023
Remaining in 2022	$	14,571
2023	18,100
2024	18,113
2025	14,597
2026	13,157
After 2026	152,418
Total lease payments	230,956
Less: Interest	(80,794)
Present value of lease liabilities	$	150,162

Supplemental cash flow information related to operating leases was as follows:
Three months ended
(Dollars in thousands) March 31, 2022 March 31, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 5,651 $ 4,382
Right of use assets obtained in exchange for new operating lease liabilities (non-cash) 13,707 —

In connection with the BMBC Merger, the Company initiated a branch optimization initiative for the combined locations of the legacy companies. During the three months ended March 31, 2022, the Company recorded $4.3 million of accelerated right-of-use asset amortization expense due to asset impairment for the leased locations to be terminated.


	Three months ended
(Dollars in thousands)	March 31, 2023		March 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	5,060	$	5,651
Right of use assets obtained in exchange for new operating lease liabilities (non-cash)	—		13,707

As of March 31, ~~2022,~~2023, the Corporation had not entered into any material leases that have not yet commenced.

Table of Contents

Lessor Equipment Leasing

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

The components of direct finance lease income are summarized in the table below:
Three months ended
(Dollars in thousands) March 31, 2022 March 31, 2021
Direct financing leases:
Interest income on lease receivable $ 9,737 $ 4,623
Interest income on deferred fees and costs, net (544) (318)
Total direct financing lease net interest income $ 9,193 $ 4,305


	Three months ended
(Dollars in thousands)	March 31, 2023		March 31, 2022
Direct financing leases:
Interest income on lease receivable	$	12,382	$	9,737
Interest income on deferred fees and costs, net	(1,386)		(544)
Total direct financing lease net interest income	$	10,996	$	9,193

Equipment leasing receivables relate to direct financing leases. The composition of the net investment in direct financing leases was as follows:


(Dollars in thousands)	(Dollars in thousands)	March 31, 2022		December 31, 2021		(Dollars in thousands)	March 31, 2023		December 31, 2022
Lease receivables	Lease receivables	$	558,662	$	399,688	Lease receivables	$	665,312	$	642,369
Unearned income	Unearned income	(76,990)		(55,066)		Unearned income	(101,911)		(95,683)
Deferred fees and costs	Deferred fees and costs	8,927		7,654		Deferred fees and costs	13,183		12,295
Net investment in direct financing leases	Net investment in direct financing leases	$	490,599	$	352,276	Net investment in direct financing leases	$	576,584	$	558,981

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~~10.~~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 three months ended March 31, ~~2022,~~2023, management determined based on its qualitative assessment that it is not more likely than not that the fair values of our reporting units are less than their carrying values. No goodwill impairment exists during the three months ended March 31, ~~2022.~~2023.

The following table shows the allocation of goodwill to the reportable operating segments for purposes of goodwill impairment testing:

(Dollars in thousands) WSFS
Bank Cash
Connect Wealth
Management Consolidated
Company
December 31, 2021 $ 452,629 $ — $ 20,199 $ 472,828
Goodwill from business combinations 297,646 — 116,691 414,337
March 31, 2022 $ 750,275 $ — $ 136,890 $ 887,165


(Dollars in thousands)	WSFS Bank		Cash Connect®		Wealth Management		Consolidated Company
December 31, 2022	$	753,586	$	—	$	130,051	$	883,637

Goodwill adjustments	—		—		—		—
March 31, 2023	$	753,586	$	—	$	130,051	$	883,637

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
March 31, 2022
March 31, 2023									March 31, 2023
Core deposits									Core deposits	$	104,751	$	(43,022)	$	61,729	10 years
Customer relationships									Customer relationships	68,281		(14,202)		54,079		7-15 years

Tradename									Tradename	2,900		—		2,900		indefinite
Loan servicing rights(1)									Loan servicing rights(1)	11,357		(5,452)		5,905		10-25 years
Total intangible assets									Total intangible assets	$	187,289	$	(62,676)	$	124,613
December 31, 2022									December 31, 2022
Core deposits	Core deposits	$	104,751	$	(32,599)	$	72,152	10 years	Core deposits	$	104,751	$	(40,443)	$	64,308	10 years
Customer relationships	Customer relationships	72,381		(9,218)		63,163		7-15 years	Customer relationships	68,281		(12,937)		55,344		7-15 years
Non-compete agreements	Non-compete agreements	500		(125)		375		1 year	Non-compete agreements	200		(200)		—		1 year
Tradename	Tradename	2,800		—		2,800		indefinite	Tradename	2,900		—		2,900		indefinite
Loan servicing rights(1)		10,321		(3,787)		6,534		10-25 years
Total intangible assets		$	190,753	$	(45,729)	$	145,024
December 31, 2021
Core deposits		$	93,811	$	(30,103)	$	63,708	10 years
Customer relationships		15,281		(7,876)		7,405		7-15 years

Loan servicing rights(2)	Loan servicing rights(2)	6,671		(3,381)		3,290		10-25 years	Loan servicing rights(2)	11,118		(5,075)		6,043		10-25 years
Total intangible assets	Total intangible assets	$	115,763	$	(41,360)	$	74,403		Total intangible assets	$	187,250	$	(58,655)	$	128,595

(1)Includes reversal of impairment losses of less than $0.1 million for the three months ended March 31, ~~2022.~~2023.

(2)Includes ~~reversal of~~ impairment losses of $0.3 million for the year ended December 31, ~~2021~~2022

In connection with the BMBC Merger on January 1, 2022, the Company recorded $10.9 million of core deposit intangibles, $57.1 million of customer relationships, $2.8 million for the Bryn Mawr Trust tradename, $0.5 million in non-compete agreements, and $3.3 million of loan servicing rights. See Note 3 to the unaudited Consolidated Financial Statements for additional information on intangible assets recorded in connection with the BMBC Merger.

The Company recognized amortization expense on intangible assets of $3.8 million for the three months ended March 31, 2023, compared to $4.0 million for the three months ended March 31, ~~2022, compared to $2.7 million for the three months ended March 31, 2021.~~

2022.

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The following table presents the estimated future amortization expense on definite life intangible assets:


(Dollars in thousands)	(Dollars in thousands)	March 31, 2022		(Dollars in thousands)	March 31, 2023
Remaining in 2022		$	13,249
2023		16,830
Remaining in 2023				Remaining in 2023	$	12,393
2024	2024	16,558		2024	16,308
2025	2025	16,218		2025	15,978
2026	2026	15,551		2026	15,316
2027				2027	14,893
Thereafter	Thereafter	63,818		Thereafter	46,825
Total	Total	$	142,224	Total	$	121,713

Servicing Assets

The Company records mortgage servicing rights on its mortgage loan servicing portfolio, which includes mortgages that it acquires or originates as well as mortgages that it services for others, and servicing rights on Small Business Administration (SBA) loans. Mortgage servicing rights and SBA loan servicing rights are included are in Intangible assets in the accompanying unaudited Consolidated Statements of Financial Condition. Mortgage loans which the Company services for others are not included in Loans and leases, net of allowance in the accompanying unaudited Consolidated Statements of Financial Condition. Servicing rights represent the present value of the future net servicing fees from servicing mortgage loans the Company acquires or originates, or that it services for others.

The value of the Company's mortgage servicing rights was ~~$2.4~~$2.0 million and ~~$0.5~~$2.1 million at March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively, and the value of its SBA loan servicing rights was ~~$4.1~~$3.9 million and ~~$2.8~~$4.0 million at March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. ~~In connection with the BMBC Merger, the Company acquired $2.0 million of mortgage servicing rights and $1.3 million of SBA loan servicing rights.~~ Changes in the value of ~~these~~the Company's servicing rights resulted in a reversal of impairment losses of less than $0.1 million for both the three months ended March 31, ~~2022~~2023 and ~~reversal of impairment loss of $0.1 million three months ended March 31, 2021.~~2022. Revenues from originating, marketing and servicing mortgage loans as well as valuation adjustments related to capitalized mortgage servicing rights are included in Mortgage banking activities, net in the unaudited Consolidated Statements of Income and revenues from the Company's SBA loan servicing rights are included in Loan and lease fee income in the unaudited Consolidated Statements of Income.

Besides the impairment on loan servicing rights noted above, there was no impairment of other intangible assets as of March 31, ~~2022~~2023 or December 31, ~~2021~~.2022. Changing economic conditions that may adversely affect the Company's performance and could result in impairment, which could adversely affect earnings in the future.

~~11.~~10. DEPOSITS

The following table shows deposits by category:
(Dollars in thousands) March 31, 2022 December 31, 2021
Noninterest-bearing:
Noninterest demand $ 6,638,890 $ 4,565,143
Total noninterest-bearing $ 6,638,890 $ 4,565,143
Interest-bearing:
Interest-bearing demand $ 3,292,375 $ 2,793,279
Savings 2,278,863 1,970,744
Money market 4,178,959 2,906,260
Customer time deposits 1,155,819 988,974
Brokered deposits 78,638 15,662
Total interest-bearing 10,984,654 8,674,919
Total deposits $ 17,623,544 $ 13,240,062


(Dollars in thousands)			March 31, 2023		December 31, 2022
Noninterest-bearing:
	Noninterest demand		$	5,299,094	$	5,739,647
		Total noninterest-bearing	$	5,299,094	$	5,739,647

Interest-bearing:
	Interest-bearing demand		$	3,159,174	$	3,346,682
	Savings		1,967,130		2,161,858
	Money market		4,001,770		3,730,778

	Customer time deposits		1,453,211		1,102,013
	Brokered deposits		309,309		122,591
		Total interest-bearing	10,890,594		10,463,922
		Total deposits	$	16,189,688	$	16,203,569

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~~12. BORROWED FUNDS~~

~~The following is a summary of borrowed funds by type as of March 31, 2022 and December 31, 2021:~~

(Dollars in thousands) March 31, 2022 December 31, 2021
Trust preferred borrowings $ 90,295 $ 67,011
Senior and subordinated debt 248,488 147,939
Other borrowed funds 33,619 24,527

~~The following table sets forth information concerning borrowed funds by type as of and for the three months ended March 31, 2022 and March 31, 2021:~~

(Dollars in thousands)
Balance at
End of
Period
Weighted
Average
Interest
Rate
Maximum
Outstanding
at Month
End During
the Period
Average
Amount
Outstanding
During the
Year
Weighted
Average
Interest
Rate
During the
Year
March 31, 2022
Trust preferred borrowings $ 90,295 2.47 % $ 90,295 $ 90,263 2.30 %
Senior and subordinated debt 248,488 3.27 248,566 248,565 3.10
Other borrowed funds 33,619 0.10 37,941 38,396 0.10
March 31, 2021
Federal funds purchased $ — — % $ — $ 736 2.76 %
Trust preferred borrowings 67,011 1.96 67,011 67,011 1.96
Senior debt 246,734 3.45 246,734 245,654 3.67
Other borrowed funds 21,456 0.10 21,456 19,656 0.10

~~Federal Funds Purchased and Securities Sold Under Agreements to Repurchase~~

~~The Company may utilize federal funds as a short-term funding source. The Company had no securities sold under agreements to repurchase at March 31, 2022 and December 31, 2021.~~

~~Federal Home Loan Bank Advances~~

~~The Company had no FHLB Advances at March 31, 2022 and December 31, 2021.~~

Pursuant to collateral agreements with the FHLB, advances are secured by qualifying loan collateral, qualifying fixed-income securities, FHLB stock and an interest-bearing demand deposit account with the FHLB. As a member of the FHLB, the Company is required to purchase and hold shares of capital stock in the FHLB and was in compliance with this requirement with a stock investment in FHLB of $8.8 million at March 31, 2022 and $6.1 million at December 31, 2021. This stock is carried on the accompanying Consolidated Statements of Financial Condition at cost, which approximates liquidation value.

~~The Company received dividends on its stock investment in FHLB less than $0.1 million for the three months ended March 31, 2022 and 2021, respectively.~~

~~Trust Preferred Borrowings~~

In 2005, the Company issued $67.0 million of aggregate principal amount of Pooled Floating Rate Securities at a variable interest rate of 177 basis points over the three-month LIBOR rate. These securities are currently callable and have a maturity date of June 1, 2035.

In connection with the BMBC Merger, WSFS acquired Royal Bancshares Capital Trust I (Trust I) and Royal Bancshares Capital Trust II (Trust II) (collectively, the Trusts), which were utilized for the sole purpose of issuing and selling capital securities representing preferred beneficial interests. Although WSFS owns an aggregate of $774.0 thousand of the common securities of Trust I and Trust II, the Trusts are not consolidated into the Corporation’s Consolidated Financial Statements as the Corporation is not deemed to be the primary beneficiary of these entities. Inclusive of the fair value marks, WSFS assumed junior subordinated debentures to the Trusts with a carrying value of$11.6 million each, totaling $23.2 million. The junior subordinated debentures incur interest at a coupon rate of 2.98% as of March 31, 2022. The rate resets quarterly based on 3-month LIBOR plus 2.15%.

~~Table of Contents~~

Each of Trust I and Trust II issued an aggregate principal amount of $12.5 million of capital securities initially bearing fixed and/or fixed/floating interest rates corresponding to the debt securities held by each Trust to an unaffiliated investment vehicle and an aggregate principal amount of $387.0 thousand of common securities bearing fixed and/or fixed/floating interest rates corresponding to the debt securities held by each Trust to the Company. The Company has fully and unconditionally guaranteed all of the obligations of the Trusts, including any distributions and payments on liquidation or redemption of the capital securities.

The rights of holders of common securities of the Trusts are subordinate to the rights of the holders of capital securities only in the event of a default; otherwise, the common securities’ economic and voting rights are pari passu with the capital securities. The capital and common securities of the Trusts are subject to mandatory redemption upon the maturity or call of the junior subordinated debentures held by each. Unless earlier dissolved, the Trusts will dissolve on December 15, 2034. The junior subordinated debentures are the sole assets of Trusts, mature on December 15, 2034, and may be called at par by the Company any time. The Company records its investments in the Trusts’ common securities of $387.0 thousand each as investments in unconsolidated entities and records dividend income upon declaration by Trust I and Trust II.

~~Senior and Subordinated Debt~~

On June 13, 2016, the Company issued $100.0 million of senior notes due 2026 (the 2026 Notes). The 2026 Notes had a fixed coupon rate of 4.50% from issuance to but excluding June 15, 2021 and a variable coupon rate of three month LIBOR plus 3.30% from June 15, 2021 until maturity. The 2026 Notes were redeemed on June 15, 2021 at 100% of principal plus accrued and unpaid interest using cash on hand.

On December 3, 2020, the Company issued $150.0 million of senior notes due 2030 (the 2030 Notes). The 2030 Notes mature on December 15, 2030 and have a fixed coupon rate of 2.75% from issuance until December 15, 2025 and a variable coupon rate equal to the three-month term SOFR, reset quarterly, plus 2.485% from December 15, 2025 until maturity. The 2030 Notes may be redeemed beginning December 15, 2025 at 100% of principal plus accrued and unpaid interest. The remaining net proceeds from the issuance of the 2030 Notes are being used for general corporate purposes, including, but not limited to, financing organic growth, acquisitions, repurchases of common stock, and redemption of outstanding indebtedness. The carrying value of the 2030 Notes, inclusive of deferred issuance costs, was $148.0 million as of March 31, 2022.

In connection with the BMBC Merger, the Company assumed $30.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes due 2025 (the 2025 Notes) which were issued in a private placement to institutional accredited investors on August 6, 2015. The 2025 Notes mature on August 15, 2025, and currently bear interest at a variable rate that resets quarterly to a level equal to the then-current three-month LIBOR rate plus 3.068% until August 15, 2025, or any early redemption date. The interest rate of the 2025 Notes was 3.570% as of March 31, 2022. The carrying value of the 2025 Notes, inclusive of purchase accounting marks, was $30.0 million as of March 31, 2022.

In connection with the BMBC Merger, the Company assumed $70.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes due 2027 (the 2027 Notes) which were issued by BMBC in an underwritten public offering on December 13, 2017. The 2027 Notes mature on December 15, 2027, and currently bear interest at an annual fixed rate of 4.25% until and including December 14, 2022, and will thereafter bear interest at a variable rate that will reset quarterly to a level equal to the then-current three-month LIBOR rate plus 2.05% until December 15, 2027, or any early redemption date. The carrying value of the 2027 Notes, inclusive of purchase accounting marks, was $70.5 million as of March 31, 2022.

~~Other Borrowed Funds~~

Included in other borrowed funds are collateralized borrowings of $33.6 million and $24.5 million at March 31, 2022 and December 31, 2021, respectively, consisting of outstanding retail repurchase agreements, contractual arrangements under which portions of certain securities are sold overnight to retail customers under agreements to repurchase. Such borrowings were collateralized by mortgage-backed securities.

