WSFS FINANCIAL CORP 10-K

ITEM 8. 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: Page Report of Independent Registered Public Accounting Firm ( KPMG LLP , Philadelphia, PA , Auditor Firm ID: 185 ) 65 Consolidated Statements of Income 68 Consolidated Statements of Comprehensive Income (Loss) 69 Consolidated Statements of Financial Condition 70 Consolidated Statements of Changes in Stockholders’ Equity 71 Consolidated Statements of Cash Flows 72 64 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors WSFS Financial Corporation: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated statements of financial condition of WSFS Financial Corporation and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 28, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. 65 Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Assessment of the Allowance for Credit Losses for Loans and Leases Evaluated on a Collective Basis As discussed in Notes 2 and 7 to the consolidated financial statements, the Company’s total allowance for credit losses as of December 31, 2024 was $195.3 million, of which $186.9 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. For the commercial portfolio, the Company uses a base loss rate methodology which applies a probability of default (PD) and loss given default (LGD) which are calculated based on the historical rate of migration. The historical rate of migration is based on the historical rate of credit loss measured during a look-back period (LBP). The historical rate of credit loss is determined based on internally assessed risk ratings and loan segments and then adjusted for the economic forecast scenario and macroeconomic assumptions over reasonable and supportable forecast periods. For the retail and leasing portfolios, the Company uses a base loss rate methodology which calculates historical loss rates based on average net loss rates over the LBP that incorporates the economic forecast assigned to that loan. After the reasonable and supportable forecast periods, the Company reverts on a straight-line basis over the reversion period to its historical loss rates, evaluated over the LBP, for the remaining life of both commercial and retail loans and leases. The LBP, reasonable and supportable forecast, and reversion period are established for each portfolio segment. The Company estimates the exposure at default using a method which projects prepayments over the life of the loans and leases. In order to capture the unique risks of the loan and lease portfolio within the PD, LGD and average net loss rates, the Company segments the portfolio into pools, considering similar risk characteristics. A portion of the collective ACL is comprised of adjustments to historical loss information for various internal and external conditions. 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 December 31, 2024 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 portfolio, and credit risk ratings for commercial loans, and (2) certain qualitative factors. The assessment also included an evaluation of the conceptual soundness and performance of the quantitative model. In addition, auditor judgment was required to evaluate the sufficiency of audit evidence obtained. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s measurement of the collective ACL estimates, including controls over the: • continued use and appropriateness of the collective ACL methodology • continued use and appropriateness of changes made to the quantitative model • identification and determination of the significant assumptions used in the quantitative model • application of certain qualitative factors • analysis of the collective ACL results, trends, and ratios. 66 We evaluated the Company’s process to develop the collective ACL estimates by testing certain sources of data, factors, and assumptions that the Company used, and considered the relevance and reliability of such data, factors, and assumptions. In addition, we involved credit risk professionals with specialized skills and knowledge, who assisted in: • evaluating the Company’s collective ACL methodology for compliance with U.S. generally accepted accounting principles • 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 selection of the 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 • determining whether the loan portfolio is segmented by similar risk characteristics by comparing to the Company’s business environment and relevant industry practices • 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 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, 2024 collective ACL by evaluating: • cumulative results of the audit procedures • qualitative aspects of the Company’s accounting practices • potential bias in the account estimates. /s/ KPMG LLP We have served as the Company's auditor since 1994. Philadelphia, Pennsylvania February 28, 2025 67 CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31, (Dollars