What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2022-03-01 compared with 2021-03-01 · 371 added, 550 removed, 1994 unchanged (32% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following audited Consolidated Financial Statements and related documents are set forth in this Annual Report on Form 10-K on the following pages:

Report of Independent Registered Public Accounting Firm ( KPMG LLP , Philadelphia, PA , Auditor Firm ID:

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Consolidated Statements of Financial Condition

Consolidated Statements of Changes in Stockholders’ Equity

Consolidated Statements of Cash Flows

Report of Independent Registered Public Accounting Firm

7 unchanged sentences

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for the recognition and measurement of credit losses as of January 1, 2020 due to the adoption of ASC Topic 326, Financial Instruments - Credit Losses .

Basis for Opinion

14 unchanged sentences

Assessment of the Allowance for Credit Losses for Loans and Leases Evaluated on a Collective Basis

As discussed in Note 2 to the consolidated financial statements, the Company adopted ASU No.

2016-13, Financial Instruments – Credit Losses (ASC Topic 326) as of January 1, 2020.

The total allowance for credit losses for loans and leases as of January 1, 2020 was $83.4 million, which included an allowance for credit losses for loans and leases evaluated on a collective basis (the January 1, 2020 collective ACL).

As discussed in Note 8 to the consolidated financial statements, the Company’s total allowance for credit losses for loans and leases evaluated on a collective basis as of December 31, 2020 was $228.8 million (the December 31, 2020 collective ACL).

As discussed in Note 7 to the consolidated financial statements, the Company’s total allowance for credit losses as of December 31, 2021 was $94.5 million, of which $94.5 million related to the allowance for credit losses on loans and leases evaluated on a collective basis (the collective ACL).

The collective ACL includes the measure of expected credit losses on a collective (pooled) basis for those loans and leases that share similar risk characteristics.

9 unchanged sentences

These adjustments are based on qualitative factors not reflected in the quantitative model but are likely to impact the measurement of estimated credit losses.

We identified the assessment of the January 1, 2020 collective ACL and December 31, 2020 collective ACL as a critical audit matter.

We identified the assessment of the December 31, 2021 collective ACL as a critical audit matter.

A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment.

Specifically, the assessment encompassed the evaluation of the collective ACL methodology, including the methods and quantitative model used to estimate (1) the PD, LGD and average net loss rates and their significant assumptions, including portfolio segmentation, the economic forecast scenario and macroeconomic assumptions, the reasonable and supportable forecast periods, the LBP for both the commercial and retail portfolios, and credit risk ratings for commercial loans, and (2) the qualitative factors.

Specifically, the assessment encompassed the evaluation of the collective ACL methodology, including the methods and quantitative model used to estimate (1) the PD, LGD and average net loss rates and their significant assumptions, including portfolio segmentation, the economic forecast scenario and macroeconomic assumptions, the reasonable and supportable forecast periods, the LBP for both the commercial and retail portfolio, and credit risk ratings for commercial loans, and (2) the qualitative factors.

The assessment also included an evaluation of the conceptual soundness and performance of the quantitative model.

3 unchanged sentences

• development of the collective ACL methodology

• development of the quantitative model

• continued use and appropriateness of changes made to the quantitative model

• identification and determination of the significant assumptions used in the quantitative model

5 unchanged sentences

generally accepted accounting principles

• evaluating judgments made by the Company relative to the development and performance testing of the quantitative model used

• evaluating judgments made by the Company relative to the assessment and performance testing of the quantitative model used

• assessing the conceptual soundness and performance of the quantitative model used by inspecting the model documentation to determine whether the model is suitable for its intended use

• evaluating the economic forecast scenario by comparing it to the Company’s business environment and relevant industry practices

• assessing the economic forecast scenario through comparison to publicly available forecasts

• evaluating the selection of economic forecast scenario by comparing it to the Company’s business environment and relevant industry practices

• evaluating the length of the historical observation period and reasonable and supportable forecast periods by comparing to specific portfolio risk characteristics and trends

1 unchanged sentence

• testing individual credit risk ratings for a selection of commercial loans by evaluating the financial performance of the borrower, sources of repayment, and any relevant guarantees or underlying collateral

• evaluating the effect of certain qualitative factors on the December 31, 2020 collective ACL compared with relevant credit risk factors and consistency with credit trends and identified limitations of the underlying quantitative model.

We also assessed the sufficiency of the audit evidence obtained related to the January 1, 2020 collective ACL and December 31, 2020 collective ACL by evaluating:

• evaluating the effect of certain qualitative factors on the collective ACL compared with relevant credit risk factors and consistency with credit trends and identified limitations of the underlying quantitative model.

We also assessed the sufficiency of the audit evidence obtained related to the December 31, 2021 collective ACL by evaluating:

• cumulative results of the audit procedures

24 unchanged sentences

Net interest income 433,649 465,955 444,948

Provision for credit losses 153,180 25,560 13,170

(Recovery of) provision for credit losses ( 117,087 ) 153,180 25,560

Net interest income after provision for credit losses 550,736 312,775 419,388

7 unchanged sentences

Unrealized gains on equity investments, net 5,141 761 26,175

Realized gain on sale of equity investment, net 22,052 — 3,757

Realized (loss) gain on sale of equity investment, net ( 706 ) 22,052 —

Bank owned life insurance income 1,251 1,280 1,247

20 unchanged sentences

Net income $ 271,605 $ 113,320 $ 147,918

Net loss attributable to noncontrolling interest ( 1,454 ) ( 891 ) —

Net income (loss) attributable to noncontrolling interest 163 ( 1,454 ) ( 891 )

Net income attributable to WSFS $ 271,442 $ 114,774 $ 148,809

Basic $ 2.27 $ 3.02 $ 4.27

Diluted $ 2.27 $ 3.00 $ 4.19

Basic earnings per share

$ 5.71 $ 2.27 $ 3.02

Diluted earnings per share

$ 5.69 $ 2.27 $ 3.00

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

3 unchanged sentences

Net income $ 271,605 $ 113,320 $ 147,918

Net loss attributable to noncontrolling interest ( 1,454 ) ( 891 ) —

Net gain (loss) attributable to noncontrolling interest 163 ( 1,454 ) ( 891 )

Net income attributable to WSFS $ 271,442 $ 114,774 $ 148,809

Other comprehensive income (loss):

Net change in unrealized gains (losses) on investment securities available-for-sale

Net unrealized gains (losses) arising during the period, net of tax expense (benefit) of $ 12,585 , $ 13,179 , and $( 2,223 ), respectively

Other comprehensive (loss) income:

Net change in unrealized (losses) gains on investment securities available-for-sale

Net unrealized (losses) gains arising during the period, net of tax (benefit) expense of $( 29,523 ), $ 12,585 , and $ 13,179 , respectively

( 93,503 ) 39,853 41,733

6 unchanged sentences

Net change in unfunded pension liability

Change in unfunded pension liability related to unrealized loss, prior service cost and transition obligation, net of tax benefit of $ 585 , $ 1,439 , and $ 10 , respectively

Change in unfunded pension liability related to unrealized gain (loss), prior service cost and transition obligation, net of tax expense (benefit) of $ 50 , $( 585 ), and $( 1,439 ), respectively

97 ( 1,683 ) ( 4,151 )

2 unchanged sentences

Net change in cash flow hedge

Net unrealized gain (loss) arising during the period, net of tax expense (benefit) of $ 493 , $ 593 , and $( 29 ), respectively

Net unrealized gain arising during the period, net of tax expense of $ — , $ 493 , and $ 593 , respectively

— 1,560 1,877

2 unchanged sentences

( 378 ) ( 337 ) —

( 378 ) 1,223 1,877

Net change in equity method investments

Net change in other comprehensive loss of equity method investments, net of tax

Net change in other comprehensive loss of equity method investments, net of tax expense

(benefit) of $ 114 , $( 3 ), and $ — , respectively

Total other comprehensive income (loss) 32,506 38,895 ( 7,242 )

Total other comprehensive (loss) income ( 93,775 ) 32,506 38,895

Total comprehensive income $ 177,667 $ 147,280 $ 187,704

8 unchanged sentences

5,205,311 2,529,057

Investment securities, held to maturity, net of allowance for credit losses of $ 6 at December 31, 2020 (fair value $ 116,421 at December 31, 2020 and $ 136,625 at December 31, 2019)

Investment securities, held to maturity, net of allowance for credit losses of $ 4 at December 31, 2021 and $ 6 at December 31, 2020 (fair value $ 94,131 at December 31, 2021 and $ 116,421 at December 31, 2020)

90,642 111,741

16 unchanged sentences

Total deposits 13,240,062 11,856,664

Federal funds purchased — 195,000

Federal Home Loan Bank advances — 6,623

9 unchanged sentences

Capital in excess of par value 1,058,997 1,053,022

Accumulated other comprehensive income 56,007 23,501

Accumulated other comprehensive (loss) income ( 37,768 ) 56,007

Retained earnings 1,224,614 977,414

16 unchanged sentences

Balance, December 31, 2018 56,926,978 $ 569 $ 349,810 $ ( 15,394 ) $ 791,031 $ ( 305,096 ) $ 820,920 $ — $ 820,920

Net income — — — — 134,743 — 134,743 — 134,743

Other comprehensive loss — — — ( 7,262 ) — — ( 7,262 ) — ( 7,262 )

Net income (loss) — — — — 148,809 — 148,809 ( 891 ) 147,918

Other comprehensive income — — — 38,895 — — 38,895 — 38,895

Cash dividend, $ 0.47 per share

— — — — ( 22,463 ) — ( 22,463 ) — ( 22,463 )

Reclassification due to the adoption of ASU No.

2016-01 — — — 20 ( 20 ) — — — —

Issuance of common stock including proceeds from exercise of common stock

options 508,680 6 7,749 — — — 7,755 — 7,755

Re-issuance of treasury stock in connection with BNCL merger and related items — — 687,897 — — 262,071 949,968 76 950,044

Stock-based compensation expense — — 3,608 — — — 3,608 — 3,608

2 unchanged sentences

Balance, December 31, 2019 57,435,658 $ 575 $ 1,049,064 $ 23,501 $ 917,377 $ ( 140,211 ) $ 1,850,306 $ ( 815 ) $ 1,849,491

Cumulative change in

accounting principle

(Note 2) — — — — ( 30,368 ) — ( 30,368 ) — ( 30,368 )

Balance, January 1, 2020 (as adjusted for change in accounting principle) 57,435,658 575 1,049,064 23,501 887,009 ( 140,211 ) 1,819,938 ( 815 ) 1,819,123

Net income (loss) — — — — 114,774 — 114,774 ( 1,454 ) 113,320

3 unchanged sentences

Issuance of common stock including proceeds from exercise of common stock options 140,125 1 2,031 — — — 2,032 — 2,032

Re-issuance of treasury stock in connection with BNCL merger and related items — — 687,897 — — 262,071 949,968 76 950,044

Contributions from noncontrolling shareholders — — — — — — — 23 23

Stock-based compensation expense — — 2,677 — — — 2,677 — 2,677

2 unchanged sentences

Balance, December 31, 2020 57,575,783 $ 576 $ 1,053,022 $ 56,007 $ 977,414 $ ( 295,293 ) $ 1,791,726 $ ( 2,246 ) $ 1,789,480

Cumulative change in

accounting principle

(Note 2) — — — — ( 30,368 ) — ( 30,368 ) — ( 30,368 )

Balance, January 1, 2020 (as adjusted for change in accounting principle) 57,435,658 575 1,049,064 23,501 887,009 ( 140,211 ) 1,819,938 ( 815 ) 1,819,123

Net income (loss) — — — — 114,774 — 114,774 ( 1,454 ) 113,320

Other comprehensive income — — — 32,506 — — 32,506 — 32,506

Net income — — — — 271,442 — 271,442 163 271,605

Other comprehensive loss — — — ( 93,775 ) — — ( 93,775 ) — ( 93,775 )

Cash dividend, $ 0.51 per share

1 unchanged sentence

Issuance of common stock including proceeds from exercise of common stock options 119,893 1 1,521 — — — 1,522 — 1,522

Contributions from noncontrolling shareholders — — — — — — — 23 23

Stock-based compensation expense — — 5,694 — — — 5,694 — 5,694

2 unchanged sentences

Balance, December 31, 2021 57,695,676 $ 577 $ 1,058,997 $ ( 37,768 ) $ 1,224,614 $ ( 307,321 ) $ 1,939,099 $ ( 2,083 ) $ 1,937,016

(1) Repurchase of common stock for the years ended December 31, 2020 and 2019 included 3,950,855 and 2,132,390 shares repurchased, respectively, in connection with the Company's share buyback program approved by the Board of Directors, and 24,910 and 132,993 shares repurchased, respectively, to cover taxes due on the consideration transferred in the Beneficial acquisition related to the vesting of unrestricted Beneficial stock awards.

(1) Repurchase of common stock for the years ended December 31, 2021 and 2020 included 267,309 and 3,950,855 shares repurchased, respectively, in connection with the Company's share buyback program approved by the Board of Directors, and 31,188 and 24,910 shares withheld, respectively, to cover tax liabilities.

