What changed in this filing

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Item 1A. Risk Factors

2022-03-01 compared with 2021-03-01 · 94 added, 80 removed, 301 unchanged (37% of the section changed)

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Model risk refers to the possibility of unintended business outcomes arising from the design, implementation or use of models.

The novel coronavirus (“COVID-19”) pandemic and the impact of actions to mitigate the spread of the virus has adversely affected our business, financial condition and results of operations and is likely to continue to do so.

Federal, state and local governments have enacted various restrictions in an attempt to limit the spread of COVID-19.

Over the course of the COVID-19 pandemic, federal, state and local governments enacted various restrictions and policies in an attempt to limit the spread of COVID-19.

Such measures have disrupted economic activity and contributed to job losses and reductions in consumer and business spending.

In response to the economic and financial effects of COVID-19, the Federal Reserve has sharply reduced interest rates (which we expect will likely remain low for a considerable period) and instituted quantitative easing measures as well as domestic and global capital market support programs.

In addition, the Trump and Biden Administrations, Congress, various federal government agencies and state governments have taken measures to address the economic and social consequences of the pandemic, including the passage of the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act.

In response to the economic and financial effects of COVID-19, the Federal Reserve reduced interest rates through 2020 and 2021 and instituted quantitative easing measures as well as domestic and global capital market support programs although the Federal Reserve has suggested that it may take steps to raise interest rates in 2022.

In addition, federal, state and local governments have taken measures to address the economic and social consequences of the pandemic, including the passage of the CARES Act.

The CARES Act, among other things, provides certain measures to support individuals and businesses in maintaining solvency through monetary relief, including in the form of financing, loan forgiveness and automatic forbearance.

Beginning April 6, 2020, we began processing loan applications, under the Paycheck Protection Program (PPP) created under the CARES Act.

All of the federal banking regulatory agencies have encouraged lenders to extend additional loans, and the federal government is considering additional stimulus and support legislation focused on providing aid to various sectors, including small businesses.

We are also making a high level of loan modifications under our deferred payment program.

The ultimate impact over the longer term on our lending and other business activities as a result of new government and regulatory policies, programs and guidelines, as well as regulators’ reaction to such activities, remains uncertain.

The continuation of the economic effects of the COVID-19 pandemic have had a destabilizing effect on financial markets, key market indices and overall economic activity.

The uncertainty regarding the duration of the pandemic and the resulting economic disruption has caused increased market volatility and has led to an economic recession and a significant decrease in consumer confidence and business generally.

The continuation of these conditions, including whether due to a resurgence or additional waves of COVID-19 infections, particularly as the geographic areas in which we operate continue to re-open, how quickly and to what extent normal economic and operating conditions can resume, especially as a vaccine becomes widely available, as well as the impacts of the CARES Act and other federal and state measures, specifically with respect to loan forbearances, has adversely affected our results of operations and financial condition, and have and can be expected to further adversely impact our businesses and results of operations and the operations of our borrowers, customers and business partners.

In 2021, the pandemic continued to evolve with the rapid spread of the Omicron variant.

The uncertainty regarding the duration of the pandemic and the resulting economic disruption contributed to a slowdown in economic growth and business generally and continues to contribute to increased market volatility and a significant decrease in consumer confidence, compounded by unfavorable economic trends such as increased unemployment levels, inflation, and supply chain issues.

The continuation of these conditions, including whether due to a resurgence or additional waves of COVID-19 infections or variants thereof, particularly as the geographic areas in which we operate, how quickly and to what extent normal economic and operating conditions can resume and continue, and the potential waning of vaccine effectiveness or effects of low vaccination rates, has adversely affected our results of operations and financial condition, and have and may further adversely impact our businesses and results of operations and the operations of our borrowers, customers and business partners.

In particular, these events have had, and/or can be expected to continue to have, the following effects, among other things:

• impair the ability of borrowers to repay outstanding loans or other obligations, resulting in increases in delinquencies and modifications to loans;

• impair the value of collateral securing loans (particularly with respect to real estate);

• impair the value of collateral securing loans;

• impair the value of our assets, including our securities portfolio, goodwill and intangible assets;

• require an increase in our allowance for credit losses, particularly in light of our adoption of CECL in the first quarter of 2020;

• require an increase in our allowance for credit losses;

• adversely affect the stability of our deposit base or otherwise impair our liquidity;

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• negatively impact our self-insurance healthcare costs;

• result in increased compliance risk as we become subject to new regulatory and other requirements, including new and changing guidance, associated with the PPP and other new programs in which we participate;