in thousands, except per share data) 2024 2023 2022 Interest income: Interest and fees on loans and leases $ 918,381 $ 845,271 $ 582,754 Interest on mortgage-backed securities 102,024 107,555 106,606 Interest and dividends on investment securities: Taxable 2,798 2,803 2,812 Tax-exempt 5,941 5,980 4,087 Other interest income 34,438 14,913 7,556 1,063,582 976,522 703,815 Interest expense: Interest on deposits 308,676 209,820 28,181 Interest on Federal Home Loan Bank advances 2,967 5,348 538 Interest on senior and subordinated debt 9,690 9,815 8,246 Interest on trust preferred borrowings 6,910 6,736 3,482 Interest on federal funds purchased 343 1,673 443 Interest on other borrowings 29,558 18,027 35 358,144 251,419 40,925 Net interest income 705,438 725,103 662,890 Provision for credit losses 61,410 88,071 48,089 Net interest income after provision for (recovery of) credit losses 644,028 637,032 614,801 Noninterest income: Credit/debit card and ATM income 88,710 59,718 40,088 Investment management and fiduciary revenue 146,945 131,050 121,608 Deposit service charges 26,664 25,393 24,484 Mortgage banking activities, net 7,565 4,799 7,271 Loan and lease fee income 6,681 5,718 6,275 Unrealized gains on equity investments, net — 329 5,980 Realized gain on sale of equity investment, net 2,309 9,493 — Bank owned life insurance income 4,724 4,642 1,804 Other income 57,322 48,729 52,624 340,920 289,871 260,134 Noninterest expense: Salaries, benefits and other compensation 332,682 289,193 283,905 Occupancy expense 37,579 42,184 40,885 Equipment expense 47,744 42,242 40,994 Professional fees 20,164 21,200 18,497 Data processing and operations expenses 18,281 19,054 20,876 Marketing expense 7,824 7,914 7,230 FDIC expenses 12,166 15,887 6,098 Loan workout and other credit costs 2,123 852 702 Corporate development expense 473 3,931 42,749 Restructuring expense 2,193 ( 230 ) 22,473 Other operating expense 156,460 119,406 89,917 637,689 561,633 574,326 Income before taxes 347,259 365,270 300,609 Income tax provision 83,764 96,245 77,961 Net income $ 263,495 $ 269,025 $ 222,648 Less: Net (loss) income attributable to noncontrolling interest ( 176 ) ( 131 ) 273 Net income attributable to WSFS $ 263,671 $ 269,156 $ 222,375 Basic earnings per share $ 4.43 $ 4.40 $ 3.50 Diluted earnings per share $ 4.41 $ 4.40 $ 3.49 The accompanying notes are an integral part of these Consolidated Financial Statements 68 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Year Ended December 31, (Dollars in thousands) 2024 2023 2022 Net income $ 263,495 $ 269,025 $ 222,648 Less: Net (loss) income attributable to noncontrolling interest ( 176 ) ( 131 ) 273 Net income attributable to WSFS $ 263,671 $ 269,156 $ 222,375 Other comprehensive (loss) income: Net change in unrealized gains (losses) on investment securities available-for-sale Net unrealized (losses) gains arising during the period, net of tax (benefit) expense of $( 11,955 ), $ 20,085 , and $( 167,261 ), respectively ( 37,857 ) 63,601 ( 529,660 ) Net change in securities held-to-maturity Net change in unrealized losses (gains) on securities reclassified to held-to-maturity, net of tax expense (benefit) of $ 4,774 , $ 5,361 , and $( 34,319 ), respectively (1)(2) 15,118 16,980 ( 108,678 ) Net change in unfunded pension liability Change in unfunded pension liability related to unrealized loss (gain) and prior service cost, net of tax expense (benefit) of $ 269 , $ 1 , and $( 5 ), respectively 799 ( 132 ) 209 Net change in cash flow hedge Net unrealized (loss) gain arising during the period, net of tax (benefit) expense of $( 2,809 ), $ 504 , and $ — , respectively ( 8,894 ) 1,596 — Amortization of unrealized gain on terminated cash flow hedges, net of tax benefit of $ — , $ 34 and $ 51 , respectively — ( 107 ) ( 160 ) ( 8,894 ) 1,489 ( 160 ) Net change in equity method investments Net change in other comprehensive (loss) income of equity method investments, net of tax (benefit) expense of $( 16 ), $( 27 ), and $ 67 , respectively ( 52 ) ( 85 ) 213 Total other comprehensive (loss) income ( 30,886 ) 81,853 ( 638,076 ) Total comprehensive income (loss) $ 232,785 $ 351,009 $ ( 415,701 ) (1) Includes $ 119.8 million, net of tax benefit, of unrealized losses on transferred investment securities with a book value of $ 1.1 billion from available-for-sale to held-to-maturity that were transferred in June 2022 . (2) Includes amortization of unrealized gains and losses on securities reclassified to held-to-maturity. The accompanying notes are an integral part of these Consolidated Financial Statements 69 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION December 31, (Dollars in thousands, except per share and share data) 2024 2023 Assets: Cash and due from banks $ 722,722 $ 629,310 Cash in non-owned ATMs 430,320 458,889 Interest-bearing deposits in other banks including collateral (restricted cash) of $ 1,701 at December 31, 