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

5 unchanged sentences

Adjustments to reconcile net income to net cash provided by operating activities:

Provision for credit losses 153,180 25,560 13,170

(Recovery of) provision for credit losses ( 117,087 ) 153,180 25,560

Depreciation of premises and equipment, net 15,410 14,999 15,852

(Accretion) amortization of fees, premiums and discounts, net ( 60,159 ) ( 45,548 ) 15,255

Accretion of fees, premiums and discounts, net ( 38,257 ) ( 60,159 ) ( 45,548 )

Amortization of intangible assets 10,583 10,909 11,113

6 unchanged sentences

Unrealized gains on equity investments, net ( 5,141 ) ( 761 ) ( 26,175 )

Realized gain on sale of equity investment, net ( 22,052 ) — ( 3,757 )

Deferred income tax (benefit) expense ( 32,848 ) 7,074 3,378

(Increase) decrease in accrued interest receivable ( 6,241 ) 1,406 ( 2,596 )

Realized loss (gain) on sale of equity investment, net 706 ( 22,052 ) —

Deferred income tax expense (benefit) 39,838 ( 32,848 ) 7,074

Decrease (increase) in accrued interest receivable 2,739 ( 6,241 ) 1,406

Increase in other assets ( 46,378 ) ( 18,339 ) ( 4,676 )

2 unchanged sentences

(Decrease) increase in accrued interest payable ( 714 ) ( 1,653 ) 1,203

Increase (decrease) in other liabilities 24,675 30,922 ( 2,931 )

(Decrease) increase in other liabilities ( 4,807 ) 24,675 30,922

Increase in value of bank-owned life insurance ( 1,048 ) ( 1,757 ) ( 806 )

8 unchanged sentences

Proceeds from bank-owned life insurance surrender — — 59,710

Net proceeds from sale of Visa Class B shares 85,850 — —

Net proceeds from sale of equity investments 4,899 85,850 —

Net cash from business combinations — — 76,072

Net (increase) decrease in loans and leases ( 449,091 ) 201,934 ( 101,174 )

Purchases of Visa Class B shares — — ( 1,568 )

Sale of Visa Class B shares — — 6,186

Net decrease (increase) in loans and leases 1,265,395 ( 449,091 ) 201,934

Purchases of FHLB stock ( 625 ) ( 145,400 ) ( 394,428 )

10 unchanged sentences

Net increase in demand and saving deposits $ 1,760,031 $ 2,501,442 $ 69,761

(Decrease) increase in time deposits ( 197,765 ) ( 55,400 ) 43,871

Decrease in time deposits ( 169,871 ) ( 197,765 ) ( 55,400 )

Decrease in brokered deposits ( 202,625 ) ( 29,474 ) ( 156,396 )

6 unchanged sentences

Issuance of common stock and exercise of common stock options 1,522 2,032 7,755

Redemption of senior debt ( 100,000 ) — —

Issuance of senior debt, net of costs — 147,780 —

1 unchanged sentence

Net cash provided by (used in) financing activities $ 1,244,924 $ 1,942,785 $ ( 432,694 )

Increase (decrease) in cash, cash equivalents, and restricted cash $ 1,082,983 $ ( 49,005 ) $ ( 103,109 )

(Decrease) increase in cash, cash equivalents, and restricted cash $ ( 121,796 ) $ 1,082,983 $ ( 49,005 )

Cash, cash equivalents, and restricted cash at beginning of period 1,654,735 571,752 620,757

6 unchanged sentences

Loans transferred to portfolio from held-for-sale at fair value 72,621 34,517 24,862

Available-for-sale securities purchased, not settled 34,489 — —

Fair value of assets acquired, net of cash received — — 5,032,156

16 unchanged sentences

The Company also has one unconsolidated subsidiary, WSFS Capital Trust III (the Trust).

WSFS Bank has three wholly owned subsidiaries:

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

(WSFS Wealth Investments) and 1832 Holdings, Inc., and one majority-owned subsidiary, NewLane Finance Company (NewLane Finance ® ).

WSFS Bank has two wholly owned subsidiaries:

Beneficial Equipment Finance Corporation (BEFC) and 1832 Holdings, Inc., and one majority-owned subsidiary, NewLane Finance Company (NewLane Finance ® ).

Founded in 1832, the Bank is one of the ten oldest bank and trust companies continuously operating under the same name in the U.S.

The Company provides residential and commercial real estate, commercial and consumer lending services, as well as retail deposit and cash management services.

The Company provides residential and commercial mortgage, commercial and consumer lending services, as well as retail deposit and cash management services.

The Company's core banking business is commercial lending funded primarily by customer-generated deposits.

3 unchanged sentences

Information on the Company's website is not incorporated by reference into this Annual Report on Form 10-K.

The Company's leasing business is conducted by NewLane Finance ® .

NewLane Finance ® originates small business leases and provides commercial financing to businesses nationwide, targeting various equipment categories including technology, software, office, medical, veterinary and other areas.

In addition, NewLane Finance ® offers captive insurance through its subsidiary, Prime Protect.

Basis of Presentation

2 unchanged sentences

Although the Company's estimates contemplate current conditions and how it expects them to change in the future, it is reasonably possible that actual conditions in 2022 could be worse than anticipated in those estimates, which could materially affect its results of operations and financial condition.

The accounting for the allowance for credit losses and reserves for lending related commitments, goodwill, intangible assets, post-retirement benefit obligations, the fair value of financial instruments, and income taxes are subject to significant estimates.

Among other effects, changes to these estimates could result in future impairment of investment securities, goodwill and intangible assets and the establishment of the allowance and reserve for lending related commitments as well as increased post-retirement benefits expense.

The accounting for the allowance for credit losses (including loans and leases held for investment, investment securities available-for-sale and held-to-maturity), lending related commitments, goodwill, intangible assets, post-retirement benefit obligations, the fair value of financial instruments, and income taxes are subject to significant estimates.

Among other effects, changes to these estimates could result in future impairments of investment securities, goodwill and intangible assets, the establishment of additional allowance and lending-related commitment reserves, changes in the fair value of financial instruments, as well as increased post-retirement benefits and income tax expense.

Certain reclassifications have been made to the prior year’s Consolidated Financial Statements to conform to the current year’s presentation.

All significant intercompany accounts and transactions were eliminated in consolidation.

Business Combinations

On March 1, 2019, the Company acquired Beneficial Bancorp, Inc.

(Beneficial), including its subsidiary Beneficial Bank, a community bank headquartered in Philadelphia, Pennsylvania, creating the largest, premier, locally-headquartered community bank in the Delaware and greater Philadelphia region.

Beneficial merged with and into WSFS, with WSFS continuing as the surviving corporation and simultaneously, Beneficial Bank merged with and into WSFS Bank, with WSFS Bank continuing as the surviving bank.

This acquisition grew the Company's market share, deepened the Company's presence in the Philadelphia, southeastern Pennsylvania and New Jersey markets, and enhanced its customer base.

The results of Beneficial's operations are included in the Company's Consolidated Financial Statements since the date of the acquisition.

See Note 3 for further information.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

39 unchanged sentences

Equity Investments

The Company has equity investments accounted for in accordance with both ASC 321-10, Investments - Equity Securities and ASC 323-10, Investments - Equity Method and Joint Ventures .

The Company has equity investments in certain strategic partnerships that are accounted for in accordance with both ASC 321-10, Investments - Equity Securities and ASC 323-10, Investments - Equity Method and Joint Ventures .

Our equity investments are recorded in Other investments on the Consolidated Statements of Financial Condition.

Equity investments recorded in accordance with ASC 321-10 are classified into one of the following two categories and accounted for as follows:

12 unchanged sentences

The qualitative assessment to determine whether impairment exists requires the use of the Company’s judgment.

If, after completing the qualitative assessment, the Company concludes an equity method investment is impaired, a loss for the difference between the equity investment’s carrying value and its fair value may be recognized in the Consolidated Statements of Income.

After an impairment charge is recorded, the new cost basis cannot be subsequently written up to a higher value as a result of increases in fair value.

64 unchanged sentences

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

Qualitative factors in the model can add to or subtract from quantitative reserves.

Qualitative factors can add to or subtract from quantitative reserves.

The Company's loan officers and risk managers meet at least quarterly to discuss and review the conditions and risks associated with individual problem loans.

8 unchanged sentences

Allowance for Loan and Lease Losses (Prior to the Company's Adoption of CECL)

The Company adopted the ASC 326 guidance on January 1, 2020, using the modified retrospective approach for financial assets recorded at amortized cost with the exception of purchase credit deteriorated assets, which were previously classified as purchase credit impaired accounted for under ASC 310-30, adopted using the prospective approach.

The cumulative effect of the adoption resulted in a $ 30.4 million decrease to the beginning balance of retained earnings as of January 1, 2020.

For periods prior to the adoption of CECL, the Company maintain an allowance for loan and lease losses (allowance) which represents our best estimate of probable losses within our loan portfolio.

38 unchanged sentences

Troubled debt restructurings consist of concessions granted to borrowers facing financial difficulty.

For additional detail regarding the allowance for loan and lease losses and the provision for loan and lease losses, see Note 8.

Loans Held for Sale

72 unchanged sentences

Accounting Guidance Adopted in 2021

ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) .

ASU 2016-13 replaces the incurred loss impairment methodology with the current expected credit losses (CECL) methodology which requires management consideration and judgment of a broader range of information to determine credit loss estimates.

In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326 , clarifying that operating lease receivables are not within the scope of Topic 326.

In December 2018, federal regulators issued a final rule related to regulatory capital and CECL (Regulatory Capital Rule:

Implementation and Transition of the Current Expected Credit Losses Methodology for Allowances and Related Adjustments to the Regulatory Capital Rule and Conforming Amendments to Other Regulations) , intended to provide regulatory capital relief for entities transitioning to CECL.

In May 2019, the FASB issued ASU No.

2019-05, Financial Instruments-Credit Losses (Topic 326):

Targeted Transition Relief , providing entities the option to irrevocably elect the fair value option on eligible financial instruments, which excluded held-to-maturity debt securities.

In November 2019, the FASB issued ASU No.

2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, clarifying guidance on expected recoveries for purchased credit deteriorated financial assets, accrued interest receivable and collateral maintenance provisions and providing transition relief for troubled debt restructurings.

In March 2020, the FASB issued ASU No.

2020-03, Codification Improvements to Financial Instruments , clarifying the contractual term of a net investment in a lease and the requirement to establish an allowance for credit loss when an entity regains control of sold financial assets.

While the CARES Act provided an option to defer implementation of the CECL methodology, the Company adopted this guidance on January 1, 2020, using the modified retrospective approach for financial assets recorded at amortized cost with the exception of purchase credit deteriorated (PCD) assets, which were previously classified as purchase credit impaired (PCI) accounted for under ASC 310-30, adopted using the prospective approach.

The cumulative effect of the adoption resulted in a $ 30.4 million decrease to the beginning balance of retained earnings as of January 1, 2020.

Results and disclosures for reporting periods beginning after January 1, 2020 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP.

For further details on the impact of the adoption, accounting policies, elections, and practical expedients applied, see Summary of Significant Accounting Policies and CECL disclosures throughout the Notes to the Consolidated Financial Statements.

The following table illustrates the impact of ASC 326 on loans, leases, purchased financial assets, debt securities, other assets and unfunded lending commitments compared to the incurred loss approach, as disclosed prior to adoption on January 1, 2020.

January 1, 2020

As reported under ASC 326 Pre-ASC 326 Adoption Impact of ASC 326 Adoption

(Dollars in thousands)

Investment securities, held-to-maturity

State and political subdivisions $ ( 8 ) $ — $ ( 8 )

Allowance for credit losses on held-to-maturity debt securities $ ( 8 ) $ — $ ( 8 )

Loans and leases

Commercial and industrial (1)

( 42,596 ) ( 22,849 ) ( 19,747 )

Owner-occupied commercial ( 3,144 ) ( 4,616 ) 1,472

Commercial mortgages ( 9,114 ) ( 7,452 ) ( 1,662 )

Construction ( 4,572 ) ( 3,891 ) ( 681 )

Residential ( 8,903 ) ( 1,381 ) ( 7,522 )

Consumer ( 15,102 ) ( 7,387 ) ( 7,715 )

Allowance for credit losses on loans and leases $ ( 83,431 ) $ ( 47,576 ) $ ( 35,855 )

Deferred tax assets 18,452 9,991 8,461

Other liabilities

Allowance for credit losses on unfunded lending commitments ( 4,513 ) ( 1,547 ) ( 2,966 )

Total ASC 326 impact to retained earnings $ 30,368

(1) Includes commercial small business leases.

2018-13, Fair Value Measurement Disclosure Framework:

In August 2018, the FASB issued ASU No.

2018-13, Fair Value Measurement Disclosure Framework , which amended ASC 820 - Fair Value Measurement .

The new guidance modifies, adds and removes certain disclosures aimed to improve the overall usefulness of the disclosure requirements for fair value measurements.

The guidance is effective in annual and interim periods in fiscal years beginning after December 15, 2019.

Early adoption is permitted.

Adoption is required on either a prospective or retrospective basis, depending on the amendment.

The Company adopted this standard on January 1, 2020.

See Note 19 for changes to financial statement disclosures resulting from the adoption of this standard.

2018-14, Compensation-Retirement Benefits - Defined Benefit Plans-General (Topic 715):

In August 2018, the FASB issued ASU No.

2018-14, Compensation-Retirement Benefits - Defined Benefit Plans-General (Topic 715) which applies to all employers that provide defined benefit pension or other postretirement benefit plans for their employees.

The new guidance modifies, adds and removes certain disclosures aimed to improve the overall usefulness of the disclosure requirements to financial statement users.

The guidance is effective for annual periods beginning after December 15, 2020.

Early adoption is permitted.

Use of the retrospective method is required.

The Company early adopted this standard on January 1, 2020.

See Note 15 for changes to financial statement disclosures resulting from the adoption of this standard.

2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Topic 350) :

In August 2018, the FASB issued ASU No.

2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Topic 350) .

The new guidance provided clarity on capitalizing and expensing implementation costs for cloud computing arrangements in a service contract.

If an implementation cost is capitalized, the cost should be recognized over the noncancellable term and periodically assessed for impairment.

The guidance is effective in annual and interim periods in fiscal years beginning after December 15, 2019.

Early adoption is permitted.

Adoption can be applied retrospectively or prospectively to all implementation costs incurred after the date of adoption.

The Company adopted this standard on January 1, 2020, on a prospective basis with no impact to the Consolidated Financial Statements at the time of adoption.

2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments:

In April 2019, the FASB issued ASU No.

2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.

The new guidance amended ASU 2016-13 to address topics related to accrued interest receivables, recoveries, disclosures, and provides certain other clarifications.

The new guidance also amended ASU 2017-12 to provide clarification on certain hedge accounting topics and transition requirements.

Lastly, the new guidance amended ASU 2016-01, Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities , to add clarifying guidance when using the measurement alternative under ASC 820, among certain other clarifications.

The guidance is effective for annual periods beginning after December 15, 2019.

Early adoption is permitted.

Adoption is required on a prospective, modified-retrospective or retrospective basis, depending on the amendment.

The Company included the amendments related to ASU 2016-13 as part of its CECL guidance implementation and adoption at January 1, 2020.

The Company adopted other amendments within this guidance on January 1, 2020 with no impact to the Consolidated Financial Statements at the time of adoption.

Accounting Guidance Pending Adoption at December 31, 2020

2019-12, Income Taxes (Topic 740):

7 unchanged sentences

Adoption is required on a prospective, modified-retrospective or retrospective basis, depending on the amendment.

The Company does not expect the application of this guidance to have a material impact on the Consolidated Financial Statements.

The Company adopted this standard on January 1, 2021, on a prospective basis with no impact to the Consolidated Financial Statements at the time of adoption.

2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815:

6 unchanged sentences

Use of the prospective method is required.

The Company does not expect the application of this guidance to have a material impact on the Consolidated Financial Statements.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting:

In March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

The amendments provide optional guidance to entities for a limited period of time to ease the transition in accounting for and recognizing the effects of reference rate reform on financial reporting.

Under the guidance, modifications of contracts due to reference rate reform will not require contract remeasurement or reassessment of a previous accounting determination.

For hedge accounting, modification of critical terms of the hedge due to changes in reference rate reform will not affect hedge accounting or dedesignate the hedging relationship.

The guidance also provides specific expedients for fair value hedges, cash flow hedges, and excluded components.

