What changed in this filing

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Item 1. Business

2023-02-28 compared with 2022-03-01 · 203 added, 204 removed, 681 unchanged (37% of the section changed)

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Our mission is simple:

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

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

As of December 31, 2022, we serviced our Customers primarily from our 119 offices located in Pennsylvania (61), Delaware (39), New Jersey (17), Virginia (1) and Nevada (1), our ATM network, our website at www.wsfsbank.com and our mobile apps.

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

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

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

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

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

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

As of December 31, 2022, the Company had seven consolidated subsidiaries:

WSFS Bank, Cypress Capital Management, LLC (Cypress), WSFS Capital Management, LLC (West Capital), WSFS Wealth Management, LLC (Powdermill ® ), WSFS SPE Services, LLC, The Bryn Mawr Trust Company of Delaware (BMT-DE), and 601 Perkasie, LLC.

• On January 1, 2023, WSFS completed the merger and brand conversion of Cypress and West Capital and has renamed the combined entity Bryn Mawr Capital Management, LLC.

The following pertains to these entities as of December 31, 2022:

◦ Cypress provides asset management services.

As a registered investment adviser and fee-only wealth management firm, Cypress had approximately $1.0 billion in AUM at December 31, 2022 compared to approximately $1.3 billion at December 31, 2021.

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

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

West Capital had approximately $810.9 million in AUM at December 31, 2022, compared to approximately $947.5 million at December 31, 2021.

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

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

• BMT-DE, a Delaware state chartered non-depository trust company, supplements our existing Wealth Management segment by offering Delaware advantage trust services including directed trusts, asset protection trusts and dynasty trusts via centers of influence such as estate planning attorneys.

• 601 Perkasie, LLC was formed to hold certain tax credit investments.

As of December 31, 2022, WSFS Bank had two wholly-owned subsidiaries:

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

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

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

In addition, NewLane Finance ® offers new product offerings for insurance through its subsidiary, Prime Protect.

As of December 31, 2022, WSFS had three unconsolidated subsidiaries, WSFS Capital Trust III (the Trust), Royal Bancshares Capital Trust I, and Royal Bancshares Capital Trust II .

• The Trust was formed in 2005 to issue $67.0 million aggregate principal amount of Pooled Floating Rate Capital Securities.

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

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WSFS Capital Trust I invested all of the proceeds from the sale of the Pooled Floating Rate Capital Securities in our Junior Subordinated Debentures.

• Royal Bancshares Capital Trust I (Trust I) and Royal Bancshares Capital Trust II (Trust II) (collectively, the Trusts) were acquired in connection with the BMBC Merger.

The Trusts were utilized for the sole purpose of issuing and selling capital securities representing preferred beneficial interests.

Although WSFS owns an aggregate of $774.0 thousand of the common securities of Trust I and Trust II, the Trusts are not consolidated into the Corporation’s Consolidated Financial Statements as the Corporation is not deemed to be the primary beneficiary of these entities.

Segment Information

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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 loans and leases and other financial products to commercial and consumer customers.

Cash Connect ® 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 cash logistics industry.

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We have built a $9.3 billion commercial loan and lease portfolio by recruiting seasoned commercial lenders in our markets, offering the high level of service and flexibility typically associated with a community bank and through acquisitions.

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

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

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

We fund this business primarily with deposits generated through commercial relationships and consumer deposits, as well as through our digital banking platforms.

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

Cash Connect ®

Our Cash Connect ® business is a premier provider of ATM vault cash, smart safe (safes that automatically accept, validate, record and hold cash in a secure environment) and other cash logistics services through strategic partnerships with several of the largest networks, manufacturers and service providers in the ATM industry.

Cash Connect ® services non-bank and WSFS-branded ATMs and smart safes nationwide.

As of December 31, 2022, Cash Connect ® manages approximately $1.7 billion in total cash and services approximately 26,300 non-bank ATMs and approximately 7,500 smart safes nationwide.

Cash Connect ® provides related services such as online reporting and ATM cash management, predictive cash ordering and reconcilement services, armored carrier management, loss protection, ATM processing equipment sales and deposit safe cash logistics.

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

As of December 31, 2022, Cash Connect ® also supports approximately 650 owned and branded ATMs for WSFS Bank, which has one of the largest branded ATM networks in our market.

Wealth Management

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Combined, these businesses had $64.5 billion of AUM and AUA at December 31, 2022.

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

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

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

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

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

Bryn Mawr Trust ® is our predominant Private Wealth Management brand, providing advisory, investment management and trustee services to institutions, affluent and high-net-worth individuals.