• result in increased compliance risk as we become subject to new regulatory and other requirements, related to programs in which we participate;

• impair the ability of loan guarantors to honor commitments;

• negatively impact our regulatory capital ratios;

• risks to our business model and operation by having a large part of our workforce continuing to work remotely, which may negatively impact the productivity and availability of key personnel and other Associates necessary to conduct our business, as well as third-party service providers who perform critical services for us (including the processing of forgiveness applications associated with our PPP loans), or otherwise cause operational failures due to changes in our normal business practices necessitated by the pandemic and related governmental actions;

• present increased operational risks to our business practices with part of our workforce and third-party service providers who perform critical services for us working remotely and at risk of missing work;

• increase cyber and payment fraud risk and other operational risks, given increased online and remote activity, which may adversely affect the realization of the anticipated benefits of our Delivery Transformation initiative.

Prolonged measures by health or other governmental authorities encouraging or requiring significant restrictions on travel, assembly or other core business practices could further harm our business and those of our customers, in particular our small to medium sized business customers.

Although we have business continuity plans and other safeguards in place, there is no assurance that they will be effective.

Prolonged or renewed measures by health or other governmental authorities encouraging or requiring significant restrictions on travel, assembly or other core business practices could further harm our business and those of our customers, in particular our small to medium sized business customers.

Although we have business continuity plans and other safeguards in place, they may not be effective.

Our loan portfolio includes loans that are in forbearance but which are not classified as TDRs because they were current at the time forbearance began.

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For example, for the year ended December 31, 2020 these factors caused a substantial increase in our provision for credit losses and the amount of our problem loans.

While the ultimate impact of these factors over the longer term is uncertain and we do not yet know the full extent of the impacts on our business, our operations or the global economy as a whole, nor the pace of economic recovery when the COVID-19 pandemic subsides, the decline in economic conditions generally and a prolonged negative impact on small to medium sized businesses, in particular, due to COVID-19 is likely to result in an adverse effect on our business, financial condition and results of operations in future periods.

While the ultimate impact of these factors over the longer term is uncertain and we do not yet know the full extent of the impacts on our business, our operations or the global economy as a whole, nor the pace of economic recovery when the COVID-19 pandemic subsides, the decline in economic conditions generally and a prolonged negative impact on small to medium sized businesses, in particular, due to COVID-19 may result in an adverse effect on our business, financial condition and results of operations in future periods.

Difficult market conditions and unfavorable economic trends could adversely affect our industry and our business.

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• Downward pressure on our stock price or an impaired ability to access the capital markets or otherwise obtain needed funding on attractive terms or at all;

• Changes in the regulatory environment, including regulations promulgated or to be promulgated under federal banking legislation or other new regulations, and changes in accounting standards (such as the new CECL accounting policy), could influence recognition of loan and lease losses and our allowance for credit losses, and could result in earlier recognition of loan losses and decreases in capital;

• Changes in the regulatory environment, including regulations promulgated or to be promulgated under federal banking legislation or other new regulations, and changes in accounting standards, could influence recognition of loan and lease losses and our allowance for credit losses, and could result in earlier recognition of loan losses and decreases in capital;

• Increased competition due to intensified consolidation of the financial services industry.

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We may not be able to successfully manage our interest rate risk.

In addition, increases in market interest rates and/or adverse changes in the local residential real estate market, the general economy or consumer confidence would likely have a significant adverse impact on our noninterest income, as a result of reduced demand for residential mortgage loans that we pre-sell.

Interest rate increases often result in larger payment requirements for our borrowers, which increase the potential for default and could result in a decrease in the demand for loans.

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Changes in interest rates also can affect the value of loans, securities and other assets.

An increase in interest rates that adversely affects the ability of borrowers to pay the principal or interest on loans may lead to an increase in nonperforming assets and a reduction of income recognized, which could have a material adverse effect on our results of operations and cash flows.

An increase in interest rates that adversely affects the ability of borrowers to pay the principal or interest on loans may lead to an increase in nonperforming assets and a reduction of income recognized, which could have an adverse effect on our results of operations and cash flows.

Further, when we place a loan on nonaccrual status, we reverse any accrued but unpaid interest receivable, which decreases interest income.

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Our ability to engage in routine funding transactions could be adversely affected by the actions of and changes in the commercial soundness of other financial institutions.

Defaults by, or even rumors or questions about, one or more financial services institutions, or the financial services industry generally, have led to market-wide liquidity problems and could lead to losses or defaults by us or by other institutions.