Further, the guidance provides a one-time election to sell or transfer held to maturity debt securities that are affected by the reference rate change.

The guidance is effective upon issuance through December 31, 2022.

The Company will apply the guidance to any contracts modifications made due to reference rate reform.

The Company adopted this standard on January 1, 2021, on a prospective basis with no impact to the Consolidated Financial Statements at the time of adoption.

2021-01, Reference Rate Reform (Topic 848):

2 unchanged sentences

The new guidance expands and clarifies the scope of ASU No.

2020-04 to include derivatives affected by changes in interest rates used for margining, discounting, or contract price alignment, commonly referred to as the “discounting transaction”.

Derivatives impacted by the discounting transaction will be eligible for certain optional expedients and exceptions related to contract modifications and hedge accounting as defined in Topic 848.

2020-04 to include derivatives affected by changes in interest rates used for margining, discounting, or contract price alignment, commonly referred to as the “discounting transaction.” Derivatives impacted by the discounting transaction will be eligible for certain optional expedients and exceptions related to contract modifications and hedge accounting as defined in Topic 848.

The guidance is effective upon issuance through December 31, 2022 and there was no impact to the Company at the time the guidance became effective.

The Company will apply this guidance to any derivatives affected by the discounting transition due to reference rate reform.

BUSINESS COMBINATIONS

Beneficial Bancorp, Inc.

On March 1, 2019, the Company acquired Beneficial.

Subject to the terms and conditions of the merger agreement, the Beneficial stockholders received 0.3013 shares of WSFS common stock and $ 2.93 in cash for each share of Beneficial common stock.

Based on the February 28, 2019 closing share price of $ 43.28 , the value of the stock consideration was $ 950.0 million and cash consideration was $ 228.2 million, for total transaction value of $ 1.2 billion.

Results of the combined Company’s operations are included in the Consolidated Financial Statements since the date of the acquisition.

Beneficial conducted its primary business operations through its wholly owned subsidiary, Beneficial Bank, which was merged into WSFS Bank.

At closing, Beneficial had 74 branches and offices in southeastern Pennsylvania and southern New Jersey.

WSFS acquired Beneficial to expand the scale and efficiency of its operations in the Philadelphia, southeastern Pennsylvania and New Jersey markets, and to create opportunities to generate additional revenue by providing its full suite of banking, mortgage banking, wealth management and insurance services to the legacy Beneficial markets.

The acquisition of Beneficial was accounted for as a business combination using the acquisition method of accounting and, accordingly, the assets acquired, liabilities assumed and consideration transferred were recorded at their estimated fair values as of the acquisition date.

The excess of consideration transferred over the fair value of net assets acquired was recorded as goodwill, which is not amortizable nor deductible for tax purposes.

The Company allocated the total balance of goodwill to its WSFS Bank segment.

The remeasurement period expired on February 29, 2020, and the Company does not expect any further material adjustments impacting the identified intangibles and goodwill.

During the year ended December 31, 2020, there were no remeasurement period adjustments made to the fair values of assets acquired and liabilities assumed.

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

(Dollars in thousands)

Consideration Transferred:

Common shares issued ( 21,816,355 )

Cash paid to Beneficial stock and option holders 228,239

Value of consideration 1,178,207

Assets acquired:

Cash and due from banks 304,311

Investment securities 619,834

Loans and leases, net 3,711,246

Premises and equipment 69,873

Deferred income taxes 18,463

Bank owned life insurance 82,510

Core deposit intangible 85,053

Servicing rights intangible 2,466

Other assets 135,890

Total assets 5,029,646

Liabilities assumed:

Deposits 4,056,506

Other liabilities 101,754

Total liabilities 4,158,260

Net assets acquired:

Goodwill resulting from acquisition of Beneficial $ 306,821

As a result of the merger, the Company developed a comprehensive integration plan under which it has incurred direct costs, which were expensed as incurred.

These direct costs include costs related to:

(i) terminated contracts, (ii) consolidated facilities (including lease termination expenses), (iii) severance, (iv) marketing, and (v) professional and legal fees.

Costs related to the acquisition and restructuring are included in the Corporate Development and Restructuring expense line items, respectively, on the Consolidated Statements of Income.

During the fourth quarter of 2018, WSFS announced a retail banking office optimization plan that included the consolidation of fourteen Beneficial and eleven WSFS Bank banking offices.

Most of the consolidations and rebranding of the remaining Beneficial banking offices were completed during the conversion, which occurred during the third quarter of 2019.

As of December 31, 2020, there were six retail locations remaining to complete the optimization plan.

Costs related to this plan are included in the Corporate Development and Restructuring expense line items on the Consolidated Statements of Income.

Additionally, during the second quarter of 2019, WSFS completed the sale of five legacy Beneficial retail banking offices in New Jersey to the Bank of Princeton, a New Jersey-based financial institution, at a deposit premium of 7.37 %.

The Company will apply this guidance to any derivatives affected by the discounting transaction due to reference rate reform.

There was no material accounting guidance pending adoption at December 31, 2021.

NONINTEREST INCOME

7 unchanged sentences

Total credit/debit card and ATM income $ 29,479 $ 35,014 $ 50,383

Credit/debit card and ATM income is composed of bailment fees, interchange fees, and other card and ATM fees are earned from bailment arrangements with customers.

Credit/debit card and ATM income is composed of bailment fees, interchange fees, and other card and ATM fees.

Bailment fees are earned from bailment arrangements with customers.

Bailment arrangements are legal relationships in which property is delivered to another party without a transfer of ownership.

5 unchanged sentences

This revenue stream generates fee income through monthly billing for bailment services.

Bailment fees decreased in 2020 as compared to 2019 due to the lower interest rate environment.

Bailment fees decreased in 2021 as compared to 2020 and 2019 due to the lower interest rate environment.

Credit/debit card and ATM income also includes interchange fees.

1 unchanged sentence

These revenue streams generate fee income at the time a transaction occurs and are recorded as revenue at the time of the transaction.

Interchange fees decreased in 2020 as compared to 2019 as a result of the Durbin Amendment impacting the Company beginning on July 1, 2020.

Interchange fees decreased in 2021 and 2020 as compared to 2019 as a result of the Durbin Amendment which became effective for the Company on July 1, 2020.

The Durbin Amendment is a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 that established a cap on interchange fees with respect to debit transactions for banks that, together with their affiliates, have over $10 billion in assets.

Investment management and fiduciary income

5 unchanged sentences

Total investment management and fiduciary income $ 62,348 $ 48,979 $ 42,450

Investment management and fiduciary income is composed of trust, wealth management and advisory fees.

Trust fees are based on revenue earned from custody, escrow and trustee services on structured finance transactions;

Investment management and fiduciary income is composed of trust fees and wealth management and advisory fees.

Trust fees are based on revenue earned from custody, escrow and trustee and trustee related services on structured finance transactions;

indenture trustee, administrative agent and collateral agent services to institutions and corporations;

1 unchanged sentence

and investment and trustee services to families and individuals across the U.S.

Most fees are flat fees, except for a portion of personal and corporate trustee fees where the Company earns a percentage on the assets under management (AUM).

Most fees are flat fees, except for a portion of personal and corporate trustee fees where the Company earns a percentage on the assets under management or assets held within a trust.

This revenue stream primarily generates fee income through monthly, quarterly and annual billings for services provided.

Trust fees increased in 2020 as compared to 2019 primarily due to increased institutional trust activity.

Wealth management and advisory fees consists of fees from West Capital, Cypress, Powdermill ® and WSFS Wealth Investments.

Trust fees increased in 2021 as compared to 2020 and 2019 primarily due to increased institutional trust activity.

Wealth management and advisory fees consists of fees from Cypress, West Capital, Powdermill ® and WSFS Wealth ® Investments.

Wealth management and advisory fees are based on revenue earned from services including asset management, financial planning, family office, and brokerage.

14 unchanged sentences

Revenue is recorded at the time of the transaction.

Return and overdraft fees declined in 2020 due to elevated deposits from customers who received PPP loans, government stimulus impact and lower customer spending.

The following table presents the components of other income:

8 unchanged sentences

These fees are primarily generated through monthly billings or at the time of the transaction.

Miscellaneous products and services was higher in 2019, as compared to 2020 and 2018, primarily due to a non-recurring transfer of client accounts to a departing Wealth investment advisor in accordance with the buy-out provisions of the advisor's contract.

Arrangements with multiple performance obligations

16 unchanged sentences

Outstanding common stock equivalents having no dilutive effect 1 12 1

Basic earnings per share is calculated by dividing Net income attributable to WSFS by the weighted-average number of basic shares outstanding.

Basic earnings per share is calculated by dividing Net income attributable to WSFS by the weighted-average basic shares outstanding.

Diluted earnings per share is calculated by dividing Net income attributable to WSFS by the weighted-average fully diluted shares outstanding, using the treasury stock method.

Fully diluted shares include the adjustment for the dilutive effect of common stock awards, which include outstanding stock options and unvested restricted stock units from the 2013 Incentive Plan and the 2018 Incentive Plan.

Fully diluted shares include the adjustment for the dilutive effect of common stock awards, which include outstanding stock options and unvested restricted stock units under the 2013 Incentive Plan and the 2018 Incentive Plan.

INVESTMENT SECURITIES

6 unchanged sentences

Available-for-Sale Debt Securities

CMO $ 461,819 $ 9,949 $ 443 $ — $ 471,325

FNMA MBS 1,544,105 55,747 882 — 1,598,970

FHLMC MBS 190,856 12,142 105 — 202,893

GNMA MBS 22,716 1,046 — — 23,762

GSE agency notes 230,769 1,987 649 — 232,107

Collateralized mortgage obligation (CMO) $ 586,830 $ 3,569 $ 14,633 $ — $ 575,766

Fannie Mae (FNMA) mortgage-backed securities (MBS) 4,275,307 24,170 53,793 — 4,245,684

Freddie Mac (FHLMC) MBS 139,708 6,336 516 — 145,528

Ginnie Mae (GNMA) MBS 17,456 551 71 — 17,936

Government-sponsored enterprises (GSE) agency notes 230,581 — 10,184 — 220,397

$ 5,249,882 $ 34,626 $ 79,197 $ — $ 5,205,311

4 unchanged sentences

(1) Held-to-maturity securities transferred from available-for-sale are included in held-to-maturity at amortized cost basis at the time of transfer.

The amortized cost of transferred held-to-maturity securities included net unrealized gains of $ 0.4 million at December 31, 2020, which are offset in Accumulated other comprehensive income .

The amortized cost of transferred held-to-maturity securities included net unrealized gains of $ 0.2 million at December 31, 2021, which are offset in Accumulated other comprehensive income (loss) .

At the time of transfer, there was no allowance for credit loss on the available-for-sale securities.

2 unchanged sentences

(Dollars in thousands) Amortized

Allowance for

Credit Losses Fair

Available-for-Sale Debt Securities

3 unchanged sentences

GNMA MBS 22,716 1,046 — — 23,762

GSE agency notes 230,769 1,987 649 — 232,107

$ 2,450,265 $ 80,871 $ 2,079 $ — $ 2,529,057

4 unchanged sentences

(1) Held-to–maturity securities transferred from available-for-sale are included in held-to-maturity at fair value at the time of transfer.

The amortized cost of transferred held-to-maturity securities included net unrealized gains of $ 0.6 million at December 31, 2019, which are offset in Accumulated other comprehensive income .

The scheduled maturities of the Company's available-for-sale and held-to-maturity investments at December 31, 2020 and December 31, 2019 are presented in the table below:

The amortized cost of transferred held-to-maturity securities included net unrealized gains of $ 0.4 million at December 31, 2020, which are offset in Accumulated other comprehensive income (loss) .

At the time of transfer, there was no allowance for credit loss on the available-for-sale securities.

Subsequent to transfer, the securities were evaluated for credit loss.

The scheduled maturities of available-for-sale and held-to-maturity debt securities at December 31, 2021 and December 31, 2020 are presented in the table below:

Available-for-Sale

31 unchanged sentences

The held-to-maturity debt securities are not collateral-dependent securities as these are general obligation bonds issued by cities, states, counties, or other local and foreign governments.

Investment securities with fair market values aggregating $ 1.3 billion and $ 1.1 billion were pledged as collateral for retail customer repurchase agreements, municipal deposits, and other obligations as of December 31, 2020 and 2019, respectively.

Investment securities with fair market values aggregating $ 2.2 billion and $ 1.3 billion were pledged as collateral for retail customer repurchase agreements, municipal deposits, and other obligations as of December 31, 2021 and December 31, 2020, respectively.

During the year ended December 31, 2021, the Company sold $ 14.1 million of debt securities categorized as available-for-sale, resulting in $ 0.3 million of realized gains and no realized losses.

During the year ended December 31, 2019, the Company sold $ 618.2 million of debt securities categorized as available-for-sale, of which $ 578.8 million was related to the acquisition of Beneficial.

During the year ended December 31, 2020, the Company sold $ 305.8 million of debt securities categorized as available-for-sale, resulting in $ 9.1 million of realized gains and no realized losses.

During the year ended December 31, 2019, the Company sold $ 618.2 million, of which $ 578.8 million was related to the acquisition of Beneficial.

The remaining $ 39.8 million resulted in realized gains of $ 0.3 million and no realized losses.

During the year ended December 31, 2018, the Company sold $ 7.0 million of investment securities categorized as available-for-sale, resulting in realized gains of less than $ 0.1 million and no realized losses.

As of December 31, 2021 and December 31, 2020, the Company's debt securities portfolio had remaining unamortized premiums of $ 69.4 million and $ 60.4 million, respectively, and unaccreted discounts of $ 12.7 million and $ 2.6 million, respectively.

7 unchanged sentences

FHLMC MBS 11,227 348 1,917 168 13,144 516

GNMA MBS 4,847 71 — — 4,847 71

GSE agency notes 64,509 1,918 155,888 8,266 220,397 10,184

$ 3,510,536 $ 56,088 $ 550,108 $ 23,109 $ 4,060,644 $ 79,197

For debt securities in an unrealized loss position, the table below shows the Company's gross unrealized losses and fair value by investment category and length of time that individual debt securities were in a continuous unrealized loss position at December 31, 2019.

For debt securities in an unrealized loss position, the table below shows the gross unrealized losses and fair value by investment category and length of time that individual debt securities were in a continuous unrealized loss position at December 31, 2020.

Duration of Unrealized Loss Position

6 unchanged sentences

FHLMC MBS 5,191 105 — — 5,191 105

GNMA MBS 1,847 4 5,742 59 7,589 63

$ 394,889 $ 3,707 $ 23,099 $ 275 $ 417,988 $ 3,982

Held-to-maturity debt securities:

State and political subdivisions (1)

GSE agency notes 101,016 649 — — 101,016 649

$ 579,528 $ 2,076 $ 4,355 $ 3 $ 583,883 $ 2,079

(1) State and political subdivisions with an unrealized loss position of less than twelve months had an unrealized loss of less than $ 1 thousand at December 31, 2019.