2024 and $ 4,270 at December 31, 2023 1,776 4,701 Total cash, cash equivalents, and restricted cash 1,154,818 1,092,900 Investment securities, available for sale (amortized cost of $ 4,218,266 at December 31, 2024 and $ 4,504,342 at December 31, 2023) 3,510,648 3,846,537 Investment securities, held to maturity, net of allowance for credit losses of $ 7 at December 31, 2024 and $ 8 at December 31, 2023 (fair value $ 895,511 at December 31, 2024 and $ 985,931 at December 31, 2023) 1,015,161 1,058,557 Other investments 18,184 17,434 Loans held for sale at fair value 49,699 29,268 Loans and leases, net of allowance of $ 195,281 at December 31, 2024 and $ 186,126 at December 31, 2023 12,996,218 12,583,202 Bank-owned life insurance 36,565 42,762 Stock in Federal Home Loan Bank of Pittsburgh, at cost 11,805 15,398 Other real estate owned 5,204 1,569 Accrued interest receivable 84,671 85,979 Premises and equipment 86,028 104,484 Goodwill and intangible assets 988,160 1,004,560 Other assets 857,142 712,022 Total assets $ 20,814,303 $ 20,594,672 Liabilities and Stockholders’ Equity Liabilities: Deposits: Noninterest-bearing $ 4,987,753 $ 4,917,297 Interest-bearing demand 12,042,055 11,556,789 Total deposits 17,029,808 16,474,086 Federal Home Loan Bank advances 51,040 — Trust preferred borrowings 90,834 90,638 Senior and subordinated debt 218,631 218,400 Other borrowed funds 23,102 586,038 Accrued interest payable 38,173 46,684 Other liabilities 783,339 709,011 Total liabilities 18,234,927 18,124,857 Stockholders’ Equity: Common stock 0.01 par value, shares authorized of 90,000,000 ; shares issued of 76,264,211 at December 31, 2024 and 76,095,094 at December 31, 2023 763 761 Capital in excess of par value 1,996,191 1,984,746 Accumulated other comprehensive loss ( 624,877 ) ( 593,991 ) Retained earnings 1,871,523 1,643,657 Treasury stock at cost, 17,607,002 shares at December 31, 2024 and 15,557,263 shares at December 31, 2023 ( 653,848 ) ( 557,537 ) Total stockholders’ equity of WSFS 2,589,752 2,477,636 Noncontrolling interest ( 10,376 ) ( 7,821 ) Total stockholders’ equity 2,579,376 2,469,815 Total liabilities and stockholders’ equity $ 20,814,303 $ 20,594,672 The accompanying notes are an integral part of these Consolidated Financial Statements 70 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Dollars in thousands, except per share and share amounts) Shares Common Stock Capital in Excess of Par Value Accumulated Other Comprehensive Loss Retained Earnings Treasury Stock Total Stockholders’ Equity of WSFS Non-controlling Interest Total Stockholders' Equity Balance, December 31, 2021 57,695,676 $ 577 $ 1,058,997 $ ( 37,768 ) $ 1,224,614 $ ( 307,321 ) $ 1,939,099 $ ( 2,083 ) $ 1,937,016 Net income — — — — 222,375 — 222,375 273 222,648 Other comprehensive loss — — — ( 638,076 ) — — ( 638,076 ) — ( 638,076 ) Cash dividend, $ 0.56 per share — — — — ( 35,746 ) — ( 35,746 ) — ( 35,746 ) Distributions to noncontrolling shareholders — — — — — — — ( 504 ) ( 504 ) Issuance of common stock including proceeds from exercise of common stock options 109,473 1 3,178 — — — 3,179 — 3,179 Issuance of common stock in acquisition of BMT 18,116,848 181 907,835 — — — 908,016 — 908,016 Noncontrolling interest assumed in acquisition — — — — — — — ( 913 ) ( 913 ) Stock-based compensation expense — — 6,349 — — — 6,349 — 6,349 Repurchase of common stock (1) — — ( 2,149 ) — — ( 197,934 ) ( 200,083 ) — ( 200,083 ) Balance, December 31, 2022 75,921,997 $ 759 $ 1,974,210 $ ( 675,844 ) $ 1,411,243 $ ( 505,255 ) $ 2,205,113 $ ( 3,227 ) $ 2,201,886 Net income (loss) — — — — 269,156 — 269,156 ( 131 ) 269,025 Other comprehensive income — — — 81,853 — — 81,853 — 81,853 Cash dividend, $ 0.60 per share — — — — ( 36,742 ) — ( 36,742 ) — ( 36,742 ) Distributions to noncontrolling shareholders — — — — — — — ( 4,463 ) ( 4,463 ) Issuance of common stock including proceeds from exercise of common stock options 173,097 2 3,296 — — — 3,298 — 3,298 Stock-based compensation expense — — 9,605 — — — 9,605 — 9,605 Repurchase of common stock (1) — — ( 2,365 ) — — ( 52,282 ) ( 54,647 ) — ( 54,647 ) Balance, December 31, 2023 76,095,094 $ 761 $ 1,984,746 $ ( 593,991 ) $ 1,643,657 $ ( 557,537 ) $ 2,477,636 $ ( 7,821 ) $ 2,469,815 Net income (loss) — — — — 263,671 — 263,671 ( 176 ) 263,495 Other comprehensive loss — — — ( 30,886 ) — — ( 30,886 ) — ( 30,886 ) Cash dividend, $ 0.60 per share — — — — ( 35,805 ) — ( 35,805 ) — ( 35,805 ) Distributions to noncontrolling shareholders — — ( 920 ) — — — ( 920 ) ( 2,379 ) ( 3,299 ) Issuance of common stock including proceeds from exercise of common stock options (2) 169,117 2 464 — — — 466 — 466 Stock-based compensation expense — — 11,901 — — — 11,901 — 11,901 Repurchase of common stock (1) — — — — — ( 96,311 ) ( 96,311 ) — ( 96,311 ) Balance, December 31, 2024 76,264,211 $ 763 $ 1,996,191 $ ( 624,877 ) $ 1,871,523 $ ( 653,848 ) $ 2,589,752 $ ( 10,376 ) $ 2,579,376 (1) Repurchase