What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-03-01 compared with 2021-03-01 · 253 added, 262 removed, 632 unchanged (45% of the section changed)

8 unchanged sentences

“We Stand for Service.” Our strategy of “Engaged Associates, living our culture, making a better life for all we serve” focuses on exceeding customer expectations, delivering stellar experiences and building customer advocacy through highly-trained, relationship-oriented, friendly, knowledgeable and empowered Associates.

As of December 31, 2020, we service our Customers primarily from our 112 offices located in Pennsylvania (52), Delaware (42), New Jersey (16), Virginia (1) and Nevada (1), our ATM network, our website at www.wsfsbank.com and our mobile apps.

The Company has six consolidated subsidiaries:

As of December 31, 2021, we serviced our Customers primarily from our 112 offices located in Pennsylvania (52), Delaware (42), New Jersey (16), Virginia (1) and Nevada (1), our ATM network, our website at www.wsfsbank.com and our mobile apps.

As of December 31, 2021, the Company had six consolidated subsidiaries:

WSFS Bank, WSFS Wealth Management, LLC (Powdermill ® ), WSFS Capital Management, LLC (West Capital), Cypress Capital Management, LLC (Cypress), Christiana Trust Company of Delaware ® (Christiana Trust DE), and WSFS SPE Services, LLC.

• Powdermill ® provides multi-family office services to affluent clientele in the local community and throughout the U.S.

• West Capital provides fee-only wealth management services tailored to the needs of high net worth individuals operating under a multi-family office philosophy.

• West Capital, a registered investment adviser, provides fee-only wealth management services tailored to the needs of high net worth individuals operating under a multi-family office philosophy.

West Capital had approximately $947.5 million in AUM at December 31, 2021, compared to approximately $806.5 million at December 31, 2020.

• Cypress provides asset management services.

As a registered investment adviser and fee-only wealth management firm, Cypress had approximately $1.2 billion in AUM at December 31, 2020, flat compared to December 31, 2019.

As a registered investment adviser and fee-only wealth management firm, Cypress had approximately $1.3 billion in AUM at December 31, 2021 compared to approximately $1.2 billion at December 31, 2020.

• Christiana Trust DE supplements our existing Wealth Management segment by offering Delaware advantage trust services including directed trusts, asset protection trusts and dynasty trusts.

• WSFS SPE Services, LLC provides commercial domicile services which include providing employees, directors, subleases of office facilities and registered agent services in Delaware and Nevada.

WSFS Bank has three wholly owned subsidiaries:

Beneficial Equipment Finance Corporation (BEFC), WSFS Investment Group, Inc.

(WSFS Wealth ® Investments), and 1832 Holdings, Inc.

WSFS Bank has one majority-owned subsidiary, NewLane Finance ® .

As of December 31, 2021, WSFS Bank had two wholly owned subsidiaries:

Beneficial Equipment Finance Corporation (BEFC), and 1832 Holdings, Inc.

WSFS Bank had one majority-owned subsidiary, NewLane Finance Company (NewLane Finance ® ).

• BEFC was acquired during the Beneficial Bancorp, Inc.

1 unchanged sentence

Subsequent to the Beneficial acquisition, the leasing operations of BEFC were combined with NewLane Finance ® , described below.

• WSFS Wealth ® Investments markets various third-party investment and insurance products such as single-premium annuities, whole life policies and securities primarily through our retail banking system and directly to the public.

• 1832 Holdings, Inc.

1 unchanged sentence

• 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 new product offerings for insurance through a newly-formed subsidiary, Prime Protect, which commenced operations during the fourth quarter of 2020.

WSFS has one unconsolidated subsidiary, WSFS Capital Trust III (the Trust), which was formed in 2005 to issue $67.0 million aggregate principal amount of Pooled Floating Rate Capital Securities.

These securities are callable and have a maturity date of June 1, 2035.

In addition, NewLane Finance ® offers new product offerings for insurance through a newly-formed subsidiary, Prime Protect.

As of December 31, 2021, WSFS had one unconsolidated subsidiary, WSFS Capital Trust III (the Trust), which was formed in 2005 to issue $67.0 million aggregate principal amount of Pooled Floating Rate Capital Securities.

These securities are currently callable and have a maturity date of June 1, 2035.

The proceeds from this issue were used to fund the redemption of $51.5 million Floating Rate WSFS Capital Trust I Preferred Securities (formerly, WSFS Capital Trust I).

6 unchanged sentences

The Wealth Management segment provides a broad array of planning and advisor services, investment management, personal and institutional trust services, and credit and deposit products to individuals, corporate, and institutional clients.

As of December 31, 2020, WSFS Bank's banking business had a total loan and lease portfolio of $9.0 billion, which is primarily commercial lending funded by customer-generated deposits.

We have built a $7.1 billion commercial loan and lease portfolio by recruiting the best seasoned commercial lenders in our markets and offering the high level of service and flexibility typically associated with a community bank.

As of December 31, 2021, WSFS Bank's banking business had a total loan and lease portfolio of $7.9 billion, which was funded primarily through commercial relationships and retail and customer-generated deposits.

We have built a $6.2 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 fund this business primarily with deposits generated through commercial relationships and retail deposits, as well as through our digital banking platforms.

WSFS Bank also offers a broad variety of consumer loan products, retail securities and insurance brokerage services through our retail branches, and mortgage and title services through those branches and through WSFS Mortgage ® .

WSFS Mortgage ® is a mortgage banking company and abstract and title company specializing in a variety of residential mortgage and refinancing solutions.

1 unchanged sentence

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 in the U.S.

Cash Connect ® manages approximately $1.6 billion in total cash and services approximately 27,900 non-bank ATMs and approximately 4,500 smart safes nationwide.

As of December 31, 2021, Cash Connect ® manages approximately $1.7 billion in total cash and services approximately 27,400 non-bank ATMs and approximately 6,300 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 over 600 branded ATMs for WSFS Bank, which has one of the largest branded ATM networks in our market.

As of December 31, 2021, Cash Connect ® also supports over 600 owned and branded ATMs for WSFS Bank, which has one of the largest branded ATM networks in our market.

Wealth Management

1 unchanged sentence

Combined, these businesses had $34.6 billion of AUM and AUA at December 31, 2021.

WSFS Wealth ® Investments provides financial advisory services.

WSFS Wealth ® Investments provides financial advisory services along with insurance and brokerage products.

Cypress, a registered investment adviser, is a fee-only wealth management firm managing a “balanced” investment style portfolio focused on preservation of capital and generating current income.

West Capital, a registered investment adviser, is a fee-only wealth management firm operating under a multi-family office philosophy to provide customized solutions to institutions and high-net-worth individuals.

The trust division of WSFS, comprised of WSFS Institutional Services ® and Christiana Trust DE, provides personal trust and fiduciary services, as well as, trustee, agency, bankruptcy administration, custodial and commercial domicile services to corporate and institutional clients.

Powdermill ® is a multi-family office providing independent solutions to high-net-worth individuals, families and corporate executives through a coordinated, centralized approach.

WSFS Wealth Client Management provides comprehensive solutions to high net worth clients by delivering credit and deposit products as well as partnering with other wealth management units.

The trust division of WSFS, comprised of WSFS Institutional Services ® and Christiana Trust DE, provides trustee, agency, bankruptcy administration, custodial and commercial domicile services to institutional and corporate clients and special purpose vehicles.

Christiana Trust DE also provides personal trust and fiduciary services to families and individuals across the U.S.

Powdermill ® is a multi-family office specializing in providing independent solutions to high-net-worth individuals, families and corporate executives through a coordinated, centralized approach.

WSFS Wealth Client Management serves high-net-worth clients by delivering credit and deposit products and partnering with other Wealth Management businesses to provide comprehensive solutions to clients.

For segment financial information for the years ended December 31, 2021, 2020 and 2019, see Note 21 to the Consolidated Financial Statements in this report.

Recent Business Developments

• COVID-19 pandemic:

The COVID-19 pandemic adversely affected our results of operations in 2020, and we have adapted our business operations in response to the pandemic and governmental actions in response to it.

◦ During March 2020, we immediately closed all of our retail branch office lobbies, while continuing to service our Customers through our branch locations equipped with drive-thru services, in addition to our contact centers, mobile apps and www.wsfsbank.com .

◦ By the second quarter of 2020, we began a phased approach to reopen our retail branch office lobbies while following the recommended Federal, State and local guidance at the direction from the CDC, State Departments of Health and other governing bodies, including appropriate personal protective equipment and social distancing, as we were servicing our Customers.

◦ By the end of 2020, most of the previously closed banking locations that service our Customers had reopened while we monitored the impacts of COVID-19 and implemented short-term closures when appropriate.

During this time, the retail office closures did not significantly impact our financial condition and results of operations, as our Customer deposits remained intact based on our ability to service our Customers through our other service channels and the fees and costs associated with our Customer deposits remained under normal business operations.

We also continued with a carefully planned and phased approach to opening our remaining office locations that aligns with Federal, State and local guidance.

Even with the majority of non-retail office Associates working remotely, our ability to operate and execute on our strategy continues without significant disruption.

For more information on the effects of the pandemic, see "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors – Market Risks."

• Regulatory relief programs:

We participated in some of the regulatory relief programs offered as a result of the CARES Act, including the PPP.

In 2020, we provided nearly $1.0 billion in PPP loans to more than 5,400 new and existing WSFS Customers, which resulted in $21.7 million of additional interest income from PPP loans and $3.3 million of PPP related costs during the year ended December 31, 2020.

We experienced an increase in customer deposits and liquidity due to these PPP loans and the current economic environment.