~~Borrower in Custody~~

The Company had $255.6 million and $282.1 million of loans and securities pledged to the Federal Reserve of Philadelphia (FRB) at March 31, 2022 and December 31, 2021, respectively. The Company did not borrow funds from the FRB during the three months ended March 31, 2022 or 2021.

~~Table of Contents~~

~~13.~~11. INCOME TAXES

There were no unrecognized tax benefits as of March 31, ~~2022.~~2023. 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 ~~2018~~2019 through ~~2021~~2022 tax years are subject to examination as of March 31, ~~2022.~~2023. The Company does not expect to record or realize any material unrecognized tax benefits during ~~2022.~~2023.

The amortization of the low-income housing credit investments has been reflected as income tax expense of ~~$1.2~~$1.4 million and ~~$0.9~~$1.2 million for the three months ended March 31, 2023 and 2022, ~~and 2021.~~respectively.

The amount of affordable housing tax credits, amortization, and tax benefits recorded as income tax expense for the three months ended March 31, ~~2022~~2023 were ~~$1.1 million,~~ $1.2 million, $1.4 million and ~~$0.3~~$0.4 million, respectively. The carrying value of the investment in affordable housing credits is ~~$38.4~~$67.6 million at March 31, ~~2022,~~2023, compared to ~~$39.6~~$69.0 million at December 31, ~~2021.~~2022.

~~14.~~

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12. FAIR VALUE DISCLOSURES OF FINANCIAL ASSETS AND LIABILITIES

FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

ASC 820-10, Fair Value Measurement (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.

~~Table of Contents~~

The following tables present financial instruments carried at fair value as of March 31, ~~2022~~2023 and December 31, ~~2021~~2022 by level in the valuation hierarchy (as described above):

March 31, 2022
(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:
Available-for-sale securities:
CMO $ — $ 563,090 $ — $ 563,090
FNMA MBS — 4,586,978 — 4,586,978
FHLMC MBS — 126,406 — 126,406
GNMA MBS — 16,059 — 16,059
GSE agency notes — 203,396 — 203,396
Other assets — 72,252 209 72,461
Total assets measured at fair value on a recurring basis $ — $ 5,568,181 $ 209 $ 5,568,390
Liabilities measured at fair value on a recurring basis:
Other liabilities $ — $ 70,516 $ 18,632 $ 89,148
Assets measured at fair value on a nonrecurring basis:
Other investments $ — $ — $ 13,651 $ 13,651
Other real estate owned — — 1,818 1,818
Loans held for sale — 70,617 — 70,617
Total assets measured at fair value on a nonrecurring basis $ — $ 70,617 $ 15,469 $ 86,086

December 31, 2021
(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:
Available-for-sale securities:
CMO $ — $ 575,766 $ — $ 575,766
FNMA MBS — 4,245,684 — 4,245,684
FHLMC MBS — 145,528 — 145,528
GNMA MBS — 17,936 — 17,936
GSE agency notes — 220,397 — 220,397
Other assets — 5,153 — 5,153
Total assets measured at fair value on a recurring basis $ — $ 5,210,464 $ — $ 5,210,464
Liabilities measured at fair value on a recurring basis:
Other liabilities $ — $ 3,039 $ 20,252 $ 23,291
Assets measured at fair value on a nonrecurring basis
Other investments $ — $ — $ 10,518 $ 10,518
Other real estate owned — — 2,320 2,320
Loans held for sale — 113,349 — 113,349
Total assets measured at fair value on a nonrecurring basis $ — $ 113,349 $ 12,838 $ 126,187


	March 31, 2023
(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:
Available-for-sale securities:
CMO	$	—	$	506,136	$	—	$	506,136
FNMA MBS	—		3,235,823		—		3,235,823
FHLMC MBS	—		122,089		—		122,089
GNMA MBS	—		40,242		—		40,242
GSE agency notes	—		182,169		—		182,169

Other assets	—		122,085		78		122,163
Total assets measured at fair value on a recurring basis	$	—	$	4,208,544	$	78	$	4,208,622

Liabilities measured at fair value on a recurring basis:
Other liabilities	$	—	$	119,622	$	16,295	$	135,917

Assets measured at fair value on a nonrecurring basis:
Other investments	$	—	$	—	$	24,797	$	24,797
Other real estate owned	—		—		1,131		1,131
Loans held for sale	—		39,734		—		39,734

Total assets measured at fair value on a nonrecurring basis	$	—	$	39,734	$	25,928	$	65,662

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	December 31, 2022
(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:
Available-for-sale securities:
CMO	$	—	$	506,380	$	—	$	506,380
FNMA MBS	—		3,250,258		—		3,250,258
FHLMC MBS	—		121,999		—		121,999
GNMA MBS	—		36,138		—		36,138
GSE agency notes	—		178,285		—		178,285

Other assets	—		156,912		81		156,993
Total assets measured at fair value on a recurring basis	$	—	$	4,249,972	$	81	$	4,250,053

Liabilities measured at fair value on a recurring basis:
Other liabilities	$	—	$	156,520	$	17,102	$	173,622

Assets measured at fair value on a nonrecurring basis
Other investments	$	—	$	—	$	26,120	$	26,120
Other real estate owned	—		—		833		833
Loans held for sale	—		42,985		—		42,985

Total assets measured at fair value on a nonrecurring basis	$	—	$	42,985	$	26,953	$	69,938

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 GSEs 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 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 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.

Table of Contents

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, derivatives on the residential mortgage held for sale loan pipeline, and risk participation agreements. 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 risk participation agreements are obtained from an independent pricing service.

Other liabilities

Other liabilities include the fair value of interest rate products, derivatives on the residential mortgage held for sale loan pipeline, foreign exchange forward contracts, risk participation agreements, 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 foreign exchange forward contracts and risk participation agreements are obtained from an independent pricing service. 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.

~~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, 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).

Table of Contents

Loans and leases

Loans and leases are segregated by portfolio segments with similar financial characteristics. The fair values of loans and leases, 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 products, derivatives on the residential mortgage held for sale loan pipeline, and risk participation agreements (see discussion in “Fair Value of Financial Assets and Liabilities” section above).

~~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.

Off-balance sheet instruments

The fair value of off-balance sheet instruments, including swap guarantees of ~~$12.5~~$9.9 million at March 31, ~~2022~~2023 and ~~$13.1~~$10.4 million at December 31, ~~2021,~~2022, respectively, and standby letters of credit, approximates the recorded net deferred fee 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

Table of Contents

Financial instruments measured at fair value using significant unobservable inputs (Level 3)

The following table provides a description of the valuation ~~technique~~techniques and significant unobservable inputs for the Company's financial instruments classified as Level 3:

March 31, 2022
Financial Instrument Fair Value Valuation Technique(s) Unobservable Input Range
(Weighted Average)
Other investments $ 13,651 Observed market comparable transactions Period of observed transactions May 2021
Other real estate owned 1,818 Fair market value of collateral Costs to sell 10.0%
Other assets (Risk participation agreements purchased) 209 Credit Value Adjustment CDS Spread and Loss Given Default (LGD)
CDS spread: 110 - 250 bps
LGD: 30%
Other liabilities (Risk participation agreements sold) 7 Credit Value Adjustment CDS Spread and Loss Given Default (LGD)
CDS spread: 1 - 250 bps
LGD: 30%
Other liabilities (Financial derivatives related to
sales of certain Visa Class B shares) 18,625 Discounted cash flow Timing of Visa litigation resolution 1.50 - 6.50 years (4.25 years or 4Q 2025)

~~Table of Contents~~

(Dollars in thousands)

March 31, 2023

Financial Instrument

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Other investments

24,797

Observed market comparable transactions

Period of observed transactions

May 2022

Other real estate owned

1,131

Fair market value of collateral

Costs to sell

10.0%

Other assets (Risk participation agreements purchased)

Credit Value Adjustment

CDS Spread and Loss Given Default (LGD)

CDS spread: 110 - 250 bps (195 bps)

LGD: –% - 30% (30%)

Other liabilities (Risk participation agreements sold)

Credit Value Adjustment

CDS Spread and Loss Given Default (LGD)

CDS spread: 1 - 250 bps (104 bps)

LGD: 30%

Other liabilities (Financial derivative related to
sales of certain Visa Class B shares)

16,291

Discounted cash flow

Timing of Visa litigation resolution

1.00 - 5.50 years (3.48 years or 4Q 2025)

The book value and estimated fair value of the Company's financial instruments are as follows:


			March 31, 2022				December 31, 2021						March 31, 2023				December 31, 2022
(Dollars in thousands)	(Dollars in thousands)	Fair Value Measurement	Book Value		Fair Value		Book Value		Fair Value		(Dollars in thousands)	Fair Value Measurement	Book Value		Fair Value		Book Value		Fair Value
Financial assets:	Financial assets:										Financial assets:
Cash, cash equivalents, and restricted cash	Cash, cash equivalents, and restricted cash	Level 1	$	2,283,769	$	2,283,769	$	1,532,939	$	1,532,939	Cash, cash equivalents, and restricted cash	Level 1	$	1,103,040	$	1,103,040	$	837,258	$	837,258
Investment securities available-for-sale	Investment securities available-for-sale	Level 2	5,495,929		5,495,929		5,205,311		5,205,311		Investment securities available-for-sale	Level 2	4,086,459		4,086,459		4,093,060		4,093,060
Investment securities held-to-maturity, net	Investment securities held-to-maturity, net	Level 2	84,898		85,754		90,642		94,131		Investment securities held-to-maturity, net	Level 2	1,094,799		1,035,856		1,111,619		1,040,104
Other investments	Other investments	Level 3	13,651		13,651		10,518		10,518		Other investments	Level 3	24,797		24,797		26,120		26,120
Loans, held for sale	Loans, held for sale	Level 2	70,617		70,617		113,349		113,349		Loans, held for sale	Level 2	39,734		39,734		42,985		42,985
Loans and leases, net(1)	Loans and leases, net(1)	Level 3	11,197,482		11,355,608		7,791,482		7,723,867		Loans and leases, net(1)	Level 3	11,976,845		11,955,133		11,759,992		11,567,888
Stock in FHLB of Pittsburgh	Stock in FHLB of Pittsburgh	Level 2	8,804		8,804		6,073		6,073		Stock in FHLB of Pittsburgh	Level 2	42,122		42,122		24,116		24,116
Accrued interest receivable	Accrued interest receivable	Level 2	53,241		53,241		41,596		41,596		Accrued interest receivable	Level 2	77,356		77,356		74,448		74,448
Other assets	Other assets	Level 2	72,461		72,461		5,153		5,153		Other assets	Levels 2, 3	122,163		122,163		156,993		156,993
Financial liabilities:	Financial liabilities:										Financial liabilities:
Deposits	Deposits	Level 2	17,623,544		17,603,155		13,240,062		13,236,816		Deposits	Level 2	$	16,189,688	$	16,147,909	$	16,203,569	$	16,156,124
Borrowed funds	Borrowed funds	Level 2	372,402		350,649		239,477		225,119		Borrowed funds	Level 2	1,138,206		1,129,912		726,894		709,014
Standby letters of credit	Standby letters of credit	Level 3	413		413		674		674		Standby letters of credit	Level 3	620		620		739		739
Accrued interest payable	Accrued interest payable	Level 2	5,258		5,258		736		736		Accrued interest payable	Level 2	15,135		15,135		5,174		5,174
Other liabilities	Other liabilities	Levels 2, 3	89,148		89,148		23,291		23,291		Other liabilities	Levels 2, 3	135,917		135,917		173,622		173,622

(1) Includes reverse mortgage loans.

At March 31, ~~2022~~2023 and December 31, ~~2021~~2022 the Company had no commitments to extend credit measured at fair value.

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~~15.~~13. 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. The ~~Corporation~~Company does not use derivative financial instruments for trading purposes.

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 March 31, ~~2022.~~2023.


	Fair Values of Derivative Instruments
(Dollars in thousands)		Count	Notional		Balance Sheet Location	Derivatives (Fair Value)
Derivatives designated as hedging instruments:
Interest rate products		1	$	100,000	Other assets	$	1,822
Total			$	100,000		$	1,822
Derivatives not designated as hedging instruments:
Interest rate products			$	1,916,460	Other assets	$	119,336
Interest rate products			1,919,729		Other liabilities	(119,336)
Interest rate lock commitments with customers			38,957		Other assets	752
Interest rate lock commitments with customers			859		Other liabilities	(1)
Forward sale commitments			11,257		Other assets	29
Forward sale commitments			23,850		Other liabilities	(167)
FX forwards			3,653		Other assets	146
FX forwards			3,000		Other liabilities	(118)
Risk participation agreements sold			106,926		Other liabilities	(4)
Risk participation agreements purchased			90,591		Other assets	78
Financial derivatives related to sales of certain Visa Class B shares			113,177		Other liabilities	(16,291)
Total derivatives			$	4,328,459		$	(13,754)

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Fair Values of Derivative Instruments
(Dollars in thousands) Notional Balance Sheet Location Derivatives
(Fair Value)
Derivatives not designated as hedging instruments:
Interest rate products $ 1,428,507 Other assets $ 69,824
Interest rate products 1,428,507 Other liabilities (69,874)
Interest rate lock commitments with customers 59,199 Other assets 833
Interest rate lock commitments with customers 48,435 Other liabilities (573)
Forward sale commitments 92,690 Other assets 1,595
Forward sale commitments 12,911 Other liabilities (39)
FX forwards 803 Other liabilities (30)
Risk participation agreements sold 53,175 Other liabilities (7)
Risk participation agreements purchased 66,872 Other assets 209
Financial derivatives related to
sales of certain Visa Class B shares 113,177 Other liabilities (18,625)
Total derivatives $ 3,304,276 $ (16,687)

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 December 31, ~~2021.~~2022.


		Fair Values of Derivative Instruments						Fair Values of Derivative Instruments
(Dollars in thousands)	(Dollars in thousands)		Notional		Balance Sheet Location	Derivatives (Fair Value)			(Dollars in thousands)	Notional		Balance Sheet Location	Derivatives (Fair Value)

Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:								Derivatives not designated as hedging instruments:
Interest rate products	Interest rate products		$	54,834	Other assets	$	2,625		Interest rate products	$	1,794,678	Other assets	$	156,414
Interest rate products	Interest rate products		54,834		Other liabilities	(2,847)			Interest rate products	1,794,678		Other liabilities	(156,414)
Risk participation agreements			4,214		Other liabilities	(3)
Interest rate lock commitments with customers	Interest rate lock commitments with customers		102,264		Other assets	1,991			Interest rate lock commitments with customers	24,673		Other assets	385
Interest rate lock commitments with customers	Interest rate lock commitments with customers		12,813		Other liabilities	(73)			Interest rate lock commitments with customers	1,179		Other liabilities	(7)
Forward sale commitments	Forward sale commitments		63,664		Other assets	537			Forward sale commitments	9,072		Other assets	75
Forward sale commitments	Forward sale commitments		67,032		Other liabilities	(116)			Forward sale commitments	20,719		Other liabilities	(54)
FX forwards									FX forwards	4,177		Other assets	38
FX forwards									FX forwards	3,052		Other liabilities	(45)
Risk participation agreements sold									Risk participation agreements sold	68,459		Other liabilities	(2)
Risk participation agreements purchased									Risk participation agreements purchased	87,168		Other assets	81
Financial derivatives related to sales of certain Visa Class B shares	Financial derivatives related to sales of certain Visa Class B shares		113,177		Other liabilities	(20,252)			Financial derivatives related to sales of certain Visa Class B shares	113,177		Other liabilities	(17,100)
Total derivatives	Total derivatives		$	472,832		$	(18,138)		Total derivatives	$	3,921,032		$	(16,629)

~~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, the Company primarily uses interest rate options, including floors, caps, collars, or swaps as part of its interest rate risk management strategy. Interest rate options 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.

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 February 2023, the Company purchased an interest rate floor at a premium of $1.4 million with a $100.0 million notional amount to hedge variable cash flows associated with a variable rate loan pool through the first quarter of 2026. 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. If the Company determines that a cash flow hedge is no longer highly effective, future changes in the fair value of the hedging instrument would be reported in earnings. During the three months ending March 31, 2023, less than $0.1 million of amortization expense on the premium was reclassified into interest income. The Company does not expect any unrealized gains or losses related to cash flow hedges to be reclassified into earnings in the next twelve months.

In 2020, the Company terminated its 3three interest rate ~~derivatives~~swaps that were designated as cash flow hedges for a net gain of $1.3 million, recognized in accumulated other comprehensive income. The derivatives were used to hedge the variable cash flows associated with a variable rate loan pool. Hedge accounting was discontinued, and the net gain in accumulated comprehensive income 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 three months ended March 31, ~~2022,~~2023, less than $0.1 million was reclassified into interest income. During the next twelve months, the Company estimates that an additional ~~$0.2~~$0.1 million will be reclassified as an increase to interest income.