At December 31, 2020, available-for-sale debt securities for which the amortized cost basis exceeded fair value totaled $ 583.9 million.

At December 31, 2021, available-for-sale debt securities for which the amortized cost basis exceeded fair value totaled $ 4.1 billion.

Total unrealized losses on these securities were $ 79.2 million at December 31, 2021.

2 unchanged sentences

As a result, there is no allowance for credit losses recorded for available-for-sale debt securities as of December 31, 2021.

At December 31, 2020, held-to-maturity debt securities had an amortized cost basis of $ 111.7 million.

At December 31, 2021 and December 31, 2020, held-to-maturity debt securities had an amortized cost basis of $ 90.6 million and $ 111.7 million, respectively.

The held-to-maturity debt security portfolio primarily consists of highly rated municipal bonds.

5 unchanged sentences

Ending balance $ 90,146 $ 500

As a result of the adoption of ASC 326 on January 1, 2020, the Company reviewed its held-to-maturity debt securities for potential credit losses.

The following table presents the activity in the allowance for credit losses for debt securities held-to-maturity by major security type for the year ended December 31, 2020:

The following table summarizes the amortized cost of debt securities held-to-maturity as of December 31, 2020, aggregated by credit quality indicator:

(Dollars in thousands) State and political subdivisions Foreign bonds

A+ rated or higher $ 110,959 $ 501

Not rated 287 —

Ending balance $ 111,246 $ 501

The Company reviewed its held-to-maturity debt securities by major security type for potential credit losses.

There was no activity in the allowance for credit losses for foreign bond debt securities for the twelve months ended December 31, 2021 and 2020.

The following table presents the activity in the allowance for credit losses for state and political subdivisions debt securities for the twelve months ended December 31, 2021 and 2020:

Twelve months ended December 31,

(Dollars in thousands) 2021 2020

Allowance for credit losses:

4 unchanged sentences

Ending balance $ 4 $ 6

Accrued interest receivable of $ 1.1 million as of December 31, 2020 for held-to-maturity debt securities was excluded from the evaluation of allowance for credit losses.

There were no nonaccrual or past due held-to-maturity debt securities as of December 31, 2020.

Equity Investments

The following tables detail the amortized cost, and the estimated fair value of the Company's equity investments, which are included in Other investments in the audited Consolidated Statements of Financial Condition.

December 31, 2020

(Dollars in thousands) Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value

Equity Investments

Visa Class B shares (1)

$ 618 $ 185 $ — $ 803

Other equity investments (2)

10,384 — 1,646 8,738

$ 11,002 $ 185 $ 1,646 $ 9,541

December 31, 2019

(Dollars in thousands) Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value

Accrued interest receivable of $ 0.9 million and $ 1.1 million as of December 31, 2021 and December 31, 2020, respectively, for held-to-maturity debt securities were excluded from the evaluation of allowance for credit losses.

There were no nonaccrual or past due held-to-maturity debt securities as of December 31, 2021 and December 31, 2020.

Equity Investments

Visa Class B shares (1)

$ 15,716 $ 45,565 $ — $ 61,281

Other equity investments (2)

8,140 625 — 8,765

$ 23,856 $ 46,190 $ — $ 70,046

(1) The Company recorded a net realized gain on sale of Visa Class B shares of $ 22.1 million and $ 3.8 million during the years ended December 31, 2020 and 2018, respectively.

There were no such sales in 2019.

These gains are recorded in Realized gain on sale of equity investment in the Consolidated Statements of Income.

The Company recorded unrealized gains on its remaining investment in Visa Class B shares of $ 3.0 million, $ 25.6 million, and $ 20.7 million during the years ended December 31, 2020, 2019, and 2018, respectively, which is recorded in Unrealized gain on equity investment, net in the Consolidated Statements of Income.

(2) As of December 31, 2020 and 2019, the fair value balance of the investment in Spring EQ was $ 4.2 million and $ 3.4 million, respectively.

The Company recorded an impairment loss of $ 2.3 million in the investment in Spring EQ during the first quarter of 2020, which is recorded in Unrealized gain on equity investment, net in the Consolidated Statements of Income.

There were no impairment losses recorded on the Company's equity investments during the year ended December 31, 2019.

During the second quarter of 2020, the Company amended its agreement with Spring EQ in an exchange for additional equity interest.

The additional equity interest in Spring EQ was valued at $ 2.4 million.

The Company had equity investments with a fair value of $ 10.5 million and $ 9.5 million as of December 31, 2021 and December 31, 2020, respectively.

During the twelve months ended December 31, 2021, total net gains on equity investments of $ 4.4 million were recorded from the sale of the Company's investment in Social Finance, Inc.

(SoFi) in July 2021.

This included a realized loss of $ 0.7 million which was recorded in Realized loss (gain) on equity investments, net in the Consolidated Statements of Income at the time of sale.

During the twelve months ended December 31, 2020, total net gains on equity investments of $ 22.8 million were recorded in the Company's Consolidated Statements of Income.

This included a net realized gain of $ 22.1 million which was recorded in Realized loss (gain) on equity investments, net for the sale of Visa Class B shares in June 2020.

During the twelve months ended December 31, 2019, total net gains on equity investments of $ 26.2 million were recorded in the Company's Consolidated Statements of Income.

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

10 unchanged sentences

7,885,989 9,024,739

Deferred fees, net (4)

Allowance for credit losses 94,507 228,804

Net loans and leases $ 7,791,482 $ 8,795,935

(1) Includes PPP loans of $ 751.2 million at December 31, 2020

(1) Includes PPP loans of $ 31.5 million and $ 751.2 million 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) At December 31, 2020, deferred fees, net are included in portfolio segment totals to present the amortized cost basis in accordance with the adoption of CECL.

At December 31, 2019, deferred fees, net are excluded from portfolio segment totals to present the unpaid principal balance under the incurred loss methodology.

Accrued interest receivable on loans outstanding was $ 31.6 million and $ 37.6 million at December 31, 2021 and 2020, respectively.

ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY INFORMATION

The following table provides the activity of the Company's allowance for credit losses and loan and lease balances for the year ended December 31, 2020 under the CECL model in accordance with ASC 326 (as adopted on January 1, 2020).

During 2020, the increase to the allowance for credit losses was primarily due to the Company's initial adoption of CECL, acute deterioration in the economic forecast used in its CECL models related to the impact of COVID-19 pandemic and enhanced loan reviews which resulted in risk migration that occurred during the year in several specific portfolios, mainly in the accommodation and food service industries.

The following tables provide the activity of the Company's allowance for credit losses and loan and lease balances for the years ended December 31, 2021 and December 31, 2020 in accordance with ASC 326.

During 2021, the decrease to the allowance for credit losses was primarily due to positive impacts on the economic forecasts and significantly improved credit quality metrics that reverted the Company's problem assets, nonperforming assets and delinquencies to at or near the levels prior to the COVID-19 pandemic.

(Dollars in thousands) Commercial and Industrial (1)

2 unchanged sentences

Allowance for credit losses

Beginning balance, prior to adoption of ASC 326 $ 22,849 $ 4,616 $ 7,452 $ 3,891 $ 1,381 $ 7,387 $ 47,576

Impact of adopting ASC 326 (4)

19,747 ( 1,472 ) 1,662 681 7,522 7,715 35,855

Beginning balance $ 150,875 $ 9,615 $ 31,071 $ 12,190 $ 6,893 $ 18,160 $ 228,804

Charge-offs ( 23,592 ) ( 83 ) ( 73 ) ( 2,473 ) — ( 2,094 ) ( 28,315 )

Recoveries 8,756 160 269 — 789 1,131 11,105

Provision (credit) 114,412 6,665 21,903 7,582 ( 2,011 ) 4,629 153,180

(Credit) provision ( 86,072 ) ( 5,118 ) ( 19,644 ) ( 7,814 ) ( 4,330 ) 5,891 ( 117,087 )

Ending balance $ 49,967 $ 4,574 $ 11,623 $ 1,903 $ 3,352 $ 23,088 $ 94,507

11 unchanged sentences

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

(4) The impact of adopting ASC 326 includes $ 0.1 million for the initial allowance on loans purchased with credit deterioration.

The following tables provide the activity of the allowance for loan and lease losses and loan and lease balances for the years ended December 31, 2019 and 2018 under the incurred loss model:

(Dollars in thousands) Commercial and Industrial (1)

Construction Residential (2)

Consumer Total

Commercial Commercial

Mortgages Construction Residential (2)

Year Ended December 31, 2020

Allowance for loan and lease losses

Beginning balance $ 14,211 $ 5,057 $ 6,806 $ 3,712 $ 1,428 $ 8,325 $ 39,539

Allowance for credit losses

Beginning balance, prior to adoption of ASC 326 $ 22,849 $ 4,616 $ 7,452 $ 3,891 $ 1,381 $ 7,387 $ 47,576

Impact of adoption ASC 326 (4)

19,747 ( 1,472 ) 1,662 681 7,522 7,715 35,855

Charge-offs ( 10,388 ) ( 336 ) ( 104 ) — ( 229 ) ( 2,464 ) ( 13,521 )

1 unchanged sentence

Provision (credit) 114,412 6,665 21,903 7,582 ( 2,011 ) 4,629 153,180

Provision (credit) for acquired loans 298 185 89 10 233 272 1,087

Ending balance $ 150,875 $ 9,615 $ 31,071 $ 12,190 $ 6,893 $ 18,160 $ 228,804

Period-end allowance allocated to:

Individually evaluated for impairment $ 1,179 $ 23 $ — $ — $ 463 $ 176 $ 1,841

Collectively evaluated for impairment 21,664 4,383 7,387 3,867 824 7,210 45,335

Acquired loans evaluated for impairment 6 210 65 24 94 1 400

Loans evaluated on an individual basis $ 1 $ — $ 13 $ — $ — $ — $ 14

Loans evaluated on a collective basis 150,874 9,615 31,058 12,190 6,893 18,160 228,790

Ending balance $ 150,875 $ 9,615 $ 31,071 $ 12,190 $ 6,893 $ 18,160 $ 228,804

Period-end loan balances:

Individually evaluated for impairment (3)

$ 11,158 $ 4,060 $ 1,753 $ — $ 12,151 $ 7,467 $ 36,589

Collectively evaluated for impairment 1,619,549 971,694 1,105,174 437,999 145,582 899,724 5,179,722

Acquired nonimpaired loans 603,157 313,955 1,107,379 142,592 834,820 219,413 3,221,316

Acquired impaired loans 1,564 6,757 8,670 491 7,326 2,127 26,935

Loans evaluated on an individual basis $ 14,048 $ 6,496 $ 20,309 $ 79 $ 5,921 $ 2,371 $ 49,224

Loans evaluated on a collective basis 2,935,255 1,326,231 2,065,753 716,196 758,472 1,163,546 8,965,453

Ending balance $ 2,949,303 $ 1,332,727 $ 2,086,062 $ 716,275 $ 764,393 $ 1,165,917 $ 9,014,677

$ 2,235,428 $ 1,296,466 $ 2,222,976 $ 581,082 $ 999,879 $ 1,128,731 $ 8,464,562

(Dollars in thousands) Commercial and Industrial Owner-

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

(2) Period-end loan balance excludes reverse mortgages at fair value of $ 10.1 million.

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

(4) Includes $ 0.1 million for the initial allowance on loans purchased with credit deterioration.

The following table provides the activity of the allowance for loan and lease losses and loan and lease balances for the year ended 2019 under the incurred loss model:

(Dollars in thousands) Commercial and Industrial (1)

Construction Residential (2)

6 unchanged sentences

Provision (credit) 23,977 ( 472 ) ( 830 ) 207 126 1,465 24,473

Provision (credit) for acquired loans ( 100 ) 56 ( 9 ) ( 18 ) ( 29 ) ( 7 ) ( 107 )

Provision for acquired loans 298 185 89 10 233 272 1,087

Ending balance $ 22,849 $ 4,616 $ 7,452 $ 3,891 $ 1,381 $ 7,387 $ 47,576

13 unchanged sentences

(1) Includes commercial small business leases.

(2) Period-end loan balance excludes reverse mortgages at fair value of $ 16.6 million as of December 31, 2019 and $ 16.5 million as of December 31, 2018.

(3) The difference between this amount and nonaccruing loans represents accruing troubled debt restructured loans which are considered to be impaired loans of $ 14.3 million as of December 31, 2019 and $ 15.0 million as of December 31, 2018.

(2) Period-end loan balance excludes reverse mortgages at fair value of $ 16.6 million as of December 31, 2019.

(3) The difference between this amount and nonaccruing loans represents accruing troubled debt restructured loans which are considered to be impaired loans of $ 14.3 million as of December 31, 2019.

(4) Ending loan balances do not include net deferred fees.

The following table shows nonaccrual and past due loans presented at amortized cost at the date indicated under the CECL model:

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

December 31, 2021

12 unchanged sentences

% of Total Loans 0.37 % 0.13 % 0.50 % 99.29 % 0.21 % 100.00 %

(1) Nonaccrual loans with an allowance totaled $ 13 thousand.

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

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

(3) Residential accruing current balances excludes reverse mortgages at fair value of $ 10.1 million.

(3) Residential accruing current balances exclude reverse mortgages at fair value of $ 3.9 million.

(4) Includes $ 17.0 million of delinquent, but still accruing, U.S.

government-guaranteed student loans that carry little risk of credit loss.

The following table shows nonaccrual and past due loans presented at unpaid principal balance at the date indicated under the incurred loss model:

December 31, 2020

12 unchanged sentences

% of Total Loans 0.31 % 0.19 % 0.50 % 99.04 % 0.46 % 100.00 %

(1) Includes commercial small business leases.

(2) Residential accruing current balances excludes reverse mortgages at fair value of $ 16.6 million.

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

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

(3) Residential accruing current balances exclude reverse mortgages at fair value of $ 10.1 million.

(4) Includes $ 18.2 million of delinquent, but still accruing, U.S.

government-guaranteed student loans that carry little risk of credit loss.

(4) Balances in table above includes $ 3.2 billion in acquired non-impaired loans.