In December 2020, Congress approved the next round of PPP (PPP 2.0) and the SBA began accepting PPP 2.0 applications on January 19, 2021.

We are again participating in providing our business Customers the access to funding they need to bridge the gap between economic recovery and the vaccine rollout.

However, unlike the first round, we will be partnering with third party providers who will accept, process and service PPP 2.0 loans.

This arrangement allows us to expand our reach to more non-WSFS Customers, including those in underserved communities that struggled to gain access to PPP funds in the first round.

See "Financial Condition" and "Regulation" for further details.

• Community outreach:

During 2020, WSFS made a $3.0 million grant to the WSFS Community Foundation to address the impacts of COVID-19 on the communities we serve and provide long-term support for education, health and human services, and economic development in our communities.

The WSFS Community Foundation and its effects on our communities provided $335,500 in grants to 25 local nonprofit organizations and schools engaged in the fight against COVID-19, and WSFS Bank provided a $200,000 donation to four community development financial institutions (CDFIs) to utilize for relief grants to help accelerate recovery efforts of local small businesses within the Bank’s footprint.

Despite the challenges of the pandemic, our Associates also volunteered nearly 12,000 hours during 2020 as part of our long-standing commitment to community service.

Our Associate volunteer hours supported many areas involving food banks, homeless shelters, nursing homes, assisted living, community and education centers.

Our involvement in PPP during 2020, as described above, helped to support an estimated 100,000 jobs in our region.

In partnering with third party providers for the next round of PPP funding, our goal is to further expand our reach to continue to support both WSFS and non-WSFS customers, including those in underserved communities who struggled to gain access to PPP funds in the first round.

WSFS also partnered with four local financial institutions to participate in a loan program, the Micro-Loan Recovery Program, which currently includes a combined commitment of $650,000 to fund small Philadelphia businesses impacted by the COVID-19 pandemic.

Through our partnership with the other financial institutions, we are helping to address the financial needs of the small businesses throughout the city of Philadelphia with the goal of keeping these businesses open and operating.

• Acquisition and Integration Efforts:

On January 1, 2022, we completed our acquisition of Bryn Mawr Bank Corporation (BMBC), a Pennsylvania corporation and the parent holding company of The Bryn Mawr Trust Company, a Pennsylvania chartered bank and wholly owned subsidiary of BMBC.

Our bank technology, branding, and branch conversion is scheduled to occur later in the first quarter of 2022, with our Trust and Wealth integration expected to follow in late 2022 or early 2023.

Throughout this document, we refer to these acquired entities collectively as “Bryn Mawr Trust.”

• Upstart Strategic Partnership:

During 2021 we launched our strategic partnership with Upstart Holdings, Inc.

(Upstart), a leading white label lending-as-a-service platform provider specializing in risk-based priced unsecured consumer loans.

With this relationship WSFS is now able to deliver an AI enabled underwriting program customized to our specifications.

The Upstart partnership enables WSFS to digitize our unsecured personal loan product, acquire new in-footprint customers, and provides cross-sell opportunities within our footprint.

• Future Forward:

Throughout the COVID-19 pandemic, our Retail branch office locations remained open servicing our Customers while following the recommended Federal, State and local guidance, including appropriate personal protective equipment and social distancing.

During 2021, we began a phased transition to the office at our corporate locations with approximately 30% of Associates in these locations working from the office at least 3 days per week.

As we move into 2022, we look to further expand our Future Forward initiative and transition more Associates into office locations while taking the appropriate precautions.

Our Future Forward strategy is also focused on our current and future office capacity and including assessment of our current space utilized by us and potential for optimization in this area.

This strategy will continue to evolve as we progress into 2022.

WSFS DIFFERENTIATION STRATEGY

17 unchanged sentences

Our business model is designed using the science of Human Sigma, which is built on a foundation of engagement.

The Human Sigma model, identified by Gallup, Inc., begins with Associates (employees) who take ownership for their responsibilities and impact;

The Human Sigma model, identified by Gallup, Inc.

(Gallup), begins with Associates (employees) who take ownership for their responsibilities and impact;

as such, they are more likely to consistently perform at a higher level.

We significantly invest in our culture of engagement which underpins all that we do at WSFS, including attracting, motivating and retaining our Associates, delivering stellar Customer experiences and strengthening the well-being of our communities.

We significantly invest in our culture of engagement which underpins all that we do at WSFS, including attracting, inspiring and retaining our Associates, delivering stellar Customer experiences and strengthening the well-being of our communities.

Our culture is based on the fundamental principal of “a really good life.” Our strategy, “Engaged Associates, living our culture, making a better life for all we serve” builds upon that principal.

2 unchanged sentences

Research studies validate the direct link between engagement and a company’s financial performance.

Our strategy, which triggers our virtuous cycle, ensures that research and reinforces our culture that is evidenced in our Company results.

Human Capital

Our strategy, which drives our virtuous cycle, ensures that research and reinforces our culture that is evidenced in our Company results.

Human Resources

At December 31, 2021, we had 1,839 full-time equivalent Associates.

1 unchanged sentence

During 2021, WSFS captured the voice of our Associates and our Customers through multiple channels, including our ongoing partnership with Gallup Inc.

During this pivotal year with the continued onboarding of former Beneficial customers and the impact of the COVID-19 pandemic, we continued to use these tools to measure our Associate and Customer engagement.

(Gallup), which was used to measure our Associate and Customer engagement.

Surveys conducted for us by Gallup indicate that, in 2021:

• Our Associate engagement survey results placed WSFS in the 94th percentile of Gallup's overall company-level database.

• Our Associate engagement survey results placed WSFS in the 93rd percentile of Gallup's global overall company-level database.

Our Associate engagement ratio was 16.5:1, which means there were 16.5 engaged Associates for every actively disengaged Associate.

1 unchanged sentence

working population ratio of 2.1:1.

• Our Customer engagement survey results reflected that 60% of Customers polled ranked WSFS a “five” out of five, strongly agreeing with the statement “WSFS is the perfect bank for people like me.” Our Customer engagement ratio was 5.4:1, which means there were 5.4 engaged Customers for every actively disengaged Customer.

• Our culture of inclusion index of 4.48 placed WSFS in the 74th percentile of Gallup's global overall workgroup-level database.

We believe these results reflect that Associates are encouraged to be themselves, are a valued part of their teams, experience strength-based developments, have inclusive conversations and trust in the Company's mission, values and leadership.

• 62.7% of Customers surveyed ranked WSFS a “five” out of five, strongly agreeing with the statement “WSFS is the perfect bank for people like me,” which placed WSFS in the 71st percentile of Gallup's global overall customer database.

Our Customer engagement ratio was 6.1:1, which means there were 6.1 engaged Customers for every actively disengaged Customer.

• Customer loyalty grew during the year, as measured by our Net Promoter Scores (NPS).

Our branch network achieved an overall NPS of 72.3 in 2020, with the fourth quarter of 2020 resulting in the highest quarter performance since program inception.

Surveys are conducted utilizing Medallia.

Our branch network achieved an overall NPS of 79.3 in 2021 compared to 72.3 in 2020.

The fourth quarter of 2021 resulted in the highest quarter performance since program inception.

By fostering a culture of engaged and empowered Associates, we believe we have become the employer and bank of choice in our market.

In 2021, we were honored to receive the following accolades:

• Ranked #21 in the United States on the Forbes World’s Best Banks Listing;

• Selected as one of only two companies nationwide to receive the Gallup Culture Transformation Award in its inaugural year;

• Named a Top Workplace in Delaware for the 15th year in a row, and the second consecutive year in first place;

• Named a Top Workplace in Philadelphia and southeastern PA for the sixth year in a row;

• Named to the 'Soaring 76', recognizing us as one of the 76 fastest growing companies in the greater Philadelphia region for the fourth year in a row by the Philadelphia Business Journal;

• Ranked 4th Best Overall Bank in Bank Director's 2021 RankingBanking study, while placing first in the Best Board and Best Technology Strategy categories.

• Ranked #10 in the United States on the Forbes America’s Best Banks Listing;

• Received The Gallup Exceptional Workplace Award for the fifth time;

• Named a Top Workplace in Delaware for the 15th year in a row;

• Named a Top Workplace in Philadelphia and southeastern PA for the seventh year in a row;

• Named to the 'Soaring 76', recognizing us as one of the 76 fastest growing companies in the Greater Philadelphia region for the fifth year in a row by the Philadelphia Business Journal;

• Named "Best of Biz Editor's Pick" for customer service in the South Jersey Business Magazine;

• Recognized by The Forum of Executive Women as a "Champion of Board Diversity."

Diversity, Equity and Inclusion

Diversity, Equity and Inclusion (DE&I) is supported by the values of WSFS.

In 2020, as a commitment to those values, we launched our DE&I Initiative to continue to assess diversity, equity and inclusion with respect to WSFS and our interactions in and with the communities we serve.

In support of the DE&I Initiative, WSFS formed an advisory group of 16 Associates representing all of the divisions of the Company.

The advisory group works alongside an assembled group of division advocates of over 40 Associates to maintain open lines of communication with our Associates to help generate ideas and vet concepts in furtherance of the DE&I Initiative's goals.

During 2020, we began a search to hire a director of DE&I, who will focus on supporting, managing and implementing diversity and inclusion strategies and programs, and create and deliver initiatives designed to sustain a culture of inclusion.

Diversity, Equity and Inclusion (DE&I) is rooted in the values of WSFS, which is led by our Director of DE&I, Michelle Burroughs, who was hired in October 2021.

Our DE&I efforts focus on educating, supporting, managing and implementing diversity and inclusion strategies and programs, and creating and delivering initiatives designed to sustain a culture of inclusion.