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Derivatives Not Designated as Hedging Instruments:

Customer Derivatives – Interest Rate Swaps

The Company enters into interest rate swaps with commercial loan customers wishing to manage interest rate risk. The Company then enters into corresponding swap agreements with swap dealer counterparties to economically hedge the exposure arising from these contracts. The interest rate swaps with both the customers and third parties are not designated as hedges under ASC 815, Derivatives and Hedging (ASC 815) and are marked to market through earnings. As the interest rate swaps are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by ASC 820. As of March 31, 2023, there were no fair value adjustments related to credit quality.

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 effect of the derivative financial instruments on the unaudited Consolidated Statements of Income for the three months ended March 31, 2023 and March 31, 2022.








	Amount of (Loss) or Gain Recognized in Income				Location of Gain or (Loss) Recognized in Income
(Dollars in thousands)	Three Months Ended March 31,
Derivatives not designated as hedging instruments	2023		2022
Interest rate lock commitments with customers	$	421	$	(1,227)		Mortgage banking activities, net
Forward sale commitments	(148)		3,137			Mortgage banking activities, net
Total	$	273	$	1,910

Foreign Exchange Forward Contracts

The Company enters into foreign exchange forward contracts (FX forwards) with customers to exchange one currency for another on an agreed date in the future at an agreed exchange rate. The Corporation then enters into corresponding FX forwards with swap dealer counterparties to economically hedge its exposure on the exchange rate component of the customer agreements. The FX forwards with both the customers and third parties are not designated as hedges under ASC 815 and are marked to market through earnings. Exposure to gains and losses on these contracts increase or decrease over their respective lives as currency exchange and interest rates fluctuate. As the FX forwards are structured to offset each other, changes to the underlying term structure of currency exchange rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by ASC 820. As of March 31, 2023, there were no fair value adjustments related to credit quality.

Risk Participation Agreements

The Company may enter into a risk participation agreement (RPA) with another institution as a means to assume a portion of the credit risk associated with a loan structure which includes a derivative instrument, in exchange for fee income commensurate with the risk assumed. This type of derivative is referred to as an “RPA sold.” In addition, in an effort to reduce the credit risk associated with an interest rate swap agreement with a borrower for whom the Corporation has provided a loan structured with a derivative, the Corporation may purchase an RPA from an institution participating in the facility in exchange for a fee commensurate with the risk shared. This type of derivative is referred to as an “RPA purchased.”

~~Swap Guarantees~~Risk Participation Agreements

The Company ~~entered~~may enter into ~~agreements~~a risk participation agreement (RPA) with ~~5 unrelated financial institutions whereby those financial institutions entered into interest rate~~another institution as a means to assume a portion of the credit risk associated with a loan structure which includes a derivative ~~contracts (interest rate swap transactions) directly~~instrument, in exchange for fee income commensurate with ~~customers~~the risk assumed. This type of derivative is referred to ~~them by~~as an “RPA sold.” In addition, in an effort to reduce 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 tocredit risk associated with an interest rate swap ~~transactions~~agreement with a borrower for ~~our customers without creating~~whom the ~~swap ourselves. These swap guarantees are accounted~~Corporation has provided a loan structured with a derivative, the Corporation may purchase an RPA from an institution participating in the facility in exchange for ~~as credit derivatives.~~

At March 31, 2022 and December 31, 2021, there were 259 and 261 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 and $1.1 billion at March 31, 2022 and December 31, 2021, respectively. At March 31, 2022, the swap transactions remaining maturities ranged from under 1 year to 14 years. At March 31, 2022, 82 of these customer swaps were in a paying position to third parties for $6.6 million, with our swap guarantees having a fair value of $12.5 million. At December 31, 2021, 193 of these customer swaps were in a paying position to third parties for $35.8 million,fee commensurate with the ~~Company's swap guarantees having a fair value~~risk shared. This type of ~~$13.1 million. However, for both periods, none of the Company's customers were in default of the swap agreements.~~

~~Customer Derivatives~~ – ~~Interest Rate Swaps~~

The Company enters into interest rate swaps with commercial loan customers wishing to manage interest rate risk. The Company then enters into corresponding swap agreements with swap dealer counterparties to economically hedge the exposure arising from these contracts. The interest rate swaps with both the customers and third parties are not designated as hedges under FASB ASC 815 and are marked to market through earnings. As the interest rate swaps are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by FASB ASC 820. As of March 31, 2022, there were no fair value adjustments related to credit quality.

~~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, alsoderivative is 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 effect of the derivative financial instruments on the unaudited Consolidated Statements of Income for the three months ended March 31, 2022 and March 31, 2021.~~

Amount of (Loss) or Gain Recognized in Income Location of Gain or (Loss) Recognized in Income
(Dollars in thousands) Three Months Ended March 31,
Derivatives not designated as hedging instruments 2022 2021
Interest rate lock commitments with customers $ (1,227) $ (3,264) Mortgage banking activities, net
Forward sale commitments 3,137 6,123 Mortgage banking activities, net
Total $ 1,910 $ 2,859

~~Table of Contents~~

~~Foreign Exchange Forward Contracts~~

~~The Company enters into foreign exchange forward contracts (FX forwards) with customers to exchange one currency for another on~~ an agreed date in the future at an agreed exchange rate. The Corporation then enters into corresponding FX forwards with swap dealer counterparties to economically hedge its exposure on the exchange rate component of the customer agreements. The FX forwards with both the customers and third parties are not designated as hedges under FASB ASC 815 and are marked to market through earnings. Exposure to gains and losses on these contracts increase or decrease over their respective lives as currency exchange and interest rates fluctuate. As the FX forwards are structured to offset each other, changes to the underlying term structure of currency exchange rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by FASB ASC 820. As of March 31, 2022, there were no fair value adjustments related to credit quality.“RPA purchased.”

Risk Participation Agreements

Swap Guarantees

The Company entered into agreements with one 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.

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At March 31, 2023 and December 31, 2022, there were 203 and 209 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 $0.8 billion at March 31, 2023 and December 31, 2022. At March 31, 2023, the swap transactions remaining maturities ranged from under 1 year to 12 years. At March 31, 2023, 1 of these customer swaps was in a paying position to third parties for less than $0.1 million, with our swap guarantees having a fair value of $9.9 million. At December 31, 2022, none of these customer swaps were in a paying position to third parties, with the Company's swap guarantees having a fair value of $10.4 million. However, for both periods, none of the Company's customers were in default of the swap agreements.

Credit-risk-related Contingent Features

The Company has minimum collateral posting thresholds with certain of its derivative counterparties, and has posted collateral of ~~$6.0 million in securities and $7.2~~$6.7 million in cash against its obligations under these agreements which meets or exceeds the minimum collateral posting requirements. If the Company had breached any of these provisions at March 31, ~~2022,~~2023, it could have been required to settle its obligations under the agreements at the termination value.

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~~16.~~14. 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 3three segments: WSFS Bank, Cash Connect®, and Wealth Management.

The WSFS Bank segment provides financial products to commercial and ~~retail~~consumer customers. ~~Retail~~Consumer and Commercial Banking, Commercial Real Estate Lending and other banking business units are operating departments of WSFS Bank. These departments share the same regulators, 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~~Bryn Mawr Trust® ~~Investments provides financial~~is our predominant Private Wealth Management brand, providing advisory, ~~services along with insurance~~investment management 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 solutionstrustee services to institutions, affluent and high-net-worth individuals. The Bryn Mawr Trust Company of Delaware provides personal trust and fiduciary services to families and individuals across the U.S. and internationally. WSFS Institutional Services® provides trustee, agency, bankruptcy administration, custodial and commercial domicile services to institutional, corporate clients and special purpose vehicles. ~~BMT-DE~~Private Wealth Management serves high-net-worth clients and ~~Christiana Trust DE, which merged on April 1, 2022, provide personal~~institutions by providing trustee and advisory services, financial planning, customized investment strategies, brokerage products such as annuities and traditional banking services such as credit and deposit products tailored to its clientele. Private Wealth Management includes businesses that operate under the bank’s charter, through a broker/dealer and as a registered investment advisor (RIA). It generates revenue through fee-only arrangements, net interest income and other fee-only services such as estate administration, trust tax planning and ~~fiduciary services to families and individuals across the U.S. under The Bryn Mawr Trust Company of Delaware name.~~custody. 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 businesses to provide comprehensive solutions to clients. BMT Insurance Advisors is a full-service insurance agency, through which the Bank offers insurance and related products and services to its customer base. This includes casualty, property and allied insurance lines, as well as life insurance, annuities, medical insurance and accident and health insurance for groups and individuals.

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The following tables show segment results for the three months ended March 31, ~~2022~~2023 and ~~2021:~~2022:


		Three Months Ended March 31, 2022								Three Months Ended March 31, 2021									Three Months Ended March 31, 2023								Three Months Ended March 31, 2022
(Dollars in thousands)	(Dollars in thousands)	WSFS Bank		Cash Connect®		Wealth Management		Total		WSFS Bank		Cash Connect®		Wealth Management		Total		(Dollars in thousands)	WSFS Bank		Cash Connect®		Wealth Management		Total		WSFS Bank		Cash Connect®		Wealth Management		Total
Statements of Income	Statements of Income																	Statements of Income
External customer revenues:	External customer revenues:																	External customer revenues:
Interest income	Interest income	$	141,402	$	—	$	2,735	$	144,137	$	119,131	$	—	$	2,150	$	121,281	Interest income	$	221,285	$	—	$	5,098	$	226,383	$	141,402	$	—	$	2,735	$	144,137
Noninterest income	Noninterest income	18,825		10,070		31,679		60,574		23,348		9,702		14,772		47,822		Noninterest income	14,150		18,179		30,798		63,127		18,825		10,070		31,679		60,574
Total external customer revenues	Total external customer revenues	160,227		10,070		34,414		204,711		142,479		9,702		16,922		169,103		Total external customer revenues	235,435		18,179		35,896		289,510		160,227		10,070		34,414		204,711
Inter-segment revenues:	Inter-segment revenues:																	Inter-segment revenues:
Interest income	Interest income	1,052		326		5,339		6,717		844		269		2,695		3,808		Interest income	6,099		395		20,727		27,221		1,052		326		5,339		6,717
Noninterest income	Noninterest income	6,490		365		186		7,041		3,695		286		401		4,382		Noninterest income	6,900		461		105		7,466		6,490		365		186		7,041
Total inter-segment revenues	Total inter-segment revenues	7,542		691		5,525		13,758		4,539		555		3,096		8,190		Total inter-segment revenues	12,999		856		20,832		34,687		7,542		691		5,525		13,758
Total revenue	Total revenue	167,769		10,761		39,939		218,469		147,018		10,257		20,018		177,293		Total revenue	248,434		19,035		56,728		324,197		167,769		10,761		39,939		218,469
External customer expenses:	External customer expenses:																	External customer expenses:
Interest expense	Interest expense	5,403		—		176		5,579		6,904		—		192		7,096		Interest expense	38,487		—		5,364		43,851		5,403		—		176		5,579
Noninterest expenses	Noninterest expenses	148,501		7,549		18,407		174,457		80,544		7,298		7,777		95,619		Noninterest expenses	100,949		13,500		18,596		133,045		148,501		7,549		18,407		174,457
Provision for (recovery of) credit losses	Provision for (recovery of) credit losses	19,209		—		(238)		18,971		(19,593)		—		(567)		(20,160)		Provision for (recovery of) credit losses	27,717		—		1,294		29,011		19,209		—		(238)		18,971
Total external customer expenses	Total external customer expenses	173,113		7,549		18,345		199,007		67,855		7,298		7,402		82,555		Total external customer expenses	167,153		13,500		25,254		205,907		173,113		7,549		18,345		199,007
Inter-segment expenses:	Inter-segment expenses:																	Inter-segment expenses:
Interest expense	Interest expense	5,665		275		777		6,717		2,964		180		664		3,808		Interest expense	21,122		3,559		2,540		27,221		5,665		275		777		6,717
Noninterest expenses	Noninterest expenses	551		1,145		5,345		7,041		687		1,087		2,608		4,382		Noninterest expenses	566		1,346		5,554		7,466		551		1,145		5,345		7,041
Total inter-segment expenses	Total inter-segment expenses	6,216		1,420		6,122		13,758		3,651		1,267		3,272		8,190		Total inter-segment expenses	21,688		4,905		8,094		34,687		6,216		1,420		6,122		13,758
Total expenses	Total expenses	179,329		8,969		24,467		212,765		71,506		8,565		10,674		90,745		Total expenses	188,841		18,405		33,348		240,594		179,329		8,969		24,467		212,765
(Loss) income before taxes		$	(11,560)	$	1,792	$	15,472	$	5,704	$	75,512	$	1,692	$	9,344	$	86,548
Income before taxes																		Income before taxes	$	59,593	$	630	$	23,380	$	83,603	$	(11,560)	$	1,792	$	15,472	$	5,704
Income tax provision	Income tax provision							1,737								21,407		Income tax provision							20,941								1,737
Consolidated net income	Consolidated net income							3,967								65,141		Consolidated net income							62,662								3,967
Net income attributable to noncontrolling interest								163								59
Net (loss) income attributable to noncontrolling interest																		Net (loss) income attributable to noncontrolling interest							258								163
Net income attributable to WSFS	Net income attributable to WSFS							$	3,804							$	65,082	Net income attributable to WSFS							$	62,404							$	3,804
Supplemental Information	Supplemental Information																	Supplemental Information
Capital expenditures for the period ended	Capital expenditures for the period ended	$	1,647	$	—	$	—	$	1,647	$	1,270	$	—	$	—	$	1,270	Capital expenditures for the period ended	$	856	$	—	$	—	$	856	$	1,647	$	—	$	—	$	1,647

The following table shows significant components of segment net assets as of March 31, ~~2022~~2023 and December 31, ~~2021:~~2022:


		March 31, 2022								December 31, 2021									March 31, 2023								December 31, 2022
(Dollars in thousands)	(Dollars in thousands)	WSFS Bank		Cash Connect®		Wealth Management		Total		WSFS Bank		Cash Connect®		Wealth Management		Total		(Dollars in thousands)	WSFS Bank		Cash Connect®		Wealth Management		Total		WSFS Bank		Cash Connect®		Wealth Management		Total
Statements of Financial Condition	Statements of Financial Condition																	Statements of Financial Condition
Cash and cash equivalents	Cash and cash equivalents	$	1,773,611	$	479,576	$	30,582	$	2,283,769	$	1,039,046	$	477,806	$	16,087	$	1,532,939	Cash and cash equivalents	$	659,901	$	394,931	$	48,208	$	1,103,040	$	317,022	$	476,850	$	43,386	$	837,258
Goodwill	Goodwill	750,275		—		136,890		887,165		452,629		—		20,199		472,828		Goodwill	753,586		—		130,051		883,637		753,586		—		130,051		883,637
Other segment assets	Other segment assets	17,423,737		4,836		365,167		17,793,740		13,481,370		6,785		283,405		13,771,560		Other segment assets	17,933,900		3,137		395,576		18,332,613		17,824,946		10,429		358,485		18,193,860
Total segment assets	Total segment assets	$	19,947,623	$	484,412	$	532,639	$	20,964,674	$	14,973,045	$	484,591	$	319,691	$	15,777,327	Total segment assets	$	19,347,387	$	398,068	$	573,835	$	20,319,290	$	18,895,554	$	487,279	$	531,922	$	19,914,755

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~~17.~~15. 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 on a more limited basis, 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 inon 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)~~.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 no provision is made for losses at the time of sale. There were 2no repurchases ~~for $0.8 million~~ during the three months ended March 31, ~~2022~~2023 and notwo repurchases for $0.8 million during the same period in ~~2021.~~2022.

Unfunded Lending Commitments

At March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, the allowance for credit losses of unfunded lending commitments was ~~$11.7~~$11.6 million and ~~$7.4~~$11.9 million, respectively. A provision release of ~~$0.1~~$0.2 million was recognized during the three months ended March 31, ~~2022~~2023 compared to a provision ~~for unfunded lending commitments~~expense of ~~$0.6~~$0.1 million during the three months ended March 31, ~~2021.~~2022.

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~~18.~~16. CHANGE IN ACCUMULATED OTHER COMPREHENSIVE ~~(LOSS) INCOME~~LOSS

Accumulated other comprehensive ~~income~~loss 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 ~~(loss) income~~loss are presented, net of tax, as a component of stockholders’ equity. Amounts that are reclassified out of accumulated other comprehensive ~~(loss) income~~loss are recorded on the unaudited Consolidated ~~Statement~~Statements of Income either as a gain or loss.