Such events could materially and adversely affect our results of operations.

Significant increases of nonperforming assets from the current level, or greater than anticipated costs to resolve these credits, will have an adverse effect on our earnings.

Such events could adversely affect our results of operations.

The financial services industry and our market area are highly competitive.

We compete with regional and national financial institutions and other non-bank companies, some of which may have larger client bases, operate with greater resources, and offer lending terms and services that we do not or cannot offer.

Some of these competitors may have other advantages, such as the favorable tax treatments available to credit unions.

The financial services industry continues to consolidate due to the benefits of operating at a larger scale and is undergoing rapid technological development that may require us to further develop and invest in our digital capabilities.

This competition can affect the pricing for our products and services and if the Company cannot compete effectively, we may lose market share and income resulting in an adverse effect on our earnings, results of operations and financial position.

Significant increases of nonperforming assets, or greater than anticipated costs to resolve these credits, can have an adverse effect on our earnings.

Our nonperforming assets, which consist of non-accrual loans, assets acquired through foreclosure and troubled debt restructurings (TDRs) adversely affect our net income in various ways.

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Significant increases in the level of our nonperforming assets from the current level, or greater than anticipated costs to resolve these credits, will have an adverse effect on our earnings.

Our loan portfolio includes a substantial amount of commercial real estate, construction and land development and commercial and industrial loans.

Our loan portfolio includes a substantial amount of commercial mortgage, construction and land development and commercial and industrial loans.

The credit risk related to these types of loans is greater than the risk related to residential loans.

Our commercial loan portfolio includes commercial and industrial loans, commercial real estate loans and construction and land development loans.

Commercial real estate loans generally carry larger loan balances and involve a greater degree of risk of nonpayment or late payment than home equity loans or residential mortgage loans.

Our commercial loan portfolio includes commercial and industrial loans, commercial mortgage loans and construction and land development loans.

Commercial mortgage loans generally carry larger loan balances and involve a greater degree of risk of nonpayment or late payment than home equity loans or residential mortgage loans.

Any significant failure to pay or late payments by our customers would adversely affect our earnings.

The increased credit risk associated with these types of loans is a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the larger size of loan balances, and the potential that adverse changes in general economic conditions can adversely affect income-producing properties.

A portion of our commercial real estate, construction and land development and commercial and industrial loan portfolios includes a balloon payment feature.

A portion of our commercial mortgage, construction and land development and commercial and industrial loan portfolios includes a balloon payment feature.

A number of factors may affect a borrower’s ability to make or refinance a balloon payment, including the financial condition of the borrower, the prevailing local economic conditions and the prevailing interest rate environment.

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A natural disaster, public health crisis or catastrophic event or other significant climate change effect that either damages or destroys residential or multifamily real estate underlying mortgage loans or REO properties, or negatively affects the ability of borrowers to continue to make payments on loans, could increase our serious delinquency rates and average loan loss severity in the affected areas.

Such events could also cause downturns in economic and market conditions generally, which could have a material adverse effect on our business and financial results.

Such events could also cause downturns in economic and market conditions generally, which could have an adverse effect on our business and financial results.

We may not have adequate insurance coverage for some of these natural, catastrophic, public health or climate change-related events.

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Capital and Liquidity Risk

Our inability to grow deposits in the future could materially adversely affect our liquidity and ability to grow our business.

Our inability to grow deposits in the future could adversely affect our liquidity and ability to grow our business.

A key part of our strategy is to grow deposits.

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However, the Bank may not continue to meet these requirements.

Limitations on the Bank’s ability to accept brokered deposits (including regulatory limitations on the amount of brokered deposits in total or as a percentage of total assets) for any reason in the future could materially adversely impact our funding costs and liquidity.

Any limitation on the interest rates the Bank can pay on deposits could competitively disadvantage us in attracting and retaining deposits and have a material adverse effect on our business.

Any limitation on the interest rates the Bank can pay on deposits could competitively disadvantage us in attracting and retaining deposits and have an adverse effect on our business.

We could experience an unexpected inability to obtain needed liquidity.

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Also, our right to participate in a distribution of assets upon a subsidiary’s liquidation or reorganization is subject to the prior claims of the subsidiary’s creditors.

Limitations on our subsidiaries to pay dividends to us could have a material adverse effect on our liquidity and on our ability to pay dividends on our common stock.

Limitations on our subsidiaries to pay dividends to us could have an adverse effect on our liquidity and on our ability to pay dividends on our common stock.