During 2021, the Company completed the following DE&I accomplishments:

• Created DE&I Strategic Pillars and socialized with Executive Leadership Team;

• Completed the DE&I Steering Committee Charter and structure;

• Established 2022 Focus Areas for DE&I Steering Committee and Strategic Pillars;

• Completed "Listening Tours" with approximately 50 Associates to capture qualitative data regarding DE&I;

• Established report routine with Voice of Customer team that will review Customer discrimination data.

Community Banking Model

17 unchanged sentences

Our Customers tell us this is an important differentiator from larger, in-market competitors.

Our community banking model continues to be a key differentiating point and drove our response in assisting our Customers and the communities we serve and who have been impacted by the COVID-19 pandemic.

This was reflected in our active involvement in many relief programs in our community, such as PPP, our payment deferral programs, the Micro-Loan Recovery Program, and grants to the WSFS Community Foundation in support of various outreach programs in our communities to provide long-term support for education, health and human services, and economic development.

Our Diversified Business

3 unchanged sentences

• Prudent capital levels - Maintaining prudent capital levels is key to our operating philosophy.

At December 31, 2020 all regulatory capital levels for WSFS Bank and the Company were in excess of "well-capitalized" levels.

For the capital position of WSFS Bank and the Company, refer to Note 14 of the Consolidated Financial Statements.

At December 31, 2021 all regulatory capital levels for the Bank were in excess of "well-capitalized" levels.

For the capital position of the Bank and the Company, refer to Note 13 of the Consolidated Financial Statements.

At December 31, 2021, the Company's common equity to assets ratio was 12.29% and its tangible common equity to tangible assets ratio, which is a non-GAAP financial measure, was 9.14%.

4 unchanged sentences

We supplement this portfolio diversification with a disciplined underwriting process and the benefit of knowing our customers.

We have also taken a proactive approach to identifying trends in our local economy and have responded to areas of concern.

We have also taken a proactive approach to identifying credit-related trends in our local economy and have responded to areas of concern.

• Focus on credit quality - We seek to control credit risk in our investment portfolio and use this portion of our balance sheet primarily to help us manage liquidity and interest rate risk, while providing marginal income and tax relief.

Our philosophy and pre-purchase due diligence has allowed us to avoid the significant investment write-downs in the current economic climate.

Our philosophy and pre-purchase due diligence have allowed us to control credit risk in our investment portfolio.

• Asset/liability management strategies - Our investment portfolio is consistent with the approved risk appetite of our Board of Directors.

6 unchanged sentences

We continue to execute our current Board-approved share repurchase plan, as well as any future Board-approved share repurchase plans, including opportunistically repurchasing shares, based on current valuation levels, above our stated practice of returning a minimum of 25% of annual net income to stockholders through dividends and share repurchases.

All share repurchases were temporarily suspended upon the announcement of the signing of the Merger Agreement with BMBC on March 10, 2021.

We resumed repurchases during the first quarter of 2022 following the close of our combination with Bryn Mawr Trust on January 1, 2022.

Performance Expectations and Alignment with Stockholder Priorities

1 unchanged sentence

We define “high-performing” as the top quintile of a relevant peer group in return on assets (ROA).

Management incentives are, in large part, based on driving performance of ROA as well as return on average tangible common equity (ROTCE) and EPS growth.

Management incentives are, in large part, based on driving performance of ROA as well as return on average tangible common equity (ROTCE), which is a non-GAAP financial measure, and EPS growth.

More details on management incentive plans will be included in the proxy statement for our 2022 Annual Meeting of Stockholders.

1 unchanged sentence

Core ROA, which excludes non-core items and is a non-GAAP financial measure, was 1.80% for the year ended December 31, 2021.

Core ROA for 2020 excludes (i) securities gains, (ii) realized and unrealized gains on equity investments, net, (iii) corporate development and restructuring expense, (iv) loss on early extinguishment of debt, and (v) contribution to WSFS Community Foundation.

Core ROA for 2021 excludes (i) securities gains, (ii) realized and unrealized gains and losses on equity investments, net, (iii) loss on debt extinguishment, (iv) corporate development and restructuring expense, (v) recovery of legal settlement, and (vi) contribution to WSFS CARES Foundation.

For a reconciliation of Core ROA to ROA, the most comparable GAAP measure, refer to “Reconciliation of non-GAAP financial measures included in Item 1” located at the end of this section.

We have achieved success over the long-term in lending and deposit gathering, growing the Wealth Management segment’s client base and growing Cash Connect ® ’s customer base and services.

We have achieved success over the long-term in lending and deposit gathering, growing the Wealth Management segment’s client base and product offerings and growing Cash Connect ® ’s customer base and services.

Our success has been the result of a focused strategy that provides service, responsiveness and careful execution in a consolidating marketplace.

We plan to continue to grow by:

• Developing talented, service-minded Associates:

• Developing talented, service-focused Associates:

We have successfully recruited Associates with strong ties to, and the passion to serve, their communities to enhance our service in existing markets and to provide a strong start in new communities.

We also focus on developing talent and leadership from our current Associate base to better equip those Associates for their jobs and prepare them for leadership roles at WSFS.

During 2020, the following key Associate and Board updates occurred:

Reed, joined as Executive Vice President, Chief Risk Officer;

Conklin, joined as Executive Vice President, Chief Human Resources Officer;

Eddens, will be retiring at the end of 2021, and has transitioned to Executive Vice President, Chief Customer Officer;

Foster, was appointed to the WSFS Board of Directors.

Our strategy continues to be diligent on attracting, retaining and rewarding the best talent, which we believe has positioned us well in the current climate of the Great Resignation that has seen many employees of U.S.

companies reconsider their priorities and voluntarily resign.

• Embracing the Human Sigma concept:

1 unchanged sentence

• Building fee income through investment in and growth of our Wealth Management and Cash Connect ® segments.

◦ Wealth Management experienced record growth during 2020 in AUM and corresponding AUM-based revenues largely due to market performance.

WSFS Institutional Services ® ended 2020 as the securitization industry's sixth most active trustee for U.S.

◦ Wealth Management experienced near-record growth during 2021 in AUM and corresponding AUM-based revenues largely due to market performance.

WSFS Institutional Services ® ended 2021 as the securitization industry's fourth most active trustee for U.S.

Asset and Mortgage Backed Securities according to Asset-Backed Alert’s ABS Database.

◦ Cash Connect ® , in partnership with our retail strategy, expanded its WSFS branded ATM network by adding over 150 ATMs during 2020 to serve Delaware and the Greater Philadelphia region.

The number of owned and branded ATMs increased to 626 as of December 31, 2020.

◦ Cash Connect ® saw sustained demand for ATM cash and related services during the on-going COVID-19 pandemic, and in partnership with our retail strategy, continued to serve the Delaware and the Greater Philadelphia region through the WSFS ATM network.

The number of owned and branded ATMs was 609 as of December 31, 2021.

• Continuing strong growth in commercial and retail lending by:

1 unchanged sentence

◦ Executing our community banking model that combines stellar experiences with the banking products and services our business customers demand.

◦ Continuing to expand our NewLane Finance ® leasing business, including an insurance product through a newly formed subsidiary, Prime Protect, as described above.

◦ Adding seasoned lending professionals that have helped us win customers in our Delaware, southeastern Pennsylvania and southern New Jersey markets, which contributes to our expanding commercial small business leasing portfolio and residential mortgage, small business and SBA portfolios in the footprint we operate.

In the past 12 months, we expanded our Commercial and Small Business Banking teams in the Greater Philadelphia region with the addition of nine experienced relationship managers.

◦ Continuing to grow our NewLane Finance ® leasing business.

◦ Adding seasoned lending professionals that have helped us win customers in our Delaware, southeastern Pennsylvania and southern New Jersey markets, which contributes to our expanding commercial small business leasing portfolio and residential, small business and SBA portfolios in the footprint we operate.

◦ Leveraging our strategic partnership with Upstart, a leading white label lending-as-a-service platform provider specializing in risk-based priced unsecured consumer loans, which we launched in 2021.

• Continuing to grow deposits by:

3 unchanged sentences

◦ Finding creative ways to build deposit market share such as targeted marketing programs.

• Continuing investment in our Delivery Transformation initiative (described in greater detail below) to increase adoption and usage of digital channels aligned with our strategy by:

• Continuing investment in our Delivery Transformation initiative (described in greater detail in “Innovation” below) to increase adoption and usage of digital channels aligned with our strategy by:

◦ Improving branch NPS scores and expanding NPS surveys to our contact center.

◦ Providing a deeper adoption of myWSFS to provide a personalize mobile experience.

◦ Deploying Medallia for real-time customer feedback from our branches and contact center.

2 unchanged sentences

◦ Implementing Salesforce to support our customer relationship management with focus on change management, adoption and governance.

• Seeking strategic acquisitions over the next several years, as we expect our growth to continue to be a mix of organic and acquisition-related growth, consistent with our long-term strategy.

• Seeking targeted, strategic opportunities in our non-banking businesses while we focus on optimizing our recent franchise investments.

Disciplined Cost Management

11 unchanged sentences

As such, we have concluded that we need to transform our delivery channels to meet these new expectations.

As we continue to make progress on our 2019-2021 Strategic Plan, we have accelerated our transformation by optimizing our physical branch network and making strategic investments in meaningful technology solutions, supported by specialized talent.

Our transformation includes optimizing our physical branch network and making strategic investments in meaningful technology solutions, supported by specialized talent.

Those investments are expected to provide our Customers with leading edge products and elevate our Associates, as they strive to serve in a competitive and compelling way.