Changes to accumulated other comprehensive ~~(loss) income~~loss 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 (1)
Net change in equity method investments Total
Balance, December 31, 2021 $ (33,873) $ 175 $ (4,691) $ 268 $ 353 $ (37,768)
Other comprehensive (loss) income before reclassifications (275,918) 56 — 1 — (275,861)
Less: Amounts reclassified from accumulated other comprehensive (loss) income — (84) (27) (40) — (151)
Net current-period other comprehensive (loss) income (275,918) (28) (27) (39) — (276,012)
Balance, March 31, 2022 $ (309,791) $ 147 $ (4,718) $ 229 $ 353 $ (313,780)
Balance, December 31, 2020 $ 59,882 $ 276 $ (4,788) $ 646 $ (9) $ 56,007
Other comprehensive (loss) income before reclassifications (69,589) — — — 273 (69,316)
Less: Amounts reclassified from accumulated other comprehensive (loss) income (250) (16) (16) (111) — (393)
Net current-period other comprehensive loss (69,839) (16) (16) (111) 273 (69,709)
Balance, March 31, 2021 $ (9,957) $ 260 $ (4,804) $ 535 $ 264 $ (13,702)
(1)Cash flow hedges were terminated as of April 1, 2020

~~Table of Contents~~


(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		Net change in equity method investments		Total
Balance, December 31, 2022	$	(563,533)	$	(108,503)	$	(4,482)	$	108	$	566	$	(675,844)
Other comprehensive income (loss)	53,010		(1)		12		332		(3)		53,350

Less: Amounts reclassified from accumulated other comprehensive loss	—		4,166		(47)		(40)		—		4,079
Net current-period other comprehensive income (loss)	53,010		4,165		(35)		292		(3)		57,429
Balance, March 31, 2023	$	(510,523)	$	(104,338)	$	(4,517)	$	400	$	563	$	(618,415)

Balance, December 31, 2021	$	(33,873)	$	175	$	(4,691)	$	268	$	353	$	(37,768)
Other comprehensive (loss) income	(275,918)		56		—		1		—		(275,861)
Less: Amounts reclassified from accumulated other comprehensive loss	—		(84)		(27)		(40)		—		(151)
Net current-period other comprehensive (loss) income	(275,918)		(28)		(27)		(39)		—		(276,012)
Balance, March 31, 2022	$	(309,791)	$	147	$	(4,718)	$	229	$	353	$	(313,780)

The unaudited Consolidated Statements of Income were impacted by components of other comprehensive income as shown in the tables below:


		Three Months Ended March 31,				Affected line item in unaudited Consolidated Statements of Income		Three Months Ended March 31,				Affected line item in unaudited Consolidated Statements of Income
(Dollars in thousands)	(Dollars in thousands)	2022		2021			(Dollars in thousands)	2023		2022
Securities available for sale:
Realized gains on securities transactions		$	—	$	(329)	Securities gains, net
Income taxes		—		79		Income tax provision
Net of tax		—		(250)
Net unrealized holding gains on securities transferred between available-for-sale and held-to-maturity:
Amortization of net unrealized gains to income during the period		(111)		(21)		Interest and dividends on investment securities

Net unrealized holding losses (gains) on securities transferred between available-for-sale and held-to-maturity:							Net unrealized holding losses (gains) on securities transferred between available-for-sale and held-to-maturity:
Amortization of net unrealized losses (gains) to income during the period							Amortization of net unrealized losses (gains) to income during the period	5,481		(111)		Net interest income
Income taxes	Income taxes	27		5		Income tax provision	Income taxes	(1,315)		27		Income tax provision
Net of tax	Net of tax	(84)		(16)			Net of tax	4,166		(84)
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 credits	Prior service credits	(19)		(22)			Prior service credits	(19)		(19)

Actuarial (gains) losses	Actuarial (gains) losses	(17)		1			Actuarial (gains) losses	(43)		(17)
Total before tax	Total before tax	(36)		(21)		Salaries, benefits and other compensation	Total before tax	(62)		(36)		Salaries, benefits and other compensation
Income taxes	Income taxes	9		5		Income tax provision	Income taxes	15		9		Income tax provision
Net of tax	Net of tax	(27)		(16)			Net of tax	(47)		(27)

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 period	Amortization of net unrealized gains to income during the period	(52)		(146)		Interest and fees on loans and leases	Amortization of net unrealized gains to income during the period	(52)		(52)		Interest and fees on loans and leases
Income taxes	Income taxes	12		35		Income tax provision	Income taxes	12		12		Income tax provision
Net of tax	Net of tax	(40)		(111)			Net of tax	(40)		(40)
Total reclassifications	Total reclassifications	$	(151)	$	(393)		Total reclassifications	$	4,079	$	(151)

~~19.~~

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17. 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.

There were no material changes or additions to other significant pending legal or other proceedings involving the Company other than those arising out of routine operations.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

WSFS Financial Corporation (WSFS, and together with its subsidiaries, the Company) is a savings and loan holding company headquartered in Wilmington, Delaware. Substantially all of our assets are held by our subsidiary, Wilmington Savings Fund Society, FSB (WSFS Bank or the Bank), one of the ten oldest bank and trust companies in the United States (U.S.) continuously operating under the same name. With ~~$21.0~~$20.3 billion in assets and ~~$58.1~~$65.6 billion in assets under management (AUM) and assets under administration (AUA) at March 31, ~~2022,~~2023, WSFS Bank is the oldest and largest locally-managed bank and trust company headquartered in the Greater Philadelphia and Delaware region. As a federal savings bank that was formerly chartered as a state mutual savings bank, WSFS Bank enjoys a broader scope of permissible activities than most other financial institutions. A fixture in the community, we have been in operation for more than ~~190~~191 years. In addition to our focus on stellar customer 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, enriching the communities we serve” focuses on exceeding customer expectations, delivering stellar experiences and building customer advocacy through highly-trained, relationship-oriented, friendly, knowledgeable and empowered Associates.

As of March 31, ~~2022,~~2023, we had ~~eight~~six consolidated subsidiaries: WSFS Bank, WSFS Wealth Management, LLC (Powdermill®), ~~WSFS~~Bryn Mawr Capital Management, LLC ~~(West Capital), Cypress Capital Management, LLC (Cypress), Christiana Trust Company of Delaware~~® ~~(Christiana Trust DE)~~(BMCM), WSFS SPE Services, LLC, The Bryn Mawr Trust Company of Delaware (BMT-DE), and 601 Perkasie, LLC. The Company also has three unconsolidated subsidiaries: WSFS Capital Trust III, Royal Bancshares Capital Trust I, and Royal Bancshares Capital Trust II... WSFS Bank has ~~five wholly owned~~two wholly-owned subsidiaries: Beneficial Equipment Finance Corporation (BEFC), and 1832 Holdings, Inc., ~~BMT Insurance Advisors, Inc. (BMT Insurance Advisors), Bryn Mawr Equipment Finance, Inc., and KCMI Capital, Inc. (KCMI),~~ and one majority-owned subsidiary, NewLane Finance Company (NewLane Finance®).

~~On April 1, 2022,~~2023, WSFS completed the merger and brand conversion of ~~Christiana Trust of DE~~WSFS Capital Management, LLC (West Capital) and ~~BMT-DE. The~~Cypress Capital Management, LLC and renamed the combined ~~organization will retain~~ ~~and operate underThe~~entity Bryn Mawr ~~Trust Company~~Capital Management, LLC. BMCM is registered as an investment advisor with the U.S. Securities and Exchange Commission and is a wholly-owned subsidiary of Delaware name. Additionally, BMEF merged with and into BEFC effective April 1, 2022. Effective April 29, 2022, KCMI, a WSFS Bank subsidiary acquired in the BMBC Merger, was sold to a third-party financial institution. KCMI specializes in providing non-traditional commercial mortgage loans to well-established small businesses throughout the United States. As of March 31, 2022, KCMI had $55.5 million of net loans. This sale and subsidiary mergers occurred during the second quarter of 2022 and are not included in our March 31, 2022 unaudited Consolidated Financial Statements, and does not have a material impact on our unaudited Consolidated Financial Statements and related disclosures.WSFS.

Our banking business had a total loan and lease portfolio of ~~$11.3~~$12.1 billion as of March 31, ~~2022,~~2023, which was funded primarily through commercial relationships and retail and customer generated deposits. We have built a ~~$9.1~~$9.5 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 and retail securities ~~and insurance~~ brokerage through our retail branches, in addition to mortgage and title services through our branches and WSFS Mortgage®, our mortgage banking company specializing in a variety of residential mortgage and refinancing solutions. Our leasing business, conducted by NewLane Finance®, originates small business leases and provides commercial financing to businesses nationwide, targeting various equipment categories including technology, software, office, medical, veterinary and other areas. In addition, NewLane Finance® offers captive insurance through its subsidiary, Prime Protect.

Our Cash Connect® 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 ATM industry. Cash Connect® services non-bank and WSFS-branded ATMs and retail safes nationwide, and manages ~~$1.9~~approximately $1.7 billion in total cash and services approximately ~~29,300~~26,100 non-bank ATMs and ~~approximately 6,700~~7,900 smart safes nationwide. Cash Connect® provides related services such as online reporting and ATM cash management, predictive cash ordering and reconcilement services, armored carrier management, loss protection, ATM processing equipment sales and deposit safe cash logistics. Cash Connect® also supports ~~630~~691 branded ATMs for WSFS Bank Customers, which is one of the largest branded ATM networks in our market.

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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 $~~58.1~~65.6 billion of AUM and AUA at March 31, ~~2022. WSFS Wealth~~2023. Bryn Mawr Trust® ~~Investments provides financial~~is our predominant Private Wealth Management brand, providing advisory, ~~services along with insurance~~investment management 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 solutionstrustee services to institutions, affluent and high-net-worth individuals. BMT-DE provides personal trust and fiduciary services to families and individuals across the U.S. and internationally. WSFS Institutional Services® provides trustee, agency, bankruptcy administration, custodial and commercial domicile services to institutional, corporate clients and special purpose vehicles. ~~BMT-DE~~Private Wealth Management serves high-net-worth clients and ~~Christiana Trust DE, which merged on April 1, 2022, provide personal~~institutions by providing trustee and advisory services, financial planning, customized investment strategies, brokerage products such as annuities and traditional banking services such as credit and deposit products tailored to its clientele. Private Wealth Management includes businesses that operate under the bank’s charter, through a broker/dealer and as a registered investment advisor (RIA). It generates revenue through fee-only arrangements, net interest income and other fee-only services such as estate administration, trust tax planning and ~~fiduciary services to families and individuals across the U.S. under The Bryn Mawr Trust Company of Delaware name.~~custody. 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 businesses to provide comprehensive solutions to clients. BMT Insurance Advisors is a full-service insurance agency, through which the Bank offers insurance and related products and services to its customer base. This includes casualty, property and allied insurance lines, as well as life insurance, annuities, medical insurance and accident and health insurance for groups and individuals.

As of March 31, ~~2022,~~2023, we service our customers primarily from ~~122~~119 offices located in Pennsylvania ~~(63)~~(61), Delaware (39), New Jersey, ~~(18)~~(17), Virginia (1) and Nevada (1), our ATM network, our website at www.wsfsbank.com and our mobile app.

Highlights and Other Notables Items for Three Months Ended March 31, ~~2022~~

~~Results and other notable items include the following:~~2023

•~~BMBC Merger~~Three Months Ended March 31, 2023

◦~~We successfully closed~~WSFS completed the ~~BMBC Merger on January 1, 2022.~~redemption of the $30.0 million of fixed-to-floating rate subordinated notes due 2025 (the 2025 Notes) acquired from Bryn Mawr Trust. The 2025 Notes were redeemed at a price of 100%, plus accrued and unpaid interest through the date of redemption.

◦WSFS repurchased 262,000 shares of common stock under the Company's share repurchase programs at an average price of $49.11 per share, for an aggregate purchase price of $12.9 million.

◦The ~~total value~~Board of ~~consideration paid of $908.0 million and $493.7 million in net assets acquired resulted in $414.3 million of goodwill recognized.~~

◦~~The BMBC Merger initially added~~ ~~$3.5 billion~~ ~~of net loans and leases,~~ ~~$4.1 billion~~ ~~of deposits, and $23.6 billion of AUM and AUA.~~

◦~~We recorded $34.0 million of corporate development expenses and $17.5 million of restructuring expenses during the three months ended March 31, 2022 primarily related to the BMBC Merger.~~

•~~Balance Sheet~~

◦~~During the three months ended March 31, 2022, our balance sheet was significantly impacted by the net assets acquired from the BMBC Merger. See Note 3 for additional details.~~

•~~Credit Metrics~~Directors approved a $0.15 per share quarterly dividend.

◦The allowance for credit losses (ACL) on loans and leases increased ~~$41.8~~$17.3 million, ~~during the three months ended March 31, 2022, primarily~~ due to ~~an initial ACL of $49.6 million recorded in connection with~~impact from the ~~BMBC Merger. The initial $49.6 million ACL recorded includes $23.5 million related to non-purchase credit deteriorated (PCD) loans, or the initial provision for credit loss recorded,~~economic forecast and ~~$26.1 million related to PCD loans, which did not have an initial income statement impact, but adjusted the amortized cost basis of the loans at acquisition (i.e., a balance sheet gross-up).~~

•~~Other Notable Items~~net loan originations.

◦~~During~~The Bank and the ~~three months ended March 31, 2022, WSFS~~ Company continue to be well above well-capitalized across all measures of regulatory capital, with total risk-based capital of 14.56% and 14.71%, respectively.

◦~~repurchased 938,985 shares~~ In April 2023, Moody's Investors Service (“Moody’s”) lowered the macro profile for the U.S. banking system to ‘Strong+’ from ‘Very Strong.’ Lowering the macro profile resulted in updates to 22 bank ratings. As part of ~~common stock under~~this update, Moody’s reaffirmed both the ~~Company's share repurchase program~~ ~~at an average price of $50.66, for an aggregate purchase price of~~ ~~$47.6 million.~~Company and Bank ratings with a stable outlook from positive.

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FINANCIAL CONDITION

Total assets increased ~~$5.2 billion~~$404.5 million to ~~$21.0~~$20.3 billion at March 31, ~~2022~~2023 compared to December 31, ~~2021.~~2022. This increase is primarily comprised of the following:

•Total cash and cash equivalents increased $265.8 million, primarily due to a $340.8 million increase in cash at the Federal Reserve, offset by increased lending activity and the redemption of the 2025 Notes as discussed above.

•Net loans and leases, excluding loans held for sale, increased ~~$3.4 billion~~$216.9 million primarily ~~driven by the $3.5 billion~~due to increases of $122.0 million in commercial mortgages, $57.5 million in consumer loans primarily from our consumer partnerships, and ~~leases acquired~~$37.1 million in ~~the BMBC Merger partially offset by the initial $49.6 million ACL recorded in connection with the BMBC Merger~~.owner-occupied commercial loans.

•~~Goodwill and intangible~~Other assets ~~increased $414.3~~decreased $62.8 million ~~and $70.6 million, respectively,~~ primarily due to a $37.0 million decline in capital markets derivatives from the ~~BMBC Merger. See Notes 3~~continued rising interest rate environment and 10an $18.1 million decline on our tax asset related to ~~the unaudited Consolidated Financial Statements for additional information.~~unrealized gains on available-for-sale securities.

•Total ~~cash and cash equivalents increased $750.8~~investment securities decreased $23.4 million:

◦Investment securities, held-to-maturity decreased $16.8 million, primarily due to ~~$573.8~~repayments, maturities and calls of $21.7 million, ~~acquired in the BMBC Merger.~~offset by $5.5 million of amortization of net unrealized losses on available-for-sale securities transferred to held-to-maturity.

•◦Investment securities, available-for-sale ~~increased $290.6~~decreased $6.6 million ~~during the three months ended March 31, 2022,~~ primarily due to ~~$805.8~~repayments, maturities and calls of $80.3 million, ~~in purchases and $500.4 million acquired in the BMBC merger, partially~~ offset by ~~repayments of $649.3 million and decreased market-values~~increased market values on available-for-sale securities of ~~$363.0~~$69.7 million

•~~Loans held for sale decreased $42.7 million during the three months ended March 31, 2022 driven by a combination~~ and purchases of ~~lower origination volume and higher loans sales in our mortgage banking business during the three months ended March 31, 2022.~~$4.8 million.

Total liabilities increased ~~$4.6 billion~~$303.1 million to ~~$18.4~~$18.0 billion at March 31, ~~2022~~2023 compared to December 31, ~~2021.~~2022. This increase is primarily comprised of the following:

•~~Total deposits~~FHLB advances increased ~~$4.4 billion, primarily driven by $4.1 billion~~$450.0 million due to fixed rate FHLB term advances as part of ~~deposits assumed in the BMBC Merger.~~our routine balance sheet management.

•Other liabilities ~~increased $85.6~~decreased $104.3 million during the quarter, primarily due to ~~$123.2~~a $48.1 million ~~of BMT acquired liabilities, partially offset by $34.5~~reduction in capital markets derivatives collateral, a $37.0 million ~~lower~~reduction in capital market derivatives, as well as a $30.7 million decrease in accrued expenses ~~reflecting~~primarily related to the ~~timing~~payment of ~~settlement for debt security trades.~~accrued compensation.