Additionally, if our subsidiaries’ earnings are not sufficient to make dividend payments to us while maintaining adequate capital levels;

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The laws and regulations governing our business are intended primarily to protect depositors, our customers, the public, the FDIC’s Deposit Insurance Fund, and the banking system as a whole, and not our stockholders or holders of our debt.

The Federal Reserve is the primary federal regulator for the Company and the OCC is the Bank’s primary regulator.

The banking laws, regulations and policies applicable to us govern a variety of matters, including certain debt obligations, changes in control, maintenance of adequate capital, and general business operations, including permissible types, amounts and terms of loans and investments, the amount of reserves held against deposits, restrictions on dividends, establishment of new offices and the maximum interest rate that may be charged by law.

The Federal Reserve is the primary federal regulator for the Company, the OCC is the Bank’s primary regulator and the CFPB regulates the Bank’s compliance with consumer financial protection laws .

The banking laws, regulations and policies applicable to us govern a variety of matters, including certain debt obligations, changes in control, maintenance of adequate capital, and general business operations, including permissible types, amounts and terms of loans and investments, the amount of reserves held against deposits, restrictions on dividends, establishment of new offices, the maximum interest rate that may be charged by law and treatment of customers.

In addition, federal and state banking regulators have broad authority to supervise our banking business, including the authority to prohibit activities that represent unsafe or unsound banking practices or constitute violations of statute, rule, regulation or administrative order.

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If our policies, procedures and systems or those of our third party vendors are deemed deficient, we would be subject to liability, including fines and regulatory actions, which may include restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of our business plan, including any acquisition plans.

Any of these results could have a material adverse effect on our business, financial condition, results of operations and future prospects.

We are subject to numerous laws designed to protect consumers and promote community investment, including fair lending laws and the Community Reinvestment Act, and failure to comply with these laws or perform satisfactorily could lead to a wide variety of sanctions.

Any of these results could have an adverse effect on our business, financial condition, results of operations and future prospects.

We are subject to numerous laws designed to protect consumers and promote community investment, including fair lending laws and the Community Reinvestment Act.

Failure to comply with these laws or perform satisfactorily could lead to a wide variety of sanctions.

The Equal Credit Opportunity Act, the Fair Housing Act and other fair lending laws and regulations impose nondiscriminatory lending requirements on financial institutions.

The CFPB, the Department of Justice and other federal agencies are responsible for enforcing these laws and regulations.

Adverse findings in an evaluation of an institution’s fair lending compliance could result in a wide variety of sanctions, including damages and civil money penalties, injunctive relief, restrictions on mergers and acquisitions activity, restrictions on expansion, and restrictions on entering new business lines.

Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private class action litigation.

Such actions could have a material adverse effect on our business, financial condition, results of operations and future prospects.

Adverse findings in an evaluation of our fair lending compliance could result in a wide variety of sanctions, including damages and civil money penalties, injunctive relief, restrictions on mergers and acquisitions activity, restrictions on expansion, and restrictions on entering new business lines.

Private parties may also have the ability to challenge our performance under fair lending laws in private class action litigation.

Such actions could have an adverse effect on our business, financial condition, results of operations and future prospects.

The Community Reinvestment Act imposes community investment obligations on insured depository institutions.

If the Bank does not perform satisfactorily under the Community Reinvestment Act, as determined by the OCC, the Company and the Bank could be restricted in their ability to expand through mergers, acquisitions, and the establishment of branches.

The fiscal, monetary and regulatory policies of the federal government and its agencies could have a material adverse effect on our results of operations.

The fiscal, monetary and regulatory policies of the federal government and its agencies could have an adverse effect on our results of operations.

The Federal Reserve regulates the supply of money and credit in the U.S.

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Changes in Federal Reserve policies, fiscal policy, and our regulatory environment generally are beyond our control, and we are unable to predict what changes may occur or the manner in which any future changes may affect our business, financial condition and results of operations.

The intention of the United Kingdom’s FCA to cease support of LIBOR could negatively affect the fair value of our financial assets and liabilities, results of operations and net worth.

A transition to an alternative reference interest rate could present operational problems and result in market disruption, including inconsistent approaches for different financial products, as well as disagreements with counterparties.

Although we expect that the capital and debt markets will cease to use LIBOR as a benchmark in the near future and the administrator of LIBOR has announced its intention to extend the publication of most LIBOR term rates through June 30, 2023, we cannot predict whether LIBOR will actually cease to be available after its current expiration dates, whether the Secured Overnight Funding Rate (SOFR) will become the market benchmark in its place or what impact such a transition may have on our business, results of operations and financial condition.