1 unchanged sentence

Through our Delivery Transformation and our ongoing commitment to Stellar Service, we intend to continue to lead the community and regional banking industry with regards to service delivery and Customer experience.

We have formed several strategic alliances and investments, which have allowed us to stay at the forefront of emerging technology in our industry.

We have embraced a partnership model to help diversify our consumer business and learn from innovators in the industry.

We position ourselves with strategic partners when it is the best experience for our Customers and aligned to our strategic plan.

Through these partnerships, we look forward to offering and supporting even more innovative products to the financial services marketplace, continuing our organizational learning in this fast-developing space, and participating in value creation for our stockholders.

These current partnerships include:

• LendKey Technologies, Inc.:

A digital lending platform that specializes in student loans and student loan refinancing.

• Spring EQ, LLC:

A digital mortgage solution specializing in home equity, refinancing, cash out, and home purchase loans.

• Cred Technologies (cred.ai):

A Philadelphia-based fintech company that provides a high-tech, mobile-first everyday card spending experience.

Through our partnership with cred.ai, we issue credit cards and provide deposit accounts.

A leading white label lending-as-a-service platform provider specializing in risk-based priced unsecured consumer loans.

Our partnership with Upstart allowed us to expand our personal loan offerings to a wider, more inclusive Customer base while diversifying our business and creating more digital-friendly Customer experiences.

Previously, we partnered with and made an investment in Social Finance, Inc.

(SoFi), an online personal finance company that provides a full suite of products.

During 2021, we liquidated our investment in SoFi for a net gain of $4.4 million.

Enterprise Risk Management

3 unchanged sentences

these statements are reviewed and approved by the Board annually.

From a regulatory perspective, our ERM program is evaluated as part of the regular Safety and Soundness examination by the OCC.

Key Risk Indicators (KRI’s) or Risk metrics are continually monitored in relation to risk appetite though a Risk Assessment Summary (RAS) dashboard.

From a regulatory perspective, our ERM program is evaluated as part of the regular Safety and Soundness examination by the Office of the Comptroller of the Currency (OCC).

Key Risk Indicators (KRIs) or Risk metrics are continually monitored in relation to risk appetite though a Risk Assessment Summary dashboard.

Each KRI has an assigned quantitative tolerance level which considers our overall risk appetite, regulatory requirements, the bank’s peer group statistics, best practices, and general industry guidelines.

30 unchanged sentences

Based on current market conditions, we expect our focus on growing commercial and industrial loans and other relationship-based commercial loans to continue during the remainder of 2022 and beyond.

The following table shows the composition of our loan and lease portfolio at year-end for the last five years:

The following table shows the composition of our loan and lease portfolio at year-end for the last two years:

At December 31,

(Dollars in thousands) 2021 2020

2019 2018 2017 2016

Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent

Amount Percent Amount Percent

Types of Loans

7 unchanged sentences

546,667 7.0 774,455 8.8

Consumer 1,165,917 13.3 1,128,731 13.4 680,939 14.0 558,493 11.7 450,029 10.1

1,158,573 14.9 1,165,917 13.3

Gross loans and leases 7,885,989 101.2 9,024,739 102.6

Deferred fees (unearned income) — — 9,143 0.1 7,348 0.2 7,991 0.2 7,673 0.2

Allowance for credit losses 94,507 1.2 228,804 2.6

1 unchanged sentence

$ 7,791,482 100.0 % $ 8,795,935 100.0 %

(1) Includes the impact of our adoption of CECL on January 1, 2020.

(2) Commercial and industrial loans include $751.2 million of PPP loans at December 31, 2020.

(3) Includes reverse mortgages, at fair value of $10.1 million, $16.6 million, $16.5 million, $19.8 million, and $22.6 million at December 31, 2020, 2019, 2018, 2017, and 2016, respectively .

(4) Excludes $197.5 million, $83.9 million, $25.3 million, $31.1 million, and $54.8 million of commercial and industrial loans and residential mortgage loans held for sale at December 31, 2020, 2019, 2018, 2017, and 2016, respectively.

The following tables show our loan portfolio by remaining contractual maturity as of December 31, 2020.

The first table details the total loan portfolio by type of loan.

The second table details the total loan portfolio by those with fixed interest rates and those with adjustable interest rates.

(1) Includes $31.5 million and $751.2 million of PPP loans at December 31, 2021 and 2020, respectively.

(2) Includes reverse mortgages, at fair value of $3.9 million and $10.1 million at December 31, 2021 and 2020, respectively .

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

(4) Excludes $113.3 million and $197.5 million of commercial and industrial loans and residential loans held for sale at December 31, 2021 and 2020, respectively.

The following table shows the remaining contractual maturity and rate sensitivity of the loan portfolio by loan category as of December 31, 2021.

Loans may be pre-paid, so the actual maturity may differ from the contractual maturity.

2 unchanged sentences

(Dollars in thousands) Less than

Over Five Years Total

Commercial and industrial loans $ 213,970 $ 1,836,619 $ 649,829 $ 2,700,418

Commercial owner-occupied loans 18,010 432,568 882,149 1,332,727

Commercial mortgage loans 25,273 1,106,516 954,273 2,086,062

Construction loans 6,497 542,553 167,225 716,275

Five to Fifteen Years Over Fifteen Years Total

Commercial and industrial (1)

Interest rate:

Fixed $ 2,694 $ 353,443 $ 184,525 $ 48,104 $ 588,766

Adjustable 204,697 803,975 295,743 24,862 1,329,277

Total $ 207,391 $ 1,157,418 $ 480,268 $ 72,966 $ 1,918,043

Owner-occupied commercial

Interest rate:

Fixed $ 3,247 $ 319,842 $ 291,038 $ 206,156 $ 820,283

Adjustable 14,059 160,111 287,282 59,972 521,424

Total $ 17,306 $ 479,953 $ 578,320 $ 266,128 $ 1,341,707

Commercial mortgages

Interest rate:

Fixed $ 9,988 $ 506,952 $ 233,631 $ 157,139 $ 907,710

Adjustable 16,543 402,286 492,934 62,037 973,800

Total $ 26,531 $ 909,238 $ 726,565 $ 219,176 $ 1,881,510

Interest rate:

Fixed $ 788 $ 19,089 $ 19,198 $ 4,817 $ 43,892

Adjustable 41,108 479,838 118,586 3,789 643,321

Total $ 41,896 $ 498,927 $ 137,784 $ 8,606 $ 687,213

Commercial small business leases

Residential loans (1)

1,776 24,468 738,149 764,393

Consumer loans 11,760 82,938 1,071,219 1,165,917

Total gross loans and leases $ 277,296 $ 4,238,548 $ 4,498,833 $ 9,014,677

Rate sensitivity:

Interest rate:

Fixed $ — $ 274,525 $ 77,751 $ — $ 352,276

Adjustable — — — — —

Total $ — $ 274,525 $ 77,751 $ — $ 352,276

Residential (2)

Interest rate:

Fixed $ 684 $ 25,498 $ 99,525 $ 312,979 $ 438,686

Adjustable (3)

— 588 15,681 87,778 104,047

Total gross loans and leases $ 277,296 $ 4,238,548 $ 4,498,833 $ 9,014,677

Total $ 684 $ 26,086 $ 115,206 $ 400,757 $ 542,733

Interest rate:

Fixed $ 30 $ 104,613 $ 312,498 $ 303,808 $ 720,949

Adjustable 14,973 18,912 57,369 346,370 437,624

Total $ 15,003 $ 123,525 $ 369,867 $ 650,178 $ 1,158,573

Total loans and leases $ 308,811 $ 3,469,672 $ 2,485,761 $ 1,617,811 $ 7,882,055

(1) Includes $31.5 million of PPP loans.

(2) Excludes reverse mortgages at fair value of $3.9 million.

3 unchanged sentences

As a federal savings bank that was formerly chartered as a Delaware savings bank, the Bank has certain additional lending authority.

Commercial, commercial owner-occupied, commercial mortgage and construction loans have higher levels of risk than residential mortgage lending.

Commercial, owner-occupied commercial, commercial mortgage and construction loans have higher levels of risk than residential lending.

These loans typically involve larger loan balances concentrated with single borrowers or groups of related borrowers.

In addition, the payment experience on loans secured by income-producing properties is typically dependent on the successful operation of the related real estate project and may be more subject to adverse conditions in the commercial real estate market or in the general economy than residential mortgage loans.

The majority of our commercial and commercial real estate loans are concentrated in Delaware and Pennsylvania.

We offer commercial real estate mortgage loans on multi-family properties and on other commercial real estate.

The majority of our commercial and commercial mortgage loans are concentrated in Delaware and Pennsylvania.

We offer commercial mortgage loans on multi-family properties and on other commercial real estate.

Generally, loan-to-value ratios for these loans do not exceed 80% of appraised value at origination.

2 unchanged sentences

The largest type is retail-related (non-mall, neighborhood shopping centers and other retail) with balances of $496.0 million at December 31, 2021.

The average size of a loan in the commercial mortgage portfolio is $0.8 million and only 13 loans are greater than $12.0 million, with one loan greater than $24.0 million.

The average size of a loan in the commercial mortgage portfolio is $0.7 million and only nine loans are greater than $12.0 million, with one loan greater than $24.0 million.

We offer commercial construction loans to developers.

In some cases these loans are made as “construction/permanent” loans, which provides for disbursement of loan funds during construction with the option of conversion to mini-permanent loans (one - five years) upon completion of construction.

These construction loans are short-term, usually not exceeding two years, with interest rates generally indexed to our WSFS prime rate, the “Wall Street” prime rate or LIBOR, and are adjusted periodically as these indices change.

