WSFS FINANCIAL CORP [WSFS] Filings

10-Q 1 wsfs-20240331.htm 10-Q wsfs-20240331

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, 2024


☐			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: 60,093,741 shares as of May 2, 2024.

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, 2024 and 2023	5
	Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2024 and 2023	6
	Consolidated Statements of Financial Condition as of March 31, 2024 and December 31, 2023	7
	Consolidated Statements of Changes in Stockholders' Equity for the Three Months Ended March 31, 2024 and 2023	8
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023	9
	Notes to the Consolidated Financial Statements for the Three Months Ended March 31, 2024	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	47
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	59
Item 4.	Controls and Procedures	59
PART II. Other Information
Item 1.	Legal Proceedings	60
Item 1A.	Risk Factors	60
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	60
Item 3.	Defaults upon Senior Securities	60
Item 4.	Mine Safety Disclosures	60
Item 5.	Other Information	60
Item 6.	Exhibits	61

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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 difficult and unfavorable conditions and trends related to housing markets, costs of living, unemployment levels, interest rates, supply chain issues, inflation, and economic growth;

•the impacts related to or resulting from bank failures and other economic and industry volatility, including potential increased regulatory requirements and costs and potential impacts to macroeconomic conditions;

•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, which could impact market confidence in our operations;

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

•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;

•the credit risk associated with the substantial amount of commercial real estate, commercial and industrial, and construction and land development loans in the Company's loan portfolio;

•the extensive federal and state regulation, supervision and examination governing almost every aspect of the Company’s operations, and potential expenses associated with complying with such regulations;

•the Company’s ability to comply with applicable capital and liquidity requirements, including 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;

•the success of the Company's growth plans;

•failure of the financial and/or operational controls of the Company’s Cash Connect® and/or Wealth Management segments;

•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;

•negative perceptions or publicity with respect to the Company generally and, in particular, the Company’s trust and wealth management business;

•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 remote working arrangements;

•the Company’s ability to recruit and retain key Associates;

•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);

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•possible changes in the speed of loan prepayments by the Company’s Customers and loan origination or sales volumes;

•possible changes in market valuations and/or 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 interactions 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®, NewLane Finance®, Powdermill® Financial Solutions, 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,
(Dollars in thousands, except per share and share data)	2024		2023

Interest income:
Interest and fees on loans and leases	$	224,703	$	193,724
Interest on mortgage-backed securities	25,897		27,526
Interest and dividends on investment securities:
Taxable	700		704
Tax-exempt	1,484		1,533
Other interest income	8,838		2,896
	261,622		226,383
Interest expense:
Interest on deposits	72,795		35,192
Interest on Federal Home Loan Bank advances	308		3,371
Interest on senior and subordinated debt	2,449		2,573
Interest on federal funds purchased	—		1,139
Interest on trust preferred borrowings	1,756		1,555
Interest on other borrowings	9,036		21
	86,344		43,851
Net interest income	175,278		182,532
Provision for credit losses	15,138		29,011
Net interest income after provision for credit losses	160,140		153,521
Noninterest income:
Credit/debit card and ATM income	19,669		13,361
Investment management and fiduciary income	32,928		30,476
Deposit service charges	6,487		6,039
Mortgage banking activities, net	1,647		1,122
Loan and lease fee income	1,523		1,372

Unrealized loss on equity investments, net	—		(4)

Bank owned life insurance income	1,200		1,510
Other income	12,403		9,251
	75,857		63,127
Noninterest expense:
Salaries, benefits and other compensation	75,806		72,849
Occupancy expense	9,479		10,408
Equipment expense	10,692		9,792
Data processing and operations expenses	3,660		4,724
Professional fees	4,481		4,439
Marketing expense	1,782		1,716

FDIC expenses	3,982		2,582
Loan workout and other credit costs	1,071		(55)
Corporate development expense	208		740
Restructuring expense	—		(761)


Other operating expense	37,911		26,611
	149,072		133,045
Income before taxes	86,925		83,603
Income tax provision	21,202		20,941
Net income	$	65,723	$	62,662
Less: Net (loss) income attributable to noncontrolling interest	(38)		258
Net income attributable to WSFS	$	65,761	$	62,404
Earnings per share:
Basic	$	1.09	$	1.01
Diluted	$	1.09	$	1.01
Weighted average shares of common stock outstanding:
Basic	60,352,200		61,510,714
Diluted	60,521,951		61,678,871

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)	2024		2023

Net income	$	65,723	$	62,662
Less: Net (loss) income attributable to noncontrolling interest	(38)		258
Net income attributable to WSFS	65,761		62,404
Other comprehensive (loss) income:
Net change in unrealized (losses) gains on investment securities available-for-sale
Net unrealized (losses) gains arising during the period, net of tax (benefit) expense of $(12,634) and $16,740, respectively	(40,007)		53,010



Net change in securities held-to-maturity
Net change in unrealized gains on available-for-sale securities reclassified to held-to-maturity, net of tax benefit of $1,158 and $1,315, respectively	3,669		4,165
Net change in unfunded pension liability
Change in unfunded pension liability related to unrealized gain and prior service cost, net of tax expense of $39 and $11, respectively	(124)		(35)


Net change in cash flow hedge
Net unrealized (loss) gain arising during the period, net of tax (benefit) expense of $(2,031) and $105, respectively	(6,433)		332
Amortization of unrealized gain on terminated cash flow hedges, net of tax benefit of $— and $13, respectively	—		(40)
	(6,433)		292
Net change in equity method investments
Net change in other comprehensive income of equity method investments, net of tax benefit of $7 and $1, respectively	(21)		(3)
Total other comprehensive (loss) income	(42,916)		57,429
Total comprehensive income	$	22,845	$	119,833

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)	March 31, 2024		December 31, 2023

Assets:
Cash and due from banks	$	787,729	$	629,310
Cash in non-owned ATMs	186,522		458,889
Interest-bearing deposits in other banks including collateral (restricted cash) of $2,453 at March 31, 2024 and $4,270 at December 31, 2023	2,820		4,701
Total cash, cash equivalents, and restricted cash	977,071		1,092,900
Investment securities, available-for-sale (amortized cost of $4,444,676 at March 31, 2024 and $4,504,342 at December 31, 2023	3,734,229		3,846,537
Investment securities, held-to-maturity, net of allowance for credit losses of $8 at March 31, 2024 and December 31, 2023 (fair value $949,727 at March 31, 2024 and $985,931 at December 31, 2023)	1,049,807		1,058,557
Other investments	17,051		17,434
Loans, held for sale at fair value	26,858		29,268
Loans and leases, net of allowance for credit losses of $192,629 at March 31, 2024 and $186,126 at December 31, 2023	12,790,128		12,583,202
Bank owned life insurance	42,708		42,762
Stock in Federal Home Loan Bank (FHLB) of Pittsburgh at cost	15,526		15,398
Other real estate owned	1,210		1,569
Accrued interest receivable	88,310		85,979
Premises and equipment	104,617		104,484


Goodwill and intangible assets	1,000,344		1,004,560
Other assets	731,389		712,022
Total assets	$	20,579,248	$	20,594,672
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Noninterest-bearing	$	4,652,875	$	4,917,297
Interest-bearing	11,534,329		11,556,789






Total deposits	16,187,204		16,474,086


Trust preferred borrowings	90,687		90,638
Senior and subordinated debt	218,458		218,400
Other borrowed funds	815,813		586,038
Accrued interest payable	37,911		46,684
Other liabilities	763,553		709,011
Total liabilities	18,113,626		18,124,857
Stockholders’ Equity:
Common stock $0.01 par value, 90,000,000 shares authorized; issued 76,133,596 at March 31, 2024 and 76,095,094 at December 31, 2023	761		761
Capital in excess of par value	1,987,800		1,984,746
Accumulated other comprehensive loss	(636,907)		(593,991)
Retained earnings	1,700,349		1,643,657
Treasury stock at cost, 16,049,631 shares at March 31, 2024 and 15,557,263 shares at December 31, 2023	(578,522)		(557,537)
Total stockholders’ equity of WSFS	2,473,481		2,477,636
Noncontrolling interest	(7,859)		(7,821)
Total stockholders' equity	2,465,622		2,469,815
Total liabilities and stockholders' equity	$	20,579,248	$	20,594,672

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, 2024
(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, 2023	76,095,094	$	761	$	1,984,746	$	(593,991)	$	1,643,657	$	(557,537)	$	2,477,636	$	(7,821)	$	2,469,815
Net income	—	—		—		—		65,761		—		65,761		(38)		65,723
Other comprehensive loss	—	—		—		(42,916)		—		—		(42,916)		—		(42,916)
Cash dividend, $0.15 per share	—	—		—		—		(9,069)		—		(9,069)		—		(9,069)

Issuance of common stock including proceeds from exercise of common stock options	38,502	—		599		—		—		—		599		—		599


Stock-based compensation expense	—	—		2,455		—		—		—		2,455		—		2,455
Repurchases of common shares (1)	—	—		—		—		—		(20,985)		(20,985)		—		(20,985)
Balance, March 31, 2024	76,133,596	$	761	$	1,987,800	$	(636,907)	$	1,700,349	$	(578,522)	$	2,473,481	$	(7,859)	$	2,465,622

(1)Repurchase of common stock includes 492,368 shares repurchased in connection with the Company's share repurchase program approved by the Board of Directors.


	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 shares (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.

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,
(Dollars in thousands)	2024		2023

Operating activities:
Net income	$	65,723	$	62,662
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	15,138		29,011
Depreciation of premises and equipment, net	4,100		4,327
Accretion of fees and discounts, net	(5,380)		(6,358)
Amortization of intangible assets	3,931		3,845
Amortization of right-of-use lease assets	2,837		3,905
Decrease in operating lease liability	(2,627)		(3,170)
Income from mortgage banking activities, net	(1,647)		(1,122)

Loss on sale of other real estate owned and valuation adjustments, net	23		—
Stock-based compensation expense	2,455		3,185
Unrealized loss on equity investments, net	—		4


Deferred income tax benefit	5,239		1,484
Increase in accrued interest receivable	(2,331)		(2,908)
(Increase) decrease in other assets	(16,346)		47,058
Origination of loans held for sale	(67,083)		(58,269)
Proceeds from sales of loans held for sale	60,776		36,986
Decrease in value of bank owned life insurance	54		1,028
Increase in capitalized interest, net	(332)		(315)
(Decrease) increase in accrued interest payable	(8,773)		9,961
Increase (decrease) in other liabilities	57,109		(101,123)

Net cash provided by operating activities	$	112,866	$	30,191
Investing activities:

Repayments, maturities and calls of investment securities held-to-maturity	13,084		21,721

Purchases of investment securities available-for-sale	(17,231)		(4,824)
Repayments, maturities and calls of investment securities available-for-sale	76,084		80,343



Net increase in loans	(117,639)		(129,561)

Purchase of loans held-for-investment	(92,358)		(88,455)
Purchases of stock of Federal Home Loan Bank of Pittsburgh	(6,168)		(92,439)
Redemptions of stock of Federal Home Loan Bank of Pittsburgh	6,040		74,433
Sales of other real estate owned	359		—
Investment in premises and equipment	(4,233)		(856)
Sales of premises and equipment	—		3
Net cash used in investing activities	$	(142,062)	$	(139,635)