The intention and actions of the United Kingdom’s FCA to cease support of LIBOR could negatively affect the fair value of our financial assets and liabilities, results of operations and net worth.

The transition to alternative reference interest rate could present operational problems and result in market disruption, including inconsistent approaches for different financial products, as well as disagreements with counterparties.

The FCA ceased publishing most LIBOR settings as of January 1, 2022 but will continue to publish five U.S.

LIBOR settings through mid-2023.

We expect that the capital and debt markets will cease to use LIBOR as a benchmark, but we cannot predict whether LIBOR will actually cease to be available after its current expiration dates, whether the Secured Overnight Funding Rate (SOFR) will become the market benchmark in its place or what impact such a transition may have on our business, results of operations and financial condition.

The selection of SOFR as the alternative reference rate for these products currently presents certain market concerns because SOFR (unlike LIBOR) does not have an inherent term structure or credit risk component.

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It is uncertain whether these other indices will remain acceptable alternatives for such products.

We have a significant number of financial products, including mortgage loans, mortgage-related securities, other debt securities and derivatives, that are tied to LIBOR, and we continue to enter into transactions involving such products that will mature after 2021, with appropriate alternative reference rates to take effect after LIBOR's discontinuation.

We have a significant number of financial products, including mortgage loans, mortgage-related securities, other debt securities and derivatives, that are indexed to LIBOR, and we continue to enter into transactions involving such products that will mature after 2021, with appropriate alternative reference rates to take effect after LIBOR's discontinuation, including the use of the WSJ Prime as a LIBOR alternative.

We expect that the transition will span several reporting periods through June 2023.

The replacement of LIBOR also may result in economic mismatches between different categories of instruments that now consistently rely on the LIBOR benchmark.

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WSFS and WSFS Bank have over $10 billion in total consolidated assets, which leads to increased regulatory scrutiny.

Banking and thrift organizations with $10 billion or more in assets are subject to debit card interchange fee restrictions set forth in section 1075 of the Dodd-Frank Act, known as the Durbin Amendment, and implemented by regulations of the Federal Reserve, cap the maximum debit interchange fee that an issuer may receive per transaction at the sum of 21 cents plus five basis points.

These provisions cap the maximum debit interchange fee that an issuer may receive per transaction at the sum of 21 cents plus five basis points.

An issuer that adopts certain fraud prevention procedures may charge an additional one cent per transaction.

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WSFS Bank became subject to CFPB supervision, examination, and enforcement at the beginning of the first quarter of 2020.

Other regulatory requirements apply, and have previously applied, to insured depository institution holding companies and insured depository institutions with $10 billion or more in total consolidated assets.

Other regulatory requirements apply, to insured depository institution holding companies and insured depository institutions with $10 billion or more in total consolidated assets.

Congress and/or regulatory agencies may impose new requirements or surcharges on such institutions in the future.

The Economic Growth Act includes provisions that relieve banking organizations with less than $10 billion in total consolidated assets (and that satisfy certain other conditions) from risk-based capital requirements, restrictions on proprietary trading and investment and sponsorship in hedge funds and private equity funds known as the Volcker Rule, and certain other regulatory requirements.

The Economic Growth, Regulatory Relief, and Consumer Protection Act included provisions that relieve banking organizations with less than $10 billion in total consolidated assets (and that satisfy certain other conditions) from risk-based capital requirements, restrictions on proprietary trading and investment and sponsorship in hedge funds and private equity funds known as the Volcker Rule, and certain other regulatory requirements.

By exceeding $10 billion in total consolidated assets, WSFS and WSFS Bank do not qualify for any of this relief.

The CFPB has reshaped consumer financial regulations through rulemaking and enforcement of prohibitions against unfair, deceptive and abusive business practices.

The CFPB has reshaped consumer financial regulations through rulemaking and enforcement of prohibitions against unfair, deceptive or abusive business acts or practices.

Compliance with any such change may impact the manner in which WSFS and WSFS Bank offer consumer financial products or services, and our results of operations.

The CFPB has broad authority to administer and carry out provisions of the Dodd-Frank Act with respect to the Company's consumer financial products and services.

As a relatively new independent agency with new rulemaking and enforcement authority, the CFPB may impose requirements more onerous than those of other bank regulatory agencies.

The CFPB has broad authority to administer and carry out provisions of the Dodd-Frank Act with respect to the Company's consumer financial products and services and may impose requirements more onerous than those of other bank regulatory agencies.