These construction loans are short-term, usually not exceeding three years, with interest rates generally indexed to our WSFS prime rate, the “Wall Street” prime rate or LIBOR, and are adjusted periodically as these indices change.

The loan appraisal process includes the same evaluation criteria as required for permanent mortgage loans, but also takes into consideration:

5 unchanged sentences

At December 31, 2021, $1.1 billion was committed for construction loans, of which $687.2 million was outstanding.

The residential construction and land development (CLD) portfolio represented $331.4 million, or 4%, of total loans and 22% of Tier 1 capital (Tier 1 + ACL), and the commercial CLD portfolio represented $275.4 million, or 3%, of total loans.

These portfolios include $25.4 million of “land hold” loans, which are land loans not currently being developed, at December 31, 2020.

Also at December 31, 2021, the residential construction and land development (CLD) portfolio represented $316.7 million, or 4%, of total loans and the commercial CLD portfolio represented $279.9 million, or 4%, of total loans.

At December 31, 2021, the construction portfolio included $38.3 million of “land hold” loans, which are land loans not currently being developed.

Commercial and industrial and owner-occupied commercial loans include loans for working capital, financing equipment and real estate acquisitions, business expansion and other business purposes.

3 unchanged sentences

These loans are diversified by industry, with no industry representing more than 20% of the portfolio.

During 2020, we participated in certain regulatory relief programs under the CARES Act, which include the Paycheck Protection Program (PPP).

At December 31, 2020, we had $751.2 million in PPP loans.

Small business and middle market commercial loans that include specialty-lending products, including small business leases and SBA loans, comprise the remainder of our commercial portfolio.

As of December 31, 2021, our small business and SBA loans include loan exposures up to $1.5 million and $5.0 million, respectively.

Our commercial small business leases generated through NewLane Finance ® , finance critical equipment through advanced technologies, a customer-centric approach and transparent business lending practices.

The commercial small business leases portfolio was $352.3 million, or 4% of total loans, at December 31, 2021.

These leases included initial average deal sizes of approximately $30 thousand, with yields ranging from 4% to 29% and initial maturity terms of 12 to 72 months.

Federal law limits the Bank’s extensions of credit to any one borrower to 15% of our unimpaired capital (approximately $247.7 million), and an additional 10% if the additional extensions of credit are secured by readily marketable collateral.

2 unchanged sentences

Our internal "House Limit" to any one borrowing relationship is $100.0 million.

Small business and middle market commercial loans that include specialty-lending products, including small business leases and SBA loans, comprise the remainder of our commercial portfolio.

Our small business and SBA loans include loan exposures up to $1.5 million and $5.0 million, respectively.

Our commercial small business leases generated through NewLane Finance Company finance critical equipment through advanced technologies, a customer-centric approach and transparent business lending practices.

The commercial small business leases portfolio was $248.9 million at December 31, 2020.

These leases included initial average deal sizes of approximately $30 thousand, with yields ranging from 4% to 29% and initial maturity terms of 12 to 72 months.

Residential Lending

1 unchanged sentence

On a very limited basis, we have originated or purchased loans with loan-to-value ratios exceeding 80% without a private mortgage insurance requirement or government guarantee.

Any such loans are originated for sale into the secondary market.

At December 31, 2021, the balance of all such loans was approximately $37.5 million.

Our residential mortgage loans generally are underwritten and documented in accordance with standard underwriting criteria published by Fannie Mae, Freddie Mac, Federal Housing Agency, Veterans Administration, the U.S.

Our residential loans generally are underwritten and documented in accordance with standard underwriting criteria published by Fannie Mae, Freddie Mac, Federal Housing Agency, Veterans Administration, the U.S.

Department of Agriculture and other secondary market participants to assure maximum eligibility for subsequent sale in the secondary market.

4 unchanged sentences

The change in rate for the first adjustment date could be higher than the typical limited rate change of two percentage points at each subsequent adjustment date.

Adjustments are generally based upon a margin (ranging from 2.25% to 2.75%) over the weekly average yield on U.S.

Adjustments are generally based upon a margin (as of December 31, 2021, 2.75% for the U.S Treasury and the Standard Overnight Finance Rate) over the weekly average yield on U.S.

Treasury securities adjusted to a constant maturity, as published by the Board of Governors of the Federal Reserve System (the Federal Reserve).

15 unchanged sentences

The recourse is limited to a pro rata portion of the premium paid by the investor for that loan, less any prepayment penalty collectible from the borrower.

There were no repurchases in 2020, one repurchase in 2019 with minimal impact, and no repurchases in 2018.

There were no repurchases in 2021 and 2020, and one repurchase in 2019 with minimal impact.

Consumer Lending

13 unchanged sentences

government guaranteed with little risk of credit loss.

The following table shows the composition of our consumer loan portfolio at year-end for the last five years:

We originate personal loans, which are typically unsecured with 36-month or 60-month terms, through our partnership with Upstart.

The following table shows the composition of our consumer loan portfolio at year-end for the last two years:

At December 31,

2019 2018 2017 2016

(Dollars in thousands) Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent

(Dollars in thousands) Amount Percent Amount Percent

Home equity lines of credit $ 361,486 31 % $ 348,715 30 %

4 unchanged sentences

Total consumer loans $ 1,158,573 100 % $ 1,165,917 100 %

(1) Includes the impact of our adoption of CECL on January 1, 2020.

(2) Includes equity-secured installment loans, personal and other loans.

(1) Includes secured and unsecured installment loans, personal and other loans.

Loan Originations, Purchases and Sales

2 unchanged sentences

We purchase loans from outside our traditional lending area through our relationships with Spring EQ and LendKey, when such purchases are deemed appropriate.

We originate fixed-rate and adjustable-rate residential loans through our banking offices and WSFS Mortgage ® , our mortgage banking company.

We originate commercial real estate and commercial loans through our commercial lending division and SBA loan program.

We originate fixed-rate and adjustable-rate residential loans through our banking offices and WSFS Mortgage ® , our mortgage banking company, and personal loans through our partnership with Upstart.

We originate commercial mortgage and commercial loans through our commercial lending division and SBA loan program.

Commercial loans are made for working capital, financing equipment acquisitions, business expansion and other business purposes.

During 2020, we originated $2.8 billion of commercial and commercial real estate loan exposures (including nearly $1.0 billion of PPP loans) compared to $1.6 billion in 2019.

During 2021, we originated $1.5 billion of commercial and commercial mortgage loan exposures compared to $2.8 billion in 2020 (including nearly $1.0 billion of PPP loans).

To reduce our exposure on certain types of these loans, and/or to maintain relationships within internal lending limits, at times we will sell a portion of our commercial loan portfolio, typically through loan participations.

3 unchanged sentences

Commercial loan participation purchases totaled $50.6 million and $93.4 million in 2021 and 2020, respectively.

Any significant modification or additional exposure to one borrowing relationship exceeding $7.5 million must be approved by the Loan Committee.

Any additional exposure to one borrowing relationship exceeding $25.0 million must be approved by the Senior Loan Committee.

During 2020, we adopted interim underwriting guidelines to help us manage our credit exposures in response to the COVID-19 pandemic.

The Executive and Risk Committee of the Board of Directors reviews the minutes of the Loan Committee and Senior Loan Committee meetings.

The Executive and Risk Committee also approves new credit exposures exceeding $20.0 million and new credit exposures in excess of $10.0 million with two or more Tier 1 policy exceptions.

Depending upon their experience and management position, individual officers of the Bank have the authority to approve smaller loan amounts.

Our credit policy includes a “House Limit” to any one borrowing relationship, which increased from $40.0 million to $70.0 million in March 2019 in connection with the Beneficial acquisition, consistent with overall growth in capital and the size of our loan portfolio.

In rare circumstances, we will approve exceptions to the “House Limit.” Our policy allows for only 10 such relationships with an aggregate exposure of 10% of Tier 1 Capital plus ACL.

At December 31, 2020, one C&I relationship exceeded the $70.0 million “House Limit.” The loans in this relationship were performing in accordance with their original terms at December 31, 2020.

Commercial credit approvals require a minimum of two authorized signers, and three signers, of escalating authority, are required for new credit actions to relationships with exposure over $2.5 million up to $35 million.

New credit actions to relationships exceeding $35 million, along with new single transactions of $30 million or more, new transactions exceeding the Bank’s Single Borrower or Project Hold limits and new transactions of $10 million or more with two or more Tier 1 exceptions require approval by Senior Loan Committee.

The Executive and Risk Committee of the Board of Directors reviews the minutes of the Senior Loan Committee meetings.

Our credit policy includes a “House Limit” to any one borrowing relationship of $100.0 million.

Our policy allows for 10 relationships with an aggregate exposure in excess of the "House Limit" not to exceed 10% of Tier 1 Capital plus ACL.

At December 31, 2021, no relationships exceeded the $100.0 million “House Limit.”

Residential and Consumer:

During 2020, we originated $929.7 million of residential loans, an increase compared to $438.1 million in 2019 as a result of the lower interest rate environment and increased volume during the COVID-19 pandemic.

During 2021, we originated $976.9 million of residential loans, an increase compared to $929.7 million in 2020.

From time to time, we have purchased whole loans and loan participations in accordance with our ongoing asset and liability management objectives.

There were $6.5 million of purchases in 2019 related to our Community Reinvestment Act (CRA) obligations.

There were no such purchases in 2020.

We sell most newly originated mortgage loans in the secondary market to generate fee income, to control the interest rate sensitivity of our balance sheet and to manage overall balance sheet mix.

There were $2.3 million of purchases in 2021 related to our Community Reinvestment Act (CRA) obligations compared to $0.8 million of purchases in 2020.