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	Three Months Ended March 31,
(Dollars in thousands)	2024		2023
Financing activities:
Net decrease in demand and saving deposits	$	(351,025)	$	(560,596)
Increase in time deposits	110,523		350,922
(Decrease) increase in brokered deposits	(51,676)		186,718

Receipts from FHLB advances	1,950,000		4,153,000
Repayments of FHLB advances	(1,950,000)		(3,703,000)
Receipts from federal funds purchased	—		5,150,000
Repayments of federal funds purchased	—		(5,150,000)
Receipts from Bank Term Funding Program	235,000		—
Distributions to noncontrolling shareholders	—		(49)
Cash dividend	(9,069)		(9,255)
Issuance of common stock including proceeds from exercise of common stock options	599		362
Redemption of senior and subordinated debt	—		(30,000)


Repurchases of common shares	(20,985)		(12,876)
Net cash used in financing activities	$	(86,633)	$	375,226
(Decrease) increase in cash, cash equivalents, and restricted cash	(115,829)		265,782
Cash, cash equivalents, and restricted cash at beginning of period	1,092,900		837,258
Cash, cash equivalents, and restricted cash at end of period	$	977,071	$	1,103,040
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	95,118	$	33,890
Income taxes	2,289		455
Non-cash information:
Loans transferred to other real estate owned	$	—	$	298
Loans transferred to portfolio from held-for-sale at fair value	9,252		23,476
Available-for-sale securities purchased, not settled	1,236		—

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, 2024

(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, 2024, the other subsidiaries of WSFS include The Bryn Mawr Trust Company of Delaware (BMT-DE), Bryn Mawr Capital Management, LLC (BMCM), WSFS Wealth Management, LLC (Powdermill®), WSFS SPE Services, LLC, 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 two wholly-owned subsidiaries: Beneficial Equipment Finance Corporation (BEFC) and 1832 Holdings, Inc., and one majority-owned subsidiary, NewLane Finance Company (NewLane Finance®).

Overview

Founded in 1832, the Bank is one of the ten oldest bank and trust companies continuously operating under the same name in the United States (U.S.). The Company provides residential and commercial mortgage, commercial and consumer lending services, as well as consumer deposit and treasury 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 individuals, institutions and corporations. The Federal Deposit Insurance Corporation (FDIC) insures the Company's customers’ deposits to their legal maximums. The Company serves its customers primarily from 114 offices located in Pennsylvania (57), Delaware (40), New Jersey (14), Florida (1), Nevada (1) and Virginia (1), its ATM network, website at www.wsfsbank.com and mobile app. Information on the website is not incorporated by reference into this Quarterly Report on Form 10-Q.

The Company's leasing business is conducted by NewLane Finance®. NewLane Finance® originates small business leases and provides commercial financing to businesses nationwide, targeting various equipment categories including technology, software, office, medical, veterinary and other areas. In addition, NewLane Finance® offers captive insurance through its subsidiary, Prime Protect.

Basis of Presentation

In preparing the unaudited Consolidated Financial Statements, the Company is required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Amounts subject to significant estimates include the allowance for credit losses (including loans and leases held for investment, investment securities available-for-sale and held-to-maturity), loans held for sale, 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.

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. 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, 2024. 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, 2023 (the 2023 Annual Report on Form 10-K) that was filed with the SEC on February 29, 2024 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 2023 Annual Report on Form 10-K. Those significant accounting policies remain unchanged at March 31, 2024.

RECENT ACCOUNTING PRONOUNCEMENTS

The following accounting pronouncements were adopted by the Company during the three months ended March 31, 2024, but did not have a material impact on the unaudited Consolidated Financial Statements.

•ASU No. 2023-01, Leases (Topic 842) — Common Control Agreements

•ASU No. 2023-02, Investments — Equity Method and Joint Ventures (Topic 323) Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method

There were no other applicable material accounting pronouncements adopted by the Company since December 31, 2023.

Accounting Guidance Pending Adoption as of March 31, 2024

ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures: In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. Adoption is required retrospectively for all prior periods presented in the financial statements. The Company is currently evaluating this update to determine the impact on the Company’s disclosures.

ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures: 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, 2024. Early adoption is permitted. Adoption is required on a prospective, modified retrospective, or retrospective basis depending on the amendment. The Company is currently evaluating this update to determine the impact on the Company’s disclosures.

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3. NONINTEREST INCOME

Credit/debit card and ATM income

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


	Three Months Ended March 31,
(Dollars in thousands)		2024		2023
Bailment fees		$	14,964	$	8,684
Interchange fees		3,753		3,886
Other card and ATM fees		952		791
Total credit/debit card and ATM income		$	19,669	$	13,361

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,
(Dollars in thousands)		2024		2023
Trust fees		$	21,861	$	20,516
Wealth management and advisory fees		11,067		9,960
Total investment management and fiduciary income		$	32,928	$	30,476

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 Bryn Mawr Trust (excluding BMT-DE), 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 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,
(Dollars in thousands)		2024		2023
Service fees		$	4,362	$	4,136
Return and overdraft fees		1,800		1,647
Other deposit service fees		325		256
Total deposit service charges		$	6,487	$	6,039

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, treasury 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,
(Dollars in thousands)		2024		2023
Managed service fees		$	5,586	$	4,799
Currency preparation		1,675		1,282
ATM loss protection		859		648
Capital markets revenue		3,001		2,879
Miscellaneous products and services		1,282		(357)
Total other income		$	12,403	$	9,251

Other income consists of managed service fees, which are primarily courier fees related to treasury management and are partially offset in noninterest expense, 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.

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

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4. EARNINGS PER SHARE

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


	Three Months Ended March 31,
(Dollars and shares in thousands, except per share data)	2024		2023
Numerator:
Net income attributable to WSFS	$	65,761	$	62,404
Denominator:
Weighted average basic shares	60,352		61,511
Dilutive potential common shares	170		168
Weighted average fully diluted shares	60,522		61,679
Earnings per share:
Basic	$	1.09	$	1.01
Diluted	$	1.09	$	1.01
Outstanding common stock equivalents having no dilutive effect	—		6

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 and performance stock units under the 2018 Incentive Plan.

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, 2024
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Allowance for Credit Losses		Fair Value
Available-for-Sale Debt Securities
Collateralized mortgage obligation (CMO)	$	551,883	$	—	$	99,992	$	—	$	451,891
Fannie Mae (FNMA) mortgage-backed securities (MBS)	3,495,526		118		548,295		—		2,947,349
Freddie Mac (FHLMC) MBS	124,992		—		13,241		—		111,751
Ginnie Mae (GNMA) MBS	47,478		1		3,539		—		43,940
Government-sponsored enterprises (GSE) agency notes	224,797		—		45,499		—		179,298
	$	4,444,676	$	119	$	710,566	$	—	$	3,734,229
Held-to-Maturity Debt Securities(1)
FNMA MBS	$	864,584	$	—	$	99,912	$	—	$	764,672
State and political subdivisions	185,231		1,368		1,536		8		185,055

	$	1,049,815	$	1,368	$	101,448	$	8	$	949,727

(1)Held-to-maturity securities transferred from available-for-sale are included in held-to-maturity at fair value basis at the time of transfer. The amortized cost of transferred held-to-maturity securities included net unrealized losses of $115.6 million at March 31, 2024, which are offset in Accumulated other comprehensive 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, 2023
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Allowance for Credit Losses		Fair Value
Available-for-Sale Debt Securities
CMO	$	560,952	$	—	$	96,333	$	—	$	464,619
FNMA MBS	3,544,762		162		502,574		—		3,042,350
FHLMC MBS	126,856		—		11,324		—		115,532
GNMA MBS	46,333		6		2,999		—		43,340
GSE agency notes	225,439		—		44,743		—		180,696
	$	4,504,342	$	168	$	657,973	$	—	$	3,846,537
Held-to-Maturity Debt Securities(1)
FNMA MBS	$	872,653	$	—	$	74,332	$	—	$	798,321
State and political subdivisions	185,912		2,665		959		8		187,610

	$	1,058,565	$	2,665	$	75,291	$	8	$	985,931

(1)Held-to-maturity securities transferred from available-for-sale are included in held-to-maturity at fair value at the time of transfer. The amortized cost of transferred held-to-maturity securities included net unrealized losses of $120.4 million at December 31, 2023, which are offset in Accumulated other comprehensive 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, 2024 and December 31, 2023 are presented in the table below:


	Available-for-Sale
	Amortized		Fair
(Dollars in thousands)	Cost		Value
March 31, 2024 (1)
Within one year	$	2,480	$	2,415
After one year but within five years	97,525		92,024
After five years but within ten years	549,047		462,583
After ten years	3,795,624		3,177,207
	$	4,444,676	$	3,734,229
December 31, 2023 (1)
Within one year	$	—	$	—
After one year but within five years	86,224		82,387
After five years but within ten years	569,956		485,593
After ten years	3,848,162		3,278,557
	$	4,504,342	$	3,846,537

(1)Actual maturities could differ from contractual maturities.

As of March 31, 2024, the Company’s available-for-sale investment securities consisted of 973 securities, 965 of which were in an unrealized loss position.

As of March 31, 2024, substantially all of the Corporation’s 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, 2024 and December 31, 2023, 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, 2024 and December 31, 2023 are presented in the table below:


	Held-to-Maturity
	Amortized		Fair
(Dollars in thousands)	Cost		Value
March 31, 2024 (1)
Within one year	$	—	$	—
After one year but within five years	11,930		11,741
After five years but within ten years	47,195		46,747
After ten years	990,690		891,239
	$	1,049,815	$	949,727
December 31, 2023 (1)
Within one year	$	—	$	—
After one year but within five years	10,932		10,856
After five years but within ten years	46,489		46,246
After ten years	1,001,144		928,829
	$	1,058,565	$	985,931

(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 5.8 years at March 31, 2024.

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 $3.0 billion and $3.3 billion were pledged as collateral for investment sweep repurchase agreements, municipal deposits, and other obligations as of March 31, 2024 and December 31, 2023, respectively.

During the three months ended March 31, 2024 and 2023, the Company had no sales of debt securities categorized as available-for-sale.

As of March 31, 2024 and December 31, 2023, the Company's debt securities portfolio had remaining unamortized premiums of $54.7 million and $56.9 million, respectively, and unaccreted discounts of $20.3 million and $20.9 million, respectively.

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 March 31, 2024.


	Duration of Unrealized Loss Position
	Less than 12 months				12 months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Loss		Value		Loss		Value		Loss
Available-for-sale debt securities:
CMO	$	—	$	—	$	451,891	$	99,992	$	451,891	$	99,992
FNMA MBS	18,744		275		2,916,614		548,020		2,935,358		548,295
FHLMC MBS	—		—		111,745		13,241		111,745		13,241
GNMA MBS	7,785		227		35,109		3,312		42,894		3,539
GSE agency notes	—		—		179,298		45,499		179,298		45,499
	$	26,529	$	502	$	3,694,657	$	710,064	$	3,721,186	$	710,566

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	Duration of Unrealized Loss Position
	Less than 12 months				12 months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Loss		Value		Loss		Value		Loss
Available-for-sale debt securities:
CMO	$	—	$	—	$	464,619	$	96,333	$	464,619	$	96,333
FNMA MBS	9,068		125		3,026,520		502,449		3,035,588		502,574
FHLMC MBS	—		—		115,525		11,324		115,525		11,324
GNMA MBS	10,543		217		31,681		2,782		42,224		2,999
GSE agency notes	—		—		180,696		44,743		180,696		44,743
	$	19,611	$	342	$	3,819,041	$	657,631	$	3,838,652	$	657,973

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, 2024.