The following table presents the amortized cost basis of nonaccruing collateral-dependent loans by class at December 31, 2020 under the CECL model:

December 31, 2020

(Dollars in thousands) Property Equipment and other

The following table presents the amortized cost basis of nonaccruing collateral-dependent loans by class at December 31, 2021 and December 31, 2020:

December 31, 2021 December 31, 2020

(Dollars in thousands) Property Equipment and other Property Equipment and other

Commercial and industrial (1)

4 unchanged sentences

Residential (2)

3,125 — 3,247 —

2,380 — 2,294 16

Total $ 12,597 $ 4,012 $ 38,722 $ 3,186

2 unchanged sentences

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

The following table provides an analysis of the Company's impaired loans at December 31, 2019 under the incurred loss model:

December 31, 2019

(Dollars in thousands) Ending

Commercial and industrial $ 11,900 $ 9,979 $ 1,921 $ 1,185 $ 14,653 $ 17,033

Owner-occupied commercial 5,596 3,919 1,677 233 6,083 7,869

Commercial mortgages 4,888 1,753 3,135 65 5,215 4,607

Construction 435 — 435 24 488 1,686

Residential 14,119 8,858 5,261 557 16,721 12,031

Consumer 7,584 5,876 1,708 178 8,444 7,729

Total $ 44,522 $ 30,385 $ 14,137 $ 2,242 $ 51,604 $ 50,955

(1) Reflects loan balances at or written down to their remaining book balance.

(2) The above includes acquired impaired loans totaling $ 7.9 million in the ending loan balance and $ 9.0 million in the contractual principal balance.

Interest income of $ 0.8 million was recognized on individually reviewed loans during 2020.

Interest income of $ 0.8 million was recognized on impaired loans during 2019.

Interest income of $ 0.8 million was recognized on individually reviewed loans during 2021 and 2020.

As of December 31, 2021, there were 28 residential loans and 9 commercial loans in the process of foreclosure.

8 unchanged sentences

• Special Mention.

Borrowers have potential weaknesses that deserve management’s close attention.

These borrowers have potential weaknesses that deserve management’s close attention.

Borrowers in this category may be experiencing adverse operating trends, for example, declining revenues or margins, high leverage, tight liquidity, or increasing inventory without increasing sales.

3 unchanged sentences

• Substandard or Lower .

Borrowers have well-defined weaknesses that require extensive oversight by management.

These borrowers have well-defined weaknesses that require extensive oversight by management.

Borrowers in this category may exhibit one or more of the following:

10 unchanged sentences

Loans that are greater than 90 days past due are generally considered nonperforming and placed on nonaccrual status.

The following tables provide an analysis of loans by portfolio segment based on the credit quality indicators used to determine the allowance for credit losses, as of December 31, 2020 under the CECL model.

The following table provides an analysis of loans by portfolio segment based on the credit quality indicators used to determine the allowance for credit losses as of December 31, 2021.

Term Loans Amortized Cost Basis by Origination Year

38 unchanged sentences

(6) Includes troubled debt restructured home equity installment loans performing in accordance with the loans' modified terms and are accruing interest.

The following tables provide an analysis of loans by portfolio segment based on the credit quality indicators used to determine the allowance for loan and lease loss, as of December 31, 2019 under the incurred loss model.

Commercial Credit Exposure

December 31, 2019

The following table provides an analysis of loans by portfolio segment based on the credit quality indicators used to determine the allowance for credit losses as of December 31, 2020.

Term Loans Amortized Cost Basis by Origination Year

2020 2019 2018 2017 2016 Prior

Revolving loans amortized cost basis Revolving loans converted to term Total

(Dollars in thousands)

Commercial and industrial (1) :

Owner-occupied

Commercial Commercial

Mortgages Construction Total Commercial (2)

(Dollars in thousands) Amount %

$ 1,250,528 $ 448,704 $ 296,594 $ 157,359 $ 97,036 $ 125,361 $ 6,182 $ 136,110 $ 2,517,874

Special mention 3,040 26,470 28,636 8,482 2,577 16,993 — 34,403 120,601

Accrual 78,809 32,679 23,017 — 134,505

Nonaccrual 9,852 4,037 1,626 — 15,515

Doubtful 1,179 23 — — 1,202

Total Special Mention and Substandard 102,127 36,739 65,121 — 203,987 3 %

Acquired impaired 1,564 6,757 8,670 491 17,482 — %

Substandard or Lower 82,868 60,227 57,880 50,446 15,151 35,150 63 9,043 310,828

$ 1,336,436 $ 535,401 $ 383,110 $ 216,287 $ 114,764 $ 177,504 $ 6,245 $ 179,556 $ 2,949,303

Owner-occupied commercial:

Pass $ 220,165 $ 225,766 $ 90,515 $ 135,903 $ 123,897 $ 271,086 $ — $ 123,194 $ 1,190,526

Total $ 2,235,428 $ 1,296,466 $ 2,222,976 $ 581,082 $ 6,335,952 100 %

(1) Includes commercial small business leases.

(2) Includes $ 2.2 billion of acquired non-impaired loans at December 31, 2019.

Residential Credit Exposure

Special mention 1,525 5,885 1,838 17,578 4,125 1,997 — 14,467 47,415

Substandard or Lower 3,703 13,426 15,272 19,883 11,581 19,331 — 11,590 94,786

$ 225,393 $ 245,077 $ 107,625 $ 173,364 $ 139,603 $ 292,414 $ — $ 149,251 $ 1,332,727

Commercial mortgages:

Pass $ 379,592 $ 283,004 $ 240,924 $ 257,809 $ 254,780 $ 375,473 $ — $ 148,210 $ 1,939,792

Special mention 8,324 1,774 21,762 21,269 1,274 6,507 — 1,870 62,780

Substandard or Lower 26,343 25,402 2,253 1,950 3,242 24,300 — — 83,490

$ 414,259 $ 310,180 $ 264,939 $ 281,028 $ 259,296 $ 406,280 $ — $ 150,080 $ 2,086,062

Construction:

Pass $ 189,257 $ 214,956 $ 208,981 $ 11,414 $ 7,414 $ 3,645 $ — $ 66,018 $ 701,685

Special mention — — — 3,515 — — — — 3,515

Substandard or Lower — 8,648 — — — 79 — 2,348 11,075

$ 189,257 $ 223,604 $ 208,981 $ 14,929 $ 7,414 $ 3,724 $ — $ 68,366 $ 716,275

Residential (3) :

Consumer Total Retail (3)

December 31, 2019 December 31, 2019 December 31, 2019

(Dollars in thousands) Amount Percent

Performing $ 42,475 $ 26,309 $ 71,410 $ 85,277 $ 149,643 $ 383,358 $ — $ — $ 758,472

Nonperforming (4)

113 — — — 283 5,525 — — 5,921

Acquired impaired loans 7,326 2,127 9,453 — %

$ 42,588 $ 26,309 $ 71,410 $ 85,277 $ 149,926 $ 388,883 $ — $ — $ 764,393

Consumer (5) :

Performing $ 235,948 $ 134,064 $ 251,087 $ 63,713 $ 44,700 $ 53,717 $ 371,842 $ 8,287 $ 1,163,358

Total $ 999,879 $ 1,128,731 $ 2,128,610 100 %

(1) Includes $ 14.0 million as of December 31, 2019 of troubled debt restructured mortgages and home equity installment loans that are performing in accordance with the loans modified terms and are accruing interest.

(2) Residential performing loans excludes $ 16.6 million of reverse mortgages at fair value as of December 31, 2019.

(3) Total includes acquired non-impaired loans of $ 1.1 billion at December 31, 2019.

Nonperforming (6)

— — 636 232 — — 1,396 295 2,559

$ 235,948 $ 134,064 $ 251,723 $ 63,945 $ 44,700 $ 53,717 $ 373,238 $ 8,582 $ 1,165,917

(1) Includes commercial small business leases.

(2) Includes $ 751.2 million of PPP loans

(3) Excludes reverse mortgages at fair value.

(4) Includes troubled debt restructured mortgages performing in accordance with the loans' modified terms and are accruing interest.

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

(6) Includes troubled debt restructured home equity installment loans performing in accordance with the loans' modified terms and are accruing interest.

Troubled Debt Restructurings (TDR)

4 unchanged sentences

Total TDRs $ 14,960 $ 20,140

Less than $ 0.1 million and $ 0.6 million in related reserves have been established for these loans at December 31, 2020 and December 31, 2019, respectively.

Approximately $ 0.2 million and less than $ 0.1 million in related reserves have been established for these loans at December 31, 2021 and December 31, 2020, respectively.

The following tables present information regarding the types of loan modifications made and the balances of loans modified as TDRs during the years ended December 31, 2021 and 2020:

10 unchanged sentences

Consumer — 1 23 6 30 — — 12 7 19

4 1 18 11 34 12 4 11 13 40

Total — 1 25 6 32 4 1 18 11 34

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

1 unchanged sentence

(Dollars in thousands) 2021 2020

Modification Post

Modification Pre

Commercial $ — $ — $ 1 $ 1

4 unchanged sentences

Consumer 1,585 1,585 1,714 1,714

Total (1)(2)(3)

$ 1,731 $ 1,731 $ 4,396 $ 4,396

The TDRs set forth in the table above resulted in a $ 0.5 million decrease in the Company's allowance for credit losses, and resulted in no additional charge-offs during the year ended December 31, 2020.

For the year ended December 31, 2019, the TDRs set forth in the table above resulted in a $ 0.2 million decrease in the Company's allowance for credit losses and no additional charge-offs.

For the year ended December 31, 2020, no TDRs defaulted that had received troubled debt modification during the past twelve months, compared with four TDRs with a total loan amount of $ 0.3 million during the year ended December 31, 2019.

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

During the year ended December 31, 2021, no TDRs defaulted that had received troubled debt modification during the past twelve months.

(2) During the year ended December 31, 2020 the TDRs in the table above resulted in a $ 0.5 million decrease in the allowance for credit losses, respectively, and no additional charge-offs.

During the year ended December 31, 2020, no TDRs defaulted that had received troubled debt modification during the past twelve months.

(3) The TDRs in the table above did not occur as a result of the loan forbearance program under the CARES Act.

PREMISES AND EQUIPMENT

5 unchanged sentences

Furniture and equipment 70,915 67,336

186,253 181,814

Gross premises and equipment 189,963 186,253

Accumulated depreciation 102,668 89,697

$ 96,556 $ 104,465

Net premises and equipment $ 87,295 $ 96,556

The Company recognized depreciation expense of $ 13.5 million, $ 14.3 million and $ 15.0 million for the years ended December 31, 2021, 2020 and 2019, respectively.

8 unchanged sentences

The Company accounts for lease components separately from nonlease components and subleases certain real estate to third parties.

The components of the Company's ongoing operating lease cost under ASC 842, Leases (as adopted on January 1, 2019) were as follows:

The components of the Company's ongoing operating lease cost were as follows:

Twelve months ended

(Dollars in thousands) December 31, 2020 December 31, 2019

(Dollars in thousands) December 31, 2021 December 31, 2020 December 31, 2019

Operating lease cost (1)

3 unchanged sentences

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

Rent expense under ASC 840, Leases was $ 12.9 million in 2018.

Supplemental balance sheet information related to operating leases was as follows:

1 unchanged sentence

Right-of-use assets $ 144,134 $ 150,985

Total assets $ 150,985 $ 166,221

Total $ 144,134 $ 150,985

Lease liabilities $ 159,526 $ 166,451

Total liabilities $ 166,451 $ 181,814

Lease term and discount rate

Total $ 159,526 $ 166,451

Lease term and discount rate of operating leases

Weighted average remaining lease term (in years) 19.17 19.36

Operating leases 19.36 19.06

Weighted average discount rate 4.27 % 4.26 %

Operating leases 4.26 % 4.17 %

Maturities of operating lease liabilities were as follows:

7 unchanged sentences

Twelve months ended

(Dollars in thousands) December 31, 2020 December 31, 2019

(Dollars in thousands) December 31, 2021 December 31, 2020 December 31, 2019

Cash paid for amounts included in the measurement of lease liabilities:

4 unchanged sentences

Interest income from direct financing leases where the Company is a lessor is recognized in Interest and fees on loans and leases on the Consolidated Statements of Income.

The allowance for credit losses on finance leases are included within Provision for credit losses on the Consolidated Statements of Income.

The allowance for credit losses on finance leases are included within (Recovery of) provision for credit losses on the Consolidated Statements of Income.

The components of direct finance lease income are summarized in the table below:

Twelve months ended

(Dollars in thousands) December 31, 2020 December 31, 2019

(Dollars in thousands) December 31, 2021 December 31, 2020 December 31, 2019

Direct financing leases:

Interest income on lease receivable $ 21,947 $ 15,805 $ 9,032

Interest income on deferred fees and costs 433 427

(Amortization)/accretion of deferred fees and costs ( 1,963 ) 433 427

Total direct financing lease income $ 19,984 $ 16,238 $ 9,459

13 unchanged sentences

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

The Company performs its annual impairment test on October 1 or more frequently if events and circumstances indicate that the fair value of a reporting unit is less than its carrying value.

WSFS performs its annual goodwill impairment test on October 1 or more frequently if events and circumstances indicate that the fair value of a reporting unit is less than its carrying value.

In between annual tests, management performs a qualitative review of goodwill quarterly as part of the Company's review of the overall business to ensure no events or circumstances have occurred that would impact its goodwill evaluation.

During the year ended December 31, 2020, the Company included considerations of the current economic environment caused by COVID-19 in its evaluation, and determined that it is not more likely than not that the carrying value of goodwill is impaired.

During the year ended December 31, 2021, management determined based on its qualitative assessment that it is not more likely than not that the fair values of our reporting units are less than their carrying values.

No goodwill impairment exists during the year ended December 31, 2021.

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

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

( Dollars in thousands )

December 31, 2019 $ 452,629 $ 20,199 $ 472,828

Goodwill from business combinations 309,486 — 309,486

Remeasurement period adjustments ( 2,665 ) — ( 2,665 )

Goodwill adjustments — — —

December 31, 2020 452,629 20,199 472,828

2 unchanged sentences

Other intangible assets

ASC 350 also requires that an acquired intangible asset be separately recognized if the benefit of the intangible asset is obtained through contractual or other legal rights, or if the asset can be sold, transferred, licensed, rented or exchanged, regardless of the acquirer’s intent to do so.

ASC 350 requires that an acquired intangible asset be separately recognized if the benefit of the intangible asset is obtained through contractual or other legal rights, or if the asset can be sold, transferred, licensed, rented or exchanged, regardless of the acquirer’s intent to do so.

The following table summarizes the Company's intangible assets:

4 unchanged sentences

Customer relationships 15,281 ( 7,876 ) 7,405 7 - 15 years

Non-compete agreements 221 ( 190 ) 31 5 years

Loan servicing rights 5,302 ( 2,440 ) 2,862 10 - 25 years

Total other intangible assets $ 116,515 $ ( 31,957 ) $ 84,558

Loan servicing rights (1)

6,671 ( 3,381 ) 3,290 10 - 25 years

Total intangible assets $ 115,763 $ ( 41,360 ) $ 74,403

December 31, 2020

2 unchanged sentences

Non-compete agreements 221 ( 190 ) 31 5 years

Loan servicing rights 4,880 ( 1,568 ) 3,312 10 - 25 years

Total other intangible assets $ 118,373 $ ( 22,456 ) $ 95,917

Loan servicing rights (2)

5,302 ( 2,440 ) 2,862 10 - 25 years

Total intangible assets $ 116,515 $ ( 31,957 ) $ 84,558

(1) Includes reversal of impairment losses of $ 0.3 million for the year ended December 31, 2021.