We sell most newly originated mortgage loans in the secondary market to generate fee income and to manage our overall balance sheet mix.

Residential loan sales totaled $965.7 million in 2021 and $798.9 million in 2020.

1 unchanged sentence

At December 31, 2021, we serviced $91.5 million of residential first mortgage loans and reverse mortgage loans for others, compared to $132.4 million at December 31, 2020.

We also serviced residential first mortgage loans and reverse mortgage loans for our own portfolio totaling $0.8 billion and $1.0 billion at December 31, 2020 and 2019, respectively.

Our consumer lending activity is conducted through our branch offices, our partnerships with Spring EQ and LendKey and referrals from other parts of our business.

We originate a variety of consumer credit products including home improvement loans, home equity lines of credit, automobile loans, unsecured lines of credit and other secured and unsecured personal installment loans.

We also serviced residential first mortgage loans and reverse mortgage loans for our own portfolio totaling $546.7 million and $774.5 million at December 31, 2021 and 2020, respectively.

We offer government-insured reverse mortgages to our customers.

1 unchanged sentence

During 2021 and 2020, we originated $1.8 million and $1.0 million in reverse mortgages, respectively.

Our consumer lending activity is conducted through our branch offices, our partnerships with Upstart, Spring EQ and LendKey and referrals from other parts of our business.

Fee Income from Lending Activities

We earn fee income from lending activities, including fees for originating loans, servicing loans and selling loans and loan participations.

We also receive fee income for making commitments to originate construction, residential and commercial real estate loans.

We earn fee income from lending activities, including fees for originating, servicing and selling loans and loan participations.

We also receive fee income for making commitments to originate construction, residential and commercial mortgage loans.

Additionally, we collect fees related to existing loans which include prepayment charges, late charges, assumption fees and interest rate swap fees.

3 unchanged sentences

Loan fee income was mainly due to fee accretion on new and existing loans (including the acceleration of the accretion on loans that paid early), loan growth and prepayment penalties.

The increase in loan fee income was concentrated in commercial and industrial due to $15.6 million in fees earned on PPP loans.

The increase in loan fee income since 2019 was concentrated in commercial and industrial due to $15.4 million and $15.6 million in fees earned on PPP loans for 2021 and 2020, respectively.

LOAN LOSS EXPERIENCE, PROBLEM ASSETS AND DELINQUENCIES

6 unchanged sentences

We manage our portfolio to identify problem loans as promptly as possible and take immediate actions to minimize losses.

To accomplish this, our Loan Administration and Risk Management Department monitors the asset quality of our loans and investments in real estate portfolios and reports such information to the Credit Policy Committee, the Finance Department, and the Audit Committee of our Board of Directors.

To accomplish this, our Loan Administration and Risk Management Departments monitor the asset quality of our loans and real estate portfolios and reports such information to the Credit Policy Committee, the Finance Department, and the Audit Committee of our Board of Directors.

SOURCES OF FUNDS

4 unchanged sentences

• Retained earnings

• Commercial and retail deposit programs

• Commercial and retail deposits

• Loan repayments

• Federal funds purchased

• Federal Home Loan Banks (FHLB) borrowings

• Federal Home Loan Bank (FHLB) borrowings

• Federal Reserve Discount Window access

14 unchanged sentences

Total $ 130,049

The estimated amount of total uninsured deposits as of December 31, 2021 was $7.5 billion as compared to $5.6 billion at December 31, 2020.

Federal Home Loan Bank Advances

As a member of the FHLB, we are able to obtain FHLB advances.

At December 31, 2020, we had $6.6 million in FHLB advances, compared with $112.7 million at December 31, 2019.

The lower outstanding advances from the FHLB at December 31, 2020 were impacted by prepayments made during the year as part of routine balance sheet and liquidity management.

During 2020, the weighted average interest rate of FHLB advances was 2.22%, a decrease from 2.43% at December 31, 2019, as the current period was impacted by the lower interest rate environment and the aforementioned prepayment of higher cost borrowings.

At December 31, 2021, we had no FHLB advances, compared to $6.6 million at December 31, 2020.

Pursuant to collateral agreements with the FHLB, the advances are secured by qualifying first mortgage loans, qualifying fixed-income securities, FHLB stock and an interest-bearing demand deposit account with the FHLB.

4 unchanged sentences

In 2005, the Trust issued $67.0 million aggregate principal amount of Pooled Floating Rate Securities at a variable interest rate of 177 basis points over the three-month LIBOR rate.

These securities are callable and have a maturity date of June 1, 2035.

Federal Funds Purchased and Securities Sold Under Agreements to Repurchase

During 2020 and 2019, we purchased federal funds as a short-term funding source.

At December 31, 2020, we had no federal funds purchased, compared to $195.0 million at an average rate of 1.60% at December 31, 2019.

As of December 31, 2020 and 2019, we had no securities under agreements to repurchase as a funding source.

On June 13, 2016, we issued $100.0 million of senior notes due 2026 (the 2016 senior notes).

The 2016 senior notes mature on June 15, 2026 and have a fixed coupon rate of 4.50% from issuance to, but excluding, June 15, 2021, and a variable coupon rate of three month LIBOR plus 3.30% from June 15, 2021 until maturity.

The 2016 senior notes may be redeemed beginning on June 15, 2021 at 100% of principal plus accrued and unpaid interest.

The proceeds remaining after the redemption of the 2012 notes are being used for general corporate purposes.

On December 3, 2020, we issued $150.0 million of senior notes due 2030 (the 2020 senior notes).

The 2020 senior notes mature on December 15, 2030 and have a fixed coupon rate of 2.75% from issuance until December 15, 2025 and a variable coupon rate equal to the three-month term Secured Overnight Funding Rate, (SOFR), reset quarterly, plus 2.485% from December 15, 2025 until maturity.

The 2020 senior notes may be redeemed beginning December 15, 2025 at 100% of principal plus accrued and unpaid interest.

The net proceeds from the issuance of the 2020 senior notes are being used for general corporate purposes, including, but not limited to, financing organic growth, acquisitions, repurchases of common stock, and redemption of outstanding indebtedness.

These securities are currently callable and have a maturity date of June 1, 2035.

On June 13, 2016, we issued $100.0 million of senior notes due 2026 (the 2026 Notes).

The 2026 Notes were redeemed on June 15, 2021 at 100% of principal plus accrued and unpaid interest using cash on hand.

The 2026 Notes had a fixed coupon rate of 4.50% from issuance to, but excluding, June 15, 2021.

On December 3, 2020, we issued $150.0 million of senior notes due 2030 (the 2030 Notes).

The 2030 Notes mature on December 15, 2030 and have a fixed coupon rate of 2.75% from issuance until December 15, 2025 and a variable coupon rate equal to the three-month term Secured Overnight Funding Rate, (SOFR), reset quarterly, plus 2.485% from December 15, 2025 until maturity.

The 2030 Notes may be redeemed beginning December 15, 2025 at 100% of principal plus accrued and unpaid interest.

The net proceeds from the issuance of the 2030 Notes are being used for general corporate purposes, including, but not limited to, financing organic growth, acquisitions, repurchases of common stock, and redemption of outstanding indebtedness.

Reconciliation of non-GAAP financial measures included in Item 1

2 unchanged sentences

GAAP, we provide the following non-GAAP financial measures in Item 1:

core ROA, the tangible common equity to tangible assets ratio, core EPS, and core ROTCE.

We believe these measures provide investors with useful information for understanding of the company’s performance when analyzing changes in our underlying business between reporting periods and provide for greater transparency with respect to supplemental information used by management in its financial and operational decision making.

core ROA and the tangible common equity to tangible assets ratio.

We believe these measures provide investors with useful information for understanding the Company’s performance when analyzing changes in our underlying business between reporting periods and provide for greater transparency with respect to supplemental information used by management in its financial and operational decision making.

We believe the presentation of these non-GAAP financial measures, when used in conjunction with GAAP financial measures, is a useful financial analysis tool that can assist investors in assessing the company’s operating performance and underlying prospects.

This analysis should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.

Core ROA, Core EPS and Core ROTCE are calculated as follows:

Core ROA is calculated as follows:

For the year ended

4 unchanged sentences

Unrealized gains on equity investments, net (5,141)

Realized gains on equity investments, net (22,052)

Recovery of legal settlement (15,000)

Realized loss on equity investments, net 706

Loss of debt extinguishment 1,087

Corporate development and restructuring expenses 13,022

Loss on early extinguishment of debt 2,280

Contribution to WSFS Community Foundation 3,000

Contribution to WSFS CARES Foundation 1,000

Tax impact of pre-tax adjustments 1,764

3 unchanged sentences

Core ROA (non-GAAP) 1.80 %

Calculation of Core EPS (non-GAAP):

EPS (GAAP) $ 2.27

Pre-tax adjustments:

Securities gains, realized/unrealized gains on equity investments, corporate development and restructuring expense, loss on early extinguishment of debt, and contribution to WSFS Community Foundation (0.43)

Tax impact of pre-tax adjustments 0.07

Core EPS (non-GAAP) $ 1.91

Calculation of Core ROTCE (non-GAAP):

Net average tangible common equity

Average stockholders’ equity of WSFS $ 1,836,115

average goodwill and intangible assets 563,126

Net average tangible common equity $ 1,272,989

Adjusted net income (non-GAAP) attributable to WSFS $ 96,648

Tax effected amortization of intangible assets 8,481

Core net tangible income (non-GAAP) $ 105,129

Net average tangible common equity $ 1,272,989

Core return on average tangible common equity (non-GAAP) 8.26 %

The tangible common equity to tangible assets ratio is calculated as follows:

24 unchanged sentences

These economic relief initiatives included the Paycheck Protection Program (PPP), relief with respect to troubled debt restructurings (TDRs), mortgage forbearance, government stimulus payments and extended unemployment benefits.