At March 31, 2024 and December 31, 2023, held-to-maturity debt securities had an amortized cost basis of $1.0 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 non-government and non-agency securities through credit ratings. The following table summarizes the amortized cost of debt securities held-to-maturity as of March 31, 2024, aggregated by credit quality indicator:


(Dollars in thousands)	FNMA MBS		State and political subdivisions
A+ rated or higher	$	—	$	185,231
Not rated	864,584		—
Ending balance	$	864,584	$	185,231

The following table summarizes the amortized cost of debt securities held-to-maturity as of December 31, 2023, aggregated by credit quality indicator:


(Dollars in thousands)	FNMA MBS		State and political subdivisions
A+ rated or higher	$	—	$	185,912
Not rated	872,653		—
Ending balance	$	872,653	$	185,912

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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, 2024 and 2023. 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, 2024 and 2023:


	Three months ended March 31,
(Dollars in thousands)	2024		2023
Allowance for credit losses:
Beginning balance	$	8	$	10

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



Ending balance	$	8	$	9

Accrued interest receivable of $3.2 million and $3.7 million as of March 31, 2024 and December 31, 2023, 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, 2024 and December 31, 2023.

Equity Investments

The Company had equity investments at fair value of $17.1 million and $17.4 million as of March 31, 2024 and December 31, 2023, respectively.

During the three months ended March 31, 2024, the Company did not recognize any gains or losses related to our equity method investments.

During the three months ended March 31, 2023, the Company recognized $1.3 million of net losses related to our equity method investments within Other income on the unaudited Consolidated Statements of Income.

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6. LOANS AND LEASES

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



(Dollars in thousands)	March 31, 2024		December 31, 2023
Commercial and industrial	$	2,591,861	$	2,540,070
Owner-occupied commercial	1,882,876		1,886,087
Commercial mortgages	3,876,856		3,801,180
Construction	1,056,349		1,035,530
Commercial small business leases	633,803		623,622
Residential(1)	875,141		870,705
Consumer(2)	2,065,871		2,012,134
	12,982,757		12,769,328
Less:

Allowance for credit losses	192,629		186,126
Net loans and leases	$	12,790,128	$	12,583,202

(1) Includes reverse mortgages at fair value of $2.5 million at March 31, 2024 and $2.8 million at December 31, 2023.

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

Accrued interest receivable on loans and leases was $71.6 million and $69.8 million at March 31, 2024 and December 31, 2023, respectively. Accrued interest receivable on loans and leases was excluded from the evaluation of allowance for credit losses.

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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, 2024 and 2023. The increase was primarily due to the impacts of the economic uncertainty and forecast and net loan growth.


(Dollars in thousands)	Commercial and Industrial		Owner-occupied Commercial		Commercial Mortgages		Construction		Commercial Small Business Leases		Residential(1)		Consumer(2)		Total
Three months ended March 31, 2024
Allowance for credit losses
Beginning balance	$	49,394	$	10,719	$	36,055	$	10,762	$	15,170	$	5,483	$	58,543	$	186,126

Charge-offs	(476)		—		(25)		—		(4,852)		(50)		(6,456)		(11,859)
Recoveries	1,766		201		2		—		591		89		575		3,224
Provision	5,218		(351)		765		197		4,550		(115)		4,874		15,138
Ending balance	$	55,902	$	10,569	$	36,797	$	10,959	$	15,459	$	5,407	$	57,536	$	192,629








Period-end allowance allocated to:
Loans evaluated on an individual basis	$	6,814	$	—	$	—	$	—	$	—	$	—	$	—	$	6,814
Loans evaluated on a collective basis	49,088		10,569		36,797		10,959		15,459		5,407		57,536		185,815
Ending balance	$	55,902	$	10,569	$	36,797	$	10,959	$	15,459	$	5,407	$	57,536	$	192,629
Period-end loan balances:
Loans evaluated on an individual basis	$	27,229	$	5,866	$	21,536	$	3,962	$	—	$	8,311	$	2,664	$	69,568
Loans evaluated on a collective basis	2,564,632		1,877,010		3,855,320		1,052,387		633,803		864,354		2,063,207		12,910,713
Ending balance	$	2,591,861	$	1,882,876	$	3,876,856	$	1,056,349	$	633,803	$	872,665	$	2,065,871	$	12,980,281

(1)Period-end loan balance excludes reverse mortgages at fair value of $2.5 million.

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


(Dollars in thousands)	Commercial and Industrial		Owner - occupied Commercial		Commercial Mortgages		Construction		Commercial Small Business Leases		Residential(1)		Consumer(2)		Total
Three months ended March 31, 2023
Allowance for credit losses
Beginning balance	$	49,526	$	6,019	$	21,473	$	6,987	$	9,868	$	4,668	$	53,320	$	151,861

Charge-offs	(6,563)		—		—		—		(2,899)		—		(4,204)		(13,666)
Recoveries	701		5		2		530		515		43		159		1,955
Provision	9,809		32		8,639		2,155		1,752		616		6,009		29,012
Ending balance	$	53,473	$	6,056	$	30,114	$	9,672	$	9,236	$	5,327	$	55,284	$	169,162








Period-end allowance allocated to:
Loans evaluated on an individual basis	$	4,562	$	91	$	—	$	—	$	—	$	—	$	—	$	4,653
Loans evaluated on a collective basis	48,911		5,965		30,114		9,672		9,236		5,327		55,284		164,509
Ending balance	$	53,473	$	6,056	$	30,114	$	9,672	$	9,236	$	5,327	$	55,284	$	169,162
Period-end loan balances:
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	2,546,299		1,844,754		3,465,740		1,022,951		576,584		779,538		1,866,511		12,102,377
Ending balance	$	2,568,742	$	1,846,661	$	3,473,083	$	1,023,711	$	576,584	$	786,060	$	1,868,427	$	12,143,268

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

(2)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, 2024
(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	$	2,674		$	590		$	3,264		$	2,561,347		$	12,987		$	14,263		$	2,591,861
Owner-occupied commercial	3,582			599			4,181			1,873,369			5,326			—			1,882,876
Commercial mortgages	1,866			49			1,915			3,853,407			21,534			—			3,876,856
Construction	7,343			—			7,343			1,045,044			3,962			—			1,056,349
Commercial small business leases	9,809			3			9,812			623,991			—			—			633,803
Residential(1)	1,793			—			1,793			865,684			5,188			—			872,665
Consumer(2)	17,651			10,121			27,772			2,035,411			2,688			—			2,065,871
Total	$	44,718		$	11,362		$	56,080		$	12,858,253		$	51,685		$	14,263		$	12,980,281
% of Total Loans	0.34		%	0.09		%	0.43		%	99.06		%	0.40		%	0.11		%	100		%

(1)Residential accruing current balances excludes reverse mortgages at fair value of $2.5 million.

(2)Includes $16.1 million of delinquent, but still accruing, U.S. government-guaranteed student loans that carry little risk of credit loss.


	December 31, 2023
(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(1)			Nonaccrual Loans With An Allowance			Total Loans
Commercial and industrial	$	1,630		$	293		$	1,923		$	2,518,934		$	13,645		$	5,568		$	2,540,070
Owner-occupied commercial	1,786			487			2,273			1,878,952			4,862			—			1,886,087
Commercial mortgages	1,190			—			1,190			3,777,698			22,292			—			3,801,180
Construction	—			—			—			1,022,913			12,617			—			1,035,530
Commercial small business leases	6,697			772			7,469			616,153			—			—			623,622
Residential(2)	9,261			—			9,261			856,055			2,579			—			867,895
Consumer(3)	15,249			10,032			25,281			1,984,407			2,446			—			2,012,134
Total	$	35,813		$	11,584		$	47,397		$	12,655,112		$	58,441		$	5,568		$	12,766,518
% of Total Loans	0.28		%	0.09		%	0.37		%	99.13		%	0.46		%	0.04		%	100		%

(1)Excludes nonaccruing loans held-for-sale.

(2)Residential accruing current balances excludes reverse mortgages, at fair value of $2.8 million.

(3)Includes $14.5 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, 2024 and December 31, 2023:


	March 31, 2024		December 31, 2023
(Dollars in thousands)	Property		Equipment and other		Property		Equipment and other
Commercial and industrial(1)	$	17,141	$	10,110	$	17,230	$	1,983
Owner-occupied commercial	5,326		—		4,862		—
Commercial mortgages	21,534		—		22,292		—
Construction	3,962		—		12,617		—

Residential(2)	5,188		—		2,579		—
Consumer(3)	2,687		—		2,446		—
Total	$	55,838	$	10,110	$	62,026	$	1,983

(1)Excludes nonaccruing loans held-for-sale in 2023.

(2)Excludes reverse mortgages at fair value.

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

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As of March 31, 2024, there were 32 residential loans and 11 commercial loans in the process of foreclosure. The total outstanding balance on these loans was $6.3 million and $1.3 million, respectively. As of December 31, 2023, there were 31 residential loans and 9 commercial loans in the process of foreclosure. The total outstanding balance on these loans was $3.2 million and $1.1 million, respectively. Loan workout and other real estate owned (OREO) (recoveries) expenses were $(0.4) million during the three months ended March 31, 2024 and $0.2 million during three months ended March 31, 2023. Loan workout and OREO expenses are included in Loan workout and other credit costs on the unaudited Consolidated 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.

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 March 31, 2024.


	Term Loans Amortized Cost Basis by Origination Year(1)
(Dollars in thousands)	2024		2023		2022		2021		2020		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Commercial and industrial:
Risk Rating
Pass	$	176,858	$	762,244	$	450,439	$	163,071	$	191,450	$	385,731	$	9,218	$	233,340	$	2,372,351
Special mention	1,662		4,485		8,443		3,228		218		2,526		—		1,589		22,151
Substandard or Lower	43,408		52,654		41,001		6,973		5,473		33,163		—		14,687		197,359
	$	221,928	$	819,383	$	499,883	$	173,272	$	197,141	$	421,420	$	9,218	$	249,616	$	2,591,861
Current-period gross writeoffs	$	—	$	—	$	109	$	143	$	156	$	68	$	—	$	—	$	476
Owner-occupied commercial:
Risk Rating
Pass	$	59,845	$	340,919	$	242,775	$	239,418	$	206,450	$	473,877	$	—	$	188,984	$	1,752,268
Special mention	—		3,123		3,037		5,369		1,088		22,524		—		1,571		36,712
Substandard or Lower	—		1,196		17,957		11,550		5,430		45,662		—		12,101		93,896
	$	59,845	$	345,238	$	263,769	$	256,337	$	212,968	$	542,063	$	—	$	202,656	$	1,882,876
Current-period gross writeoffs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial mortgages:
Risk Rating
Pass	$	126,380	$	806,552	$	461,038	$	488,314	$	431,554	$	1,051,552	$	—	$	395,234	$	3,760,624
Special mention	5,324		22,437		576		1,107		1,810		5,117		—		—		36,371
Substandard or Lower	—		10,159		1,153		1,009		21,285		30,794		—		15,461		79,861
	$	131,704	$	839,148	$	462,767	$	490,430	$	454,649	$	1,087,463	$	—	$	410,695	$	3,876,856
Current-period gross writeoffs	$	—	$	25	$	—	$	—	$	—	$	—	$	—	$	—	$	25
Construction:
Risk Rating
Pass	$	81,959	$	357,747	$	344,241	$	75,655	$	2,704	$	2,088	$	—	$	110,361	$	974,755
Special mention	7,148		35,402		5,257		—		—		—		—		—		47,807
Substandard or Lower	—		15,430		14,395		3,258		—		152		—		552		33,787
	$	89,107	$	408,579	$	363,893	$	78,913	$	2,704	$	2,240	$	—	$	110,913	$	1,056,349
Current-period gross writeoffs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial small business leases:
Risk Rating
Performing	$	68,659	$	244,037	$	174,415	$	91,029	$	33,350	$	22,313	$	—	$	—	$	633,803
Nonperforming	—		—		—		—		—		—		—		—		—
	$	68,659	$	244,037	$	174,415	$	91,029	$	33,350	$	22,313	$	—	$	—	$	633,803
Current-period gross writeoffs	$	—	$	1,347	$	1,656	$	1,253	$	429	$	167	$	—	$	—	$	4,852
Residential(2):
Risk Rating
Performing	$	23,516	$	188,880	$	67,040	$	96,732	$	56,831	$	431,193	$	—	$	—	$	864,192
Nonperforming	—		—		167		3,538		483		4,285		—		—		8,473
	$	23,516	$	188,880	$	67,207	$	100,270	$	57,314	$	435,478	$	—	$	—	$	872,665
Current-period gross writeoffs	$	—	$	—	$	—	$	—	$	—	$	50	$	—	$	—	$	50
Consumer(3):
Risk Rating
Performing	$	54,669	$	423,471	$	538,009	$	144,717	$	99,941	$	296,127	$	500,904	$	5,329	$	2,063,167
Nonperforming	—		—		—		135		352		—		1,717		500		2,704
	$	54,669	$	423,471	$	538,009	$	144,852	$	100,293	$	296,127	$	502,621	$	5,829	$	2,065,871
Current-period gross writeoffs	$	286	$	677	$	4,239	$	774	$	380	$	100	$	—	$	—	$	6,456