•~~Senior~~Total senior and subordinated debt ~~increased $100.5~~decreased $29.9 million due to the ~~addition~~redemption of ~~subordinated notes assumed in~~ the ~~BMBC Merger.~~2025 Notes as discussed above.

For further information, see "Notes to the Consolidated Financial Statements (Unaudited)."

~~Table of Contents~~

~~Loans and Leases~~

The following table shows the remaining contractual maturity and rate sensitivity of the loan portfolio by loan category as of March 31, 2022. Loans may be pre-paid, so the actual maturity may differ from the contractual maturity. Prepayments tend to be highly dependent upon the interest rate environment. Loans having no stated maturity or repayment schedule are reported in the "Less than One Year" category.

(Dollars in thousands)
Less than
One Year
One to
Five Years
Five to Fifteen Years Over Fifteen Years Total
Commercial and industrial(1)
Interest rate:
Fixed $ 55,265 $ 636,469 $ 212,720 $ 49,241 $ 953,695
Adjustable 306,951 855,777 319,383 57,722 1,539,833
Total $ 362,216 $ 1,492,246 $ 532,103 $ 106,963 $ 2,493,528
Owner-occupied commercial
Interest rate:
Fixed $ 52,833 $ 421,522 $ 427,302 $ 179,205 $ 1,080,862
Adjustable 40,765 249,632 429,806 71,762 791,965
Total $ 93,598 $ 671,154 $ 857,108 $ 250,967 $ 1,872,827
Commercial mortgages
Interest rate:
Fixed $ 129,174 $ 782,180 $ 377,236 $ 156,579 $ 1,445,169
Adjustable 88,937 693,279 1,038,555 95,302 1,916,073
Total $ 218,111 $ 1,475,459 $ 1,415,791 $ 251,881 $ 3,361,242
Construction
Interest rate:
Fixed $ 10,405 $ 71,994 $ 39,807 $ 7,624 $ 129,830
Adjustable 344,671 296,165 146,732 6,492 794,060
Total $ 355,076 $ 368,159 $ 186,539 $ 14,116 $ 923,890
Commercial small business leases
Interest rate:
Fixed $ 6,129 $ 464,049 $ 20,421 $ — $ 490,599
Adjustable — — — — —
Total $ 6,129 $ 464,049 $ 20,421 $ — $ 490,599
Residential(2)
Interest rate:
Fixed $ 10,197 $ 25,606 $ 136,809 $ 487,701 $ 660,313
Adjustable(3)
10 548 29,763 114,692 145,013
Total $ 10,207 $ 26,154 $ 166,572 $ 602,393 $ 805,326
Consumer
Interest rate:
Fixed $ 2,544 $ 239,898 $ 344,059 $ 295,682 $ 882,183
Adjustable 8,452 47,118 32,763 411,600 499,933
Total $ 10,996 $ 287,016 $ 376,822 $ 707,282 $ 1,382,116
Total loans and leases $ 1,056,333 $ 4,784,237 $ 3,555,356 $ 1,933,602 $ 11,329,528

~~(1)~~ ~~Includes $8.5 million of PPP loans.~~

~~(2)~~ ~~Excludes reverse mortgages at fair value of $4.3 million.~~

~~(3)~~ ~~Includes hybrid adjustable-rate mortgages.~~

~~Table of Contents~~

~~Deposits~~

~~The following table shows the maturities of certificates of deposit of $250,000 or more as of March 31, 2022:~~


~~(Dollars in thousands)~~
~~Maturity Period~~	~~March 31, 2022~~
~~Less than 3 months~~	$	~~45,342~~
~~Over 3 months to 6 months~~	~~24,864~~
~~Over 6 months to 12 months~~	~~47,209~~
~~Over 12 months~~	~~40,143~~
~~Total~~	$	~~157,558~~

~~The estimated amount of total uninsured deposits as of March 31, 2022 was $10.2 billion as compared to $7.5 billion at December 31, 2021.~~

LIQUIDITY AND CAPITAL RESOURCES

Capital Resources

Stockholders’ equity of WSFS increased ~~$581.4~~$101.2 million between December 31, ~~2021~~2022 and March 31, ~~2022.~~2023. This increase was primarily due to ~~$908.0~~$62.4 million of ~~WSFS common shares issued in connection with the BMBC Merger, partially offset by a decrease~~earnings and an increase of ~~$275.9~~$57.4 million in accumulated other comprehensive ~~income~~loss driven by market value increases on available-for-sale mortgage-backed securities, ~~from the effect of decreased market-values, $47.6~~partially offset by $12.9 million from the repurchase of shares of common stock under our stock repurchase plan, and the payment of dividends on our common stock of ~~$8.5~~$9.3 million.

During the first quarter of ~~2022,~~2023, our Board of Directors approved a quarterly cash dividend of ~~$0.13~~$0.15 per share of common stock. This dividend will be paid on May ~~20, 2022~~19, 2023 to stockholders of record as of May ~~6, 2022.~~5, 2023.

Book value per share of common stock was ~~$38.94~~$37.57 at March 31, ~~2022, an decrease~~2023, a increase of ~~$1.79~~$1.78 from ~~$40.73~~$35.79 at December 31, ~~2021.~~2022. Tangible book value per share of common stock (a non-GAAP financial measure) was ~~$22.99~~$21.15 at March 31, ~~2022,~~2023, a ~~decrease~~increase of ~~$6.25~~$1.79 from ~~$29.24~~$19.36 at December 31, ~~2021. These decreases are due to the same drivers of the increase in stockholders' equity of WSFS described above.~~2022. We believe tangible book value per common share helps management and investors better understand and assess changes from period to period in stockholders’ equity exclusive of changes in intangible assets. This non-GAAP measure should be considered in addition to results prepared in accordance with Generally Accepted Accounting Principles in the U.S. (GAAP), and is not a substitute for, or superior to, GAAP results. For a reconciliation of tangible book value per common share to book value per share in accordance with GAAP, see "Reconciliation of Non-GAAP Measure to GAAP Measure."

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The table below compares the Bank's and the Company’s consolidated capital position to the minimum regulatory requirements as of March 31, ~~2022:~~2023:


		Consolidated Capital				Minimum 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)	Amount		Percent		Amount		Percent		Amount		Percent		(Dollars in thousands)	Amount		Percent		Amount		Percent		Amount		Percent
Total Capital (to Risk-Weighted Assets)	Total Capital (to Risk-Weighted Assets)													Total Capital (to Risk-Weighted Assets)
Wilmington Savings Fund Society, FSB	Wilmington Savings Fund Society, FSB	$	2,148,722	14.89	%	$	1,154,255	8.00	%	$	1,442,819	10.00	%	Wilmington Savings Fund Society, FSB	$	2,246,416	14.56	%	$	1,234,314	8.00	%	$	1,542,893	10.00	%
WSFS Financial Corporation	WSFS Financial Corporation	2,160,007		14.94		1,156,786		8.00		1,445,983		10.00		WSFS Financial Corporation	2,275,094		14.71		1,237,430		8.00		1,546,787		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, FSB	Wilmington Savings Fund Society, FSB	2,010,382		13.93		865,692		6.00		1,154,255		8.00		Wilmington Savings Fund Society, FSB	2,065,564		13.39		925,736		6.00		1,234,314		8.00
WSFS Financial Corporation	WSFS Financial Corporation	1,845,665		12.76		867,590		6.00		1,156,786		8.00		WSFS Financial Corporation	1,950,536		12.61		928,072		6.00		1,237,430		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, FSB	Wilmington Savings Fund Society, FSB	2,010,382		13.93		649,269		4.50		937,832		6.50		Wilmington Savings Fund Society, FSB	2,065,564		13.39		694,302		4.50		1,002,880		6.50
WSFS Financial Corporation	WSFS Financial Corporation	1,845,665		12.76		650,692		4.50		939,889		6.50		WSFS Financial Corporation	1,950,536		12.61		696,054		4.50		1,005,412		6.50
Tier 1 Leverage Capital	Tier 1 Leverage Capital													Tier 1 Leverage Capital
Wilmington Savings Fund Society, FSB	Wilmington Savings Fund Society, FSB	2,010,382		9.98		805,620		4.00		1,007,025		5.00		Wilmington Savings Fund Society, FSB	2,065,564		10.57		781,681		4.00		977,101		5.00
WSFS Financial Corporation	WSFS Financial Corporation	1,845,665		9.16		805,790		4.00		1,007,237		5.00		WSFS Financial Corporation	1,950,536		9.97		782,799		4.00		978,499		5.00

Under the prompt corrective action regime, regulators have established five capital tiers: well-capitalized, adequately-capitalized, under-capitalized, significantly under-capitalized, and critically under-capitalized. A depository institution’s capital tier depends on its capital levels in relation to various relevant capital measures, which include leverage and risk-based capital measures and certain other factors. Depository institutions that are not classified as well-capitalized are subject to various restrictions, which may include restrictions on capital distributions, payment of management fees, acceptance of brokered deposits and other operating activities.

Regulatory capital requirements for the Bank and the Company include a minimum common equity Tier 1 capital ratio of 4.50% of risk-weighted assets, a Tier 1 capital ratio of 6.00% of risk-weighted assets, a minimum Total capital ratio of 8.00% of risk-weighted assets and a minimum Tier 1 leverage capital ratio of 4.00% of average assets. In order to avoid limits on capital distributions and discretionary bonus payments, the Bank and the Company must maintain a capital conservation buffer of 2.5% of common equity Tier 1 capital over each of the risk-based capital requirements. As of March 31, ~~2022,~~2023, the Bank and the Company were in compliance with the regulatory capital requirements and met or exceeded the amounts required to be considered “well-capitalized” as defined in the regulations.

Not included in the Bank’s capital, WSFS separately held $~~147.2~~152.7 million in cash to support share repurchases, potential dividends, acquisitions, strategic growth plans and other general corporate purposes.

As part of our adoption of the Current Expected Credit Losses (CECL) methodology in 2020, we elected to phase in the day-one adverse effects on regulatory capital that may result from the adoption of CECL over a three-year period, as permitted under a final rule of the federal banking agencies.

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,~~commercial, consumer, wealth and trust deposits, loan repayments, FHLB borrowings, repurchase agreements, access to the Federal Reserve Discount Window, and access to the brokered deposit market as well as other wholesale funding avenues. In addition, we have a large portfolio of high-quality, liquid investments, primarily short-duration mortgage-backed securities, that provide a near-continuous source of cash flow to meet current cash needs, or can be sold to meet larger discrete needs for cash. We believe these sources are sufficient to meet our funding needs as well as maintain required and prudent levels of liquidity over the next twelve months and beyond.

~~Table of Contents~~

As of March 31, ~~2022,~~2023, the ~~Corporation has~~Company had $~~2.3~~1.1 billion in cash, cash equivalents, and restricted cash. ~~Additionally,~~Our deposit portfolio is highly diverse, and has a granular deposit base with less than 5% exposure in a single industry. As of March 31, 2023, our estimated uninsured deposits were $5.8 billion, or 36% of total customer deposits, and our estimated unprotected deposits (uninsured and uncollateralized) were $4.3 billion, or 27% of total customer deposits.

As of March 31, 2023, the ~~maximum~~Company had a readily available, secured borrowing capacity ~~with~~of $4.2 billion from the FHLB, ~~was $5.1~~$1.3 billion ~~with an unused borrowing availability of $5.1 billion. Borrowing availability at~~through the Federal Reserve Discount Window, ~~was $253.4 million,~~ and ~~borrowing availability~~$0.2 billion through the ~~overnight fed funds lines totaled $1.1 billion.~~Bank Term Funding Program. In addition, the Company had $1.6 billion in unpledged securities that could be used to support additional borrowings and $0.5 billion of cash deposited with the Federal Reserve Bank. The Company’s readily available, secured borrowing capacity to estimated unprotected deposits ratio is 186%.

Our primary cash contractual obligations relate to operating leases, long-term debt, credit obligations, and data processing. At March 31, ~~2022,~~2023, we had ~~$275.0~~$231.0 million in total contractual payments for ongoing leases that have remaining lease terms of less than one year to 4039 years, which includes renewal options that are exercised at our discretion. For additional information on our operating leases see Note 98 to the unaudited Consolidated Financial Statements. At March 31, ~~2022,~~2023, we had no$800.0 million of FHLB advances ~~and~~with rates ranging from 5.08% to 5.17%. All FHLB advances had original maturities of less than one year. In addition, we had obligations for principal payments on long-term debt ~~included~~including $67.0 million for our trust preferred borrowings, due June 1, 2035, and $150.0 million for our senior debt, due December 15, 2030. In connection with the BMBC Merger, we assumed debt in the form of $30.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes due 2025 and $70.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes due ~~2027.~~2027, and $150.0 million for our senior debt, due December 15, 2030. We also acquired Royal Bancshares Capital Trust I (Trust I) and Royal Bancshares Capital Trust II (Trust II) (collectively, the Trusts), which were utilized for the sole purpose of issuing and selling capital securities representing preferred beneficial interests. Although WSFS owns an aggregate of $774.0 thousand of the common securities of Trust I and Trust II, the Trusts are not consolidated into the ~~Corporation’s~~Company’s Consolidated Financial Statements. Inclusive of the fair value marks, WSFS assumed junior subordinated debentures owed to the Trusts of with a carrying value of ~~$11.6~~$11.7 million each, totaling ~~$23.2~~$23.5 million. The Company records its investments in the Trusts’ common securities of $387.0 thousand each as investments in unconsolidated entities and records dividend income upon declaration by Trust I and Trust II. The Company has fully and unconditionally guaranteed all of the obligations of the Trusts, including any distributions and payments on liquidation or redemption of the capital securities.

We are also contractually obligated to make interest payments on our long-term debt through their respective maturities. ~~For additional information regarding long-term debt, see Note 12 to the unaudited Consolidated Financial Statements.~~ At March 31, ~~2022,~~2023, the Company had total commitments to extend credit of ~~$3.3~~ $3.8 billion, which are generally one year commitments.

In 2022, we plan to invest approximately $15 million in our Delivery Transformation initiative to increase adoption and usage of digital channels aligned with our strategy. Our organization is committed to product and service innovation as a means to drive growth and to stay ahead of changing customer demands and emerging competition. We are focused on developing and maintaining a strong “culture of innovation” that solicits, captures, prioritizes and executes innovation initiatives, including feedback from our customers, as well as leveraging technology from product creation to process improvement.

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NONPERFORMING ASSETS

Nonperforming assets include nonaccruing loans, 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:


(Dollars in thousands)	(Dollars in thousands)	March 31, 2022			December 31, 2021			(Dollars in thousands)	March 31, 2023			December 31, 2022
Nonaccruing loans:
Nonaccruing loans(1):								Nonaccruing loans(1):
Commercial and industrial	Commercial and industrial	$	7,932		$	8,211		Commercial and industrial	$	20,461		$	6,770
Owner-occupied commercial	Owner-occupied commercial	497			811			Owner-occupied commercial	581			386
Commercial mortgages	Commercial mortgages	3,616			2,070			Commercial mortgages	6,133			5,159
Construction	Construction	5,556			12			Construction	760			5,143
Residential	Residential	3,175			3,125			Residential	2,064			3,199
Consumer	Consumer	2,311			2,380			Consumer	2,018			2,145
Total nonaccruing loans	Total nonaccruing loans	23,087			16,609			Total nonaccruing loans	32,017			22,802
Other real estate owned	Other real estate owned	1,818			2,320			Other real estate owned	1,131			833
Restructured loans(1)(6)		12,933			14,204
Troubled debt restructurings (accruing)(2)								Troubled debt restructurings (accruing)(2)	—			19,737
Total nonperforming assets	Total nonperforming assets	$	37,838		$	33,133		Total nonperforming assets	$	33,148		$	43,372
Past due loans:	Past due loans:							Past due loans:
Commercial	Commercial	$	42		$	1,357		Commercial	$	1,906		$	1,022

Consumer ~~(2)~~(3)	Consumer ~~(2)~~(3)	11,581			8,634			Consumer ~~(2)~~(3)	11,659			15,513
Total past due loans	Total past due loans	$	11,623		$	9,991		Total past due loans	$	13,565		$	16,535
Ratio of allowance for credit losses to total loans and leases(3)		1.19		%	1.19		%
Troubled loans:								Troubled loans:
Commercial								Commercial	$	15,042		$	—

Ratio of nonaccruing loans to total gross loans and leases(4)		0.20			0.21
Consumer								Consumer	3,019			—
Total troubled loans								Total troubled loans	$	18,061		$	—
Ratio of allowance for credit losses to total loans and leases(4)								Ratio of allowance for credit losses to total loans and leases(4)	1.28		%	1.17		%

Ratio of nonaccruing loans to total gross loans and leases(5)								Ratio of nonaccruing loans to total gross loans and leases(5)	0.26			0.19
Ratio of nonperforming assets to total assets	Ratio of nonperforming assets to total assets	0.18			0.21			Ratio of nonperforming assets to total assets	0.16			0.22
Ratio of allowance for credit losses to nonaccruing loans	Ratio of allowance for credit losses to nonaccruing loans	591			569			Ratio of allowance for credit losses to nonaccruing loans	528			666
Ratio of allowance for credit losses to total nonperforming assets(5)		360			285
Ratio of allowance for credit losses to total nonperforming assets(6)								Ratio of allowance for credit losses to total nonperforming assets(6)	510			350

(1)~~Accruing~~Includes nonaccruing troubled loans ~~only, which includes acquired nonimpaired loans. Nonaccruing Troubled Debt Restructurings~~beginning in 2023 and nonaccruing troubled debt restructurings (TDRs) ~~are included in their respective categories of nonaccruing loans.~~prior to 2023.