(2) Includes impairment losses of $ 0.2 million for the year ended December 31, 2020.

The Company recognized amortization expense on other intangible assets of $ 10.6 million, $ 10.9 million and $ 9.7 million for the years ended December 31, 2021, 2020 and 2019, respectively.

2 unchanged sentences

of Intangibles

2022 $ 11,249

Thereafter 20,528

6 unchanged sentences

The value of the Company's mortgage servicing rights was $ 0.5 million and $ 0.6 million at December 31, 2021 and 2020, respectively, and the value of its SBA loan servicing rights was $ 2.8 million and $ 2.3 million at December 31, 2021 and 2020, respectively.

Changes in the value of these servicing rights resulted in impairment of $ 0.2 million and $ 0.7 million during 2020 and 2019, respectively.

Changes in the value of these servicing rights resulted in a reversal of impairment losses of $ 0.3 million during 2021 and an impairment loss of $ 0.2 million during 2020.

Revenues from originating, marketing and servicing mortgage loans as well as valuation adjustments related to capitalized mortgage servicing rights are included in Mortgage Banking Activities, Net in the Consolidated Statements of Income and revenues from the Company's SBA loan servicing rights are included in Loan fee income, in the Consolidated Statements of Income.

69 unchanged sentences

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

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

On June 13, 2016, the Company issued $ 100.0 million of 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 are being used for general corporate purposes.

On December 3, 2020, the Company issued $ 150.0 million of 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 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 remaining 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, the Company issued $ 100.0 million of senior notes due 2026 (the 2026 Notes).

The 2026 Notes had a fixed coupon rate of 4.50 % from issuance to but excluding June 15, 2021 and a variable coupon rate of three month LIBOR plus 3.30 % from June 15, 2021 until maturity.

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

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

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

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

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

Other Borrowed Funds

8 unchanged sentences

Risk-based capital requirements applicable to bank holding companies and depository institutions include a minimum common equity Tier 1 capital ratio of 4.50 % of risk-weighted assets, a minimum Tier 1 capital ratio of 6.00 % of risk-weighted assets, and a current minimum total capital ratio of 8.00 % of risk-weighted assets and a minimum Tier 1 leverage capital ratio of 4.00 % of average assets.

As of December 31, 2020 and 2019, the Bank was in compliance with regulatory capital requirements and exceeded the amounts required to be considered “well capitalized” as defined in the regulations.

As of December 31, 2021 and 2020, the Bank was in compliance with regulatory capital requirements and exceeded the levels necessary for the Bank to be considered “well capitalized” as defined in the regulations.

The following table presents the capital position of the Bank and the Company as of December 31, 2021 and 2020:

Consolidated Bank

For Capital Adequacy

Minimum For Capital

Adequacy Purposes

To Be Well-Capitalized

59 unchanged sentences

Previously, all Associates were eligible for these benefits if they reached normal retirement age while working for the Company.

Effective March 31, 2014, the Company changed the eligibility of this plan to include only those Associates who have achieved ten years of service with the Company as of March 31, 2014.

The Company began to use the mortality table issued by the office of the Actuary of the U.S.

Effective March 31, 2014, the Company changed the eligibility of this plan to include only those Associates who have achieved ten years of service as of March 31, 2014.

The Company uses the mortality table issued by the Office of the Actuary of the U.S.

Bureau of Census in its calculation.

14 unchanged sentences

Interest cost 54 67 78

Actuarial loss (gain) 80 229 ( 143 )

Actuarial (gain) loss ( 216 ) 80 229

Benefits paid ( 55 ) ( 90 ) ( 84 )

10 unchanged sentences

Net amount recognized $ 966 $ 811 $ 1,002

Components of net periodic benefit cost:

Components of net periodic cost (benefit):

Service cost $ 67 $ 61 $ 54

2 unchanged sentences

Net gain recognition ( 20 ) ( 36 ) ( 63 )

Net periodic benefit cost $ 16 $ ( 7 ) $ 9

Net periodic cost (benefit) $ 25 $ 16 $ ( 7 )

Assumption used to determine net periodic benefit cost:

22 unchanged sentences

The following disclosures relating to Alliance pension benefits were measured at:

(Dollars in thousands) June 30, 2020 December 31, 2019 December 31, 2018

(Dollars in thousands) June 30, 2020 December 31, 2019

Change in benefit obligation:

3 unchanged sentences

Disbursements — ( 231 )

Actuarial loss (gain) 274 864 ( 430 )

Actuarial loss 274 864

Benefit obligation at end of period $ — $ 6,893

8 unchanged sentences

Amounts recognized in accumulated other comprehensive income (1) :

Net (loss) gain $ — $ ( 279 ) $ ( 413 )

Components of net periodic benefit cost:

Net loss $ — $ ( 279 )

Components of net periodic cost (benefit):

Service cost $ 17 $ 40

4 unchanged sentences

Net gain recognition — —

Net periodic benefit cost $ 1,357 $ ( 162 ) $ 112

Net periodic cost (benefit) $ 1,357 $ ( 162 )

(1) Before tax effects

7 unchanged sentences

Benefit obligation at beginning of year $ 112,283 $ 19,302 $ 102,878 $ 20,263

Acquired in business combinations — — 91,568 19,504

Service cost — 39 — 48

2 unchanged sentences

Amendments ( 83 ) — — ( 202 )

Actuarial gain (loss) 11,499 ( 520 ) 12,020 1,035

Actuarial (loss) gain ( 4,420 ) ( 442 ) 11,499 ( 520 )

Benefits paid ( 5,185 ) ( 1,171 ) ( 5,004 ) ( 797 )

2 unchanged sentences

Fair value of plan assets at beginning of year $ 111,129 $ — $ 100,388 $ —

Acquired in business combinations — — 90,814 —

Actual return on Plan Assets 2,734 — 15,985 —

1 unchanged sentence

Participants' contributions — 68 — 35

Settlements ( 83 ) — — —

Benefits paid ( 5,185 ) ( 1,171 ) ( 5,004 ) ( 797 )

1 unchanged sentence

Fair value of plan assets at end of year $ 108,242 $ — $ 111,129 $ —

Unfunded status $ ( 1,154 ) $ ( 19,302 ) $ ( 2,490 ) $ ( 20,263 )

Funded (unfunded) status $ 3,547 $ ( 18,105 ) $ ( 1,154 ) $ ( 19,302 )

Amounts recognized in accumulated other comprehensive income (1) :

4 unchanged sentences

Expected return on plan assets ( 6,783 ) — ( 6,363 ) —

Net (gain) loss recognition 4 ( 205 ) — —

Net loss (gain) recognition 27 ( 11 ) 4 ( 205 )

Net periodic (benefit) cost $ ( 4,656 ) $ 337 $ ( 3,449 ) $ 318

89 unchanged sentences

Lease liabilities 33,501 34,955

Unrealized losses on available-for-sale securities 10,642 —

Total deferred tax assets $ 98,736 $ 128,583

1 unchanged sentence

Unrealized gains on available-for-sale securities $ — $ ( 18,997 )

Unrealized gains on equity investments — ( 10,031 )

Legal settlement ( 3,150 ) —

Accelerated depreciation ( 4,467 ) ( 4,233 )

( 1,278 ) ( 841 )

Right of use assets ( 30,268 ) ( 31,707 )

1 unchanged sentence

Intangibles ( 20,897 ) ( 22,373 )

( 756 ) ( 1,278 )

Total deferred tax liabilities ( 59,768 ) ( 79,371 )

Net deferred tax asset $ 38,968 $ 49,212

(1) Other deferred tax assets includes deferred gains, net operating losses, and reverse mortgages.

(1) Other deferred tax assets includes deferred gains and net operating losses.

(2) Other deferred tax liabilities includes derivatives and reverse mortgages.

Included in the table above is the effect of certain temporary differences for which no deferred tax expense or benefit was recognized.

In 2020, such items consisted primarily of $ 19.0 million of unrealized gains on certain investments in debt and equity securities accounted for under ASC 320 along with $ 1.6 million of unrealized losses related to postretirement benefit obligations accounted for under ASC 715 and $ 5.0 million of unrealized losses on derivatives accounted for under ASC 815.

In 2019, they consisted primarily of $ 8.7 million of unrealized losses on certain investments in debt and equity securities along with $ 1.2 million of unrealized gains related to postretirement benefit obligations and $ 0.2 million of unrealized losses on derivatives.

In 2021, such items consisted primarily of $ 10.6 million of unrealized losses on certain investments in debt and equity securities accounted for under ASC 320 and $ 1.5 million of unrealized losses related to postretirement benefit obligations accounted for under ASC 715.

In 2020, they consisted primarily of $ 19.0 million of unrealized gains on certain investments in debt and equity securities and $ 1.6 million of unrealized losses related to postretirement benefit obligations.

Based on the Company's history of prior earnings and its expectations of the future, it is anticipated that operating income and the reversal pattern of its temporary differences will, more likely than no t, be sufficient to realize a net deferred tax asset of $ 39.0 million at December 31, 2021.

As a result of the acquisition of Beneficial on March 1, 2019, the Company recorded a net deferred tax asset (DTA) of $ 18.9 million.

The Company expects to utilize all tax attributes acquired from Beneficial so no valuation allowance has been recorded against the DTA.

Pursuant to accounting guidance, The Company is not required to provide deferred taxes on Beneficial’s tax loan loss reserve as of December 31, 1987.

19 unchanged sentences

Effective tax rate 24.1 % 21.8 % 23.9 %

As a result of the adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, the Company recorded less than $ 0.1 million of income tax expense in 2020, compared to $ 2.0 million and $ 3.5 million of income tax benefits in 2019 and 2018, respectively, related to excess tax benefits from stock compensation.

As a result of the adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, the Company recorded $ 0.4 million of income tax benefit in 2021, compared to less than $ 0.1 million of income tax expense and $ 2.0 million of income tax benefit in 2020 and 2019, respectively, related to excess tax benefits from stock compensation.

This accounting standard will result in volatility to future effective tax rates.

11 unchanged sentences

The Company records interest and penalties on potential income tax deficiencies as income tax expense.

Federal tax years 2017 through 2020 remain subject to examination as of December 31, 2020, while tax years 2016 through 2020 remain subject to examination by state taxing jurisdictions.

The Company's federal and state tax returns for the 2018 through 2021 tax years are subject to examination as of December 31, 2021, while tax years 2018 through 2021 generally remain subject to examination by state taxing jurisdictions.

No federal or state income tax return examinations are currently in process.

2 unchanged sentences

Accordingly, $ 8.5 million of such impact has been reflected as an income tax credit and deferred tax asset on the Company's Consolidated Statements of Financial Condition.

On March 27, 2020, the CARES Act was enacted, and Section 2303(b) of this act provides the Company with an opportunity to carry back net operating losses (NOLs) arising from 2018, 2019 and 2020 to the prior five tax years.

Section 2303(b) of the CARES act provides the Company with an opportunity to carry back net operating losses (NOLs) arising from 2018, 2019 and 2020 to the prior five tax years.

The Company has such NOLs reflected on its balance sheet as a portion of its current tax receivables, which were previously valued at the federal corporate income tax rate of 21%.

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

Consequently, effective December 31, 2020, the Company has revalued the benefit from its NOLs to reflect a 35% tax rate, which resulted in the recognition of an additional $ 1.7 million income tax benefit and deferred tax asset on the Company's Consolidated Statements of Financial Condition.

The amortization of the low-income housing credit investments has been reflected as income tax expense of $ 3.3 million for the year ended December 31, 2020, compared to $ 3.0 million and $ 1.9 million for the years ended December 31, 2019 and December 31, 2018, respectively.

Consequently, effective March 31, 2020, the Company has revalued the benefit from its NOLs to reflect a 35% tax rate, which resulted in the recognition of an additional $ 1.7 million income tax benefit and deferred tax asset on the Company's Consolidated Statements of Financial Condition.

The amortization of the low-income housing credit investments has been reflected as income tax expense in the amount of $ 3.6 million for the year ended December 31, 2021, compared to $ 3.3 million and $ 3.0 million for the years ended December 31, 2020 and December 31, 2019, respectively.

The amount of affordable housing tax credits, amortization and tax benefits recorded as income tax expense for the year ended December 31, 2021 were $ 3.5 million, $ 3.6 million and $ 0.7 million respectively.

4 unchanged sentences

However, outstanding awards under the 2013 Plan remain in effect in accordance with their original terms.

The 2018 Plan was amended in 2021 to increase the number of shares of Common Stock available for issuance.

The 2018 Plan will terminate on the tenth anniversary of its effective date, after which no awards may be granted.

35 unchanged sentences

The following table summarizes the non-vested stock option activity during the year the ended December 31, 2021:

Shares Weighted-

Shares Weighted-Average Exercise Price Weighted-Average Grant Date Fair Value

Stock Options:

31 unchanged sentences

The Plan provides for a three-year performance achievement period beginning in 2021 and ending in 2023.

If any or all of a portion of RSU’s vest prior to 2023, there will be an additional time-based vesting requirement though the end of 2023.

If any or all of a portion of RSUs vest prior to 2023, there will be an additional time-based vesting requirement though the end of 2023.

The Performance RSUs were granted on February 28, 2019, and the Company accrues expense for this Plan based on the estimated probability of achievement of the three defined performance goals.

During 2021, the Company recognized $ 0.3 million of compensation expense related to these awards.

Beneficial Acquisition Success Plan:

3 unchanged sentences

The Company granted 66,703 RSUs under the Success Plan on December 10, 2020.

During 2021, the Company recognized $ 1.1 million of compensation expense related to these awards.

Awards from both the Integration Plan and the Success Plan will be issued under the Company’s 2018 Incentive Plan.

COMMITMENTS AND CONTINGENCIES

Data Processing and Network Operations

The Company has entered into contracts to manage its network operations, data processing and other related services.

The projected amounts of future minimum payments contractually due are as follows:

(Dollars in thousands)

Legal Proceedings

12 unchanged sentences

Commercial loan commitments 1,088,098 1,083,512

Commercial owner-occupied commitments 70,155 57,144

Owner-occupied commercial commitments 74,846 70,155

Commercial standby letters of credit 92,048 95,897

Residential mortgage loan commitments 2,842 5,317

Residential loan commitments 6,815 2,842

Consumer loan commitments 731,850 591,856

2 unchanged sentences

Commitments for consumer lines of credit were $ 731.9 million of which, $ 600.7 million were secured by real estate.

Residential mortgage loan commitments generally have closing dates within a one month period but can be extended to six months .