For example, the Dodd-Frank Act authorizes the CFPB to write rules or bring enforcement actions to prohibit acts or practices that are unfair, deceptive or abusive in connection with consumer financial products or services, and the concept of an "abusive" act or practice did not previously exist in federal banking law.

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There continues to be uncertainty as to how CFPB's strategies and priorities will impact the Company's business and operations.

Any changes by the CFPB in regulatory expectations, interpretations or practices could increase the risk of additional enforcement actions, fines and penalties, which could have a material impact to the Company's business and results of operations.

As a participating lender in the SBA’s Paycheck Protection Program (PPP), the Company is subject to added risks, including credit, fraud, and litigation risks.

Beginning in April 2020, WSFS Bank began processing loan applications under the PPP as an eligible lender with the benefit of a government guarantee of loans to small business clients, many of whom may face difficulties even after being granted such a loan.

A significant amount of our loan growth since December 31, 2019 has been a direct result of PPP loans.

However, PPP loan growth depends on governmental action to renew and fund the program.

As a participant in the PPP, we face increased risks, particularly in terms of credit, fraud and litigation risks.

The PPP opened to borrower applications shortly after the enactment of its authorizing legislation, and, as a result, there is some ambiguity in the laws, rules and guidance regarding the program’s operation.

Subsequent rounds of legislation and associated agency guidance have not provided needed clarity and in certain instances have potentially created additional inconsistencies and ambiguities.

Any changes by the CFPB in regulatory expectations, interpretations or practices could increase the risk of additional enforcement actions, fines and penalties, which could have an adverse impact to the Company's business and results of operations.

As a lender that participated in the SBA’s Paycheck Protection Program (PPP), the Company is subject to added risks, including credit, fraud, and litigation risks.

As a lender that participated in the PPP, we face increased risks, particularly in terms of credit, fraud and litigation risks.

The PPP opened to borrower applications shortly after the enactment of its authorizing legislation, and, as a result, there was some ambiguity in the laws, rules and guidance regarding the program’s operation.

Subsequent rounds of legislation and associated agency guidance did not provide the needed clarity and in certain instances potentially created additional inconsistencies and ambiguities.

Accordingly, the Company is exposed to risks relating to compliance with PPP requirements, including the risk of becoming the subject of governmental investigations, enforcement actions, private litigation, and negative publicity.

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Our risk management processes and procedures may not be effective in mitigating our risks.

We have established processes and procedures intended to identify, measure, monitor and control material risks to which we are subject, including, for example, credit risk, market risk, liquidity risk, strategic risk and operational risk.

We seek to monitor and control our risk exposure through a framework that includes our risk appetite statement, enterprise risk assessment process, risk policies, procedures and controls, reporting requirements, credit risk culture and governance structure.

Management of our risks in some cases depends upon the use of analytical and/or forecasting models.

If the models that we use to manage these risks are ineffective at predicting future losses or are otherwise inadequate, we may incur unexpected losses or otherwise be adversely affected.

In addition, the information we use in managing our credit and other risk may be inaccurate or incomplete as a result of error or fraud, both of which may be difficult to detect and avoid.

Even if the underlying assumptions and historical correlations used in our models are adequate, our models may be deficient due to errors in computer code, bad data, misuse of data, fraud or the use of a model for a purpose outside the scope of the model’s design.

Additionally, as businesses and markets evolve, our measurements may not accurately reflect this evolution.

There may also be risks that exist, or that develop in the future, that we have not appropriately anticipated, identified or mitigated, including when processes are changed or new products and services are introduced.

If our risk management framework does not effectively identify and control our risks, we could suffer unexpected losses or be adversely affected, and that could have a material adverse effect on our business, results of operations and financial condition.

Our results of operations and financial condition could be materially adversely affected if our Cash Connect ® segment’s policies, procedures and controls are inadequate to prevent a misappropriation of funds, or if a misappropriation of funds is not insured or not fully covered through insurance.

If our risk management framework does not effectively identify and control our risks, we could suffer unexpected losses or be adversely affected, and that could have an adverse effect on our business, results of operations and financial condition.

Our results of operations and financial condition could be adversely affected if our Cash Connect ® segment’s policies, procedures and controls are inadequate to prevent a misappropriation of funds, or if a misappropriation of funds is not insured or not fully covered through insurance.

The profitability of our Cash Connect ® segment depends to a large degree on its ability to accurately and efficiently distribute, track, and settle large amounts of cash to its customers’ ATMs which, in turn, depends on the successful implementation and monitoring of a comprehensive system of financial and operational controls that are designed to help prevent, detect, and recover any potential loss of funds.