(1)Origination date represents the most recent underwriting of the loan which includes new relationships, renewals and extensions.

(2)Excludes reverse mortgages at fair value.

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

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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 December 31, 2023.


	Term Loans Amortized Cost Basis by Origination Year(1)
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Commercial and industrial:
Risk Rating
Pass	$	716,848	$	490,934	$	180,343	$	211,151	$	90,522	$	383,609	$	8,785	$	237,786	$	2,319,978
Special mention	7,209		11,860		2,804		463		735		743		—		1,649		25,463
Substandard or Lower	72,993		54,024		5,951		10,224		22,046		17,906		—		11,485		194,629
	$	797,050	$	556,818	$	189,098	$	221,838	$	113,303	$	402,258	$	8,785	$	250,920	$	2,540,070
Current-period gross writeoffs	$	—	$	568	$	5,214	$	1,747	$	7,567	$	11,557	$	—	$	—	$	26,653
Owner-occupied commercial:
Risk Rating
Pass	$	346,908	$	264,895	$	251,262	$	212,365	$	194,153	$	313,801	$	—	$	178,150	$	1,761,534
Special mention	2,885		3,115		5,419		1,105		11,002		5,559		—		1,393		30,478
Substandard or Lower	996		18,865		11,109		6,787		8,019		35,330		—		12,969		94,075
	$	350,789	$	286,875	$	267,790	$	220,257	$	213,174	$	354,690	$	—	$	192,512	$	1,886,087
Current-period gross writeoffs	$	—	$	—	$	—	$	—	$	184	$	—	$	—	$	—	$	184
Commercial mortgages:
Risk Rating
Pass	$	847,137	$	464,895	$	526,280	$	465,354	$	486,855	$	619,448	$	—	$	290,083	$	3,700,052
Special mention	20,632		—		67		1,837		10,666		—		—		—		33,202
Substandard or Lower	9,862		1,153		1,047		13,837		14,352		12,212		—		15,463		67,926
	$	877,631	$	466,048	$	527,394	$	481,028	$	511,873	$	631,660	$	—	$	305,546	$	3,801,180
Current-period gross writeoffs	$	—	$	83	$	—	$	217	$	—	$	—	$	—	$	—	$	300
Construction:
Risk Rating
Pass	$	429,055	$	319,958	$	111,333	$	3,030	$	388	$	7,016	$	—	$	87,741	$	958,521
Special mention	28,718		19,769		8,227		—		—		—		—		—		56,714
Substandard or Lower	5,698		—		3,308		8,598		2,134		—		—		557		20,295
	$	463,471	$	339,727	$	122,868	$	11,628	$	2,522	$	7,016	$	—	$	88,298	$	1,035,530
Current-period gross writeoffs	$	—	$	—	$	794	$	—	$	—	$	—	$	—	$	—	$	794
Commercial small business leases:
Risk Rating
Performing	$	260,348	$	191,746	$	103,428	$	40,697	$	15,411	$	11,992	$	—	$	—	$	623,622
Nonperforming	—		—		—		—		—		—		—		—		—
	$	260,348	$	191,746	$	103,428	$	40,697	$	15,411	$	11,992	$	—	$	—	$	623,622
Current-period gross writeoffs	$	1,528	$	7,250	$	4,447	$	1,454	$	735	$	227	$	—	$	—	$	15,641
Residential(2):
Risk Rating
Performing	$	188,644	$	67,358	$	102,982	$	57,273	$	33,499	$	412,099	$	—	$	—	$	861,855
Nonperforming	—		170		713		486		1,251		3,420		—		—		6,040
	$	188,644	$	67,528	$	103,695	$	57,759	$	34,750	$	415,519	$	—	$	—	$	867,895
Current-period gross writeoffs	$	33	$	—	$	—	$	—	$	—	$	8	$	—	$	—	$	41
Consumer(3):
Risk Rating
Performing	$	391,580	$	568,919	$	153,930	$	104,248	$	44,996	$	245,849	$	494,663	$	5,662	$	2,009,847
Nonperforming	—		—		135		352		176		30		1,362		232		2,287
	$	391,580	$	568,919	$	154,065	$	104,600	$	45,172	$	245,879	$	496,025	$	5,894	$	2,012,134
Current-period gross writeoffs	$	1,790	$	15,227	$	4,411	$	313	$	198	$	455	$	—	$	—	$	22,394

(1)Origination date represents the most recent underwriting of the loan which includes new relationships, renewals and extensions.

(2)Excludes reverse mortgages at fair value.

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

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Troubled Loans

The Company offers loan modifications to commercial and consumer borrowers that may result in a payment delay, interest rate reduction, term extension, principal forgiveness, or combination thereof. Loan modifications are offered on a case-by-case basis and are generally term extension, payment delay, and interest rate reduction modification types. Forbearance (due to hardship) programs result in modification types including payment delay and/or term extension. In addition, certain reorganization bankruptcy judgments may result in interest rate reduction, term extension, or principal forgiveness modification types.

The following tables show the period-end amortized cost basis of troubled loans modified during the three months ended March 31, 2024 and 2023, disaggregated by portfolio segment and type of modification granted:


	Three Months Ended March 31, 2024
(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	$	31,865	$	349	$	820	$	—	$	—	$	33,034	1.27	%


Construction	1,910		—		—		—		—		1,910		0.18	%


Consumer(1)	325		702		1,932		—		—		2,959		0.14	%
Total	$	34,100	$	1,051	$	2,752	$	—	$	—	$	37,903	0.29	%

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


	Three months ended 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	$	12,837	$	—	$	—	$	—	$	—	$	12,837	0.41	%
Owner-occupied commercial	—		—		—		148		—		148		0.01	%
Commercial mortgages	2,057		—		—		—		—		2,057		0.06	%



Consumer(1)	803		162		1,777		158		119		3,019		0.16	%
Total	$	15,697	$	162	$	1,777	$	306	$	119	$	18,061	0.15	%

(1)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 during the three months ended March 31, 2024 and 2023:


	Three Months Ended March 31, 2024
	Term Extension(1)	Interest Rate Reduction(2)	More-Than-Insignificant Payment Delay(3)
Commercial and industrial	1.24	—%	0.01%


Construction	1.00	—	—


Consumer	0.47	—	0.02

	Three Months Ended 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	0.02

(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 percentage of loans deferred over the total loan portfolio excluding reverse mortgages at fair value.

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As of March 31, 2024 and December 31, 2023, the Company had commitments to extend credit of $19.2 million and $18.4 million, respectively, 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.

The following table shows the amortized cost of loans that received a term extension modification that had a payment default during the three months ended March 31, 2024 and were modified in the 12 months before default to borrowers experiencing financial difficulty. There were no loans that had a payment default during the three months ended March 31, 2023 and were modified in the 12 months before default to borrowers experiencing financial difficulty.


	Three Months Ended March 31, 2024
	Term Extension		More-Than-Insignificant Payment Delay		Total
Commercial and industrial	$	8,694	$	199	$	8,893






Total	$	8,694	$	199	$	8,893

The Company closely monitors the performance of troubled loans to understand the effectiveness of its modification efforts. The following tables show the performance of loans that have been modified in the last 12 months as of March 31, 2024 and 2023:


	March 31, 2024
(Dollars in thousands)	30-89 Days Past Due and Still Accruing		90+ Days Past Due and Still Accruing		Accruing Current Balances		Nonaccrual Loans		Total
Commercial and industrial	$	—	$	—	$	58,771	$	24,133	$	82,904
Owner-occupied commercial	—		—		—		65		65
Commercial mortgages	—		—		9,345		—		9,345
Construction	—		—		17,331		—		17,331

Residential	—		—		44		167		211
Consumer(1)	1,096		258		7,646		387		9,387
Total	$	1,096	$	258	$	93,137	$	24,752	$	119,243

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


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



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

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

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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 21 years, which includes renewal options that are exercised at its discretion. The Company's lease terms to calculate the lease liability and right-of-use asset include options to extend the lease when it is reasonably certain that the Company will exercise the option. The lease liability and right-of-use asset is included in Other liabilities and Other assets, respectively, in the unaudited Consolidated Statements of Financial Condition. Leases with an initial term of 12 months or less are not recorded on the unaudited Consolidated 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 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
(Dollars in thousands)	March 31, 2024		March 31, 2023
Operating lease cost (1)	$	3,972	$	4,793
Sublease income	(32)		(49)
Net lease cost	$	3,940	$	4,744

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

Supplemental information related to operating leases was as follows:


(Dollars in thousands)	March 31, 2024			December 31, 2023

Right-of-use assets	$	129,996		$	130,601



Lease liabilities	$	151,255		$	151,596


Lease term and discount rate

Weighted average remaining lease term (in years)	12.86			13.01

Weighted average discount rate	5.2		%	5.2		%

Maturities of operating lease liabilities were as follows:


(Dollars in thousands)	March 31, 2024
Remaining in 2024	$	13,564
2025	17,747
2026	16,912
2027	15,536
2028	15,538
After 2028	130,975
Total lease payments	210,272
Less: Interest	(59,017)
Present value of lease liabilities	$	151,255

Supplemental cash flow information related to operating leases was as follows:


	Three months ended
(Dollars in thousands)	March 31, 2024		March 31, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,721	$	5,060

As of March 31, 2024, the Corporation had not entered into any material leases that have not yet commenced.