Not reflected in the table above are commitments to sell residential mortgages of $ 91.9 million and $ 60.0 million at December 31, 2020 and 2019, respectively.

Residential loan commitments generally have closing dates within a one month period but can be extended to six months .

Not reflected in the table above are commitments to sell residential loans of $ 57.9 million and $ 91.9 million at December 31, 2021 and 2020, respectively.

Commitments provide for financing on predetermined terms as long as the customer continues to meet specific criteria.

3 unchanged sentences

The Company evaluates each customer’s creditworthiness and obtain collateral based on its credit evaluation of the counterparty.

Indemnifications from Secondary Market Loan Sales

Given the current interest rate environment and the Company's overall asset and liability management approach, the Company typically sells newly originated residential mortgage loans in the secondary market to mortgage loan aggregators and on a more limited basis, to government sponsored enterprise (GSEs), such as the Federal Home Loan Mortgage Corp (FHLMC), the Federal National Mortgage Association (FNMA), and the FHLB.

Secondary Market Loan Sales

The Company typically sells newly originated residential loans in the secondary market to mortgage loan aggregators and on a more limited basis, to GSEs, such as FHLMC, FNMA, and the FHLB.

Loans held for sale are reflected on the Consolidated Statements of Financial Condition at their fair value with changes in the value reflected in the Consolidated Statements of Income.

Gains and losses are recognized at the time of sale.

The Company periodically retains the servicing rights on residential mortgage loans sold which results in monthly service fee income.

The Company periodically retains the servicing rights on residential loans sold which results in monthly service fee income.

The mortgage servicing rights are included in Intangible assets in the Consolidated Statements of Financial Condition.

Otherwise, the Company sells loans with servicing released on a nonrecourse basis.

1 unchanged sentence

The Company does not sell loans with recourse, except for standard loan sale contract provisions covering violations of representations and warranties and, under certain circumstances, early payment default by the borrower.

These are customary repurchase provisions in the secondary market for residential mortgage loan sales.

These provisions may include either an indemnification from loss or an agreement to repurchase the loans.

These are customary repurchase provisions in the secondary market for residential loan sales.

These provisions may include either an indemnification from loss or the repurchase of loans.

Repurchases and losses have been rare and no provision is made for losses at the time of sale.

There were no repurchases for the year ended December 31, 2020 and one repurchase for $ 0.2 million for the year ended December 31, 2019.

There were no repurchases for the years ended December 31, 2021 and 2020.

Unfunded Lending Commitments

At December 31, 2021 and December 31, 2020, the allowance for credit losses of unfunded lending commitments was $ 7.4 million and $ 8.2 million, respectively.

A provision release for unfunded lending commitments of $ 0.8 million was recognized during the year ended December 31, 2021, and a provision expense for unfunded lending commitments of $ 3.7 million was recognized during year ended December 31, 2020.

FAIR VALUE DISCLOSURES OF FINANCIAL ASSETS AND LIABILITIES

39 unchanged sentences

GNMA MBS — 23,762 — 23,762

GSE agency notes — 232,107 — 232,107

Other assets — 14,448 — 14,448

15 unchanged sentences

Securities classified as available-for-sale are reported at fair value using Level 2 inputs.

The Company believes that this Level 2 designation is appropriate under ASC 820-10, as these securities are government sponsored enterprises (GSEs) and Ginnie Mae securities with almost all fixed income securities, none are exchange traded, and all are priced by correlation to observed market data.

The Company believes that this Level 2 designation is appropriate under ASC 820-10, as these securities are GSEs and GNMA securities with almost all fixed income securities, none are exchange traded, and all are priced by correlation to observed market data.

For these securities the Company obtains fair value measurements from an independent pricing service.

2 unchanged sentences

Other investments

Other investments includes equity investments without readily determinable fair values and equity method investments, which are both categorized as Level 3.

Other investments includes equity investments without readily determinable fair values and equity method investments, which are categorized as Level 3.

The Company's equity investments without readily determinable fair values are held at cost, and are adjusted for any observable transactions during the reporting period and its equity method investments are initially recorded at cost based on the Company’s percentage ownership in the investee, and are adjusted to reflect the recognition of the Company’s proportionate share of income or loss of the investee based on the investee’s earnings.

12 unchanged sentences

Other liabilities include the fair value of interest rate products, derivatives on the residential mortgage held for sale loan pipeline and derivative related to the sale of certain Visa Class B common shares.

Valuation of interest rate products and risk participation agreements is obtained from an independent pricing service and also from the derivative counterparty.

Valuation of interest rate products is obtained from an independent pricing service and also from the derivative counterparty.

Valuation of the derivative related to the residential mortgage held for sale loan pipeline is based on valuation of the loans held for sale portfolio as described above in Loans held for sale.

9 unchanged sentences

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash and cash equivalents

Cash, cash equivalents, and restricted cash

For cash and short-term investment securities, including due from banks, federal funds sold or purchased under agreements to resell and interest-bearing deposits with other banks, the carrying amount is a reasonable estimate of fair value.

8 unchanged sentences

Loans and leases

Fair values are estimated for portfolios of loans with similar financial characteristics.

Loans and leases are segregated by portfolio segments (see Note 2).

For loans that reprice frequently, the book value approximates fair value.

The fair values of other types of loans, with the exception of reverse mortgages, are estimated by discounting expected cash flows using the current rates at which similar loans would be made to borrowers with comparable credit ratings and for similar remaining maturities.

Loans and leases are segregated by portfolio segments with similar financial characteristics (see Note 2).

The fair values of loans and leases, with the exception of reverse mortgages, are estimated by discounting expected cash flows using the current rates at which similar loans would be made to borrowers with comparable credit ratings and for similar remaining maturities.

The fair values of reverse mortgages are based on the net present value of the expected cash flows using a discount rate specific to the reverse mortgages portfolio.

19 unchanged sentences

Other liabilities

Other liabilities include the fair value of interest rate products, risk participation agreements, derivatives on the residential mortgage held for sale loan pipeline, and derivative related to the sale of certain Visa Class B common shares (see discussion in “Fair Value of Financial Assets and Liabilities” section above).

Other liabilities include the fair value of interest rate products, derivatives on the residential mortgage held for sale loan pipeline, and derivative related to the sale of certain Visa Class B common shares (see discussion in “Fair Value of Financial Assets and Liabilities” section above).

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

The following table provides a description of the valuation technique and significant unobservable inputs for the Company's assets classified as Level 3 and measured at fair value on a nonrecurring basis:

December 31, 2020

(Dollars in thousands) December 31, 2021

Financial Instrument Fair Value Valuation Technique(s) Unobservable Input Range (Weighted Average)

Other investments $ 9,541 Observed market comparable transactions Period of observed transactions July 2020

Other investments $ 10,518 Observed market comparable transactions Period of observed transactions May 2021

Other real estate owned $ 2,320 Fair market value of collateral Costs to sell 10.0 %

Other liabilities $ 24,039 Discounted cash flow Timing of the resolution of the Visa litigation 2.75 - 7.75 years ( 5.50 years or 4Q 2025)

Other liabilities $ 20,252 Discounted cash flow Timing of Visa litigation resolution 1.75 - 6.75 years ( 4.50 years or 4Q 2025)

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

41 unchanged sentences

Fair Values of Derivative Instruments

(Dollars in thousands) Count Notional Balance Sheet Location Derivatives

Derivatives designated as hedging instruments:

Interest rate products 3 $ 75,000 Other liabilities $ ( 759 )

Total $ 75,000 $ ( 759 )

(Dollars in thousands) Notional Balance Sheet Location Derivatives

Derivatives not designated as hedging instruments:

6 unchanged sentences

Forward sale commitments 258,186 Other liabilities ( 2,240 )

Total $ 427,172 $ 1,725

Financial derivative related to sales of certain Visa Class B shares 113,177 Other liabilities ( 24,039 )

Total derivatives $ 801,542 $ ( 17,809 )

2 unchanged sentences

The Company's objectives in using interest rate derivatives are to add stability to interest income and to manage its exposure to interest rate movements.

To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy.

To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy.

Interest rate swaps designated as cash flow hedges involve the receipt of fixed amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without exchange of the underlying notional amount.

1 unchanged sentence

During the first half of 2020, such derivatives were used to hedge the variable cash flows associated with a variable rate loan pool.

In April 2020, the Company terminated its three interest rate derivatives that were designated as cash flow hedges for a net gain of $ 1.3 million.

At this point, hedge accounting was discontinued, and the net gain was recognized in accumulated other comprehensive income (loss).

Once a cash flow hedge is discontinued, the net gain or loss that remains in accumulated comprehensive income (loss) is reclassified into earnings when the transaction affects earnings.

In 2020, the Company terminated its three interest rate derivatives that were designated as cash flow hedges for a net gain of $ 1.3 million, recognized in accumulated other comprehensive income (loss).

Hedge accounting was discontinued, and the net gain in accumulated comprehensive income (loss) is reclassified into earnings when the transaction affects earnings.

As the underlying hedged transaction continues to be probable, the $ 1.3 million net gain will be recognized into earnings on a straight-line basis over each derivative's original contract term.

1 unchanged sentence

During the year ended December 31, 2021, $ 0.5 million was reclassified into interest income.

The table below presents the effect of the cash flow hedges on the Consolidated Statements of Income for the year ended December 31, 2020 and 2019.

Amount of Gain Recognized in OCI on Derivative (Effective Portion) Location of Gain Reclassified from Accumulated OCI into Income (Effective Portion)

(Dollars in thousands) Year Ended December 31,

Derivatives in Cash Flow Hedging Relationships 2020 2019

Interest Rate Products $ 1,560 $ 1,877 Interest income

Total $ 1,560 $ 1,877

Derivatives not designated as hedging instruments:

3 unchanged sentences

Swap Guarantees

The Company entered into agreements with four unrelated financial institutions whereby those financial institutions entered into interest rate derivative contracts (interest rate swap transactions) directly with customers referred to them by the Company.

Under the terms of the agreements, those financial institutions have recourse to the Company for any exposure created under each swap transaction, only in the event that the customer defaults on the swap agreement and the agreement is in a paying position to the third-party financial institution.

This is a customary arrangement that allows the Company to provide access to interest rate swap transactions for its customers without creating the swap ourselves.

The Company entered into agreements with six unrelated financial institutions whereby those financial institutions entered into interest rate derivative contracts (interest rate swap transactions) directly with customers referred to them by the Company.

Under the terms of the agreements, those financial institutions have recourse to us for any exposure created under each swap transaction, only in the event that the customer defaults on the swap agreement and the agreement is in a paying position to the third-party financial institution.

This is a customary arrangement that allows us to provide access to interest rate swap transactions for our customers without creating the swap ourselves.

These swap guarantees are accounted for as credit derivatives.

At December 31, 2021 and December 31, 2020, there were 261 and 234 variable-rate to fixed-rate swap transactions between the third-party financial institutions and the Company's customers, respectively.

The initial notional aggregate amount was approximately $ 1.1 billion at December 31, 2020 compared to $ 941.0 million at December 31, 2019.

The initial notional aggregate amount was approximately $ 1.1 billion at both December 31, 2021 and December 31, 2020.

At December 31, 2021, the swap transactions remaining maturities ranged from under 1 year to 14 years.

At December 31, 2020, 231 of these customer swaps were in a paying position to third parties for $ 81.6 million, with the Company's swap guarantees having a fair value of $ 12.8 million.

At December 31, 2021, 193 of these customer swaps were in a paying position to third parties for $ 35.8 million, with our swap guarantees having a fair value of $ 13.1 million.

At December 31, 2020, 231 of these customer swaps were in a paying position to third parties for $ 81.6 million, with the Company's swap guarantees having a fair value of $ 12.8 million.

2 unchanged sentences

Derivative financial instruments related to mortgage banking activities are recorded at fair value and are not designated as accounting hedges.

This includes commitments to originate certain fixed-rate residential mortgage loans to customers, also referred to as interest rate lock commitments.

This includes commitments to originate certain fixed-rate residential loans to customers, also referred to as interest rate lock commitments.

The Company may also enter into forward sale commitments to sell loans to investors at a fixed price at a future date and trade asset-backed securities to mitigate interest rate risk.

Effect of Derivative Instruments on the Income Statement

The table below presents the effect of the derivative financial instruments on the Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019.

Amount of (Loss) or Gain

Recognized in OCI on Derivative

(Effective Portion)

Location of (Loss) or Gain Reclassified from

Accumulated OCI into

Income (Effective Portion)

(Dollars in thousands) Twelve Months Ended

Derivatives in Cash Flow Hedging Relationships 2020 2019 2018

Interest Rate Products $ 1,560 $ 1,877 $ ( 56 ) Interest income

Total $ 1,560 $ 1,877 $ ( 56 )

Amount of (Loss) or Gain Recognized in Income Location of (Loss) or Gain Recognized in Income

(Dollars in thousands) Twelve Months Ended

(Dollars in thousands) Year Ended December 31,

Derivatives Not Designated as a Hedging Instrument 2021 2020 2019

5 unchanged sentences

The Company also has agreements with certain derivative counterparties that contain a provision where if it fails to maintain its status as a well-capitalized or adequately capitalized institution, then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements.

The Company has minimum collateral posting thresholds with certain derivative counterparties, and has posted collateral of $ 7.4 million in securities and $ 7.4 million in cash against its obligations under these agreements.

The Company has minimum collateral posting thresholds with certain of its derivative counterparties, and has posted collateral of $ 6.2 million in securities and $ 5.1 million in cash against its obligations under these agreements.

If the Company had breached any of these provisions at December 31, 2021, it could have been required to settle its obligations under the agreements at the termination value.

1 unchanged sentence

In the ordinary course of business, from time to time the Company enters into transactions with related parties, including, but not limited to, its officers and directors.

These transactions are made on substantially the same terms and conditions, including interest rates and collateral requirements, as those prevailing at the same time for comparable transactions with other customers.

They do not, in the opinion of management, involve greater than normal credit risk or include other features unfavorable to the Company.

Any related party loans exceeding $ 500,000 require review and approval by the Board of Directors.

During 2020, there were two loan transactions to an executive officer exceeding $ 500,000 , and these loans were approved by the Board.

Any related party loans exceeding $ 0.5 million require review and approval by the Board of Directors.

There was one related party loan exceeding $ 0.5 million originated and sold during the year ended December 31, 2021 as compared to two related party loans exceeding $ 0.5 million originated and sold during the year ended December 31, 2020.

During 2021, all new loans and credit line advances to related parties were $ 0.8 million and repayments were less than $ 0.1 million.

The outstanding balances of loans to related parties at December 31, 2021 and 2020 were $ 0.4 million and $ 0.2 million, respectively.

Total deposits from related parties at December 31, 2021 and 2020 were $ 5.8 million and $ 8.3 million, respectively.