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Cash Connect ® has experienced such occurrences in the past.

If our Cash Connect ® division’s established policies, procedures and controls are inadequate, or not properly executed to prevent or detect a misappropriation of funds, or if a misappropriation of funds is not insured or not fully covered through any insurance maintained by us, our results of operations or financial condition could be materially affected.

System failure or cybersecurity breaches of our network security could subject us to increased operating costs as well as litigation and other potential losses.

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In particular, the technologies and digital solutions we have introduced as part of our Delivery Transformation initiative, including our enhanced website and personalized messaging app, are susceptible to these events.

We and our third-party service providers have experienced all of these events in the past and expect to continue to experience them in the future.

We and our third-party service providers have experienced all of these events and expect to continue to experience them in the future.

These events could interrupt our business or operations, result in significant legal and financial exposure, supervisory liability, regulatory enforcement action, damage to our reputation, loss of customers and business or a loss of confidence in the security of our systems, products and services.

Although the impact to date from these events has not had a material adverse effect on us, we cannot be sure this will be the case in the future.

Any of these occurrences could have a material adverse effect on our financial condition and results of operations.

Although the impact to date from these events has not had an adverse effect on us, we cannot be sure this will be the case in the future.

Any of these occurrences could have an adverse effect on our financial condition and results of operations.

Information security risks for financial institutions like us have increased recently in part because of new technologies, the use of the internet and telecommunications technologies (including mobile devices) to conduct financial and other business transactions and the increased sophistication and activities of organized crime, perpetrators of fraud, hackers, terrorists and others.

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In addition, as a publicly-held company, we are subject to the risk of claims under the federal securities laws, and volatility in our stock price and those of other financial institutions increases this risk.

Actions brought against us may result in injunctions, settlements, damages, fines or penalties, which could have a material adverse effect on our financial condition or results of operations or require changes to our business.

Actions brought against us may result in injunctions, settlements, damages, fines or penalties, which could have an adverse effect on our financial condition or results of operations or require changes to our business.

Even if we defend ourselves successfully, the cost of litigation may be substantial, and public reports regarding claims made against us may cause damage to our reputation among existing and prospective clients or negatively impact the confidence of counterparties, rating agencies and stockholders, consequently negatively affecting our earnings.

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Strategic Risk

Integrating Bryn Mawr Trust's business into the Company's may be more difficult, costly or time consuming than expected and the anticipated benefits and cost savings of our acquisition of Bryn Mawr Trust may not be fully realized.

If we are unable to successfully integrate the business of Bryn Mawr Trust, the anticipated benefits of our acquisition of Bryn Mawr Trust, including expected revenue synergies, may not be realized fully, or at all, or may take longer to realize than expected.

The company expects to integrate Bryn Mawr Trust’s business and it is possible that the integration process could result in the loss of key employees or create inconsistencies in standards, contracts, procedures and policies.

The Company expects to incur substantial expenses in integrating the business, operations, networks, systems, technology, policies and procedures of Bryn Mawr Trust into its own.

As with any merger of financial institutions, integration efforts have diverted management attention and resources, and there may be business disruptions that affect our ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of our acquisition of Bryn Mawr Trust.

In addition, the impacts of the COVID-19 pandemic may make it more costly or difficult to integrate the businesses.

These integration matters could have an adverse effect on WSFS, our financial results and the value of our common stock for an undetermined period.

The Company expects to incur substantial expenses related to our acquisition of Bryn Mawr Trust.

The Company expects to continue to incur substantial expenses in connection with consummation of our acquisition of Bryn Mawr Trust and combining the business, operations, networks, systems, technologies, policies and procedures of the two companies.

Although we have assumed that a certain level of transaction and combination expenses would be incurred, there are a number of factors beyond their control that could affect the total amount or the timing of the combination expenses.

Due to these factors, the transaction and combination expenses associated with our acquisition of Bryn Mawr Trust could, particularly in the near term, exceed the savings that we expect to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings related to the combination of the businesses following the consummation of our acquisition of Bryn Mawr Trust.

As a result of these expenses, we have taken and expect to continue to take charges against our earnings.

The charges taken in connection with our acquisition of Bryn Mawr Trust have been and are expected to be significant, although the aggregate amount and timing of such charges are uncertain at present.

Our business strategy includes significant investment in growth plans, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth and investment in infrastructure effectively.