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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 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, 2024		March 31, 2023
Direct financing leases:
Interest income on lease receivable	$	14,800	$	12,382
Interest income on deferred fees and costs, net	(1,792)		(1,386)
Total direct financing lease net interest income	$	13,008	$	10,996

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


(Dollars in thousands)	March 31, 2024		December 31, 2023
Lease receivables	$	733,630	$	721,338
Unearned income	(118,177)		(114,341)
Deferred fees and costs	18,350		16,625
Net investment in direct financing leases	$	633,803	$	623,622

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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, 2024, management determined based on its qualitative assessment that the fair values of our reporting units exceeded their carrying values, and no goodwill impairment existed during the three months ended March 31, 2024.

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


(Dollars in thousands)	WSFS Bank		Wealth Management		Consolidated Company
December 31, 2023	$	753,586	$	132,312	$	885,898

Goodwill adjustments	—		—		—
March 31, 2024	$	753,586	$	132,312	$	885,898

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)	Gross Intangible Assets		Accumulated Amortization		Net Intangible Assets		Amortization Period
March 31, 2024
Core deposits	$	104,751	$	(53,327)	$	51,424	10 years
Customer relationships	73,880		(19,512)		54,368		7-15 years

Loan servicing rights(1)	12,734		(6,980)		5,754		10-25 years
Tradename	2,900		—		2,900		indefinite
Total intangible assets	$	194,265	$	(79,819)	$	114,446
December 31, 2023
Core deposits	$	104,751	$	(50,754)	$	53,997	10 years
Customer relationships	73,880		(18,153)		55,727		7-15 years
Loan servicing rights(2)	12,613		(6,575)		6,038		10-25 years
Tradename	2,900		—		2,900		indefinite

Total intangible assets	$	194,144	$	(75,482)	$	118,662

(1)Includes impairment losses of $0.1 million for the three months ended March 31, 2024.

(2)Includes impairment losses of less than $0.1 million for the year ended December 31, 2023.

The Company recognized amortization expense on intangible assets of $3.9 million for the three months ended March 31, 2024 compared to $3.8 million for the three months ended March 31, 2023.

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


(Dollars in thousands)	March 31, 2024
Remaining in 2024	$	12,678
2025	16,576
2026	15,869
2027	15,404
2028	14,580
Thereafter	36,439
Total	$	111,546

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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 in Goodwill and 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 $1.7 million at March 31, 2024 and December 31, 2023, and the value of its SBA loan servicing rights was $4.1 million and $4.3 million at March 31, 2024 and December 31, 2023, respectively. Changes in the value of the Company's servicing rights resulted in impairment losses of $0.1 million for the three months ended March 31, 2024 and a reversal of impairment losses of less than $0.1 million for the three months ended March 31, 2023. 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, 2024 or December 31, 2023. Changing economic conditions that may adversely affect the Company's performance and could result in impairment, which could adversely affect earnings in the future.

10. DEPOSITS

The following table shows deposits by category:


(Dollars in thousands)			March 31, 2024		December 31, 2023
Noninterest-bearing:
	Noninterest demand		$	4,652,875	$	4,917,297
		Total noninterest-bearing	$	4,652,875	$	4,917,297

Interest-bearing:
	Interest-bearing demand		$	2,856,366	$	2,935,530
	Savings		1,577,264		1,610,143
	Money market		5,205,835		5,175,123

	Customer time deposits		1,894,864		1,784,317
	Brokered deposits		—		51,676
		Total interest-bearing	11,534,329		11,556,789
		Total deposits	$	16,187,204	$	16,474,086

11. INCOME TAXES

There were no unrecognized tax benefits as of March 31, 2024. 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 2020 through 2023 tax years are subject to examination as of March 31, 2024. The Company does not expect to record or realize any material unrecognized tax benefits during 2024.

The amortization of the low-income housing credit investments has been reflected as income tax expense of $1.9 million and $1.4 million for the three months ended March 31, 2024 and 2023, respectively.

The amount of affordable housing tax credits, amortization, and tax benefits recorded as income tax expense for the three months ended March 31, 2024 were $1.7 million, $1.9 million and $0.6 million, respectively. The carrying value of the investment in affordable housing credits is $85.2 million at March 31, 2024, compared to $87.1 million at December 31, 2023 and is included in the Other assets line item on the unaudited Consolidated Statements of Financial Condition.

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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.

The following tables present financial instruments carried at fair value as of March 31, 2024 and December 31, 2023 by level in the valuation hierarchy (as described above):


	March 31, 2024
(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	$	—	$	451,891	$	—	$	451,891
FNMA MBS	—		2,947,349		—		2,947,349
FHLMC MBS	—		111,751		—		111,751
GNMA MBS	—		43,940		—		43,940
GSE agency notes	—		179,298		—		179,298

Other assets	—		168,510		44		168,554
Total assets measured at fair value on a recurring basis	$	—	$	3,902,739	$	44	$	3,902,783

Liabilities measured at fair value on a recurring basis:
Other liabilities	$	—	$	156,243	$	13,426	$	169,669

Assets measured at fair value on a nonrecurring basis:
Other investments	$	—	$	—	$	14,714	$	14,714
Other real estate owned	—		—		1,210		1,210
Loans held for sale	—		26,858		—		26,858

Total assets measured at fair value on a nonrecurring basis	$	—	$	26,858	$	15,924	$	42,782

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	December 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	$	—	$	464,619	$	—	$	464,619
FNMA MBS	—		3,042,350		—		3,042,350
FHLMC MBS	—		115,532		—		115,532
GNMA MBS	—		43,340		—		43,340
GSE agency notes	—		180,696		—		180,696

Other assets	—		153,569		78		153,647
Total assets measured at fair value on a recurring basis	$	—	$	4,000,106	$	78	$	4,000,184

Liabilities measured at fair value on a recurring basis:
Other liabilities	$	—	$	137,616	$	14,026	$	151,642

Assets measured at fair value on a nonrecurring basis
Other investments	$	—	$	—	$	15,206	$	15,206
Other real estate owned	—		—		1,569		1,569
Loans held for sale	—		29,268		—		29,268

Total assets measured at fair value on a nonrecurring basis	$	—	$	29,268	$	16,775	$	46,043

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 without readily determinable fair values, which are categorized as Level 3. The Company’s equity investments without readily determinable fair values are held at cost, and are adjusted for any observable price changes in orderly transactions for the identical or a similar investment of the same issuer 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.

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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.

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 without readily determinable fair values (see discussion in “Fair Value of Financial Assets and Liabilities” section above) as well as equity method investments.

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).

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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).

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 $6.9 million at March 31, 2024 and $7.3 million at December 31, 2023, 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

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

The following tables provide a description of the valuation techniques and significant unobservable inputs for the Company's financial instruments classified as Level 3 as of March 31, 2024 and December 31, 2023:

(Dollars in thousands)

March 31, 2024

Financial Instrument

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Other investments

14,714

Observed market comparable transactions

Period of observed transactions

December 2023

Other real estate owned

1,210

Fair market value of collateral

Costs to sell

20.0%

Other assets (Risk participation agreements purchased)

Credit Value Adjustment

CDS Spread and Loss Given Default (LGD)

CDS spread: 110 - 360 bps (189 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 (81 bps)

LGD: –% - 30% (30%)

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

13,424

Discounted cash flow

Timing of Visa litigation resolution

1.00 - 4.50 years (2.93 years or 4Q 2025)

(Dollars in thousands)

December 31, 2023

Financial Instrument

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Other investments

15,206

Observed market comparable transactions

Period of observed transactions

December 2023

Other real estate owned

1,569

Fair market value of collateral

Costs to sell

10.0% - 20.0% (18.1%)

Other assets (Risk participation agreements purchased)

Credit Value Adjustment

CDS Spread and Loss Given Default (LGD)

CDS spread: 110 - 360 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 (95 bps)

LGD: 30%

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

14,023

Discounted cash flow

Timing of Visa litigation resolution

1.00 - 4.75 years (3.06 years or 4Q 2025)

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


		March 31, 2024				December 31, 2023
(Dollars in thousands)	Fair Value Measurement	Book Value		Fair Value		Book Value		Fair Value
Financial assets:
Cash, cash equivalents, and restricted cash	Level 1	$	977,071	$	977,071	$	1,092,900	$	1,092,900
Investment securities available-for-sale	Level 2	3,734,229		3,734,229		3,846,537		3,846,537
Investment securities held-to-maturity, net	Level 2	1,049,807		949,727		1,058,557		985,931
Other investments	Level 3	17,051		17,051		17,434		17,434
Loans, held for sale	Level 2	26,858		26,858		29,268		29,268
Loans and leases, net(1)	Level 3	12,790,128		12,829,259		12,583,202		12,514,431
Stock in FHLB of Pittsburgh	Level 2	15,526		15,526		15,398		15,398
Accrued interest receivable	Level 2	88,310		88,310		85,979		85,979
Other assets	Levels 2, 3	168,554		168,554		153,647		153,647
Financial liabilities:
Deposits	Level 2	$	16,187,204	$	16,160,641	$	16,474,086	$	16,449,198
Borrowed funds	Level 2	1,124,958		1,134,269		895,076		912,760
Standby letters of credit	Level 3	754		754		814		814
Accrued interest payable	Level 2	37,911		37,911		46,684		46,684
Other liabilities	Levels 2, 3	169,669		169,669		151,642		151,642

(1) Includes reverse mortgage loans.

At March 31, 2024 and December 31, 2023 the Company had no commitments to extend credit measured at fair value.

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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 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, 2024.


	Fair Values of Derivative Instruments
(Dollars in thousands)		Count	Notional		Balance Sheet Location	Derivatives (Fair Value)
Derivatives designated as hedging instruments:
Interest rate products		13	$	1,000,000	Other assets	$	11,312
Total			$	1,000,000		$	11,312
Derivatives not designated as hedging instruments:
Interest rate products			$	2,547,154	Other assets	$	155,994
Interest rate products			2,547,154		Other liabilities	(155,994)
Interest rate lock commitments with customers			54,818		Other assets	947
Interest rate lock commitments with customers			150		Other liabilities	—
Forward sale commitments			7,442		Other assets	23
Forward sale commitments			43,880		Other liabilities	(166)
FX forwards			34,021		Other assets	234
FX forwards			17,033		Other liabilities	(83)
Risk participation agreements sold			103,028		Other liabilities	(2)
Risk participation agreements purchased			115,091		Other assets	44
Financial derivatives related to sales of certain Visa Class B shares			113,177		Other liabilities	(13,424)
Total derivatives			$	6,582,948		$	(1,115)

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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, 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		9	$	750,000	Other assets	$	15,578
Total			$	750,000		$	15,578
Derivatives not designated as hedging instruments:
Interest rate products			$	2,428,306	Other assets	$	136,924
Interest rate products			2,383,443		Other liabilities	(136,924)
Interest rate lock commitments with customers			34,651		Other assets	637

Forward sale commitments			1,000		Other assets	1
Forward sale commitments			37,348		Other liabilities	(283)
FX forwards			15,812		Other assets	429
FX forwards			13,064		Other liabilities	(409)
Risk participation agreements sold			103,648		Other liabilities	(3)
Risk participation agreements purchased			116,804		Other assets	78
Financial derivatives related to sales of certain Visa Class B shares			113,177		Other liabilities	(14,023)
Total derivatives			$	5,997,253		$	2,005

Effect of Derivative Instruments on the Income Statement

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, 2024 and March 31, 2023.