The Bryn Mawr Trust Company of Delaware, formed by the merger of BMT-DE and Christiana Trust DE on April 1, 2022, provides personal trust and fiduciary services to families and individuals across the U.S.

and internationally.

WSFS Institutional Services ® provides trustee, agency, bankruptcy administration, custodial and commercial domicile services to institutional, corporate clients and special purpose vehicles.

Private Wealth Management, which includes Private Banking, serves high-net-worth clients and institutions by providing trustee and advisory services, financial planning, customized investment strategies, brokerage products such as annuities and customized banking services including credit and deposit products tailored to its clientele.

Private Wealth Management includes businesses that operate under the bank’s charter, through a broker/dealer and as a registered investment advisor (RIA).

It generates revenue through fee-only arrangements, net interest income and other fee-only services such as estate administration, trust tax planning and custody.

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

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

For segment financial information for the years ended December 31, 2022, 2021 and 2020, see Note 22 to the Consolidated Financial Statements in this report.

Recent Business Developments

• Acquisition and Integration Efforts:

• Continued Acquisition and Integration Efforts:

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

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

Our bank technology, branding, and branch conversion was completed during the first quarter of 2022.

We have substantially completed our Trust and Wealth Management integration, including the organizational design and brand conversion.

Additional efforts surrounding technology integration are expected to continue into 2024.

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

• Upstart Strategic Partnership:

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

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

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

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

• Future Forward:

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

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

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

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

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

WSFS DIFFERENTIATION STRATEGY

While most banks offer similar products and services, we believe that WSFS, through its proven service model, sets itself apart from other banks in our market and the industry in general.

In addition, community banks such as WSFS have been able to distinguish themselves from large national or international banks by providing our Customers with the service levels, responsiveness and local decision making they prefer.

We believe that WSFS, through our unique competitive position in our market as the only community bank with a full suite of product offerings to compete with larger institutions, diversified and resilient fee income, and high-touch customer service, sets itself apart from other banks in our market and the industry in general.

Our focus on this differentiation strategy supports our core franchise with a mix of organic and acquisition-related growth and builds value for our stockholders.

Since December 31, 2017, our commercial loans and leases, which exclude loans held-for-sale, have grown from $4.0 billion to $6.2 billion at December 31, 2021, a 9% compound annual growth rate (CAGR).

Over the same period, customer deposits have grown from $5.0 billion to $13.2 billion, a 21% CAGR.

Since December 31, 2018, our commercial loans and leases, which exclude loans held-for-sale, have grown 133% from $4.0 billion to $9.3 billion at December 31, 2022.

Over the same period, customer deposits have grown 195% from $5.4 billion to $16.1 billion.

For further details, refer to the Comparative Stock Performance Graph in Item 5.

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We strive to meet our Customers’ evolving banking needs and to exceed their expectations each and every day.

Our values address integrity, service, accountability, transparency, honesty, growth and desire to improve.

They are the core of our culture, they make us who we are and we live them every day.

• Do the right thing

• Serve others

• Are welcoming, open and candid

• Grow and improve

Our values are the foundation of our culture.

They define us and serve as our moral compass.

Our values are rooted in integrity;

we do the right thing, unconditionally.

We live our values every day;

they nourish our culture and practiced, over time, become “the WSFS way.” Our values are the fuel that ignites our virtuous cycle:

when we do well, our Community does well and when our Community does well, we do well.

Serving others is fundamental to our mission and grounds our purpose.

We serve by listening, caring, collaborating, volunteering and “getting things done” for those who rely on us to be there for them.

The truth is non-negotiable.

The truth brings clarity to a challenging situation or sensitive matter;

it guides us with confidence and conviction.

Being open and honest earns trust and underpins our conversations, decisions and communications.

We value and respect each other and all we serve.

The many unique attributes of our team makes us stronger.

Respecting others’ beliefs, experiences, perspectives and feelings sparks dialogue, facilitates learning and growth, drives change, inspires innovation and builds valued relationships.

Engagement and Culture

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

The Human Sigma model, identified by Gallup, Inc.

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

Our model begins with Associates (employees) who take ownership for their responsibilities and impact;

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

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

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

We significantly invest in our culture and engagement as they underpin all that we do at WSFS, including attracting, inspiring and retaining our Associates, delivering stellar Customer experiences and strengthening the well-being of our communities as evidenced by our Vision:

"We envision a day when everyone will thrive." Our strategy, “Engaged Associates, living our culture, enriching the Communities we serve” builds upon that principal.

Our strategy in action starts a virtuous cycle whereby, as we do better, our community does better and as our community does better, we do better.

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Our Associates are not represented by a collective bargaining unit and we believe our relationship with our Associates is strong.