(2)Balance excludes COVID-19 modifications.

(3)Includes U.S. government guaranteed student loans with little risk of credit loss.

~~(3)~~(4)Represents amortized cost basis for loans, leases and held-to-maturity securities.

~~(4)~~(5)Total loans exclude loans held for sale and reverse mortgages.

~~(5)~~(6)Excludes acquired impaired loans.

~~(6)Balance excludes COVID-19 modifications.~~

Nonperforming assets ~~increased $4.7~~decreased $10.2 million between December 31, ~~2021~~2022 and March 31, ~~2022.~~2023. This ~~increase~~decrease was primarily due to the ~~transfer in~~adoption of ~~one C&I relationship totaling $5.5 million during the period, which was~~ ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, partially offset by ~~several smaller payoffs and~~ the ~~continued collection~~addition of ~~principal payments.~~two C&I relationships. The ratio of nonperforming assets to total assets decreased from ~~0.21%~~0.22% at December 31, ~~2021~~2022 to ~~0.18%~~0.16% at March 31, ~~2022.~~2023.

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The following table summarizes the changes in nonperforming assets during the periods indicated:


		Three Months Ended March 31,					Three Months Ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2022		2021		(Dollars in thousands)	2023		2022
Beginning balance	Beginning balance	$	33,133	$	60,508	Beginning balance	$	43,372	$	33,133
Additions	Additions	10,641		13,317		Additions	23,150		10,641
Collections	Collections	(5,210)		(19,604)		Collections	(8,707)		(5,210)
Transfers to accrual(1)	Transfers to accrual(1)	—		(28)		Transfers to accrual(1)	(19,903)		—
Charge-offs	Charge-offs	(726)		(4,649)		Charge-offs	(4,764)		(726)
Ending balance	Ending balance	$	37,838	$	49,544	Ending balance	$	33,148	$	37,838

(1)Includes impact of ASU No. 2022-02 adoption.

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.

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INTEREST RATE SENSITIVITY

Our primary objective in managing interest rate risk is to minimize the adverse impact of changes in interest rates on net interest income and capital, while maximizing the yield/cost spread on our asset/liability structure. Interest rates are partly a function of decisions by the Federal Open Market Committee (FOMC) on the target range for the federal funds rate, and these decisions are sometimes difficult to anticipate. In response to the economic and financial effects of COVID-19, the FOMC reduced interest rates through 2020 and 2021 and instituted quantitative easing measures as well as domestic and global capital market support programs. The FOMC raised the federal funds target rate ~~by 25~~seven times in 2022 for a total of 425 basis points and three times in ~~March 2022 and by another 50~~2023 for a total of 75 basis points, ~~in May 2022,~~ and has suggested ~~that~~ it may ~~take steps to raise~~continue raising interest rates ~~several more times~~further in ~~2022.~~2023. In order to manage the risks associated with changes or possible changes in interest rates, we rely primarily on our asset/liability structure.

Our primary tool for achieving our asset/liability management strategies is to match maturities or repricing periods of interest rate-sensitive assets and liabilities to promote a favorable interest rate spread and mitigate exposure to fluctuations in interest rates. We regularly review our interest rate sensitivity and adjust the sensitivity within acceptable tolerance ranges. At March 31, ~~2022,~~2023, interest-earning assets exceeded interest-bearing liabilities that mature or reprice within one year (interest-sensitive gap) by ~~$2.6 billion.~~$679.1 million. Our interest-sensitive assets as a percentage of interest-sensitive liabilities within the one-year window was ~~134.71%~~108.07% at March 31, ~~2022~~2023 compared with ~~120.40%~~116.93% at December 31, ~~2021.~~2022. Likewise, the one-year interest-sensitive gap as a percentage of total assets was ~~12.19%~~3.34% at March 31, ~~2022~~2023 compared with ~~7.28%~~6.29% at December 31, ~~2021.~~2022.

~~The repricing and maturities of our interest-rate sensitive assets and interest-rate sensitive liabilities at March 31, 2022 are shown in the following table:~~

(Dollars in thousands)
Less than
One Year
One to Five
Years
Five to Fifteen Years Over Fifteen Years Total
Interest-rate sensitive assets:
Loans:
Commercial loans and leases(2)
$ 4,002,063 $ 1,496,195 $ 348,996 $ 15,443 $ 5,862,697
Commercial mortgage loans(2)
2,352,855 815,355 194,980 8,553 3,371,743
Residential(1)(2)
193,699 321,202 250,819 61,414 827,134
Consumer(2)
734,768 425,614 195,927 4,520 1,360,829
Loans held for sale(2)
81,103 1,626 2,427 1,581 86,737
Investment securities, available-for-sale 2,537,566 3,178,040 1,789,998 48,372 7,553,976
Investment securities, held-to-maturity 18,005 35,826 31,071 — 84,902
Other interest-earning assets 8,804 — — — 8,804
Total interest-rate sensitive assets: $ 9,928,863 $ 6,273,858 $ 2,814,218 $ 139,883 $ 19,156,822
Interest-rate sensitive liabilities:
Interest-bearing deposits:
Interest-bearing demand $ 1,646,187 $ — $ — $ — $ 1,646,187
Savings 1,282,990 — — — 1,282,990
Money market 3,287,452 — — — 3,287,452
Customer time deposits 853,117 299,303 2,032 — 1,154,452
Trust preferred borrowings 90,295 — — — 90,295
Senior and subordinated debt 100,492 147,996 — — 248,488
Other borrowed funds 109,606 — — — 109,606
Total interest-rate sensitive liabilities: $ 7,370,139 $ 447,299 $ 2,032 $ — $ 7,819,470
Excess of interest-rate sensitive assets over interest-rate liabilities (interest-rate sensitive gap) $ 2,558,724 $ 5,826,559 $ 2,812,186 $ 139,883 $ 11,337,352
One-year interest-rate sensitive assets/interest-rate sensitive liabilities 134.72 %
One-year interest-rate sensitive gap as a percent of total assets 12.19 %

~~(1)Includes reverse mortgage loans~~

~~(2)Loan balances exclude nonaccruing loans, deferred fees and costs~~

~~Table of Contents~~

Market risk is the risk of loss from adverse changes in market prices and rates. Our market risk arises primarily from interest rate risk inherent in our lending, investing, and funding activities. To that end, we actively monitor and manage our interest rate risk exposure. One measure evaluates the impact of an immediate change in interest rates in 100 basis point increments on the economic value of equity ratio. The economic value of the equity ratio is defined as the economic value of the estimated cash flows from assets and liabilities as a percentage of economic value of cash flows from total assets.

The following table shows the estimated impact of immediate changes in interest rates on our net interest margin and economic value of equity ratio at the specified levels at March 31, ~~2022~~2023 and December 31, ~~2021:~~2022:


		March 31, 2022		December 31, 2021			March 31, 2023		December 31, 2022
% Change in Interest Rate (Basis Points)	% 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)	% 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)
+300	+300	31.6%	26.96%	25.1%	24.27%	+300	17.5%	24.54%	18.5%	27.54%
+200	+200	21.0%	25.43%	16.6%	23.07%	+200	11.7%	23.50%	12.3%	26.44%
+100	+100	10.3%	23.76%	8.2%	21.76%	+100	5.8%	22.36%	6.1%	25.22%
+50	+50	5.1%	22.22%	4.1%	20.33%	+50	2.9%	21.76%	3.1%	24.56%
+25	+25	2.5%	21.87%	2.0%	20.05%	+25	1.5%	21.44%	1.5%	24.22%
—	—	—%	21.50%	—%	19.73%	—	—%	21.15%	—%	23.87%
-25	-25	(2.5)%	21.10%	(1.4)%	19.28%	-25	(1.5)%	20.78%	(1.6)%	23.50%
-50	-50	(4.6)%	20.61%	(2.2)%	18.72%	-50	(2.9)%	20.43%	(3.3)%	23.10%
-100	-100	(5.8)%	19.42%	(3.8)%	17.36%	-100	(5.9)%	19.70%	(6.8)%	22.20%
'-200~~(3)~~	'-200~~(3)~~	NMF	NMF	NMF	NMF	'-200~~(3)~~	(12.4)%	18.00%	(14.0)%	20.20%
-300(3)		NMF	NMF	NMF	NMF
'-300						'-300	(19.0)%	16.00%	(21.2)%	17.90%

(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.

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RESULTS OF OPERATIONS

Three months ended March 31, ~~2022:~~2023: Net income for the three months ended March 31, ~~2022~~2023 was ~~$3.8~~$62.4 million, compared to ~~$65.1~~$3.8 million for the three months ended March 31, ~~2021.~~2022.

•Net interest income increased ~~$24.4~~$44.0 million ~~during the three months ended March 31, 2022 compared to the three months ended March 31, 2021,~~ primarily due to an increase from the ~~increase in average balances, primarily in loans~~balance sheet size and ~~leases as a result of~~mix and the ~~BMBC Merger and mortgage-backed securities.~~rising interest rate environment. See “Net Interest Income” for further information.

•Our provision for credit losses ~~for the three months ended March 31, 2022~~ increased ~~$39.1~~$10.0 million ~~compared to the three months ended March 31, 2021,~~ primarily due to the ~~initial provision for credit losses~~impacts of ~~$23.5 million recorded in connection with~~ the ~~BMBC Merger.~~economic uncertainty and forecast and net loan growth. See “Allowance for Credit Losses” for further information.

•Noninterest income ~~for the three months ended March 31, 2022~~ increased ~~$12.8~~$2.6 million ~~compared to the three months ended March 31, 2021, primarily~~ due to ~~the~~ increased ~~Wealth Management revenue attributable to the BMBC Merger,~~Cash Connect® income, partially offset by ~~a decline in our~~decreases of mortgage banking ~~business.~~fees, BMT Insurance Advisors income which was sold in 2Q 2022, and gains on the sale of SBA loans. See “Noninterest Income” for further information.

•Noninterest expense ~~increased $78.8~~decreased $41.4 million ~~during the three months ended March 31, 2022 compared to the three months ended March 31, 2021,~~ primarily due to ~~increases in~~higher corporate development ~~expenses,~~and restructuring ~~expenses, and salaries and benefits.~~costs from the combination with Bryn Mawr Bank Corporation (BMBC) in 2022. See “Noninterest Expense” for further information.

•Income tax provision ~~for the three months ended March 31, 2022 decreased $19.7~~increased $19.2 million ~~compared to the three months ended March 31, 2021,~~ primarily due to the ~~$80.8~~$77.9 million ~~decrease~~increase in pre-tax income.

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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 March 31,													Three months ended March 31,
		2022						2021							2023						2022
(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 leases	Commercial loans and leases	$	4,851,090	$	52,466	4.39	%	$	4,138,034	$	52,620	5.16	%	Commercial loans and leases	$	4,954,622	$	80,744	6.63	%	$	4,851,090	$	52,466	4.39	%
Commercial real estate loans	Commercial real estate loans	4,292,159		40,639		3.84		2,803,378		29,191		4.22		Commercial real estate loans	4,425,354		71,828		6.58		4,292,159		40,639		3.84
Residential loans	Residential loans	843,699		9,657		4.58		734,593		12,864		7.00		Residential loans	769,581		8,628		4.48		843,699		9,657		4.58
Consumer loans	Consumer loans	1,357,970		15,284		4.56		1,159,588		12,836		4.49		Consumer loans	1,849,398		31,535		6.92		1,357,970		15,284		4.56
Loans held for sale	Loans held for sale	74,694		835		4.53		161,287		1,341		3.37		Loans held for sale	43,527		989		9.21		74,694		835		4.53
Total loans and leases	Total loans and leases	11,419,612		118,881		4.22		8,996,880		108,852		4.91		Total loans and leases	12,042,482		193,724		6.53		11,419,612		118,881		4.22
Mortgage-backed securities(3)	Mortgage-backed securities(3)	5,223,794		23,113		1.77		2,507,910		10,704		1.71		Mortgage-backed securities(3)	4,823,507		27,526		2.28		5,223,794		23,113		1.77
Investment securities(3)	Investment securities(3)	330,826		1,321		1.82		336,410		1,449		1.98		Investment securities(3)	376,760		2,237		2.86		330,826		1,321		1.82
Other interest-earning assets	Other interest-earning assets	1,721,659		822		0.19		1,103,632		276		0.10		Other interest-earning assets	240,943		2,896		4.87		1,721,659		822		0.19
Total interest-earning assets	Total interest-earning assets	$	18,695,891	$	144,137	3.13	%	$	12,944,832	$	121,281	3.81	%	Total interest-earning assets	$	17,483,692	$	226,383	5.27	%	$	18,695,891	$	144,137	3.13	%
Allowance for credit losses	Allowance for credit losses	(134,780)						(226,911)						Allowance for credit losses	(153,181)						(134,780)
Cash and due from banks	Cash and due from banks	209,730						114,725						Cash and due from banks	230,193						209,730
Cash in non-owned ATMs	Cash in non-owned ATMs	509,568						393,964						Cash in non-owned ATMs	421,057						509,568
Bank-owned life insurance	Bank-owned life insurance	100,756						32,155						Bank-owned life insurance	101,612						100,756
Other noninterest-earning assets	Other noninterest-earning assets	1,638,727						997,444						Other noninterest-earning assets	1,919,065						1,638,727
Total assets	Total assets	$	21,019,892					$	14,256,209					Total assets	$	20,002,438					$	21,019,892
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 demand	Interest-bearing demand	$	3,435,377	$	581	0.07	%	$	2,572,325	$	618	0.10	%	Interest-bearing demand	$	3,142,930	$	5,024	0.65	%	$	3,435,377	$	581	0.07	%
Savings	Savings	2,262,026		162		0.03		1,830,781		150		0.03		Savings	2,065,212		1,256		0.25		2,262,026		162		0.03
Money market	Money market	4,092,835		925		0.09		2,682,219		854		0.13		Money market	3,861,590		19,258		2.02		4,092,835		925		0.09
Customer time deposits	Customer time deposits	1,173,023		1,323		0.46		1,117,191		2,377		0.86		Customer time deposits	1,276,204		5,993		1.90		1,173,023		1,323		0.46
Total interest-bearing customer deposits	Total interest-bearing customer deposits	10,963,261		2,991		0.11		8,202,516		3,999		0.20		Total interest-bearing customer deposits	10,345,936		31,531		1.24		10,963,261		2,991		0.11
Brokered deposits	Brokered deposits	63,376		137		0.88		136,957		497		1.47		Brokered deposits	346,355		3,661		4.29		63,376		137		0.88
Total interest-bearing deposits	Total interest-bearing deposits	11,026,637		3,128		0.12		8,339,473		4,496		0.22		Total interest-bearing deposits	10,692,291		35,192		1.33		11,026,637		3,128		0.12
Federal Home Loan Bank advances	Federal Home Loan Bank advances	—		—		—		736		5		2.76		Federal Home Loan Bank advances	267,367		3,371		5.11		—		—		—
Trust preferred borrowings	Trust preferred borrowings	90,263		513		2.30		67,011		324		1.96		Trust preferred borrowings	90,459		1,555		6.97		90,263		513		2.30
Senior and subordinated debt	Senior and subordinated debt	248,565		1,929		3.10		246,654		2,266		3.67		Senior and subordinated debt	233,189		2,573		4.41		248,565		1,929		3.10
Other borrowed funds~~(4)~~	Other borrowed funds~~(4)~~	38,396		9		0.10		19,656		5		0.10		Other borrowed funds~~(4)~~	131,221		1,160		3.59		38,396		9		0.10
Total interest-bearing liabilities	Total interest-bearing liabilities	$	11,403,861	$	5,579	0.20	%	$	8,673,530	$	7,096	0.33	%	Total interest-bearing liabilities	$	11,414,527	$	43,851	1.56	%	$	11,403,861	$	5,579	0.20	%
Noninterest-bearing demand deposits	Noninterest-bearing demand deposits	6,450,783						3,490,831						Noninterest-bearing demand deposits	5,560,252						6,450,783
Other noninterest-bearing liabilities	Other noninterest-bearing liabilities	445,855						322,296						Other noninterest-bearing liabilities	770,565						445,855
Stockholders’ equity	Stockholders’ equity	2,722,263						1,771,822						Stockholders’ equity	2,260,262						2,722,263
Noncontrolling interest	Noncontrolling interest	(2,870)						(2,270)						Noncontrolling interest	(3,168)						(2,870)
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	21,019,892					$	14,256,209					Total liabilities and stockholders’ equity	$	20,002,438					$	21,019,892
Excess of interest-earning assets over interest-bearing liabilities	Excess of interest-earning assets over interest-bearing liabilities	$	7,292,030					$	4,271,302					Excess of interest-earning assets over interest-bearing liabilities	$	6,069,165					$	7,292,030
Net interest income	Net interest income			$	138,558					$	114,185			Net interest income			$	182,532					$	138,558
Interest rate spread	Interest rate spread					2.93	%					3.48	%	Interest rate spread					3.71	%					2.93	%
Net interest margin	Net interest margin					3.01	%					3.59	%	Net interest margin					4.25	%					3.01	%

(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.~~

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Three months ended March 31, ~~2022:~~2023: During the three months ended March 31, ~~2022,~~2023, net interest income increased ~~$24.4~~$44.0 million from the three months ended March 31, ~~2021~~2022 primarily due to the increases in average balances, primarily in loans and leases and mortgage-backed securities. Net interest margin was 3.01% for the first quarter of 2022, a 58 basis point decrease compared to 3.59% for the first quarter of 2021 due to reductions of 30 basis points from lower purchase accounting accretion, 16 basis points from the balance sheet size and mix and 12the rising interest rate environment. Net interest margin was 4.25% for the first quarter of 2023, a 124 basis point increase compared to 3.01% for the first quarter of 2022 due to a favorable increase of 102 basis points from ~~PPP loans.~~

~~The following table provides certain information regarding changes in net interest income attributable to changes in the volumes of interest-earning assets~~our asset-sensitive balance sheet and ~~interest-bearing liabilities~~22 basis points from loan growth and changes in the rates for the periods indicated. For each category of interest-earning assets and interest-bearing liabilities, information is provided on the changes that are attributable to: (i) changes in volume (change in volume multiplied by prior year rate); (ii) changes in rates (change in rate multiplied by prior year volume on each category); and (iii) net change (the sum of the change in volume and the change in rate). Changes due to the combination of rate and volume changes (changes in volume multiplied by changes in rate) are allocated proportionately between changes in rate and changes in volume.