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Once integrated, acquired operations may not achieve levels of revenues, profitability, or productivity comparable with those achieved by our existing operations, or otherwise perform as expected.

Acquisitions involve numerous risks, including difficulties in the integration of the operations, technologies, services and products of the acquired companies, and the diversion of management’s attention from other business concerns.

Acquisitions, such as our recent acquisition of Bryn Mawr Trust, involve numerous risks, including difficulties in the integration of the operations, technologies, services and products of the acquired companies, and the diversion of management’s attention from other business concerns.

We may not properly ascertain all such risks prior to an acquisition or prior to such a risk impacting us while integrating an acquired company.

As a result, difficulties encountered with acquisitions could have a material adverse effect on our business, financial condition, and results of operations.

As a result, difficulties encountered with acquisitions could have an adverse effect on our business, financial condition, and results of operations.

Furthermore, we must generally receive federal regulatory approval before we can acquire another insured depository institution or its holding company.

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We invest significantly in recruitment, training, development and talent management as our Associates are the cornerstone of our model.

If we were unable to continue to attract and retain qualified key employees to support the various functions of our businesses, our performance, including our competitive position, could be materially adversely affected.

As economic conditions improve, we may face increased difficulty in retaining top performers and critical skilled employees.

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Public perception of the financial services industry declined as a result of the recent economic downturn and related government response, and we face increased public and regulatory scrutiny as a result.

Adverse developments with respect to the financial services industry may also, by association, negatively impact our reputation, or result in greater regulatory or legislative scrutiny or litigation against us.

Although we monitor developments for areas of potential risk to our reputation and brand, negative perceptions or publicity could materially and adversely impact our financial condition and results of operations.

Further adverse developments may result in additional scrutiny or new litigation against us.

Other potential sources of reputational damage are discussed throughout these risk factors.

Although we monitor developments for areas of potential risk to our reputation and brand, negative perceptions or publicity could adversely impact our financial condition and results of operations.

Significant harm to our reputation can also arise from other sources, including employee misconduct, actual or perceived unethical behavior, litigation or regulatory outcomes, failing to deliver minimum or required standards of service and quality, compliance failures, disclosure of confidential information, significant or numerous failures, interruptions or breaches of our information systems, and the activities of our clients, customers and counterparties, including vendors.

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The actual or perceived failure to adequately address conflicts of interest could affect the willingness of clients to deal with us, which could adversely affect our businesses.

The quantitative models we use to manage certain accounting and risk management functions may not be effective, which may cause material adverse effects on our results of operations and financial condition.

The quantitative models we use to manage certain accounting and risk management functions may not be effective, which may cause adverse effects on our results of operations and financial condition.

We use quantitative models to help manage certain aspects of our business and to assist with certain business decisions, including estimating probable loan losses, measuring the fair value of financial instruments when reliable market prices are unavailable and estimating the effects of changing interest rates and other market measures on our financial condition and results of operations.

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Additionally, as businesses and markets evolve, our measurements may not accurately reflect this evolution.

Even if the underlying assumptions and historical correlations used in our models are adequate, our models may be deficient due to errors in computer code, bad data, misuse of data, or the use of a model for a purpose outside the scope of the model’s design.

As a result, our models may not capture or fully express the risks we face, may suggest that we have sufficient capitalization when we do not, or may lead us to misjudge the business and economic environment in which we will operate.

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We evaluate goodwill and intangibles for impairment at least annually.

Although we have determined that goodwill and other intangible assets were not impaired during 2020, a significant and sustained decline in our stock price and market capitalization, a significant decline in our expected future cash flows, a significant adverse change in the business climate, slower growth rates or other factors could result in impairment of goodwill or other intangible assets.

Any future write-down of the goodwill or intangible assets could result in a material charge to earnings.

Changes in accounting standards or changes in how the accounting standards are interpreted or applied could materially impact the Company’s financial statements.

Although we have determined that goodwill and other intangible assets were not impaired during 2021, a significant and sustained decline in our stock price and market capitalization, a significant decline in our expected future cash flows, a significant adverse change in the business climate, slower growth rates or other factors could result in impairment of goodwill, mortgage servicing rights asset, or other intangible assets.

Any future write-down of the goodwill, mortgage servicing rights asset, or other intangible assets could result in a material charge to earnings.

Changes in accounting standards or changes in how the accounting standards are interpreted or applied could adversely impact the Company’s financial statements.

From time to time, the Financial Accounting Standards Board (FASB) or the SEC may change the financial accounting and reporting standards that govern the preparation of the Company’s financial statements.

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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 1A. Risk Factors