of common stock for the years ended December 31, 2024, 2023 and 2022 included 2,049,739 , 1,247,178 and 4,151,117 shares repurchased, respectively, in connection with the Company's share buyback program approved by the Board of Directors. The years ended December 31, 2023 and 2022 included 45,489 and 113,039 shares withheld, respectively, to cover tax liabilities. (2) Issuance of common stock includes 54,972 shares withheld to cover tax liabilities. The accompanying notes are an integral part of these Consolidated Financial Statements 71 CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, (Dollars in thousands) 2024 2023 2022 Operating activities: Net income $ 263,495 $ 269,025 $ 222,648 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 61,410 88,071 48,089 Depreciation of premises and equipment, net 13,875 17,508 24,152 Accretion of fees, premiums and discounts, net ( 24,207 ) ( 27,376 ) ( 28,378 ) Amortization of intangible assets 15,680 15,527 18,401 Amortization of right of use lease asset 10,147 15,567 17,990 Decrease in operating lease liability ( 10,957 ) ( 12,417 ) ( 16,291 ) Income from mortgage banking activities, net ( 7,565 ) ( 4,799 ) ( 7,271 ) Loss (gain) on sale of other real estate owned and valuation adjustments, net 296 195 ( 221 ) Stock-based compensation expense 11,901 9,605 6,349 Unrealized gains on equity investments, net — ( 329 ) ( 5,980 ) Realized gain on sale of equity investment, net ( 2,309 ) ( 9,493 ) — Deferred income tax benefit ( 8,162 ) ( 5,397 ) ( 4,005 ) Decrease (increase) in accrued interest receivable 1,308 ( 11,531 ) ( 22,151 ) Increase in other assets ( 106,041 ) ( 2,185 ) ( 58,852 ) Origination of loans held-for-sale ( 393,408 ) ( 280,826 ) ( 527,684 ) Proceeds from sales of loans held-for-sale 319,658 198,920 501,186 (Decrease) increase in accrued interest payable ( 8,511 ) 41,510 1,196 Increase (decrease) in other liabilities 85,291 ( 60,781 ) 315,065 (Increase) decrease in value of bank-owned life insurance ( 531 ) ( 2,053 ) ( 1,311 ) Increase in capitalized interest, net ( 1,471 ) ( 1,738 ) ( 2,078 ) Net cash provided by operating activities $ 219,899 $ 237,003 $ 480,854 Investing activities: Purchases of investment securities held to maturity $ — $ — $ ( 120,868 ) Repayments, maturities and calls of investment securities held to maturity 61,332 72,966 66,186 Purchases of investment securities available-for-sale ( 67,433 ) ( 27,689 ) ( 1,218,022 ) Repayments of investment securities available-for-sale 350,388 354,783 1,015,603 Proceeds from bank-owned life insurance death benefit 112 3,772 1,437 Proceeds from bank-owned life insurance surrender 6,616 51,981 — Net proceeds from sale of equity investments — 17,946 — Net cash (paid for) from business combinations — ( 3,000 ) 573,745 Net increase in loans and leases ( 138,250 ) ( 486,819 ) ( 41,324 ) Purchases of loans held for investment ( 269,635 ) ( 313,363 ) ( 393,159 ) Purchases of FHLB stock ( 432,919 ) ( 134,279 ) ( 51,518 ) Redemption of FHLB stock 436,512 142,997 36,207 Sales of assets acquired through foreclosure, net 803 833 1,964 Sale of premise and equipment — 17 1,191 Investment in premises and equipment, net ( 14,258 ) ( 6,406 ) ( 8,809 ) Net cash used in investing activities $ ( 66,732 ) $ ( 326,261 ) $ ( 137,367 ) (continued on following page) 72 CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED) Year Ended December 31, (Dollars in thousands) 2024 2023 2022 Financing activities: Net increase (decrease) in demand and saving deposits $ 263,007 $ ( 358,115 ) $ ( 1,123,468 ) Increase (decrease) in time deposits 346,329 681,484 ( 94,251 ) (Decrease) increase in brokered deposits ( 51,676 ) ( 70,915 ) 61,705 Receipts from FHLB advances 13,037,879 7,195,000 1,873,100 Repayments of FHLB advances ( 12,986,839 ) ( 7,545,000 ) ( 1,523,100 ) Receipts from federal funds purchased 1,525,001 7,713,000 2,730,001 Repayments of federal funds purchased ( 1,525,001 ) ( 7,713,000 ) ( 2,730,001 ) Receipts from Bank Term Funding Program 235,000 565,000 — Repayments of Bank Term Funding Program ( 800,000 ) — — Distributions to noncontrolling shareholders ( 3,299 ) ( 4,463 ) ( 504 ) Cash dividend ( 35,805 ) ( 36,742 ) ( 35,746 ) Issuance of common stock and exercise of common stock options 466 3,298 3,179 Redemption of senior and subordinated debt — ( 30,000 ) — Repurchase of common shares ( 96,311 ) ( 54,647 ) ( 200,083 ) Net cash (used in) provided by financing activities $ ( 91,249 ) $ 344,900 $ ( 1,039,168 ) Increase (decrease) in cash, cash equivalents, and restricted cash $ 61,918 $ 255,642 $ ( 695,681 ) Cash, cash equivalents, and restricted cash at beginning of period 1,092,900 837,258 1,532,939 Cash, cash equivalents, and restricted cash at end of period $ 1,154,818 $ 1,092,900 $ 837,258 Supplemental disclosure of cash flow information: Cash paid for interest during the period $ 366,655 $ 209,909 $ 36,487 Cash paid for income taxes, net 82,122 99,136 