Three Months Ended March 31, 2022 vs. 2021
(Dollars in thousands) Volume Yield/Rate Net
Interest Income:
Loans:
Commercial loans and leases(1)
$ 34,069 $ (34,223) $ (154)
Commercial mortgage loans 28,005 (16,557) 11,448
Residential 9,720 (12,927) (3,207)
Consumer 2,243 205 2,448
Loans held for sale (2,588) 2,082 (506)
Mortgage-backed securities 12,019 390 12,409
Investment securities(2)
(22) (106) (128)
Other interest-earning assets 209 337 546
Favorable (unfavorable) 83,655 (60,799) 22,856
Interest expense:
Deposits:
Interest-bearing demand 795 (832) (37)
Money market 1,399 (1,328) 71
Savings 12 — 12
Customer time deposits 765 (1,819) (1,054)
Brokered certificates of deposits (206) (154) (360)
FHLB advances (2) (3) (5)
Trust preferred borrowings 126 63 189
Senior and subordinated debt 117 (454) (337)
Other borrowed funds 4 — 4
Unfavorable (favorable) 3,010 (4,527) (1,517)
Net change, as reported $ 80,645 $ (56,272) $ 24,373

~~(1)Includes a tax-equivalent income adjustment related to commercial loans.~~

~~(2)Includes a tax-equivalent income adjustment related to municipal bonds.~~mix.

Allowance 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.

~~Table of Contents~~

During the three months ended March 31, ~~2022,~~2023, we recorded a provision for credit losses of ~~$19.0~~$29.0 million, a net change of ~~$39.1~~$10.0 million, as compared with the ~~recovery~~provision of credit losses of ~~$20.2~~$19.0 million for the three months ended March 31, ~~2021. The~~2022. This increase was primarily due to the ~~initial provision for credit losses~~impacts of ~~$23.5 million recorded in connection with~~ the ~~BMBC Merger.~~economic uncertainty and forecast and net loan growth.

The allowance for credit losses increased to ~~$136.3~~$169.2 million at March 31, ~~2022~~2023 from ~~$94.5~~$151.9 million at December 31, 2021. The increase was primarily due to an initial ACL of $49.6 million recorded in connection with the BMBC Merger. The initial $49.6 million ACL recorded includes $23.5 million related to non-PCD loans, or the initial provision for credit loss recorded, and $26.1 million related to PCD loans, which does not have an initial income statement impact, but adjusts the amortized cost basis of the loans at acquisition (i.e., a balance sheet gross-up).2022. The ratio of allowance for credit losses to total loans and leases was ~~1.19%~~1.28% at March 31, ~~2022~~2023 and 1.17% at December 31, ~~2021.~~2022.

The following tables detail the allocation of the ACL and show our net charge-offs (recoveries) by portfolio category:

(Dollars in thousands)
Commercial and Industrial(1)
Owner-
occupied
Commercial Commercial
Mortgages Construction
Residential(2)
Consumer(3)
Total
As of March 31, 2022
Allowance for credit losses $ 65,716 $ 6,125 $ 23,105 $ 3,145 $ 4,956 $ 33,283 $ 136,330
% of ACL to total ACL 48 % 5 % 17 % 2 % 4 % 24 % 100 %
Loan portfolio balance $ 2,984,127 $ 1,872,827 $ 3,361,242 $ 923,890 $ 809,610 $ 1,382,116 $ 11,333,812
% to total loans and leases 26 % 17 % 30 % 8 % 7 % 12 % 100 %
Three months ended March 31, 2022
Charge-offs $ 3,639 $ 179 $ 37 $ — $ 186 $ 810 $ 4,851
Recoveries 601 126 121 — 386 366 1,600
Net charge-offs (recoveries) $ 3,038 $ 53 $ (84) $ — $ (200) $ 444 $ 3,251
Average loan balance $ 2,949,444 $ 1,901,647 $ 3,387,900 $ 904,258 $ 839,546 $ 1,357,970 $ 11,340,765
Ratio of net charge-offs (recoveries) to average gross loans 0.42 % 0.01 % (0.01) % NMF (0.10) % 0.13 % 0.12 %


(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
As of December 31, 2021
As of March 31, 2023																							As of March 31, 2023
Allowance for credit losses	Allowance for credit losses	$	49,967		$	4,574		$	11,623		$	1,903		$	3,352		$	23,088		$	94,507		Allowance for credit losses	$	62,709		$	6,056		$	30,114		$	9,672		$	5,327		$	55,284		$	169,162
% of ACL to total ACL	% of ACL to total ACL	53		%	5		%	12		%	2		%	4		%	24		%	100		%	% of ACL to total ACL	37		%	3		%	18		%	6		%	3		%	33		%	100		%
Loan portfolio balance	Loan portfolio balance	$	2,270,319		$	1,341,707		$	1,881,510		$	687,213		$	546,667		$	1,158,573		$	7,885,989		Loan portfolio balance	$	3,145,326		$	1,846,661		$	3,473,083		$	1,023,711		$	786,060		$	1,868,427		$	12,143,268
% to total loans and leases	% to total loans and leases	28		%	17		%	24		%	9		%	7		%	15		%	100		%	% to total loans and leases	26		%	15		%	29		%	8		%	7		%	15		%	100		%
Year ended December 31, 2021
Three months ended March 31, 2023																							Three months ended March 31, 2023
Charge-offs	Charge-offs	$	23,592		$	83		$	73		$	2,473		$	—		$	2,094		$	28,315		Charge-offs	$	9,462		$	—		$	—		$	—		$	—		$	4,204		$	13,666
Recoveries	Recoveries	8,756			160			269			—			789			1,131			11,105			Recoveries	1,216			5			2			530			43			159			1,955
Net charge-offs (recoveries)	Net charge-offs (recoveries)	$	14,836		$	(77)		$	(196)		$	2,473		$	(789)		$	963		$	17,210		Net charge-offs (recoveries)	$	8,246		$	(5)		$	(2)		$	(530)		$	(43)		$	4,045		$	11,711
Average loan balance	Average loan balance	$	2,463,933		$	1,337,883		$	1,994,995		$	775,246		$	628,411		$	1,134,569		$	8,335,037		Average loan balance	$	3,134,936		$	1,819,686		$	3,428,388		$	996,965		$	766,938		$	1,849,398		$	11,996,312
Ratio of net charge-offs (recoveries) to average gross loans	Ratio of net charge-offs (recoveries) to average gross loans	0.60		%	(0.01)		%	(0.01)		%	0.32		%	(0.13)		%	0.08		%	0.21		%	Ratio of net charge-offs (recoveries) to average gross loans	1.07		%	NMF			NMF			(0.22)		%	(0.02)		%	0.89		%	0.40		%

(1)Includes commercial small business ~~leases~~leases.

(2)Excludes reverse mortgages.

(3)Includes home equity lines of credit, installment loans unsecured lines of credit and ~~PPP~~education loans.


(Dollars in thousands)	Commercial and Industrial(1)			Owner- occupied Commercial			Commercial Mortgages			Construction			Residential(2)			Consumer(3)			Total
As of December 31, 2022
Allowance for credit losses	$	59,394		$	6,019		$	21,473		$	6,987		$	4,668		$	53,320		$	151,861
% of ACL to total ACL	39		%	4		%	14		%	5		%	3		%	35		%	100		%
Loan portfolio balance	$	3,134,326		$	1,809,582		$	3,351,084		$	1,044,049		$	759,465		$	1,810,930		$	11,909,436
% to total loans and leases	26		%	15		%	28		%	9		%	7		%	15		%	100		%
Year ended December 31, 2022
Charge-offs	$	19,004		$	179		$	581		$	—		$	186		$	7,520		$	27,470
Recoveries	6,112			278			223			2,567			665			793			10,638
Net charge-offs (recoveries)	$	12,892		$	(99)		$	358		$	(2,567)		$	(479)		$	6,727		$	16,832
Average loan balance	$	3,043,836		$	1,831,428		$	3,319,687		$	962,082		$	787,273		$	1,543,704		$	11,488,010
Ratio of net charge-offs (recoveries) to average gross loans	0.42		%	(0.01)		%	0.01		%	(0.27)		%	(0.06)		%	0.44		%	0.15		%

(1)Includes commercial small business leases.

(2)Excludes reverse mortgages.

(3)Includes home equity lines of credit, installment loans unsecured lines of credit and education loans.

See Note 87 to the unaudited Consolidated Financial Statements and ~~Nonperforming Assets~~"Nonperforming Assets" above for further information.

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Noninterest Income

Three months ended March 31, ~~2022:~~2023: During the three months ended March 31, ~~2022,~~2023, noninterest income was ~~$60.6~~$63.1 million, an increase of ~~$12.8~~$2.6 million from ~~$47.8~~$60.6 million during the three months ended March 31, ~~2021.~~2022. The increase was primarily driven by ~~a $15.9~~an $8.1 million increase in Wealth Management revenue, of which $13.3 million was attributable to the BMBC Merger. In addition, the three months ended March 31, 2022, included $1.5 million of capital markets income and $1.3 million of insurance income, both attributable to the BMBC Merger. Partially offsetting thefrom Cash Connect®. The increase was ~~a $5.7~~partially offset by decreases of $1.8 million ~~decrease~~ in mortgage banking ~~activities, primarily resulting~~fees, $1.6 million of income recognized on equity investments, $1.3 million from BMT Insurance Advisors (sold in 2Q 2022), and $0.6 million from gains on the ~~decline in refinancing originations compared to the historically higher levels during the three months ended March 31, 2021.~~sale of SBA loans.

Noninterest Expense

Three months ended March 31, ~~2022~~2023: During the three ~~month~~months ended March 31, ~~2022,~~2023, noninterest expense was ~~$174.5~~$133.0 million, ~~an increase~~a decrease of ~~$78.8~~$41.4 million from ~~$95.6~~$174.5 million for the three months ended March 31, ~~2021.~~2022. The ~~increase~~decrease was primarily due to ~~increases of $31.9 million~~higher corporate development and ~~$17.8 million of~~ ~~Corporate development expenses~~ ~~and~~ ~~Restructuringexpenses, respectively,both related to~~restructuring costs after the combination with BMBC ~~Merger, as well as a $17.8 million increase~~recognized in ~~Salaries, benefits and other compensation~~ ~~as a result of increased headcount primarily from the BMBC Merger as well as higher salaries.~~2022.

Income Taxes

We and our subsidiaries file a consolidated federal income tax return and separate state income tax returns. Income taxes are accounted for in accordance with ASC 740, Income Taxes, which requires the recording of deferred income taxes for tax consequences of temporary differences. We recorded income tax expense of ~~$1.7~~$20.9 million during the three months ended March 31, ~~2022~~2023 compared to income tax expense of ~~$21.4~~$1.7 million for the same period in ~~2021.~~2022.

Our effective tax rate was ~~30.5%~~25.0% for the three months ended March 31, ~~2022~~2023 compared to ~~24.7%~~30.5% for the same period in ~~2021.~~2022. The effective tax rate for the three months ended March 31, ~~2022 increased~~2023 decreased primarily due to ~~reduction in pretax income. While we incurred~~ $0.4 million of tax expense related to nondeductible ~~acquisition~~merger costs ~~during both~~incurred in the three months ended March 31, ~~2022 and March 31, 2021, the impact to the effective tax rate was much higher in 2022 due to the lower level of pretax income.~~2022.

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, research and development tax credits (incurred in 2022) 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 (incurred in 2022) 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.

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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)	(Dollars and share amounts in thousands, except per share amounts)	March 31, 2022		December 31, 2021		(Dollars and share amounts in thousands, except per share amounts)	March 31, 2023		December 31, 2022
Stockholders’ equity of WSFS	Stockholders’ equity of WSFS	$	2,520,463	$	1,939,099	Stockholders’ equity of WSFS	$	2,306,362	$	2,205,113
Less: Goodwill and other intangible assets	Less: Goodwill and other intangible assets	1,032,189		547,231		Less: Goodwill and other intangible assets	1,008,250		1,012,232
Tangible common equity (numerator)	Tangible common equity (numerator)	$	1,488,274	$	1,391,868	Tangible common equity (numerator)	$	1,298,112	$	1,192,881
Shares of common stock outstanding (denominator)	Shares of common stock outstanding (denominator)	64,735		47,609		Shares of common stock outstanding (denominator)	61,387		61,612
Book value per share of common stock	Book value per share of common stock	$	38.94	$	40.73	Book value per share of common stock	$	37.57	$	35.79
Goodwill and other intangible assets	Goodwill and other intangible assets	15.94		11.49		Goodwill and other intangible assets	16.42		16.43
Tangible book value per share of common stock	Tangible book value per share of common stock	$	22.99	$	29.24	Tangible book value per share of common stock	$	21.15	$	19.36

CRITICAL ACCOUNTING ESTIMATES

The preparation of the unaudited Consolidated Financial Statements in accordance with U.S. GAAP requires us to make estimates and assumptions affecting the reported amounts of assets, liabilities, revenue and expenses. We regularly evaluate these estimates and assumptions including those related to the allowance for credit losses, business combinations, deferred taxes, fair value measurements and goodwill and other intangible assets. We base our estimates on historical experience and various other factors and assumptions that are believed to be reasonable under the circumstances. These form the basis for making judgments on the carrying value of certain assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Although our current estimates contemplate current economic conditions and how we expect them to change in the future, for the remainder of ~~2022,~~2023, 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. The following critical accounting policy involves more significant judgments and estimates. We have reviewed this critical accounting policy and estimates with the Audit Committee.

~~Allowance for Credit Losses~~

We maintain an allowance for credit losses (ACL) which represents our best estimate of expected losses in our financial assets, which include loans, leases and held-to-maturity debt securities. We establish our allowance in accordance with guidance provided in ASC 326, Financial Instruments – Credit Losses. The ACL includes two primary components: (i) an allowance established on financial assets which share similar risk characteristics collectively evaluated for credit losses (collective basis), and (ii) an allowance established on financial assets which do not share similar risk characteristics with any loan segment and is individually evaluated for credit losses (individual basis). We consider the determination of the allowance for credit losses to be critical because it requires significant judgment reflecting our best estimate of expected credit losses based on our historical loss experience, current conditions and economic forecasts. Our evaluation is based upon a continuous review of our financial assets, with consideration given to evaluations resulting from examinations performed by regulatory authorities. The allowance for credit losses increased to $136.3 millionCritical accounting estimates at March 31, ~~2022~~2023 did not significantly change from ~~$94.5 million~~our critical accounting estimates at December 31, 2021. The increase was primarily due to an initial ACL of $49.6 million recorded in connection with the BMBC Merger. See Note 7 to the unaudited Consolidated Financial Statements for further discussion of the ACL.