The Paycheck Protection Program and Health Care Enhancement Act, enacted on April 24, 2020, supplemented certain programs established by the CARES Act and provided $310 billion in additional funding for the PPP after the initial $349 billion appropriation had been exhausted.

The Consolidated Appropriations Act, 2021, enacted on December 27, 2020, extended some of these relief provisions in certain respects.

The CARES Act created the PPP and funded it with $349 billion.

The PPP is a stimulus response to the potential economic impacts of COVID-19, and its purpose is to provide forgivable loans to smaller businesses that use the proceeds of the loans for payroll and certain other qualifying expenses.

The Small Business Administration (SBA) manages and backs the PPP.

The PPP was a stimulus response to the potential economic impacts of COVID-19, and its purpose is to provide forgivable loans to smaller businesses that use the proceeds of the loans for payroll and certain other qualifying expenses.

The Small Business Administration (SBA) manages the PPP and guarantees the PPP loans.

If a loan is fully forgiven, SBA will repay the lending bank in full.

If a loan is partially forgiven or not forgiven at all, a bank must look to the borrower for repayment of unforgiven principal and interest.

If the borrower defaults, the loan is guaranteed by SBA.

On April 6, 2020, WSFS Bank began participating in the PPP.

We processed PPP loan applications until April 16, 2020, when the SBA announced that it had exhausted the $349 billion appropriated in the CARES Act, and stopped accepting PPP applications.

On April 24, 2020, the President signed into law the Paycheck Protection Program and Health Care Enhancement Act, which supplemented certain programs established by the CARES Act and provided $310 billion in additional funding for the PPP.

To date, we have provided nearly $1.0 billion in PPP loans for more than 5,400 new and existing WSFS Customers and are now processing loan forgiveness applications.

The Bank has not accepted any applications since August 8, 2020, the statutory deadline for submissions by prospective borrowers under the first round of PPP lending.

If the borrower defaults, the loan is guaranteed by the SBA.

The Consolidated Appropriations Act, 2021 appropriated a further $284 billion to the PPP (PPP 2.0), and permitted certain PPP borrowers to receive “second draw” loans.

In January 2021, WSFS Bank began participating in the PPP 2.0 by outsourcing the processing and servicing of PPP 2.0 loans to third party providers.

The PPP 2.0 loans will not be originated on our balance sheet;

however, we anticipate the resulting deposits from our Customers obtaining PPP 2.0 loans from other originating lenders will impact our financial condition in 2021.

The PPP 2.0 loans were not originated on our balance sheet;

however, the resulting deposits from our Customers obtaining PPP 2.0 loans from other originating lenders has impacted our financial condition.

The CARES Act and related guidance from the federal banking agencies provide financial institutions the option to temporarily suspend requirements under GAAP related to classification of certain loan modifications as TDRs, to account for the current and anticipated effects of COVID-19.

1 unchanged sentence

Additionally, under guidance from the federal banking agencies, other short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not TDRs under ASC Subtopic 310-40, “Troubled Debt Restructuring by Creditors.” These modifications include short-term (e.g., up to six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or delays in payment that are insignificant.

We have provided a number of customer relief programs in our commercial and retail portfolios, such as payment deferrals or interest only payments on loans and leases, disaster assistance, and waiving minimum deposit balance and direct deposit requirements as well as early withdrawal penalties for CDs or IRAs.

Additionally, we are offering new lines of credit or increases to existing lines of credit and increased remote deposit limits for those individuals and businesses impacted by COVID-19.

To date, we made short-term modifications for approximately $2.1 billion of loans and leases to provide our customers monetary relief, which were reduced to $114.8 million or less than 2% of our loan and lease portfolio as of December 31, 2020.

In general, pursuant to the CARES Act and related guidance from the federal banking agencies, we have not reported these short-term modifications as TDRs.

The CARES Act also provides for an opportunity to carry back net operating losses (NOLs) arising from 2018, 2019 and 2020 to the prior five tax years.

We have such NOLs reflected on our balance sheet as a portion of our current tax receivables, which were previously valued at the federal corporate income tax rate of 21%.

However, the provisions of the CARES Act provide for NOL carryback claims to be calculated based on a rate of 35%, which was the federal corporate tax rate in effect for the carryback years.

Consequently, effective December 31, 2020, we have revalued the benefit from our NOLs to reflect a 35% tax rate.

The CARES Act also includes a range of other provisions designed to support the U.S.

The CARES Act also included a range of other provisions designed to support the U.S.

economy and mitigate the impact of COVID-19 on financial institutions and their customers.

For example, provisions of the CARES Act require mortgage servicers to grant, on a borrower’s request, forbearance for up to 180 days (which can be extended for an additional 180 days) on a federally-backed single-family mortgage loan, or forbearance up to 30 days (which can be extended for two additional 30-day periods) on a federally-backed multifamily mortgage loan when the borrower experiences financial hardship due to the COVID-19 pandemic.

Further, in response to the COVID-19 pandemic, the Federal Reserve has established a number of facilities to provide emergency liquidity to various segments of the U.S.

Further, in response to the COVID-19 pandemic, the Federal Reserve established a number of facilities to provide emergency liquidity to various segments of the U.S.

economy and financial markets.

Many of these facilities expired on December 31, 2020, or were extended for brief periods into 2021.

The expiration of these facilities could have adverse effects on the U.S.

economy and ultimately on our business.

Debit Card Interchange Fees

The Federal Reserve has issued rules under the Electronic Fund Transfer Act, as amended by a section of the Dodd-Frank Act, known as the Durbin Amendment, to limit interchange fees that an issuer with $10 billion or more in assets, such as the Bank, may receive or charge for an electronic debit card transaction.

Under the rules, the maximum permissible interchange fee that an issuer may receive for an electronic debit transaction is the sum of 21 cents per transaction and five basis points multiplied by the value of the transaction.

In addition, the rules allow for an upward adjustment of no more than one cent to an issuer’s debit card interchange fee if the issuer develops and implements policies and procedures reasonably designed to achieve the fraud-prevention standards set out in the rule.

The Bank became subject to these rules beginning July 1, 2020.

All of these facilities have since expired.

The absence of these facilities could adversely affect the U.S.

economy and ultimately our business if economic conditions decline.

Transition from London Inter-Bank Offered Rate (LIBOR)

1 unchanged sentence

In June 2017, the ARRC announced the Secured Overnight Funding Rate (SOFR), a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities, as its preferred alternative to LIBOR.

In July 2017, the Chief Executive of the United Kingdom Financial Conduct Authority (FCA), which regulates LIBOR, announced its intention to stop persuading or compelling banks to submit rates for the calculation of LIBOR to the administrator of LIBOR after 2021.

The FCA has since announced its intention to extend the publication of most LIBOR term rates through June 30, 2023 (excluding 1-week U.S.

LIBOR and 2-month U.S.

LIBOR), but the Federal Reserve has continued to encourage banks to transition away from LIBOR as soon as practicable.

The United Kingdom Financial Conduct Authority (FCA), ceased publishing most LIBOR settings as of January 1, 2022, however, the FCA will continue to publish five U.S.

LIBOR settings through mid-2023.

The Federal Reserve has continued to encourage banks to transition away from LIBOR as soon as practicable and the federal banking agencies have encouraged banking organizations to cease entering into new contracts that use U.S.

LIBOR as a reference rate by no later than December 31, 2021, and to ensure existing contracts have robust fallback language that includes a clearly defined alternative reference rate.

The Federal Reserve Bank of New York has published SOFR rates on a daily basis since April 2018 and has published SOFR "term rates" daily since early 2020.

3 unchanged sentences

The International Swaps and Derivatives Association, which develops standardized language for the derivatives contracts that we enter into, has developed language that took effect in January 2021 replacing LIBOR with alternative risk-free benchmark rates, including SOFR for derivative contracts denominated in U.S.

In 2021 the ARRC announced the SOFR program, which created a phased transition for switching trading conventions from USD LIBOR to SOFR for multiple financial instruments during the second half of 2021.

The program is intended to migrate the market from LIBOR and create liquidity in SOFR.

Given LIBOR’s extensive use across financial markets, the transition away from LIBOR presents various risks and challenges to financial markets and institutions, including to the Company.

3 unchanged sentences

The Company had one investment security totaling $0.5 million, and no repurchase and resale agreements or FHLB advances indexed to LIBOR as of December 31, 2021.

Due to the uncertainty surrounding the future of LIBOR, it is expected that the transition will span several reporting periods through, and potentially beyond, the end of 2021.

Due to the uncertainty surrounding the future of LIBOR, it is expected that the transition will span several reporting periods through June 2023.

A cross-functional team from Finance, Lending, Risk and IT is leading our efforts to monitor this activity and evaluate the related risks and potential process changes arising from the transition from LIBOR.

We have completed our initial assessment, including our internal risk assessment procedures, and the cross-functional team is working towards the migration of our existing contracts and system implementation.

An internal risk assessment was completed and the cross-functional team is working towards the migration of our existing contracts and system implementation.

Our variable or floating rate instruments currently use LIBOR and give us discretion to determine a replacement benchmark rate if LIBOR becomes unavailable.

In the fourth quarter of 2021 the Bank started utilizing Wall Street Journal (WSJ) Prime as a LIBOR alternative.

The use of WSJ Prime is intended to bridge variable rate loan production until a broader market consensus on a LIBOR replacement is achieved.