	Amount of (Loss) Gain Recognized in OCI on Derivative (Effective Portion)				Location of Gain Reclassified from Accumulated OCI into Income (Effective Portion)
(Dollars in thousands)	Three Months Ended March 31,
Derivatives in Cash Flow Hedging Relationships	2024		2023
Interest rate products	$	(6,433)	$	332		Interest income
Total	$	(6,433)	$	332

	Amount of Gain (Loss) Recognized in Income				Location of Gain (Loss) Recognized in Income
(Dollars in thousands)	Three Months Ended March 31,
Derivatives not designated as hedging instruments	2024		2023
Interest rate products	$	2,435	$	2,440		Other income
Interest rate lock commitments with customers	252		421			Mortgage banking activities, net
Forward sale commitments	114		(148)			Mortgage banking activities, net
FX forwards	159		16			Other income
Risk participation agreements	(34)		3			Other income
Total	$	2,926	$	2,732

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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.

As of March 31, 2024, the Company had 13 interest rate floors purchased at an aggregate premium of $19.7 million with an aggregate notional amount of $1.0 billion to hedge variable cash flows associated with a variable rate loan pool through the first quarter of 2027. 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. As of March 31, 2024, the Company determined the cash flow hedges remain highly effective. During the three months ended March 31, 2024, $0.8 million of amortization expense on the premium was reclassified into interest income compared to less than $0.1 million during the three months ended March 31, 2023. 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.

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, 2024, 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.

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, 2024, there were no fair value adjustments related to credit quality.

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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

The Company entered into agreements with one unrelated financial institution whereby that financial institution 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, the financial institution has recourse to us for any exposure created under each swap transaction, only in the event that the customer defaults on the swap agreement and the agreement is in a paying position to the third-party financial institution. This is a customary arrangement that allows us to provide access to interest rate swap transactions for our customers without creating the swap ourselves. These swap guarantees are accounted for as credit derivatives.

At March 31, 2024 and December 31, 2023, there were 185 and 188 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 $0.7 billion at March 31, 2024 and December 31, 2023. At March 31, 2024, the swap transactions remaining maturities ranged from under 1 year to 11 years. At March 31, 2024, none of these customer swaps were in a paying position to third parties, with our swap guarantees having a fair value of $6.9 million. At December 31, 2023, none of these customer swaps were in a paying position to third parties, with the Company's swap guarantees having a fair value of $7.3 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 $2.5 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, 2024, it could have been required to settle its obligations under the agreements at the termination value.

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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 three segments: WSFS Bank, Cash Connect®, and Wealth Management.

The WSFS Bank segment provides financial products to commercial and consumer customers. Commercial and Consumer 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 smart 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. Bryn Mawr Trust® is our predominant Private Wealth Management brand, providing advisory, investment management and trustee services to institutions, affluent and high-net-worth individuals. Private Wealth Management, which includes Private Banking, serves high-net-worth clients and institutions by providing trustee and advisory services, financial planning, customized investment strategies, brokerage products such as annuities and customized banking services including 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 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.

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.

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The following tables show segment results for the three months ended March 31, 2024 and 2023:


	Three Months Ended March 31, 2024								Three Months Ended March 31, 2023
(Dollars in thousands)	WSFS Bank		Cash Connect®		Wealth Management		Total		WSFS Bank		Cash Connect®		Wealth Management		Total
Statements of Income
External customer revenues:
Interest income	$	256,133	$	—	$	5,489	$	261,622	$	221,285	$	—	$	5,098	$	226,383
Noninterest income	16,220		26,350		33,287		75,857		14,150		18,179		30,798		63,127
Total external customer revenues	272,353		26,350		38,776		337,479		235,435		18,179		35,896		289,510
Inter-segment revenues:
Interest income	6,566		440		28,871		35,877		6,099		395		20,727		27,221
Noninterest income	7,273		435		207		7,915		6,900		461		105		7,466
Total inter-segment revenues	13,839		875		29,078		43,792		12,999		856		20,832		34,687
Total revenue	286,192		27,225		67,854		381,271		248,434		19,035		56,728		324,197
External customer expenses:
Interest expense	75,079		—		11,265		86,344		38,487		—		5,364		43,851
Noninterest expenses	106,632		21,935		20,505		149,072		100,949		13,500		18,596		133,045
Provision for credit losses	14,820		—		318		15,138		27,717		—		1,294		29,011
Total external customer expenses	196,531		21,935		32,088		250,554		167,153		13,500		25,254		205,907
Inter-segment expenses:
Interest expense	29,311		3,129		3,437		35,877		21,122		3,559		2,540		27,221
Noninterest expenses	642		1,409		5,864		7,915		566		1,346		5,554		7,466
Total inter-segment expenses	29,953		4,538		9,301		43,792		21,688		4,905		8,094		34,687
Total expenses	226,484		26,473		41,389		294,346		188,841		18,405		33,348		240,594
Income before taxes	$	59,708	$	752	$	26,465	$	86,925	$	59,593	$	630	$	23,380	$	83,603
Income tax provision							21,202								20,941
Consolidated net income							65,723								62,662
Net (loss) income attributable to noncontrolling interest							(38)								258
Net income attributable to WSFS							$	65,761							$	62,404
Supplemental Information
Capital expenditures for the period ended	$	4,220	$	—	$	13	$	4,233	$	856	$	—	$	—	$	856

The following table shows significant components of segment net assets as of March 31, 2024 and December 31, 2023:


	March 31, 2024								December 31, 2023
(Dollars in thousands)	WSFS Bank		Cash Connect®		Wealth Management		Total		WSFS Bank		Cash Connect®		Wealth Management		Total
Statements of Financial Condition
Cash and cash equivalents	$	750,657	$	173,291	$	53,123	$	977,071	$	600,483	$	443,431	$	48,986	$	1,092,900
Goodwill	753,586		—		132,312		885,898		753,586		—		132,312		885,898
Other segment assets	18,278,973		15,798		421,508		18,716,279		18,191,585		15,654		408,635		18,615,874
Total segment assets	$	19,783,216	$	189,089	$	606,943	$	20,579,248	$	19,545,654	$	459,085	$	589,933	$	20,594,672

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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 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 Goodwill and intangible assets on 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.

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 was one repurchase during the three months ended March 31, 2024 for $0.3 million and no repurchases during the same period in 2023.

Unfunded Lending Commitments

At March 31, 2024 and December 31, 2023, the allowance for credit losses of unfunded lending commitments was $11.8 million and $12.1 million, respectively. A provision release of $0.3 million was recognized during the three months ended March 31, 2024 compared to a provision release of $0.2 million during the three months ended March 31, 2023.

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16. CHANGE IN ACCUMULATED OTHER COMPREHENSIVE LOSS

Accumulated other comprehensive 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 and actuarial gains and losses on defined benefit pension plans. Changes to accumulated other comprehensive loss are presented, net of tax, as a component of stockholders’ equity. Amounts that are reclassified out of accumulated other comprehensive loss are recorded on the unaudited Consolidated Statements of Income either as a gain or loss. Changes to accumulated other comprehensive 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		Net change in equity method investments		Total
Balance, December 31, 2023	$	(499,932)	$	(91,523)	$	(4,614)	$	1,597	$	481	$	(593,991)
Other comprehensive (loss) income	(40,007)		—		(75)		(6,433)		(21)		(46,536)
Less: Amounts reclassified from accumulated other comprehensive loss	—		3,669		(49)		—		—		3,620
Net current-period other comprehensive (loss) income	(40,007)		3,669		(124)		(6,433)		(21)		(42,916)
Balance, March 31, 2024	$	(539,939)	$	(87,854)	$	(4,738)	$	(4,836)	$	460	$	(636,907)

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)

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


	Three Months Ended March 31,				Affected line item in unaudited Consolidated Statements of Income
(Dollars in thousands)	2024		2023




Net unrealized holding losses on securities transferred between available-for-sale and held-to-maturity:
Amortization of net unrealized losses to income during the period	4,827		5,481		Net interest income
Income taxes	(1,158)		(1,315)		Income tax provision
Net of tax	3,669		4,166
Amortization of defined benefit pension plan-related items:
Prior service credits	(19)		(19)

Actuarial gains	(45)		(43)
Total before tax	(64)		(62)		Salaries, benefits and other compensation
Income taxes	15		15		Income tax provision
Net of tax	(49)		(47)




Net unrealized gains on terminated cash flow hedges:
Amortization of net unrealized gains to income during the period	—		(52)		Interest and fees on loans and leases
Income taxes	—		12		Income tax provision
Net of tax	—		(40)
Total reclassifications	$	3,620	$	4,079

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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 $20.6 billion in assets and $80.5 billion in assets under management (AUM) and assets under administration (AUA) at March 31, 2024, 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 192 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, 2024, we had six consolidated subsidiaries: WSFS Bank, The Bryn Mawr Trust Company of Delaware (BMT-DE), Bryn Mawr Capital Management, LLC (BMCM), WSFS Wealth Management, LLC (Powdermill®), WSFS SPE Services, LLC, 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 two wholly-owned subsidiaries: Beneficial Equipment Finance Corporation (BEFC) and 1832 Holdings, Inc., and one majority-owned subsidiary, NewLane Finance Company (NewLane Finance®).

Our banking business had a total loan and lease portfolio of $13.0 billion as of March 31, 2024, which was funded primarily through commercial relationships and consumer and customer generated deposits. We have built a $10.0 billion commercial loan and lease portfolio by recruiting seasoned commercial lenders in our markets, offering the high level of service and flexibility typically associated with a community bank and through acquisitions. We also offer a broad variety of consumer loan products and retail securities brokerage through our retail branches, 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 smart safes nationwide, and manages approximately $2.0 billion in total cash and services approximately 36,900 non-bank ATMs and 9,100 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 583 owned or branded ATMs for WSFS Bank Customers, which is one of the largest branded ATM networks in our market.

Our Wealth Management business provides a broad array of planning and advisory services, investment management, trust services, and credit and deposit products to individual, corporate and institutional clients. Combined, these businesses had $80.5 billion of AUM and AUA at March 31, 2024.

Bryn Mawr Trust® is our predominant Private Wealth Management brand, providing advisory, investment management and trustee services to institutions, affluent and high-net-worth individuals. Private Wealth Management serves high-net-worth clients and institutions by providing trustee and advisory services, financial planning, customized investment strategies, brokerage products such as annuities and traditional banking services such as credit and deposit products tailored to its clientele. Private Wealth Management includes businesses that operate under the bank’s charter, through a broker/dealer and as a registered investment advisor (RIA). It generates revenue through a percentage fee based on account assets, fee-only arrangements, net interest income and other fee-only services such as estate administration, trust tax planning and custody. 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.

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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.

As of March 31, 2024, we service our customers primarily from 114 offices located in Pennsylvania (57), Delaware (40), New Jersey (14), Florida (1) and Nevada (1) and Virginia (1), our ATM network, our website at www.wsfsbank.com and our mobile app.

Highlights and Other Notables Items for Three Months Ended March 31, 2024

•Three Months Ended March 31, 2024

◦Net loan growth of $206.9 million, or 2% (7% annualized), driven by growth across the commercial portfolio and consumer partnerships.

◦WSFS repurchased 492,368 shares of common stock under the Company's share repurchase programs at an average price of $42.62 per share, for an aggregate purchase price of approximately $21.0 million.

◦The Board of Directors approved a $0.15 per share quarterly cash dividend.

◦The Bank and the Company continue to be well above well-capitalized across all measures of regulatory capital, with total common equity tier 1 capital of 14.00% and 13.29%, respectively, and total risk-based capital of 15.25% and 15.35%, respectively.