The calculation of expected credit losses is determined using a single scenario third-party economic forecast to adjust the calculated historical loss rates of the portfolio segments to incorporate the effects of current and future economic conditions. The determination of the appropriate level of the ACL inherently involves a high degree of subjectivity and requires us to make significant estimates, including modeling methodology, historical loss experience, relevant available information from internal and external sources relating to qualitative adjustment factors, prepayment speeds and reasonable and supportable forecasts about future economic conditions. The Company's economic forecast considers the general health of the economy, the interest rate environment, real estate pricing and market risk

~~The ACL may increase or decrease due to changes in economic conditions affecting borrowers and macroeconomic variables that our financial assets~~2022, which are more susceptible to, including unforeseen events such as natural disasters and pandemics, new information regarding existing financial assets, identification of additional problems assets, the fair value of underlying collateral, and other factors. These changes, both within and outside the Company’s control, may frequently update and have a material impact to our financial results.

~~Table of Contents~~

Because current economic conditions and forecasts can change and future events are inherently difficult to predict, the anticipated amount of estimated credit losses on our financial assets, and therefore the appropriateness of the ACL, could change significantly. It is difficult to estimate how potential changes in any one economic factor or input might affect the overall ACL because a wide variety of factors and inputs are considered in these estimates and changes in those factors and inputs considered may not occur at the same rate and may not be consistent across the Company’s portfolio mix and segmentation. Additionally, changes in factors and inputs may be directionally inconsistent, such that improvement in one factor may offset deterioration in others. As of March 31, 2022, the Company believes that its ACL was adequate.

~~Business Combinations~~

We account for business combinations under ASC 805, Business Combinations using the acquisition method of accounting and record the identifiable assets acquired, liabilities assumed, consideration paid, and any non-controlling interests of the acquired business at fair value at the acquisition date. The excess of consideration paid over the fair value of the net assets acquired is recorded as goodwill. The fair values are preliminary estimates subject to adjustments during the measurement period, which does not exceed one year after acquisition. The application of business combination principles, including the determination of the fair value of net assets acquired, requires the use of significant estimates and assumptions under ASC 820, Fair Value Measurement. See Note 3 to the unaudited Consolidated Financial Statements.

Determining estimated fair value requires a significant amount of judgment and estimates. If our assumptions change or errors are determined in its calculations, the fair value could materially change resulting in a changedisclosed in our ~~goodwill or identifiable net assets acquired, including identified intangible assets. As of March~~Annual Report on Form 10-K for the year ended December 31, 2022, the Company believes that the fair value of the assets acquired, liabilities assumed, consideration paid, and any non-controlling interests of the acquired business at fair value at the acquisition date was adequate.2022.

RECENT REGULATORY DEVELOPMENTS

Recent regulatory developments at March 31, ~~2022~~2023 did not significantly change from our recent regulatory developments at December 31, ~~2021,~~2022, which are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022, except as noted below.

Potential Regulatory Reforms in Response to Recent Bank Failures

The recent failures of Silicon Valley Bank, Santa Clara, California, Signature Bank, New York, New York, and First Republic Bank, San Francisco, California, in March and April of this year, may lead to regulatory changes and initiatives that could impact the Company. For example, the FDIC has stated that it plans to impose a special deposit insurance assessment on banks in order to recover losses that the FDIC's Deposit Insurance Fund (DIF) incurred in the receiverships of these institutions. In addition, President Biden has encouraged the federal banking agencies to adopt various reforms, including the completion of an incentive compensation rule for bank executives pursuant to Section 956 of the Dodd-Frank Act, in response to these bank failures.On April 28, 2023, the Federal Reserve and the FDIC issued reports on the potential causes of failures of Silicon Valley Bank and Signature Bank, respectively. Among the changes discussed, the Federal Reserve and the FDIC highlighted potential changes needed to supervisory approaches for banks of all sizes as well as to regulatory requirements. Currently, it is unclear what actions federal regulatory agencies will take as a result of these failures.

Small Business Lending Data Collection Rule

On March 30, 2023, the CFPB finalized a rule under section 1071 of the Dodd-Frank Act requiring lenders to collect and report data regarding small business lending activity. The Company is evaluating the impact of the new rule.

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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 Financing Rate (SOFR), a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities, as its preferred alternative to LIBOR. The United Kingdom Financial Conduct Authority (FCA), ceased publishing most LIBOR settings as of January 1, 2022, however, the FCA will continue to publish five U.S. LIBOR settings through mid-2023. The Federal Reserve has continued to encourage banks to transition away from LIBOR as soon as practicable and the federal banking agencies have encouraged banking organizations to cease entering into new contracts that use U.S. LIBOR as a reference rate by no later than December 31, 2021, and to ensure existing contracts have robust fallback language that includes a clearly defined alternative reference rate. The Federal Reserve Bank of New York has published SOFR rates on a daily basis since April 2018 and has published SOFR "term rates" daily since early 2020.

The International Swaps and Derivatives Association, which develops standardized language for the derivatives contracts that we enter into, has developed language that took effect in January 2021 replacing LIBOR with alternative risk-free benchmark rates, including SOFR for derivative contracts denominated in U.S. dollars. In 2021 the ARRC announced the SOFR program, which created a phased transition for switching trading conventions from USD LIBOR to SOFR for multiple financial instruments during the second half of 2021. The program is intended to migrate the market from LIBOR and create liquidity in SOFR.

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 March 31, 2023, the Company had approximately $2.5 billion of loans and $2.0 billion of derivatives that are utilized for customer guarantees, indexed to LIBOR, that mature after planned cessation in June of 2023. In addition, the Company had approximately $162.8 million of debt securities outstanding that are indexed to LIBOR (either currently or in the future) as of March 31, 2023.

Due to the uncertainty surrounding the future of LIBOR, it is expected that the transition will span several reporting periods through June 2023. A cross-functional team from Finance, Commercial and Consumer 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. An internal risk assessment was completed and the cross-functional team is working towards the migration of our existing contracts and system implementation. Our variable or floating rate instruments currently use LIBOR and give us discretion to determine a replacement benchmark rate if LIBOR becomes unavailable. In the first quarter of 2022, the Bank began utilizing Term SOFR as a replacement to LIBOR. Term SOFR was identified as the primary successor for 1 month and 3 month LIBOR due to operational similarities and ease of conversion. We are shifting new products primarily to Term SOFR and are actively migrating the existing LIBOR indexed loan portfolio away from the LIBOR index.

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 Part I Item 2 (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 Rule 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. BMBC was acquired on January 1, 2022. We have extended oversight and monitoring processes that support internal control over financial reporting to include the acquired operations. Other than these processes, thereThere 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 during the three months ended March 31, ~~2022.~~2023.

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 1917 – Legal and Other Proceedings to the unaudited Consolidated Financial Statements.

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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, ~~2021, previously filed with~~2022, except as described below.

A failure or the ~~Securities~~perceived risk of a failure to raise the statutory debt limit of the United States could have an adverse effect on our business, financial condition and ~~Exchange Commission.~~results of operations.

The inability of U.S. lawmakers to pass legislation to raise the U.S. government’s debt limit of $31.4 trillion has increased the possibility of a default by the U.S. government on its debt obligations, which could have an adverse impact on financial markets, interest rates and economic conditions in the United States and worldwide. The U.S. government reached its debt limit of $31.4 trillion in January 2023. Since then, the U.S. Department of Treasury implemented extraordinary measures to prevent default.

~~Table~~It is unclear if Congress and the President will reach an agreement to increase the U.S. government’s debt limit in a timely manner. The political stalemate over legislation to fund U.S. government operations and raise the U.S. government’s debt limit may increase the possibility of ~~Contents~~a default by the U.S. government on its debt obligations and related credit-rating downgrades. This creates uncertainty in the U.S. financial markets and domestic political conditions which could have an adverse impact on our business, financial condition and results of operations. If the United States is unable to increase the U.S. government’s debt limit in a timely manner, U.S. federal government could shut down for a period of time and the United States could default or delay on payment of its obligations or both, which could have an adverse impact on financial markets and economic conditions in the United States and worldwide and an adverse effect on our business, financial condition and results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the first quarter of 2020, the Board of Directors of the Company approved a share repurchase program authorizing the repurchase of 7,594,977 shares of common stock, or 15% of its outstanding shares as of March 31, 2020. This repurchase program was completed during the first quarter of 2023. During the second quarter of 2022, the Board of Directors of the Company approved an additional share repurchase authorization under the program of 6,358,727 shares of common stock, or 10% of its outstanding shares as of June 30, 2022. 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%~~35% of annual net income to stockholders through dividends and share repurchases while maintaining capital ratios in excess of “well-capitalized” regulatory benchmarks.

~~During~~The following table represents information with respect to repurchases of common stock made by the Company during the three months ended March 31, ~~2022, WSFS~~ ~~repurchased 938,985 shares~~ ~~of common stock under the Company's share repurchase program~~ ~~at an average price of $50.66, for an aggregate purchase price of~~ ~~$47.6 million.~~2023.



Month	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
January 1, 2023 - January 31, 2023	20,000	$	47.26	20,000	6,568,771
February 1, 2023 - February 28, 2023	178,000	50.19		178,000	6,390,771
March 1, 2023 - March 31, 2023	64,000	46.68		64,000	6,326,771
Total	262,000	$	49.11	262,000

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits


Exhibit Number						Description of Document
~~10.1~~						Letter Agreement, dated as of March 8, 2021, by and between WSFS Financial Corporation and Francis J. Leto, incorporated herein by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on January 3, 2022
31.1						Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2						Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32						Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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 *
104						The cover page of this Quarterly Report on Form 10-Q for the quarter ended March 31, ~~2022,~~2023, filed with the SEC on May ~~10, 2022,~~5, 2023, is formatted in Inline XBRL.

* 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.

6964

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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: May ~~10, 2022~~5, 2023						/s/ Rodger Levenson
						Rodger Levenson
						Chairman, President and Chief Executive Officer
						(Principal Executive Officer)

Date: May ~~10, 2022~~5, 2023						/s/ Dominic C. Canuso
						Dominic C. Canuso
						Executive Vice President and
						Chief Financial Officer
						(Principal Financial and Accounting Officer)

7065


	January 1, 2022
(Dollars in thousands)	Book Balance		Fair Value
Commercial and industrial	$	613,197	$	586,643
Owner-occupied commercial	513,267		503,182
Commercial mortgages	1,564,234		1,549,515
Construction	209,928		208,288
Commercial small business leases	125,770		119,119
Residential	310,092		315,454
Consumer	178,247		174,547
Total acquired loans and leases	$	3,514,735	$	3,456,748


(Dollars in thousands)	WSFS Bank		Cash Connect		Wealth Management		Consolidated Company
December 31, 2021	$	452,629	$	—	$	20,199	$	472,828
Goodwill from business combinations	297,646		—		116,691		414,337

March 31, 2022	$	750,275	$	—	$	136,890	$	887,165


(Dollars in thousands)	Balance at End of Period		Weighted Average Interest Rate		Maximum Outstanding at Month End During the Period		Average Amount Outstanding During the Year		Weighted Average Interest Rate During the Year
March 31, 2022


Trust preferred borrowings	$	90,295	2.47	%	$	90,295	$	90,263	2.30	%
Senior and subordinated debt	248,488		3.27		248,566		248,565		3.10
Other borrowed funds	33,619		0.10		37,941		38,396		0.10
March 31, 2021
Federal funds purchased	$	—	—	%	$	—	$	736	2.76	%

Trust preferred borrowings	67,011		1.96		67,011		67,011		1.96
Senior debt	246,734		3.45		246,734		245,654		3.67
Other borrowed funds	21,456		0.10		21,456		19,656		0.10


(Dollars in thousands)	Less than One Year		One to Five Years		Five to Fifteen Years		Over Fifteen Years		Total
Commercial and industrial(1)
Interest rate:
Fixed	$	55,265	$	636,469	$	212,720	$	49,241	$	953,695
Adjustable	306,951		855,777		319,383		57,722		1,539,833
Total	$	362,216	$	1,492,246	$	532,103	$	106,963	$	2,493,528
Owner-occupied commercial
Interest rate:
Fixed	$	52,833	$	421,522	$	427,302	$	179,205	$	1,080,862
Adjustable	40,765		249,632		429,806		71,762		791,965
Total	$	93,598	$	671,154	$	857,108	$	250,967	$	1,872,827
Commercial mortgages
Interest rate:
Fixed	$	129,174	$	782,180	$	377,236	$	156,579	$	1,445,169
Adjustable	88,937		693,279		1,038,555		95,302		1,916,073
Total	$	218,111	$	1,475,459	$	1,415,791	$	251,881	$	3,361,242
Construction
Interest rate:
Fixed	$	10,405	$	71,994	$	39,807	$	7,624	$	129,830
Adjustable	344,671		296,165		146,732		6,492		794,060
Total	$	355,076	$	368,159	$	186,539	$	14,116	$	923,890
Commercial small business leases
Interest rate:
Fixed	$	6,129	$	464,049	$	20,421	$	—	$	490,599
Adjustable	—		—		—		—		—
Total	$	6,129	$	464,049	$	20,421	$	—	$	490,599
Residential(2)
Interest rate:
Fixed	$	10,197	$	25,606	$	136,809	$	487,701	$	660,313
Adjustable(3)	10		548		29,763		114,692		145,013
Total	$	10,207	$	26,154	$	166,572	$	602,393	$	805,326
Consumer
Interest rate:
Fixed	$	2,544	$	239,898	$	344,059	$	295,682	$	882,183
Adjustable	8,452		47,118		32,763		411,600		499,933
Total	$	10,996	$	287,016	$	376,822	$	707,282	$	1,382,116
Total loans and leases	$	1,056,333	$	4,784,237	$	3,555,356	$	1,933,602	$	11,329,528


(Dollars in thousands)	Less than One Year			One to Five Years		Five to Fifteen Years		Over Fifteen Years		Total
Interest-rate sensitive assets:
Loans:
Commercial loans and leases(2)	$	4,002,063		$	1,496,195	$	348,996	$	15,443	$	5,862,697
Commercial mortgage loans(2)	2,352,855			815,355		194,980		8,553		3,371,743
Residential(1)(2)	193,699			321,202		250,819		61,414		827,134
Consumer(2)	734,768			425,614		195,927		4,520		1,360,829
Loans held for sale(2)	81,103			1,626		2,427		1,581		86,737
Investment securities, available-for-sale	2,537,566			3,178,040		1,789,998		48,372		7,553,976
Investment securities, held-to-maturity	18,005			35,826		31,071		—		84,902
Other interest-earning assets	8,804			—		—		—		8,804
Total interest-rate sensitive assets:	$	9,928,863		$	6,273,858	$	2,814,218	$	139,883	$	19,156,822
Interest-rate sensitive liabilities:
Interest-bearing deposits:
Interest-bearing demand	$	1,646,187		$	—	$	—	$	—	$	1,646,187
Savings	1,282,990			—		—		—		1,282,990
Money market	3,287,452			—		—		—		3,287,452
Customer time deposits	853,117			299,303		2,032		—		1,154,452

Trust preferred borrowings	90,295			—		—		—		90,295
Senior and subordinated debt	100,492			147,996		—		—		248,488
Other borrowed funds	109,606			—		—		—		109,606
Total interest-rate sensitive liabilities:	$	7,370,139		$	447,299	$	2,032	$	—	$	7,819,470

Excess of interest-rate sensitive assets over interest-rate liabilities (interest-rate sensitive gap)	$	2,558,724		$	5,826,559	$	2,812,186	$	139,883	$	11,337,352
One-year interest-rate sensitive assets/interest-rate sensitive liabilities	134.72		%
One-year interest-rate sensitive gap as a percent of total assets	12.19		%


Three Months Ended March 31,	2022 vs. 2021
(Dollars in thousands)	Volume		Yield/Rate		Net
Interest Income:
Loans:
Commercial loans and leases(1)	$	34,069	$	(34,223)	$	(154)
Commercial mortgage loans	28,005		(16,557)		11,448
Residential	9,720		(12,927)		(3,207)
Consumer	2,243		205		2,448
Loans held for sale	(2,588)		2,082		(506)
Mortgage-backed securities	12,019		390		12,409
Investment securities(2)	(22)		(106)		(128)
Other interest-earning assets	209		337		546
Favorable (unfavorable)	83,655		(60,799)		22,856
Interest expense:
Deposits:
Interest-bearing demand	795		(832)		(37)
Money market	1,399		(1,328)		71
Savings	12		—		12
Customer time deposits	765		(1,819)		(1,054)
Brokered certificates of deposits	(206)		(154)		(360)
FHLB advances	(2)		(3)		(5)
Trust preferred borrowings	126		63		189
Senior and subordinated debt	117		(454)		(337)
Other borrowed funds	4		—		4
Unfavorable (favorable)	3,010		(4,527)		(1,517)
Net change, as reported	$	80,645	$	(56,272)	$	24,373