58,148 Non-cash information: Loans transferred to other real estate owned $ 4,438 $ 1,569 $ 630 Loans transferred to portfolio from held-for-sale at fair value 57,813 96,312 97,848 Securities transferred to held-to-maturity from available-for-sale at fair value — — 931,421 Receivable for bank-owned life insurance surrender proceeds — 4,731 — Receivable for bank-owned life insurance death benefit proceeds — 742 — Premises & equipment transferred to held-for-sale 18,839 — — Fair value of assets acquired, net of cash received — 7,993 4,713,544 Fair value of liabilities assumed — 4,993 4,379,273 The accompanying notes are an integral part of these Consolidated Financial Statements 73 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION General WSFS Financial Corporation (the Company or WSFS) is a savings and loan holding company organized under the laws of the State of Delaware. Substantially all of the Company's assets are held by its subsidiary, Wilmington Savings Fund Society, FSB (WSFS Bank or the Bank), a federal savings bank organized under the laws of the United States (U.S.). The Consolidated Financial Statements include the accounts of the Company, WSFS Bank, The Bryn Mawr Trust Company of Delaware (BMT-DE), Bryn Mawr Capital Management, LLC (BMCM), WSFS Wealth Management, LLC (Powdermill ® ), WSFS SPE Services, LLC, and 601 Perkasie, LLC. The Company also has three unconsolidated subsidiaries, WSFS Capital Trust III (the Trust), Royal Bancshares Capital Trust I, and Royal Bancshares Capital Trust II . WSFS Bank has two wholly-owned subsidiaries: Beneficial Equipment Finance Corporation (BEFC) and 1832 Holdings, Inc., and one majority-owned subsidiary, NewLane Finance Company (NewLane Finance ® ). Overview Founded in 1832, the Bank is one of the ten oldest bank and trust companies continuously operating under the same name in the U.S. The Company provides residential and commercial mortgage, commercial and consumer lending services, as well as retail deposit and treasury management services. The Company's core banking business is commercial lending funded primarily by customer-generated deposits. In addition, the Company offers a variety of wealth management and trust services to individual, corporate and institutional clients. The Federal Deposit Insurance Corporation (FDIC) insures the Company's Clients’ deposits to their legal maximums. The Company serves its Clients primarily from 114 offices located in Pennsylvania ( 57 ), Delaware ( 39 ) , New Jersey ( 14 ), Florida ( 2 ), Nevada ( 1 ) and Virginia ( 1 ) , its ATM network, website at www.wsfsbank.com , and mobile app. 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 The Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the U.S. (GAAP). In preparing the Consolidated Financial Statements, the Company is required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. 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 2025 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 (including loans and leases held for investment, investment securities available-for-sale and held-to-maturity), loans held for sale, lending-related commitments, goodwill, intangible assets, post-retirement benefit obligations, the fair value of financial instruments, and income taxes 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. All significant intercompany accounts and transactions were eliminated in consolidation. 74 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SIGNIFICANT ACCOUNTING POLICIES Cash, Cash Equivalents and Restricted Cash For purposes of reporting cash flows, cash, cash equivalents and restricted cash include cash, cash in non-owned ATMs, amounts due from banks, federal funds sold and securities purchased under agreements to resell and cash collateral held for derivatives, including a financial derivative related to the sale of certain Visa Class B shares. Debt Securities Debt securities mostly include mortgage-backed securities (MBS), municipal bonds, and U.S. government and agency securities and are classified into one of the following three categories and accounted for as follows: • Securities purchased with the intent of selling them in the near future are classified as “trading” and reported at fair value, with unrealized gains and losses included in earnings. • Securities purchased with the positive intent and ability to hold to maturity are classified as “held to maturity” and reported at amortized cost. • Securities not classified as either trading or held to maturity are classified as “available-for-sale” and reported at fair value, with unrealized gains and losses excluded from earnings and reported, net of tax, as a separate component of stockholders’ equity in accumulated other comprehensive income (loss). Realized gains and losses are determined using the specific identification method and included on the Consolidated Statements of Income. All sales are made without