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

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

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

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

During 2022, WSFS captured the voice of our Associates and our Customers through multiple channels to measure our Associate and Customer engagement.

The 2022 full-year survey results below reflect the first-time participation from legacy BMT Associates, onboarding of BMT Customers and the continuation of our Future Forward strategy which included a phased transition to a hybrid work environment.

• Our Associate engagement survey results placed WSFS in the 90th percentile of Gallup's global overall company-level database.

Our Associate engagement ratio was 10.3:1, which means there were 10.3 engaged Associates for every actively disengaged Associate.

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working population ratio of 1.8:1.

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

• Our culture of inclusion index of 4.40 placed WSFS in the top third of Gallup's global overall workgroup-level database.

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

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

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

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

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

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

• 62.8% of Customers surveyed ranked WSFS a “five” out of five, strongly agreeing with the statement “WSFS is the perfect bank for people like me.” Our Customer engagement ratio was 6.1:1, which means there were 6.1 engaged Customers for every actively disengaged Customer.

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

Our branch network achieved an overall NPS of 76.7 in 2022, which placed WSFS in the top quintile of Medallia's global database for transactional surveys.

In 2023, as we continue gathering and learning from Customer feedback, we will expand our Customer Survey program to consistently evaluate the experiences of our Customers and Clients across the Company.

As part of this expansion, the Bank will leverage NPS as the primary metric to measure Customer and Client engagement and loyalty.

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

In 2022, we were honored to receive the following accolades:

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

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

• Ranked #1 in Delaware on the Forbes America's Best Banks in Each State Listing;

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

• Named a Top Workplace in Delaware for the 16th year in a row;

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

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

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

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

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

• Named "Best of Biz" for Online Banking by South Jersey Magazine;

• Named a 2022 honoree of The Civic 50 Greater Philadelphia by the Philadelphia Foundation, in partnership with Points of Light and other local partners;

• Selected as Voter's Choice for "Best Community Involvement" at the Delaware Small Business Chamber's Blue Ribbon Awards.

Diversity, Equity and Inclusion

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

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

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

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

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

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

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

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

Beyond having diverse talent and Customers, WSFS works to create a truly inclusive environment with opportunities to find commonalities, build relationships and provide support to our diverse Communities from different backgrounds and cultures.

We are committed to enhancing workforce diversity, creating developmental opportunities and continually improving hiring practices to retain our status as an employer of choice.

During 2022, the Company completed the following Diversity, Equity, and Inclusion (DEI) accomplishments:

• Successfully relaunched the WSFS Diversity, Equity, and Inclusion Steering Committee (DISC), which includes DEI Strategic Pillars as well as our six active Resource Groups:

ADAPT – Advocate.

APPN – Asian Pacific-Islander Professional Network;

BOLD – Black Organization for Leadership and Development;

HOLA – Hispanic Organization for Leadership and Advancement;

PRIDE – LGBTQIA+ Community;

WIN – Women's Inclusion Network;

• Successfully relaunched our DEI intranet page with Associate resources and information;

• Shared our DEI S.E.R.V.I.C.E.

video internally and externally;

• Created Associate-authored articles and resources for cultural holidays and months;

• Integrated DEI into new hire education;

• The Forum of Executive Women again recognized WSFS as one of its Champions of Board Diversity for having at least 30% women on our Board of Directors;

• WSFS was honored by The Fund for Women & Girls with its Corporate Champion of Change Award for its commitment to creating an inclusive workplace environment by supporting Associates from diverse communities and backgrounds;

Michelle Burroughs, Senior Vice President & Chief Diversity Officer at WSFS, was recognized by the Philadelphia Business Journal as part of its Diversity in Business Awards.

Community Banking Model

Our size and community banking model play a key role in our success.

Our approach to business combines a service-oriented culture with a full complement of products and services, all aimed at meeting the needs of our retail, business and wealth Customers.

Our approach to business combines a service-oriented culture with a full complement of products and services, all aimed at meeting the needs of our consumer, business and wealth Customers.

We believe the essence of being a community bank means that we are:

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As a result, many of these banks have lost the deep knowledge of the local markets expected by our Customer base.

We believe this trend has underserved small and medium size business owners who have become accustomed to dealing directly with their bank’s senior executives, discouraged retail customers who often experience deteriorating levels of service in branches and other service outlets, and resulted in less empowered bank employees who are less engaged to provide good and timely service to their customers.

We have created the largest, premier, locally-headquartered community bank in the Delaware and Greater Philadelphia region, offering the benefits of local market knowledge and decision-making, a full-service product suite, the balance sheet to compete with larger regional and national banks, and most importantly, a culture of engaged Associates that bring to life WSFS’ mission of We Stand For Service in our daily delivery of stellar Customer experiences.