We are still considering the appropriate transition for our legacy contracts;

28 unchanged sentences

In addition, pursuant to the Dodd-Frank Act, the capital rules for savings and loan holding companies are no less stringent than those that apply to their subsidiary savings associations.

The principal sources of the Company’s cash are debt issuances and dividends from the Bank, supplemented by dividends from its other operating subsidiaries (Powdermill ® , West Capital, Cypress, Christiana Trust DE, and WSFS SPE Services, LLC).

The principal sources of the Company’s cash are debt issuances and dividends from the Bank, supplemented by dividends from its other operating subsidiaries (including Powdermill ® , West Capital, Cypress, Christiana Trust DE, and WSFS SPE Services, LLC).

Our earnings and activities are affected by federal, state and local laws and regulations.

70 unchanged sentences

Certain deductions and adjustments are necessary for both additional Tier 1 capital and Tier 2 capital.

Risk weights under the capital rules range from 0% for cash, U.S.

government securities, and certain other assets, 50% for qualifying residential mortgage exposures, 100% for corporate exposures and non-qualifying mortgage loans and certain other assets, to 600% for certain equity exposures.

Loans that are past due by 90 days or more must be risk-weighted at 150%.

Mortgage servicing assets and certain deferred tax assets that are not deducted from common equity Tier 1 capital in accordance with required adjustments are risk-weighted at 250%.

The regulatory capital rules apply a risk weight of 150% to “high volatility commercial real estate loans,” commercial real estate CRE loans that fails to meet certain prerequisites.

The Economic Growth Act limits the 150% risk weight to “high volatility acquisition, development, and construction” loans and lifts certain restrictions that previously applied for a commercial real estate loan to receive a 100% risk weight.

In December 2018, the federal banking agencies issued a final rule that allows institutions to elect to phase in the regulatory capital effects of the Current Expected Credit Losses (CECL) accounting standard over three years.

2 unchanged sentences

We have elected to phase in the regulatory capital effects of CECL over three years, beginning in 2020, and have not opted to defer the effects of CECL for two years before the three-year phase-in period.

At December 31, 2020, the Bank was in compliance with the minimum common equity Tier 1 capital, Tier 1 capital, total capital, tangible capital and leverage capital requirements.

As of December 31, 2020, the Company was in compliance with the minimum common equity Tier 1 capital, Tier 1 capital, total capital, and leverage capital requirements.

The capital ratios for the Bank and the Company, as of December 31, 2021, indicate regulatory capital levels in excess of the regulatory minimums and the levels necessary for the Bank to be considered “well capitalized.”

Prompt Corrective Action

10 unchanged sentences

Additionally, for the Company to be considered “well capitalized” under Federal Reserve regulations, the Bank must be well-capitalized and the Company must not be subject to any written agreement, order, capital directive, or prompt corrective action directive issued by the Federal Reserve to meet and maintain a specific capital level for any capital measure.

As of December 31, 2020, the Company met all the requirements to be deemed well-capitalized.

Dividend Restrictions

2 unchanged sentences

A savings association must file a notice with the Federal Reserve at least 30 days before making any capital distribution.

A federal savings association also must file an application with the OCC for approval of a capital distribution if either (1) the total capital distributions for the current calendar year (including the proposed capital distribution) exceed the sum of the institution’s net income for that year to date plus the institution’s retained net income for the preceding two years, (2) the institution would not be at least adequately capitalized following the distribution, (3) the distribution would violate any applicable statute, regulation, agreement or OCC-imposed condition, or (4) the institution is not eligible for expedited treatment of its filings.

In certain situations, a federal savings association may be able to file a notice with the OCC rather than an application;

in other situations, no application or notice is required for the OCC, although notice to the Federal Reserve still is necessary.

The OCC may prohibit a proposed capital distribution, which would otherwise be permitted by OCC regulations, if the OCC determines that such distribution would constitute an unsafe or unsound practice.

A federal savings association also must file an application with the OCC for approval of a capital distribution if, among other things:

(1) the total capital distributions for the current calendar year (including the proposed capital distribution) exceed the sum of the institution’s net income for that year to date plus the institution’s retained net income for the preceding two years, (2) the institution would not be well capitalized following the distribution, or (3) the distribution would violate any applicable statute, regulation, agreement or OCC-imposed condition.

If an application to the OCC is not required, the federal savings association must provide the OCC a copy of the notice it files with the Federal Reserve.

The OCC may prohibit a proposed capital distribution that would otherwise be permitted by OCC regulations, if the OCC determines that such distribution would constitute an unsafe or unsound practice.

Under federal law, an insured depository institution cannot make any capital distribution if the capital distribution would cause the institution to become undercapitalized or if it is already undercapitalized.

12 unchanged sentences

The methodology that the FDIC uses to calculate assessment amounts is also based on whether the Deposit Insurance Fund has met the FDIC's designated reserve ratio, which is currently 2%, and the minimum reserve ratio of 1.35% set forth in the Dodd-Frank Act.

As of December 31, 2020, the reserve ratio was 1.29%.

Future changes in insurance premiums could have an adverse effect on the operating expenses and results of operations and we cannot predict what insurance assessment rates will be in the future.

Since the outbreak of the COVID-19 pandemic, the amount of total estimated insured deposits has grown very rapidly while the funds in the DIF have grown at a normal rate, causing the DIF reserve ratio to fall below the statutory minimum of 1.35%.

The FDIC adopted a restoration plan on September 15, 2020, to restore the DIF reserve ratio to at least 1.35% by September 30, 2028.

Under the restoration plan, the FDIC will continue to closely monitor the factors that affect the DIF reserve ratio and maintain its current schedule of assessment rates.

Any future changes in insurance premiums could have an adverse effect on the operating expenses and results of operations and we cannot predict what insurance assessment rates will be in the future.

The FDIC may terminate the deposit insurance of any insured depository institution, including the Bank, if it determines after a hearing that the institution has engaged or is engaging in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, order or any condition imposed by an agreement with the FDIC.

17 unchanged sentences

The Bank’s offerings of retail products and services to consumers are subject to a large number of statutes and regulations designed to protect the finances of consumers and to promote lending to various sectors of the economy and population.

These laws include, but are not limited to the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, the Truth in Savings Act, the Electronic Funds Transfer Act, federal and state prohibitions on unfair, deceptive, and abusive practices, and regulations implementing each of these statutes.

Beginning in the first quarter of 2020, the CFPB has exclusive authority to examine the Bank for compliance with these laws.

These laws include, but are not limited to the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, the Truth in Savings Act, the Electronic Funds Transfer Act, federal and state prohibitions on unfair, deceptive, or abusive acts or practices, and regulations implementing each of these statutes.

The CFPB has exclusive authority to examine the Bank for compliance with these laws.

States may adopt more stringent consumer financial protection statutes that could apply to us as well.

10 unchanged sentences

The CFPB also has authority to establish rules prohibiting unfair, deceptive, or abusive acts or practices.

Debit Card Interchange Fees

The Bank became subject to these rules beginning July 1, 2020.

Privacy and Cybersecurity

8 unchanged sentences

Examinations by the banking agencies now include review of an institution’s information technology and its ability to thwart or mitigate cyber-attacks.

Additionally, a final rule that the federal banking agencies issued in November 2021 requires banking organizations to notify their primary federal regulator of significant computer security incidents within 36 hours of determining that such an incident has occurred.

The compliance date of this rule is May 1, 2022.

Bank Secrecy Act and Anti-Money Laundering

22 unchanged sentences

Evaluations that result in a conclusion of “Needs to Improve” or “Substantial Non-Compliance” may block or impede regulatory approvals for other actions by an institution.

The Bank received a rating of “Outstanding” in its most recent performance evaluation, dated October 26, 2020, for its existing assessment area of the state of Delaware, counties in the Greater Philadelphia region in Pennsylvania, and counties in southern New Jersey.

On May 20, 2020, the OCC issued a final rule that substantially revises how the agency will assess an institution's CRA performance beginning in 2023.

We are continuing to evaluate the impact of the final rule on the Bank.

The Bank received a rating of “Outstanding” in its most recent performance evaluation.

On December 15, 2021, the OCC adopted a final rule, which took effect on January 1, 2022, to rescind changes to the OCC’s CRA regulations that the agency had adopted in June 2020 and to restore the CRA standards that previously applied to OCC-regulated institutions.

The federal banking agencies have indicated their intent to engage in an interagency rulemaking process to modernize the CRA regulatory framework.

Sales of Insurance Products and Annuities

The Bank’s sales of insurance products and annuities, including through subsidiaries, are subject to regulation under federal and state law.

In particular, consumer protection rules of the federal banking agencies apply to the retail sales practices, solicitation, advertising or offers of insurance products and annuities by depository institutions and, in some cases, their subsidiaries.

These rules provide that before the sale of an insurance or annuity product can be completed, disclosures must be made that state (i) such product is not a deposit or other obligation of, or guaranteed by, the Bank, its affiliates, the FDIC or any other agency of the United States;

and (ii) in the case of an insurance or annuity product that involves an investment risk, that there is an investment risk involved with the product, including a possible loss of value.

The rules require formal acknowledgement from the consumer that such disclosures have been received.

The rules also provide that the Bank and its subsidiaries may not condition an extension of credit on the consumer’s purchase of an insurance product or annuity from the Bank or its affiliates or on the consumer’s agreement not to obtain or a prohibition on the consumer obtaining an insurance product or annuity from an unaffiliated entity.

In addition, to the extent practical, the Bank and its subsidiaries must keep insurance and annuity sales activities physically separate from the areas where retail banking transactions are routinely accepted from the general public.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business