recourse. The fair value of debt securities is primarily obtained from third-party pricing services. Implicit in the valuation of MBS are estimated prepayments based on historical and current market conditions. Premiums and discounts on MBS collateralized by residential 1-4 family loans are recognized in interest income using a level yield method over the period to expected maturity. Premiums and discounts on all other securities are recognized on a straight-line basis over the period to expected maturity, with the exception of premiums on callable debt securities, which are recognized over the period to the earliest call date. A debt security is placed on nonaccrual status at the time any principal or interest payments are contractually past due 90 days or more. Interest accrued but not received for a security placed on nonaccrual status is reversed against interest income. The Company's investment portfolio is reviewed each quarter for indications of potential credit losses. Refer to the respective held-to-maturity and available-for-sale debt securities sections for the allowance for credit loss policies for each portfolio. Allowance for Credit Losses - Held-to-Maturity Debt Securities The Company follows Accounting Standards Codification (ASC) 326-20, Financial Instruments - Credit Loss - Measured at Amortized Cost, to measure expected credit losses on held-to-maturity debt securities on a collective basis by security investment grade. The estimate of expected credit losses considers historical credit loss information adjusted by a security's credit rating. The Company classifies the held-to-maturity debt securities into the following major security types: mortgage backed securities and state and political subdivisions. These securities are highly rated with a history of no credit losses, and are assigned ratings based on the most recent data from ratings agencies depending on the availability of data for the security. Credit ratings of held-to-maturity debt securities, which are a significant input in calculating the expected credit loss, are reviewed on a quarterly basis. Accrued interest receivable on held-to-maturity debt securities is excluded from the estimate of credit losses and is included in Accrued interest receivable on the Consolidated Statements of Financial Condition. 75 Allowance for Credit Losses - Available-for-Sale Debt Securities The Company follows ASC 326-30, Financial Instruments - Credit Loss - Available-for-Sale Debt Securities, which provides guidance related to the recognition of and expanded disclosure requirements for expected credit losses on available-for-sale debt securities. For available-for-sale debt securities in an unrealized loss position, the Company first evaluates whether it intends to sell, or if it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either criterion is met, the security's amortized cost basis is reduced to fair value and recognized as a reduction to Noninterest income in the Consolidated Statements of Income. For debt securities available-for-sale in which the Company does not intend to sell, or it is not likely the security would be required to be sold before recovery, it evaluates whether a decline in fair value has resulted from credit losses or other adverse factors, such as a change in the security's credit rating. In assessing whether a credit loss exists, the Company compares the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance is recorded, limited to the fair value of the security. The Company performs these analyses on a quarterly basis to review the conditions and risks associated with the individual securities. Credit losses on an impaired security is measured using the present value of expected future cash flows. Any impairment not recorded through an allowance for credit loss is included in other comprehensive income (loss), net of the tax effect. The Company is required to use its judgment in determining impairment in certain circumstances. For additional detail regarding debt securities, see Note 5. Equity Investments The Company has equity investments 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: • Investments with a readily determinable fair value are reported at fair value, with unrealized gains and losses included in earnings. Any dividends received are recorded in interest income. • Investments without a readily determinable fair value are reported at cost less impairment, if any, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. Any dividends received are recorded in interest income. For equity investments without readily determinable fair values, when an orderly transaction for the identical or similar investment of the same issuer is identified, the Company uses valuation techniques permitted under ASC 820, Fair Value Measurement, to evaluate the observed transaction(s) and adjust the carrying value. ASC 321-10 also provides impairment accounting guidance for equity investments without readily determinable fair values. 