◦WSFS recorded a $1.3 million expense for the updated FDIC Special Assessment as a result of the FDIC's revised estimated losses related to the closures of certain banks in 2023, which reflects the current estimate of what WSFS will need to pay as part of the FDIC Special Assessment. However, depending on future adjustments to the DIF's estimated loss, the FDIC retained the ability to cease collection early, extend the special assessment collection period, or impose a final shortfall special assessment.

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FINANCIAL CONDITION

Total assets decreased $15.4 million to $20.6 billion at March 31, 2024 compared to December 31, 2023. This decrease is primarily comprised of the following:

•Total investment securities decreased $121.1 million:

◦Investment securities, available-for-sale decreased $112.3 million, primarily due to repayments, maturities and calls of $76.1 million and decreased market values of $52.6 million, partially offset by purchases of $17.2 million.

◦Investment securities, held-to-maturity decreased $8.8 million, primarily due to repayments, maturities and calls of $13.1 million, partially offset by $3.5 million of amortization of net unrealized losses on available-for-sale securities transferred to held-to-maturity.

•Total cash and cash equivalents decreased $115.8 million, primarily due to decreased deposits and increased lending activity, partially offset by an increase in other borrowed funds.

•Goodwill and intangible assets decreased $4.2 million due to scheduled amortization of intangible assets.

•Net loans and leases held for investment increased $206.9 million, primarily due to increases of $75.7 million in commercial mortgages, $53.7 million in consumer loans primarily from Spring EQ home equity loans, $51.8 million in commercial and industrial, $20.8 million in construction, and $10.2 million in commercial small business leases.

•Other assets increased $19.4 million, primarily due to a $19.0 million increase in derivatives from our capital markets business due to changes in fair value and an $8.3 million increase to our deferred tax asset primarily related to unrealized losses on available-for-sale securities. The increase was partially offset by the settlement of $5.5 million in receivables related to bank-owned life insurance (BOLI) policies surrendered in 2023 and death benefits, and a $4.3 million decrease in the fair value of our cash flow hedges.

Total liabilities decreased $11.2 million to $18.1 billion at March 31, 2024 compared to December 31, 2023. This decrease is primarily comprised of the following:

•Customer deposits decreased $235.2 million primarily due to decreases from expected trust deposit activity and a short-term deposit within our commercial line of business, partially offset by increases in wealth and consumer deposits.

•Accrued interest payable decreased $8.8 million, primarily due to the timing of interest payments on BTFP borrowings.

•Other borrowed funds increased $229.8 million, primarily due to $235.0 million borrowed from the Bank Term Funding Program (BTFP) as a result of favorable terms and pricing.

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

LIQUIDITY AND CAPITAL RESOURCES

Capital Resources

Stockholders’ equity of WSFS decreased $4.2 million between December 31, 2023 and March 31, 2024. This decrease was primarily due to an increase of $42.9 million in accumulated other comprehensive loss driven by market value decreases on available-for-sale mortgage-backed securities, $21.0 million from the repurchase of shares of common stock under our stock repurchase plan, and the payment of dividends on our common stock of $9.1 million, partially offset by $65.8 million of earnings.

During the three months ended March 31, 2024, our Board of Directors approved a quarterly cash dividend of $0.15 per share of common stock. This dividend will be paid on May 24, 2024 to stockholders of record as of May 10, 2024.

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Book value per share of common stock was $41.17 at March 31, 2024, an increase of $0.24 from $40.93 at December 31, 2023. Tangible book value per share of common stock (a non-GAAP financial measure) was $24.52 at March 31, 2024, an increase of $0.19 from $24.33 at December 31, 2023. We believe tangible book value per common share helps management and investors better understand and assess changes from period to period in stockholders’ equity exclusive of changes in intangible assets. This non-GAAP measure should be considered in addition to results prepared in accordance with Generally Accepted Accounting Principles in the U.S. (GAAP), and is not a substitute for, or superior to, GAAP results. For a reconciliation of tangible book value per common share to book value per share in accordance with GAAP, see "Reconciliation of Non-GAAP Measure to GAAP Measure."

The table below compares the Bank's and the Company’s consolidated capital position to the minimum regulatory requirements as of March 31, 2024:


	Consolidated Capital				Minimum For Capital Adequacy Purposes				To be Well-Capitalized Under Prompt Corrective Action Provisions
(Dollars in thousands)	Amount		Percent		Amount		Percent		Amount		Percent
Total Capital (to Risk-Weighted Assets)
Wilmington Savings Fund Society, FSB	$	2,455,986	15.25	%	$	1,288,361	8.00	%	$	1,610,451	10.00	%
WSFS Financial Corporation	2,472,486		15.35		1,288,973		8.00		1,611,216		10.00
Tier 1 Capital (to Risk-Weighted Assets)
Wilmington Savings Fund Society, FSB	2,254,618		14.00		966,271		6.00		1,288,361		8.00
WSFS Financial Corporation	2,141,122		13.29		966,730		6.00		1,288,973		8.00
Common Equity Tier 1 Capital (to Risk-Weighted Assets)
Wilmington Savings Fund Society, FSB	2,254,618		14.00		724,703		4.50		1,046,793		6.50
WSFS Financial Corporation	2,141,122		13.29		725,047		4.50		1,047,291		6.50
Tier 1 Leverage Capital
Wilmington Savings Fund Society, FSB	2,254,618		11.14		809,479		4.00		1,011,849		5.00
WSFS Financial Corporation	2,141,122		10.57		810,305		4.00		1,012,881		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, 2024, 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 $163.7 million in cash to support share repurchases, potential dividends, acquisitions, strategic growth plans and other general corporate purposes.

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Liquidity

We manage our liquidity and funding needs through our Treasury function and our Asset/Liability Committee. We have a policy that separately addresses liquidity, and management monitors our adherence to policy limits. Also, liquidity risk management is a primary area of examination by the banking regulators.

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

As of March 31, 2024, the Company had $1.0 billion in cash, cash equivalents, and restricted cash. As of March 31, 2024, our estimated uninsured deposits were $5.9 billion, or 37% of total customer deposits, and our estimated unprotected deposits (uninsured and uncollateralized) were $4.5 billion, or 28% of total customer deposits.

As of March 31, 2024, the Company had a readily available, secured borrowing capacity of $5.3 billion from the FHLB and $1.0 billion through the Federal Reserve Discount Window. In addition, the Company had $1.7 billion in unpledged securities that could be used to support additional borrowings and $0.6 billion of cash deposited with the Federal Reserve Bank.

Our primary cash contractual obligations relate to operating leases, long-term debt, credit obligations, and data processing. At March 31, 2024, we had $210.3 million in total contractual payments for ongoing leases that have remaining lease terms of less than one year to 21 years, which includes renewal options that are exercised at our discretion. For additional information on our operating leases, see Note 8 to the unaudited Consolidated Financial Statements. At March 31, 2024, we had obligations for principal payments on long-term debt including $67.0 million for our trust preferred borrowings, due June 1, 2035, $70.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes due 2027, and $150.0 million for our senior debt, due December 15, 2030. Royal Bancshares Capital Trust I (Trust I) and Royal Bancshares Capital Trust II (Trust II) (collectively, the RBC Trusts), which were acquired from Bryn Mawr Bank Corporation, were utilized for the sole purpose of issuing and selling capital securities representing preferred beneficial interests. Although WSFS owns an aggregate of $0.8 million of the common securities of Trust I and Trust II, the RBC Trusts are not consolidated into the Company’s Consolidated Financial Statements. Inclusive of the fair value marks, WSFS assumed junior subordinated debentures owed to the RBC Trusts with a current carrying value of $11.8 million each, totaling $23.7 million. The Company records its investments in the RBC Trusts’ common securities of $0.4 million 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 RBC 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.

Commitments to extend credit provide for financing on predetermined terms as long as the customer continues to meet specific criteria. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being completely drawn upon, the total commitment amounts do not necessarily represent future cash requirements. At March 31, 2024, the Company had total commitments to extend credit of $4.0 billion, which are generally one year commitments.

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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)	March 31, 2024			December 31, 2023
Nonaccruing loans(1):
Commercial and industrial	$	27,250		$	29,389
Owner-occupied commercial	5,326			4,862
Commercial mortgages	21,534			22,292
Construction	3,962			12,617
Residential	5,188			2,579
Consumer	2,688			2,446
Total nonaccruing loans(2)	65,948			74,185
Other real estate owned	1,210			1,569

Total nonperforming assets	$	67,158		$	75,754
Past due loans:
Commercial	$	1,241		$	1,552

Consumer(3)	10,121			10,032
Total past due loans	$	11,362		$	11,584
Troubled loans:
Commercial	$	109,645		$	85,330
Residential	211			777
Consumer	9,387			9,161
Total troubled loans	$	119,243		$	95,268
Ratio of allowance for credit losses to total loans and leases(4)	1.48		%	1.46		%

Ratio of nonaccruing loans to total gross loans and leases(5)	0.51			0.58
Ratio of nonperforming assets to total assets	0.33			0.37
Ratio of allowance for credit losses to nonaccruing loans	292			251
Ratio of allowance for credit losses to total nonperforming assets(6)	287			246

(1)Includes nonaccruing troubled loans.

(2)Includes nonaccrual loans held-for-sale as of December 31, 2023

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

(4)Represents amortized cost basis for loans and leases.

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

(6)Excludes acquired PCD loans.

Nonperforming assets decreased $8.6 million between December 31, 2023 and March 31, 2024. This decrease was primarily driven by the resolution of two nonperforming C&I loans during the quarter. The ratio of nonperforming assets to total assets decreased from 0.37% at December 31, 2023 to 0.33% at March 31, 2024.

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


	Three Months Ended March 31,
(Dollars in thousands)	2024		2023
Beginning balance	$	75,754	$	43,372
Additions	23,927		23,150
Collections	(25,538)		(8,707)
Transfers to accrual(1)	(193)		(19,903)
Charge-offs	(6,792)		(4,764)
Ending balance	$	67,158	$	33,148

(1)Includes impact of ASU No. 2022-02 adoption in 2023.

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. The FOMC raised the federal funds target rate four times in 2023 for a total of 100 basis points and has suggested it may lower interest rates in 2024. 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, 2024, interest-earning assets exceeded interest-bearing liabilities that mature or reprice within one year (interest-sensitive gap) by $38.5 million. Our interest-sensitive assets as a percentage of interest-sensitive liabilities within the one-year window was 100.42% at March 31, 2024 compared with 99.67% at December 31, 2023. Likewise, the one-year interest-sensitive gap as a percentage of total assets was 0.19% at March 31, 2024 compared with (0.14)% at December 31, 2023.

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, 2024 and December 31, 2023:


	March 31, 2024		December 31, 2023
% 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	17.9%	22.48%	15.7%	22.44%
+200	11.9%	21.60%	10.4%	21.46%
+100	5.9%	20.66%	5.2%	20.41%
+50	3.0%	20.15%	2.6%	19.85%
+25	1.5%	19.90%	1.3%	19.56%
—	—%	19.64%	—%	19.26%
-25	(1.5)%	19.36%	(1.3)%	18.96%
-50	(2.8)%	19.08%	(2.6)%	18.64%
-100	(5.3)%	18.50%	(4.9)%	18.00%
'-200	(9.9)%	17.20%	(9.6)%	16.50%
'-300	(14.2)%	15.80%	(14.2)%	14.80%

(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.