We believe this trend has underserved small and medium size business owners who have become accustomed to dealing directly with their bank’s senior executives, discouraged consumer customers who often experience deteriorating levels of service in branches and other service outlets, and resulted in less empowered bank employees who are less engaged to provide good and timely service to their customers.

We have created the largest, premier, locally-headquartered community bank in the Greater Philadelphia and Delaware region, offering the benefits of local market knowledge and decision-making, a full-service product suite, the balance sheet to compete with larger regional and national banks, and most importantly, a culture of engaged Associates that bring to life WSFS’ mission of We Stand For Service in our daily delivery of stellar Customer experiences.

WSFS Bank offers:

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Mindful of this balance, we prudently, but aggressively, manage our capital.

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

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

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

We continue to execute our current Board-approved share repurchase plans, as well as any future Board-approved share repurchase plans, including opportunistically repurchasing shares, based on current valuation levels, above our stated practice of returning a minimum of 35% of annual core net income to stockholders through dividends and share repurchases.

Performance Expectations and Alignment with Stockholder Priorities

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Core ROA, which excludes non-core items and is a non-GAAP financial measure, was 1.32% for the year ended December 31, 2022.

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

Core ROA for 2022 excludes (i) unrealized gains on equity investments, (ii) valuation adjustments related to our derivative liability established from the sale of 360,000 Visa Class B shares in 2Q 2020, and (iii) corporate development and restructuring expense.

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

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companies reconsider their priorities and voluntarily resign.

• Embracing the Human Sigma concept:

• We are committed to building Associate Engagement and Customer Advocacy as a way to differentiate ourselves and grow our franchise.

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

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

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

◦ After successfully integrating the Bryn Mawr Trust business during 2022, Wealth Management AUA/AUM ended 87% above 2021 balances.

WSFS Institutional Services ® ended 2022 as the securitization industry's fifth most active trustee for U.S.

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

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

◦ Cash Connect ® saw increased fee revenue due to the rising interest rate environment and continued growth in the smart safe space.

The division, in partnership with our retail strategy, continued to serve the Greater Philadelphia and the Delaware region through the WSFS ATM network.

The number of owned and branded ATMs was 686 as of December 31, 2022.

• Continuing strong growth in commercial and retail lending by:

• Continuing strong growth in commercial and consumer lending by:

◦ Offering local decision-making by seasoned banking professionals with significant local market experience.

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◦ Continuing to grow our NewLane Finance ® leasing business.

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

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

◦ Adding seasoned lending professionals that have helped us win customers in our Delaware, southeastern Pennsylvania and southern New Jersey markets.

◦ Leveraging our strategic lending partnerships, including Spring EQ, LLC, Upstart, LendKey Technologies, Inc, and Cred Technologies (cred.ai).

• Continuing to grow deposits by:

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◦ Providing a stellar experience to our Customers.

◦ Further expanding our commercial Customer relationships with deposit and cash management products.

◦ Further expanding our Commercial, Small Business, and Wealth Management Customer relationships with deposit and cash management products.

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

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

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

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

◦ Expanding DocuSign capabilities to improve turnaround time and document retention across the Company.

◦ Executing multichannel target marketing campaigns with our Customers.

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

• Continuing investment in our franchise to increase adoption and usage of digital channels aligned with our strategy by

◦ Enabling business outcomes through optimizing and leveraging the full capabilities of current and future Delivery Transformation and Technology investments to increase Associate efficiencies and improve the overall Customer experience.

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

◦ Increased Control, Transparency, Automation & Efficiencies through platform integrations, enhancements and bot implementations

◦ Advancing how we use data, the deployment of artificial intelligence, and predictive modeling to create operational efficiencies and redesign business models

◦ Continue to build upon people, process and controls within a focus on Information Security and Fraud prevention

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

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We maintain a disciplined cost management strategy while continuing to make prudent investments in our businesses through the lens of our Strategic Plan.

This was evident in management's execution of the cost synergies and branch optimization plan following the acquisition of Beneficial.

This was evident in management's execution of the cost synergies and branch optimization plan following the acquisition of Bryn Mawr Trust.

Further, we have experienced and continue to anticipate increased costs as a result of our previously announced Delivery Transformation initiative and investment in marketing technology, fully supported by business cases indicating strong return on investment, and driving our future growth.

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In 2019, we embarked on a multi-year Delivery Transformation initiative focused on melding our physical and digital delivery, consistent with our brand, by enabling our Associates with the latest technology and actionable data to better serve our Customers.

Industry and customer behavior trends continue to shift as observed in reduced branch traffic and increased mobile adoption.