During 2020, new loans and credit line advances to related parties were $ 1.7 million and repayments were $ 0.9 million.

SEGMENT INFORMATION

As defined in ASC 280, Segment Reporting , an operating segment is a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the enterprise’s chief operating decision makers to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

As defined in ASC 280, Segment Reporting (ASC 280), an operating segment is a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the enterprise’s chief operating decision makers to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

The Company evaluates performance based on pretax net income relative to resources used, and allocate resources based on these results.

2 unchanged sentences

WSFS Bank, Cash Connect ® , and Wealth Management.

The WSFS Bank segment provides loans and leases and other financial products to commercial and retail customers.

The WSFS Bank segment provides financial products to commercial and retail customers.

Retail and Commercial Banking, Commercial Real Estate Lending and other banking business units are operating departments of WSFS Bank.

These departments share the same regulator, the same market, many of the same customers and provide similar products and services through the general infrastructure of the Bank.

Accordingly, these departments are not considered discrete segments and are appropriately aggregated within the WSFS Bank segment.

The Cash Connect ® segment provides ATM vault cash, smart safe and other cash logistics services in the U.S.

through strategic partnerships with several of the largest networks, manufacturers and service providers in the ATM industry.

These departments share the same regulators, the same market, many of the same customers and provide similar products and services through the general infrastructure of the Bank.

Accordingly, these departments are not considered discrete segments and are appropriately aggregated in the WSFS Bank segment.

The Company's Cash Connect ® segment provides ATM vault cash, smart safe and other cash logistics services through strategic partnerships with several of the largest networks, manufacturers and service providers in the ATM industry.

Cash Connect ® services non-bank and WSFS-branded ATMs and retail safes nationwide.

1 unchanged sentence

The Wealth Management segment provides a broad array of planning and advisory services, investment management, trust services, and credit and deposit products to individual, corporate, and institutional clients through multiple integrated businesses.

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.

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.

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.

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.

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

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.

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.

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, 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 units to provide comprehensive solutions to clients.

The following tables show segment results for the years ended December 31, 2021, 2020, and 2019:

14 unchanged sentences

Noninterest expenses 328,277 29,465 20,774 378,516

Provision for credit losses 149,453 — 3,727 153,180

(Recovery of) provision for credit losses ( 113,715 ) — ( 3,372 ) ( 117,087 )

Total external customer expenses 236,620 29,465 18,064 284,149

26 unchanged sentences

Noninterest expenses 310,799 28,421 29,624 368,844

Provision for loan and lease losses 24,884 — 676 25,560

Provision for credit losses 149,453 — 3,727 153,180

Total external customer expenses 506,680 28,421 35,373 570,474

53 unchanged sentences

Interest income $ 357 $ 356 $ 5,589

Unrealized (losses) gains on equity investments ( 1,617 ) 3,646 15,819

Noninterest income 208,762 240,408 28,038

Realized loss on sale of equity investment ( 706 ) — —

Unrealized gains (losses) on equity investments, net 5,389 ( 1,617 ) 3,646

Other noninterest income 4,759 208,762 240,408

9,799 207,501 249,643

2 unchanged sentences

15,279 9,301 7,749

Income before equity in undistributed income of subsidiaries 198,200 241,894 37,913

(Loss) income before equity in undistributed income of subsidiaries ( 5,480 ) 198,200 241,894

Equity in undistributed income (loss) of subsidiaries 276,208 ( 84,346 ) ( 92,020 )

17 unchanged sentences

Capital in excess of par value 1,058,997 1,053,022

Accumulated other comprehensive income 56,007 23,501

Accumulated other comprehensive (loss) income ( 37,768 ) 56,007

Retained earnings 1,224,614 977,414

8 unchanged sentences

Adjustments to reconcile net income to net cash provided by operating activities:

Equity in undistributed loss (income) of subsidiaries 84,346 92,020 ( 97,626 )

Realized gains on sale of equity investments — — ( 3,757 )

Unrealized losses (gains) on equity investments 1,617 ( 3,646 ) ( 15,088 )

(Increase) decrease in other assets ( 4,537 ) 3,538 2,265

Increase (decrease) in other liabilities 7,684 6,012 ( 237 )

Net cash provided by operating activities $ 203,884 $ 246,733 $ 20,300

Equity in undistributed (income) loss of subsidiaries ( 276,208 ) 84,346 92,020

Realized loss on sale of equity investments 706 — —

Unrealized (gains) losses on equity investments ( 5,389 ) 1,617 ( 3,646 )

Decrease (increase) in other assets 10,910 ( 4,537 ) 3,538

(Decrease) increase in other liabilities ( 6,690 ) 7,684 6,012

Net cash (used for) provided by operating activities $ ( 5,229 ) $ 203,884 $ 246,733

Investing activities:

Sale of Visa Class B shares $ — $ — $ 6,186

Net cash for business combinations $ — $ — $ ( 93,990 )

Purchases of Visa Class B shares — — ( 51 )

Net cash (used for) provided by investing activities $ — $ ( 93,990 ) $ 6,135

Net cash used for investing activities $ — $ — $ ( 93,990 )

Financing activities:

1 unchanged sentence

Issuance of senior debt — 147,780 —

Redemption of senior debt ( 100,000 ) — —

Purchase of treasury stock ( 13,268 ) ( 155,832 ) ( 97,186 )

1 unchanged sentence

Net cash used for financing activities $ ( 135,988 ) $ ( 30,389 ) $ ( 111,894 )

Increase (decrease) in cash and cash equivalents $ 173,495 $ 40,849 $ ( 6,763 )

(Decrease) increase in cash and cash equivalents $ ( 141,217 ) $ 173,495 $ 40,849

Cash and cash equivalents at beginning of period 244,925 71,430 30,581

1 unchanged sentence

CHANGE IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Accumulated other comprehensive income (loss) includes unrealized gains and losses on investment securities and equity investments, unrealized gains and losses on cash flow hedges, as well as unrecognized prior service costs, transition costs, and actuarial gains and losses on defined benefit pension plans.

Accumulated other comprehensive income (loss) includes unrealized gains and losses on available-for-sale investments, unrealized gains and losses on cash flow hedges, as well as unrecognized prior service costs, transition costs, and actuarial gains and losses on defined benefit pension plans.

Changes to accumulated other comprehensive income (loss) are presented net of tax as a component of stockholders' equity.

7 unchanged sentences

defined benefit

Net change in

fair value of

derivatives used

for cash flow hedges (1)

Net change in fair value of derivatives used for cash flow hedges (1)

Net change in

2 unchanged sentences

Balance, December 31, 2018 $ ( 14,553 ) $ 779 $ 834 $ ( 2,454 ) $ — $ ( 15,394 )

Other comprehensive (loss) income before reclassifications ( 6,695 ) 6 22 ( 56 ) — ( 6,723 )

Other comprehensive income (loss) before reclassifications 41,733 ( 2 ) ( 4,045 ) 1,877 — 39,563

Amounts reclassified from accumulated other comprehensive (loss) income ( 253 ) ( 309 ) ( 106 ) — — ( 668 )

Net current-period other comprehensive loss ( 6,711 ) ( 444 ) ( 31 ) ( 56 ) — ( 7,242 )

Net current-period other comprehensive income (loss) 41,480 ( 311 ) ( 4,151 ) 1,877 — 38,895

Balance, December 31, 2019 $ 26,927 $ 468 $ ( 3,317 ) $ ( 577 ) $ — $ 23,501

Other comprehensive income (loss) before reclassifications 39,853 — ( 1,445 ) 1,560 ( 9 ) 39,959

Amounts reclassified from accumulated other comprehensive income (loss) ( 253 ) ( 309 ) ( 106 ) — — ( 668 )

Amounts reclassified from accumulated other comprehensive (loss) income ( 6,898 ) ( 192 ) ( 26 ) ( 337 ) — ( 7,453 )

Net current-period other comprehensive income (loss) 32,955 ( 192 ) ( 1,471 ) 1,223 ( 9 ) 32,506

Balance, December 31, 2020 $ 59,882 $ 276 $ ( 4,788 ) $ 646 $ ( 9 ) $ 56,007

Other comprehensive income (loss) before reclassifications 39,853 — ( 1,445 ) 1,560 ( 9 ) 39,959

Amounts reclassified from accumulated other comprehensive income (loss) ( 6,898 ) ( 192 ) ( 26 ) ( 337 ) — ( 7,453 )

Other comprehensive (loss) income before reclassifications ( 93,503 ) — 162 — 362 ( 92,979 )

Amounts reclassified from accumulated other comprehensive (loss) income ( 252 ) ( 101 ) ( 65 ) ( 378 ) — ( 796 )

Net current-period other comprehensive income (loss) ( 93,755 ) ( 101 ) 97 ( 378 ) 362 ( 93,775 )

16 unchanged sentences

Prior service (credits) costs $ ( 85 ) $ ( 266 ) $ ( 76 )

$ ( 266 ) $ ( 76 ) $ 2

Actuarial gains — ( 47 ) ( 63 )

12 unchanged sentences

Total reclassifications $ ( 796 ) $ ( 7,453 ) $ ( 668 )

(1) Prior service costs balance for the year ended December 31, 2018 includes a tax true-up adjustment of $ 0.1 million from March 31, 2018.

Note that the tax true-up was made to the deferred tax asset with an offset to AOCI and does not affect the actual net periodic benefit costs of the pension plan.

LEGAL AND OTHER PROCEEDINGS

2 unchanged sentences

In addition, the Company's defense of litigation claims may result in legal fees, which it expenses as incurred.

As previously disclosed, on February 27, 2018, the Company entered into a settlement agreement with Universitas Education, LLC (Universitas) to resolve arbitration claims related to services provided by Christiana Bank and Trust Company (CB&T) prior to its acquisition by WSFS in December 2010.

As previously disclosed, on February 27, 2018, the Company entered into a settlement agreement with Universitas Education, LLC (Universitas) to resolve arbitration claims related to services provided by Christiana Bank and Trust Company (CB&T), as Insurance Trustee of the Charter Oak Trust, prior to CB&T's acquisition by the Company in December 2010.

In accordance with the litigation settlement, the Company paid Universitas $ 12.0 million to fully settle the claims.

During the third quarter of 2018, WSFS recovered $ 7.9 million in settlement and legal costs from insurance carriers that provided coverage relating to the Universitas matter.

WSFS is pursuing all of its rights and remedies to recover the remaining amounts relating to the Universitas proceeding, including the Universitas settlement payment, legal fees and related costs, by enforcing the indemnity right in the 2010 purchase agreement by which WSFS acquired CB&T.

Thereafter, WSFS filed suit to recover the remaining amounts relating to the Universitas proceeding, including the Universitas settlement payment, legal fees and related costs, by enforcing the indemnity right in the 2010 purchase agreement by which WSFS acquired CB&T.

In the fourth quarter of 2021, WSFS agreed to a $ 15.0 million settlement of the indemnity litigation, which with prior recoveries, resulted in a complete recovery of the $ 12.0 million paid to Universitas and of all litigation costs incurred by WSFS in the Universitas arbitration and all related lawsuits, including the indemnity litigation, plus an amount allocable to prejudgment interest.

In March 2017, Nature’s Healing Trust (NHT) filed a complaint against WSFS Bank in the Delaware Court of Chancery.

NHT asserts that WSFS Bank failed to provide timely notice concerning the possible lapse of two life settlement policies (aggregate face amount of $ 6.3 million) held in the trust.

NHT asserts claims against WSFS Bank for breach of contract, breach of fiduciary duty, and negligence, and seeks the face value of the policies.

WSFS Bank disputes the factual allegations and denies liability.

WSFS Bank has, in accordance with its normal procedures, notified its insurance carriers of a possible claim.

WSFS Bank is vigorously defending itself in this matter and believes it has valid factual and legal defenses.

NHT asserted claims against WSFS Bank for breach of contract, breach of fiduciary duty, and negligence, and sought the face value of the policies.

WSFS Bank disputed the factual allegations and denied liability.

On August 5, 2021, WSFS Bank reached a settlement with NHT, under which WSFS paid no damages and each of the parties agreed to dismiss and release all of their claims against the other.

The parties incurred their own attorney's fees and costs.

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

QUARTERLY FINANCIAL SUMMARY (Unaudited)

Three months ended

12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019 3/31/2019

(Dollars in thousands, except per share data)

Interest income $ 131,297 $ 123,370 $ 125,883 $ 133,855 $ 137,350 $ 141,262 $ 142,903 $ 99,577

Interest expense 8,296 10,322 12,127 17,705 19,781 20,429 19,671 16,263

Net interest income 123,001 113,048 113,756 116,150 117,569 120,833 123,232 83,314

(Recovery of) provision for credit losses (1)

( 936 ) 2,716 94,754 56,646 1,590 4,121 12,195 7,654

Net interest income after (recovery of) provision for credit losses 123,937 110,332 19,002 59,504 115,979 116,712 111,037 75,660

Noninterest income 46,632 49,171 64,375 40,847 41,770 62,346 42,871 41,122

Noninterest expense 93,373 93,540 93,435 88,496 98,126 109,561 107,848 97,592

Income (loss) before taxes 77,196 65,963 ( 10,058 ) 11,855 59,623 69,497 46,060 19,190

Income tax provision (benefit) 17,455 15,140 ( 2,247 ) 1,288 14,199 15,902 10,091 6,260

Net income (loss) 59,741 50,823 ( 7,811 ) 10,567 45,424 53,595 35,969 12,930

Net loss attributed to noncontrolling interest ( 72 ) ( 322 ) ( 700 ) ( 360 ) ( 280 ) ( 287 ) ( 231 ) ( 93 )

Net income (loss) attributable to WSFS $ 59,813 $ 51,145 $ ( 7,111 ) $ 10,927 $ 45,704 $ 53,882 $ 36,200 $ 13,023

Earnings (loss) per share:

Basic $ 1.20 $ 1.01 $ ( 0.14 ) $ 0.21 $ 0.88 $ 1.02 $ 0.68 $ 0.34

Diluted $ 1.20 $ 1.01 $ ( 0.14 ) $ 0.21 $ 0.88 $ 1.02 $ 0.68 $ 0.33

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

SUBSEQUENT EVENTS

The Company evaluated subsequent events in accordance with ASC Topic 855 and determined that the following qualifies as a non-recognized subsequent event:

Bryn Mawr Trust Acquisition

On January 1, 2022, WSFS, the parent holding company of WSFS Bank, completed its previously announced merger with Bryn Mawr Bank Corporation (BMBC), pursuant to the Agreement and Plan of Merger, dated as of March 9, 2021, by and between WSFS and BMBC, a Pennsylvania corporation and the parent holding company of The Bryn Mawr Trust Company (collectively, "Bryn Mawr Trust").

The purchase price consideration of $ 908 million was made at closing;

however, due to the limited time since the closing, the related acquisition accounting is incomplete at this time.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data