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, 2024: Net income for the three months ended March 31, 2024 was $65.8 million, compared to $62.4 million for the three months ended March 31, 2023.

•Net interest income decreased $7.3 million, primarily due to lagging increases in deposit pricing following rate hikes in 2023. See “Net Interest Income” for further information.

•Our provision for credit losses decreased $13.9 million, primarily due to lower provision across our commercial loan portfolios and our consumer partnership portfolio. See “Allowance for Credit Losses” for further information.

•Noninterest income increased $12.7 million, primarily due to increases in income from Cash Connect® due to additional units added during the fourth quarter of 2023 and Wealth Management fee income. See “Noninterest Income” for further information.

•Noninterest expense increased $16.0 million, primarily due to higher Cash Connect® funding costs associated with a shift towards external funding, salaries and benefits, and the FDIC special assessment.

•Income tax provision increased $0.3 million, primarily due to the $3.3 million 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,
	2024						2023
(Dollars in thousands)	Average Balance		Interest		Yield/ Rate(1)		Average Balance		Interest		Yield/ Rate(1)
Assets:
Interest-earning assets:
Loans:(2)
Commercial loans and leases	$	5,047,482	$	88,530	7.06	%	$	4,954,622	$	80,744	6.63	%
Commercial real estate loans	4,887,483		86,724		7.14		4,425,354		71,828		6.58
Residential loans	874,703		10,579		4.84		769,581		8,628		4.48
Consumer loans	2,041,390		38,228		7.53		1,849,398		31,535		6.92
Loans held for sale	34,907		642		7.40		43,527		989		9.21
Total loans and leases	12,885,965		224,703		7.02		12,042,482		193,724		6.53
Mortgage-backed securities(3)	4,476,032		25,897		2.31		4,823,507		27,526		2.28
Investment securities(3)	365,375		2,184		2.65		376,760		2,237		2.86
Other interest-earning assets	643,749		8,838		5.52		240,943		2,896		4.87
Total interest-earning assets	$	18,371,121	$	261,622	5.74	%	$	17,483,692	$	226,383	5.27	%
Allowance for credit losses	(188,762)						(153,181)
Cash and due from banks	273,286						230,193
Cash in non-owned ATMs	243,941						421,057
Bank-owned life insurance	42,791						101,612
Other noninterest-earning assets	1,953,037						1,919,065
Total assets	$	20,695,414					$	20,002,438
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing demand	$	2,834,273	$	7,366	1.05	%	$	3,142,930	$	5,024	0.65	%
Savings	1,588,224		1,580		0.40		2,065,212		1,256		0.25
Money market	5,186,402		45,433		3.52		3,861,590		19,258		2.02
Customer time deposits	1,835,424		18,238		4.00		1,276,204		5,993		1.90
Total interest-bearing customer deposits	11,444,323		72,617		2.55		10,345,936		31,531		1.24
Brokered deposits	18,410		178		3.89		346,355		3,661		4.29
Total interest-bearing deposits	11,462,733		72,795		2.55		10,692,291		35,192		1.33
Federal Home Loan Bank advances	21,429		308		5.78		267,367		3,371		5.11
Trust preferred borrowings	90,655		1,756		7.79		90,459		1,555		6.97
Senior and subordinated debt	218,420		2,449		4.48		233,189		2,573		4.41
Other borrowed funds(4)	781,854		9,036		4.65		131,221		1,160		3.59
Total interest-bearing liabilities	$	12,575,091	$	86,344	2.76	%	$	11,414,527	$	43,851	1.56	%
Noninterest-bearing demand deposits	4,828,865						5,560,252
Other noninterest-bearing liabilities	822,834						770,565
Stockholders’ equity	2,476,453						2,260,262
Noncontrolling interest	(7,829)						(3,168)
Total liabilities and stockholders’ equity	$	20,695,414					$	20,002,438
Excess of interest-earning assets over interest-bearing liabilities	$	5,796,030					$	6,069,165
Net interest income			$	175,278					$	182,532
Interest rate spread					2.98	%					3.71	%
Net interest margin					3.84	%					4.25	%

(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, 2024: During the three months ended March 31, 2024, net interest income decreased $7.3 million from the three months ended March 31, 2023 primarily due to lagging deposit pricing increases following rate hikes in 2023. Net interest margin was 3.84% for the first quarter of 2024, a 41 basis point decrease compared to 4.25% for the first quarter of 2023 due to an unfavorable decrease of 48 basis points due to the lagging deposit pricing increases mentioned above and 3 basis points from purchase accounting accretion, partially offset by an increase of 10 basis points from our balance sheet size and 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.

During the three months ended March 31, 2024, we recorded a provision for credit losses of $15.1 million, a decrease of $13.9 million, as compared with the provision for credit losses of $29.0 million for the three months ended March 31, 2023. This decrease was primarily due to lower losses across our commercial loan portfolios and our consumer partnership portfolio.

The allowance for credit losses increased to $192.6 million at March 31, 2024 from $186.1 million at December 31, 2023. The ratio of allowance for credit losses to total loans and leases was 1.48% at March 31, 2024 and 1.46% at December 31, 2023.

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			Owner- occupied Commercial			Commercial Mortgages			Construction			Commercial Small Business Leases			Residential(1)			Consumer(2)			Total
As of March 31, 2024
Allowance for credit losses	$	55,902		$	10,569		$	36,797		$	10,959		$	15,459		$	5,407		$	57,536		$	192,629
% of ACL to total ACL	29		%	5		%	19		%	6		%	8		%	3		%	30		%	100		%
Loan portfolio balance	$	2,591,861		$	1,882,876		$	3,876,856		$	1,056,349		$	633,803		$	872,665		$	2,065,871		$	12,980,281
% to total loans and leases	19		%	15		%	30		%	8		%	5		%	7		%	16		%	100		%
Three months ended March 31, 2024
Charge-offs	$	476		$	—		$	25		$	—		$	4,852		$	50		$	6,456		$	11,859
Recoveries	(1,766)			(201)			(2)			—			(591)			(89)			(575)			(3,224)
Net (recoveries) charge-offs	$	(1,290)		$	(201)		$	23		$	—		$	4,261		$	(39)		$	5,881		$	8,635
Average loan balance	$	2,529,873		$	1,892,161		$	3,815,715		$	1,071,768		$	625,449		$	871,820		$	2,041,390		$	12,848,176
Ratio of net (recoveries) charge-offs to average gross loans	(0.21)		%	(0.04)		%	NMF			NMF			2.74		%	(0.02)		%	1.16		%	0.27		%

(1)Excludes reverse mortgages.

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

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(Dollars in thousands)	Commercial and Industrial			Owner- occupied Commercial			Commercial Mortgages			Construction			Commercial Small Business Leases			Residential(1)			Consumer(2)			Total
As of December 31, 2023
Allowance for credit losses	$	49,394		$	10,719		$	36,055		$	10,762		$	15,170		$	5,483		$	58,543		$	186,126
% of ACL to total ACL	27		%	6		%	19		%	6		%	8		%	3		%	31		%	100		%
Loan portfolio balance	$	2,540,070		$	1,886,087		$	3,801,180		$	1,035,530		$	623,622		$	867,895		$	2,012,134		$	12,766,518
% to total loans and leases	19		%	15		%	30		%	8		%	5		%	7		%	16		%	100		%
Year ended December 31, 2023
Charge-offs	$	26,653		$	184		$	300		$	794		$	15,641		$	41		$	22,394		$	66,007
Recoveries	(7,735)			(54)			(7)			(532)			(1,986)			(260)			(1,625)			(12,199)
Net charge-offs (recoveries)	$	18,918		$	130		$	293		$	262		$	13,655		$	(219)		$	20,769		$	53,808
Average loan balance	$	2,589,147		$	1,863,542		$	3,562,070		$	1,008,768		$	588,592		$	817,758		$	1,922,828		$	12,352,704
Ratio of net charge-offs (recoveries) to average gross loans	0.73		%	0.01		%	0.01		%	0.03		%	2.32		%	(0.03)		%	1.08		%	0.44		%

(1)Excludes reverse mortgages.

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

See Note 7 to the unaudited Consolidated Financial Statements and "Nonperforming Assets" above for further information.

Noninterest Income

Three months ended March 31, 2024: During the three months ended March 31, 2024, noninterest income was $75.9 million, an increase of $12.7 million from $63.1 million during the three months ended March 31, 2023. The increase was primarily driven by $8.2 million from Cash Connect® due to the addition of ATM vault cash units during the fourth quarter of 2023 and the higher rate environment and $2.3 million in Wealth Management fees.

Noninterest Expense

Three months ended March 31, 2024: During the three months ended March 31, 2024, noninterest expense was $149.1 million, an increase of $16.0 million from $133.0 million for the three months ended March 31, 2023. The increase was primarily due to $11.3 million from other operating expense driven by higher funding costs from Cash Connect® due to a shift towards external funding, $3.0 million from salaries and benefits costs, and $1.3 million from the FDIC Special Assessment.

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 $21.2 million during the three months ended March 31, 2024, compared to income tax expense of $20.9 million for the same period in 2023.

Our effective tax rate was 24.4% for the three months ended March 31, 2024, compared to 25.0% for the same period in 2023. The effective tax rate for the three months ended March 31, 2024 decreased primarily due to an increase in projected tax benefits from our low-income housing tax credit investments, as well as a reduction in state income taxes.

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 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 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)	March 31, 2024		December 31, 2023
Stockholders’ equity of WSFS	$	2,473,481	$	2,477,636
Less: Goodwill and other intangible assets	1,000,344		1,004,560
Tangible common equity (numerator)	$	1,473,137	$	1,473,076
Shares of common stock outstanding (denominator)	60,084		60,538
Book value per share of common stock	$	41.17	$	40.93
Goodwill and other intangible assets	16.65		16.58
Tangible book value per share of common stock	$	24.52	$	24.33

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 2024, it is possible that actual conditions may be worse than anticipated in those estimates, which could materially affect our results of operations and financial condition. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting estimates at March 31, 2024 did not significantly change from our critical accounting estimates at December 31, 2023, which are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

RECENT REGULATORY DEVELOPMENTS

Recent regulatory developments at March 31, 2024 did not significantly change from our recent regulatory developments at December 31, 2023, which are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

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. There was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting during the three months ended March 31, 2024.

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

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, 2023.

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

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 35% of annual net income to stockholders through dividends and share repurchases while maintaining capital ratios in excess of “well-capitalized” regulatory benchmarks.

The following table represents information with respect to repurchases of common stock made by the Company during the three months ended March 31, 2024.



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, 2024 - January 31, 2024	14,000	$	46.67	14,000	5,327,593
February 1, 2024 - February 29, 2024	323,748	42.26		323,748	5,003,845
March 1, 2024 - March 31, 2024	154,620	43.01		154,620	4,849,225
Total	492,368	$	42.62	492,368

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the period covered by this Quarterly Report on Form 10-Q, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

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Item 6. Exhibits


Exhibit Number						Description of Document

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, 2024, filed with the SEC on May 6, 2024, 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.

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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 6, 2024						/s/ Rodger Levenson
						Rodger Levenson
						Chairman, President and Chief Executive Officer
						(Principal Executive Officer)

Date: May 6, 2024						/s/ Arthur J. Bacci
						Arthur J. Bacci
						Executive Vice President, Chief Wealth Officer and
						Interim Chief Financial Officer
						(Principal Financial and Accounting Officer)