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

Industry and customer behavior trends continue to shift as observed in reduced branch traffic and increased digital channel adoption.

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

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

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We are designing and integrating solutions to provide personalized experiences to our Customers, while retaining the essence of what makes WSFS great.

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

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

Our organization is committed to product and service innovation as a means to drive growth and to stay ahead of changing customer demands and emerging competition.

We are focused on developing and maintaining a strong “culture of innovation” that solicits, captures, prioritizes and executes innovation initiatives, including feedback from our customers, as well as leveraging technology from product creation to process improvements.

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

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These current partnerships include:

• LendKey Technologies, Inc.:

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

• Spring EQ, LLC:

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

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

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

• LendKey Technologies, Inc.:

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

• Cred Technologies (cred.ai):

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

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

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

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

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

Enterprise Risk Management

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In the event that risk levels exceed our defined risk appetite, management action is required.

The CRO and the ERM department conduct meetings with management of respective business lines and support areas to discuss and gather information for ERM reporting.

The ERM department facilitates a Risk Liaison program, consisting of individuals in the First Line of Defense that monitor and report risks from their respective business lines.

ERM engages and has credible challenge discussions with Risk Liaisons and business line leaders to gather information for ERM reporting.

ERM reporting is also provided to the Board of Directors quarterly.

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Market Demographics

Our primary market is Delaware and the Greater Philadelphia region, including southeastern Pennsylvania and southern New Jersey.

Our primary market is the Greater Philadelphia and Delaware region, including southeastern Pennsylvania and southern New Jersey.

This market benefits from an urban concentration as well as from a unique political, legal, tax and business environment.

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Generally, this portfolio is diversified by property type, with no type representing more than 72% of the portfolio.

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

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

The largest type is retail-related (non-mall, neighborhood shopping centers and other retail) with balances of $2.4 billion at December 31, 2022.

The average size of a loan in the commercial mortgage portfolio is $1.0 million and only 28 loans are greater than $12.0 million, with five loans greater than $24.0 million.

We offer commercial construction loans to developers.

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

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

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

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

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The initial interest rate on the permanent portion of the financing is determined by the prevailing market rate at the time of conversion to the permanent loan.

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

At December 31, 2022, $1.7 billion was committed for construction loans, of which $1.0 billion was outstanding.

Also at December 31, 2022, the residential construction and land development (CLD) portfolio represented $588.0 million, or 5%, of total loans and the commercial CLD portfolio represented $321.9 million, or 3%, of total loans.

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

These relationships generally range in amounts of up to $35.0 million with an average loan balance in the portfolio of $0.4 million (excluding PPP loans), and terms ranging from less than one year to ten years.

The loans generally carry variable interest rates indexed to our WSFS prime rate, “Wall Street” prime rate or LIBOR.

These relationships generally range in amounts of up to $82.6 million with an average loan balance in the portfolio of $1.4 million, and terms ranging from less than one year to ten years.

The loans generally carry variable interest rates indexed to our WSFS prime rate, “Wall Street” prime rate or SOFR.

At December 31, 2022, our commercial and industrial and owner-occupied commercial loan portfolios were $4.4 billion and represented 37% of our total loan and lease portfolio.

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All properties securing our residential loans are appraised by independent, licensed and certified appraisers and are subject to review in accordance with our standards.

The majority of our adjustable-rate, residential loans have interest rates that adjust yearly after an initial period.

The exception to this policy is when we in limited circumstances receive an "appraisal waiver" from one of the governmental agencies, Fannie Mae or Freddie Mac.

The majority of our adjustable-rate, residential loans have interest rates that adjust yearly or bi-yearly after an initial period.

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

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

Adjustments are generally based upon a margin (as of December 31, 2022, ranging from 2.50% to 2.75% for the U.S Treasury, and 2.75% for the Standard Overnight Finance Rate) over the weekly average yield on U.S.

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

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

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

There were two loans repurchased in 2022 for $0.8 million, and no repurchases in 2021 and 2020.

Consumer Lending

Our primary consumer credit products (excluding first mortgage loans) are home equity lines of credit and installment loans.

At December 31, 2021, home equity lines of credit outstanding totaled $361.5 million and installment loans totaled $565.7 million.

In total, these product lines represented approximately 80% of total consumer loans.

Typically, maximum loan to value (LTV) limits are 85% for primary residences and 70% for all other properties.

At December 31, 2021, we had $956.4 million in total commitments for home equity lines of credit.

Home equity lines of credit offer customers the convenience of checkbook and debit card access, and revolving credit features for a portion of the life of the loan and typically are more attractive in a low interest rate environment.

Home equity lines of credit expose us to the risk that falling collateral values may leave us inadequately secured.

This credit risk is mitigated by our underwriting standards and limit on the combined LTV on residences with a value greater than $700 thousand.

The Company has focused on diversifying our consumer credit products to meet our Customers’ needs, with over 50% of the portfolio from our fintech lending partnerships.

We purchase certain second-lien home equity installment loans through our partnership with Spring EQ, LLC (Spring EQ).

These select loans meet or exceed our current underwriting standards and are similar to home equity loans originated through our branch network.

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

We have student loans through our partnership with LendKey Technologies Inc.

LendKey student loans are primarily to consolidate existing student debt and are also underwritten in accordance with our current credit standards.

The student loans portfolio also includes loans acquired from Beneficial, which are U.S.

The student loans portfolio also includes loans acquired from past acquisitions, which are U.S.

government guaranteed with little risk of credit loss.

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

Our in-house originations consist primarily of home equity lines of credit and installment loans.

At December 31, 2022, home equity lines of credit outstanding totaled $495.8 million and installment loans totaled $179.9 million.

In total, these product lines represented approximately 37% of total consumer loans.

Typically, maximum loan to value (LTV) limits are 85% for primary residences and 70% for all other properties.

At December 31, 2022, we had $1.4 billion in total commitments for home equity lines of credit.

Home equity lines of credit expose us to the risk that falling collateral values may leave us inadequately secured.

This credit risk is mitigated by our underwriting standards and limit on the combined LTV on residences with a value greater than $2.5 million.

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

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(Dollars in thousands) Amount Percent Amount Percent

Consumer Partnerships (1)

$ 967,829 54 % $ 510,808 44 %

Home equity lines of credit 495,755 27 361,486 31

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179,939 10 142,909 12

Unsecured lines of credit 33,028 3 26,773 2

Education loans 95,920 5 110,342 10

Unsecured lines of credit 71,487 4 33,028 3

Total consumer loans $ 1,810,930 100 % $ 1,158,573 100 %

(1) Includes Spring EQ, Upstart, and LendKey portfolios.

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

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

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

During 2022, we originated $2.3 billion of commercial and commercial mortgage loan exposures compared to $1.5 billion in 2021.

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

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

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

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

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Residential and Consumer:

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

During 2022, we originated $493.5 million of residential loans, a decrease compared to $976.9 million in 2021.

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

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

There were no purchases in 2022 related to our Community Reinvestment Act (CRA) obligations compared to $2.3 million of purchases in 2021.

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

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At December 31, 2022, we serviced $286.4 million of residential first mortgage loans and reverse mortgage loans for others, compared to $91.5 million at December 31, 2021.

At December 31, 2022, we had $233.7 million of residential first mortgage loans serviced by others.

We also serviced residential first mortgage loans and reverse mortgage loans for our own portfolio totaling $528.2 million and $546.7 million at December 31, 2022 and 2021, respectively.

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During 2022 and 2021, we originated $0.8 million and $1.8 million in reverse mortgages, respectively.

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

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

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

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

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

LOAN LOSS EXPERIENCE, PROBLEM ASSETS AND DELINQUENCIES

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

LOAN AND LEASE LOSS EXPERIENCE, PROBLEM ASSETS AND DELINQUENCIES

Our results of operations can be negatively impacted by nonperforming assets, which include nonaccruing loans, other real estate owned and restructured loans.

Nonaccruing loans are those on which the accrual of interest has ceased.

Loans are placed on nonaccrual status immediately if, in our opinion, collection is doubtful, or when principal or interest is past due 90 days and collateral is insufficient to cover principal and interest payments.

Loans are placed on nonaccrual status immediately if, in our opinion, collection is doubtful, or when principal or interest is past due 90 days (120 days for leases and consumer loans from our partnership with Upstart) and collateral is insufficient to cover principal and interest payments.

Interest accrued, but not collected at the date a loan is placed on nonaccrual status, is reversed and charged against interest income.

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

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

To accomplish this, our Risk Management Administration and Credit and Asset Recovery departments monitor the asset quality of our loans and real estate portfolios and reports such information to the Retail Credit Quality Committee, Credit Policy Committee, the Finance Division, and the Audit Committee of our Board of Directors.

SOURCES OF FUNDS

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• Retained earnings

• Commercial and retail deposits

• Commercial, consumer, wealth and trust deposits

• Loan repayments

• Investment securities

• Federal funds purchased

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• Brokered deposits

• Senior debt

• Trust preferred borrowings

• Senior and subordinated debt

Our branch strategy has been focused on expanding our market penetration and retail footprint in Delaware, southeastern Pennsylvania and southern New Jersey and attracting new customers in part to provide additional deposit growth.

WSFS Bank is the largest locally-headquartered community bank in the Delaware and Greater Philadelphia region.

WSFS Bank primarily attracts deposits through its retail branch offices and loan production offices, in Delaware, southeastern Pennsylvania and southern New Jersey, as well as through our digital banking platforms.

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

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

At December 31, 2022, we had $350.0 million FHLB advances compared to no FHLB advances at December 31, 2021.

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

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Trust Preferred Borrowings

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

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

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

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

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

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

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

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

In connection with the BMBC Merger, WSFS acquired Royal Bancshares Capital Trust I (Trust I) and Royal Bancshares Capital Trust II (Trust II) (collectively, the Trusts), which were utilized for the sole purpose of issuing and selling capital securities representing preferred beneficial interests.

Inclusive of the fair value marks, WSFS assumed junior subordinated debentures to the Trusts with a carrying value of $11.7 million each, totaling $23.4 million.

The junior subordinated debentures incur interest at a coupon rate of 6.92% as of December 31, 2022.

The rate resets quarterly based on 3-month LIBOR plus 2.15%.

Each of Trust I and Trust II issued an aggregate principal amount of $12.5 million of capital securities initially bearing fixed and/or fixed/floating interest rates corresponding to the debt securities held by each Trust to an unaffiliated investment vehicle and an aggregate principal amount of $387.0 thousand of common securities bearing fixed and/or fixed/floating interest rates corresponding to the debt securities held by each Trust to the Company.

The Company has fully and unconditionally guaranteed all of the obligations of the Trusts, including any distributions and payments on liquidation or redemption of the capital securities.

The rights of holders of common securities of the Trusts are subordinate to the rights of the holders of capital securities only in the event of a default;

otherwise, the common securities’ economic and voting rights are pari passu with the capital securities.

The capital and common securities of the Trusts are subject to mandatory redemption upon the maturity or call of the junior subordinated debentures held by each.

Unless earlier dissolved, the Trusts will dissolve on December 15, 2034.

The junior subordinated debentures are the sole assets of Trusts, mature on December 15, 2034, and may be called at par by the Company any time.

The Company records its investments in the Trusts’ common securities of $387.0 thousand each as investments in unconsolidated entities and records dividend income upon declaration by Trust I and Trust II.

Senior and Subordinated Debt

On 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 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.

In connection with the BMBC Merger, the Company assumed $30.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes due 2025 (the 2025 Notes) which were issued in a private placement to institutional accredited investors on August 6, 2015.

The 2025 Notes mature on August 15, 2025, and currently bear interest at a variable rate that resets quarterly to a level equal to the then-current three-month LIBOR rate plus 3.068% until August 15, 2025, or any early redemption date.

Effective February 15, 2023, the Company redeemed all remaining outstanding principal amount of the 2025 Notes.

In connection with the BMBC Merger, the Company assumed $70.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes due 2027 (the 2027 Notes) which were issued by BMBC in an underwritten public offering on December 13, 2017.

The 2027 Notes mature on December 15, 2027, and currently bear interest at a variable rate that will reset quarterly to a level equal to the then-current three-month LIBOR rate plus 2.05% until December 15, 2027, or any early redemption date.

Reconciliation of non-GAAP financial measures included in Item 1

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Net income attributable to WSFS (GAAP) $ 222,375

Securities gains (331)

Unrealized gains on equity investments, net (5,980)

Recovery of legal settlement (15,000)

Realized loss on equity investments, net 706

Loss of debt extinguishment 1,087

Visa derivative valuation adjustment 2,877

Corporate development and restructuring expenses 65,222

Contribution to WSFS CARES Foundation 1,000

Tax impact of pre-tax adjustments (13,809)

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The impact of such regulations on our business is discussed further below, as well as in "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors – Risks Relating to Regulation."

Coronavirus Aid, Relief, and Economic Security (CARES) Act

On March 27, 2020, the CARES Act was enacted, providing wide ranging economic relief for individuals and businesses impacted by COVID-19.

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

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

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

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

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

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

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

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

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

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

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

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

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

The CARES Act, as amended by the Consolidated Appropriations Act, 2021, specified that COVID-19 related loan modifications executed between March 1, 2020 and the earlier of (i) 60 days after the date of termination of the national emergency declared by the President and (ii) January 1, 2022, on loans that were current as of December 31, 2019 are not subject to TDR accounting requirements under GAAP.

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

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

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

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

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

economy and financial markets.

All of these facilities have since expired.

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

economy and ultimately our business if economic conditions decline.

Transition from London Inter-Bank Offered Rate (LIBOR)

In 2014, a committee of private-market derivative participants and their regulators, the Alternative Reference Rate Committee (ARRC), was convened by the Federal Reserve to identify an alternative reference interest rate to replace LIBOR.

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

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

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

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

The ARRC and other institutions continue to take steps to advance SOFR as an alternative benchmark.

In July 2020, the federal banking agencies issued guidance for banking organizations on managing the transition to an alternative reference rate;

for the agencies, however, SOFR is not the exclusive alternative.

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

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As of December 31, 2022, the Company had approximately $2.7 billion of loans and $2.0 billion of derivatives that are utilized for customer guarantees, indexed to LIBOR, that mature after 2022.

In addition, the Company had approximately $67.0 million of debt securities outstanding that are indexed to LIBOR (either currently or in the future) as of December 31, 2021.

In addition, the Company had approximately $192.8 million of debt securities indexed to LIBOR as of December 31, 2022, including $ 30.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes due 2025 that were redeemed in full on February 15, 2023.

The Company had one investment security totaling $0.5 million, and no repurchase and resale agreements or FHLB advances indexed to LIBOR as of December 31, 2022.

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

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

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

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

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

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

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

In the first quarter of 2022, the Bank began utilizing Term SOFR as a replacement to LIBOR.

Term SOFR was identified as the primary successor for 1 month and 3 month LIBOR due to operational similarities and ease of conversion.

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

however, we have begun to shift some new products from LIBOR.

Most recently, the floating rate on our $150 million of senior notes issued in 2020 (due 2030), beginning on December 15, 2025, is based on an alternative benchmark rate (which is expected to be the three-month term SOFR).

however, we have begun to shift new products primarily to Term SOFR and are actively migrating the existing LIBOR indexed loan portfolio away from the LIBOR index.

For additional information related to the potential impact surrounding the transition from LIBOR on the Company’s business, see "Risk Factors."

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

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

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

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

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Among these powers is the authority to proscribe the payment of dividends by bank and savings and loan holding companies.

Cypress and West Capital

Cypress and West Capital are registered investment advisers under the Investment Advisers Act of 1940 (the Investment Advisers Act) and as such are supervised by the SEC.

Bryn Mawr Capital Management, LLC

Bryn Mawr Capital Management, LLC is a registered investment adviser under the Investment Advisers Act of 1940 (the Investment Advisers Act) and as such is supervised by the SEC.

The Investment Advisers Act imposes numerous obligations on registered investment advisers, including record-keeping, operational and marketing requirements, disclosure obligations and prohibitions on fraudulent activities.

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This two-year delay is in addition to the three-year transition period that the agencies had already made available.

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

We elected to phase in the regulatory capital effects of CECL over three years, January 1, 2020 through December 31, 2022, and did not defer the effects of CECL for two years before the three-year phase-in period.

The capital ratios for the Bank and the Company, as of December 31, 2022, indicate regulatory capital levels in excess of the regulatory minimums and the levels necessary for the Bank to be considered “well capitalized.”

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

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

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

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

The FDIC adopted a restoration plan in September 2020, which it amended in June 2022, to restore the DIF reserve ratio to at least 1.35% by September 30, 2028.

On October 18, 2022 the FDIC adopted a final rule to increase initial base deposit insurance assessment rates for insured depository institutions by 2 basis points, beginning with the first quarterly assessment period of 2023.

The increased assessment rate schedules will remain in effect unless and until the reserve ratio of the DIF meets or exceeds 2%.

As a result of the new rule, the FDIC insurance costs of insured depository institutions, including the Bank, will generally increase

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

5 unchanged sentences

The Federal Reserve indicated that it may adjust reserve requirement ratios in the future if conditions warrant.

Retail Branch Network

Branch Office Network

The Bank maintains branch offices in three states, Delaware, Pennsylvania and New Jersey.

38 unchanged sentences

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

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

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

Additionally, banking organizations are required to notify their primary federal regulator of significant computer security incidents within 36 hours of determining that such an incident has occurred.

Bank Secrecy Act and Anti-Money Laundering

23 unchanged sentences

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

On May 5, 2022 the federal banking agencies issued a proposed rule that would substantially revise how they evaluate an insured depository institution’s record of satisfying the credit needs of its entire communities, including low- and moderate- income individuals and neighborhoods, under the CRA.

If this rule is finalized as proposed, it may become more challenging and/or costly for insured depository institutions to achieve an “Outstanding” or “Satisfactory” CRA rating, which could negatively impact our ability to obtain regulatory approval for an acquisition.

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

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

Sales of Insurance Products and Annuities

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

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

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

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

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

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

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

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

What changed 10-K

Item 1. Business