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 investment without a readily determinable fair value is impaired, a loss for the difference between the equity investment’s carrying value and its fair value may be recognized as a reduction to noninterest income in the Consolidated Statements of Income. Equity investments recorded in accordance with ASC 323-10 are initially recorded at cost based on the Company’s percentage ownership in the investee. Subsequently, the carrying amount of the investment is adjusted to reflect the recognition of the Company’s proportionate share of income or loss of the investee based on the investee’s earnings for the reporting period, recorded on a one-quarter lag. The Company assesses its equity method investments for impairment using ASC 323-10 guidance. 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 Unrealized gains on equity investments, net on 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. For additional detail regarding equity securities, see Note 5. 76 Loans and leases Loans and leases held for investment are recorded at amortized cost, net of allowance for credit losses. Amortized cost is the amount at which a financial asset is originated or acquired, adjusted for the amortization of premium and discount, net deferred fees or costs, collection of cash, and write-offs. Interest income on loans is recognized using the level yield method. Loan origination fees, commitment fees and direct loan origination costs are deferred and recognized over the life of the related loans using a level yield method over the period to maturity. Past Due and Nonaccrual Loans Past due loans are defined as loans contractually past due 90 days or more as to principal or interest payments. Past due loans 90 days or more that remain in accrual status are considered well secured and in the process of collection. Nonaccruing loans are those on which the accrual of interest has ceased. Loans are placed on nonaccrual status immediately if, in the opinion of the Company, collection is doubtful, or when principal or interest is past due 90 days or more and the loan is not well secured and in the process of collection. Interest accrued but not collected at the date a loan is placed on nonaccrual status is reversed and charged against interest income. In addition, the amortization of net deferred loan fees is suspended when a loan is placed on nonaccrual status. Subsequent cash receipts are applied either to the outstanding principal balance or recorded as interest income, depending on the Company’s assessment of the ultimate collectability of principal and interest. Loans are returned to accrual status when the Company assesses that the borrower has the ability to make all principal and interest payments in accordance with the terms of the loan (i.e., a consistent repayment record, generally six consecutive payments, has been demonstrated). For loans greater than 90 days past due, unless loans are well-secured and collection is imminent, their respective reserves are generally charged off once the loss has been confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged off. A loan, for which the terms have been modified in the form of principal forgiveness, an interest rate reduction, an other than-insignificant payment delay, or a term extension to a borrower experiencing financial difficulty, is considered a troubled loan. The assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. Principal balances are generally not forgiven when a loan is modified as a troubled loan. Nonaccruing troubled loans remain in nonaccrual status until there has been a period of sustained repayment performance demonstrated and repayment is reasonably assured. Since the effect of most troubled loans are already included in the Company’s estimate of expected credit losses, a change to the allowance for credit losses is generally not recorded upon modification. For additional detail regarding past due and nonaccrual loans, see Note 7. Allowance for Credit Losses - Loans and Leases The Company establishes its allowance in accordance with guidance provided in ASC 326, Financial Instruments - Credit Losses . The allowance for credit losses includes quantitative and qualitative factors that comprise the Company's current estimate of expected credit losses, including the Company's portfolio mix and segmentation, modeling methodology, historical loss experience, relevant available information from internal and external sources relating to qualitative adjustment factors, prepayment speeds and reasonable and supportable forecasts about future economic conditions. The Company's portfolio segments, established based on similar risk characteristics and loss behaviors, are: • Commercial Loans and Leases: Commercial and industrial - real estate secured, commercial and industrial - non-real estate secured, owner-occupied commercial, commercial mortgages, construction and commercial small business leases, and • Residential and Consumer Loans: Residential mortgage, equity secured lines and loans, installment loans, unsecured lines of credit, originated education loans and previously acquired education loans. Expected credit losses are net of expected recoveries and estimated over the contractual term, adjusted for expected prepayments. The contractual term excludes any extensions, renewals and modifications unless they are not unconditionally cancellable. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Expected prepayments are based on historical experience and considers adjustments for current and future economic conditions. 77 The allowance includes two primary components: (i) an allowance established on loans which share similar risk characteristics collectively evaluated for credit losses (collective basis) and (ii) an allowance established on loans which do not share similar risk characteristics with any loan segment and are individually evaluated for credit losses (individual basis). Loans that share similar risk characteristics are collectively reviewed for credit loss and are evaluated based on historical loss experience, adjusted for current economic conditions and future economic forecasts. Estimated losses are determined differently for commercial and residential and consumer loans, and each commercial segment is further segmented by internally assessed risk ratings. The Company uses a single scenario third-party economic forecast to adjust the calculated historical loss rates of the portfolio segments to incorporate the effects of current and future economic conditions. The Company's economic forecast considers the general health of the economy, the interest rate environment, real estate pricing and market risk. The Company's forecast extends out 6 quarters (the forecast period) and reverts to the historical loss rates on a straight-line basis over 4 quarters (the reversion period) as it believes this to be reasonable and supportable in the current environment. The economic forecast and reversion periods will be evaluated periodically by the Company and updated as appropriate. The historical loss rates for commercial loans are estimated by determining the probability of default (PD) and expected loss given default (LGD) and are applied to the loans' exposure at default. The probability of default is calculated based on the historical rate of migration to an event of credit loss during the look-back period. The historical loss rates for consumer loans are calculated based on average net loss rates over the same look-back period. The current look-back period is 56 quarters which ensures historical loss rates are adequately considering losses within a full credit cycle. Loans that do not share similar risk characteristics with any loan segments are evaluated on an individual basis. These loans, which may include troubled loans, are not included in the collective basis evaluation. When it is probable the Company will not collect all principal and interest due according to their contractual terms, which is assessed based on the credit characteristics of the loan and/or payment status, these loans are individually reviewed and measured for potential credit loss. The amount of the potential credit loss is measured using any of the following three methods: (i) the present value of expected future cash flows discounted at the loan’s effective interest rate; (ii) the fair value of collateral if the loan is collateral dependent; or (iii) the loan’s observable market price. If the measured fair value of the loan is less than the amortized cost basis of the loan, an allowance for credit loss is recorded. For collateral dependent loans, the expected credit losses at the individual asset level are the difference between the collateral's fair value (less cost to sell) and the amortized cost. Qualitative adjustment factors consider various internal and external conditions which are allocated among loan segments and take into consideration: • Current underwriting policies, staffing and portfolio concentrations, • Risk rating accuracy and credit administration, • Internal risk emergence (including internal trends of delinquency, and criticized loans by segment), • Economic forecasts and conditions - locally and nationally (including market trends impacting collateral values), which is separate from or in addition to the third-party economic forecast described above, and • Competitive environment, as it could impact loan structure and underwriting. 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 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. In addition, various regulatory agencies periodically review the Company's loan ratings and allowance for credit losses and the Bank's internal loan review department performs recurring loan reviews. Accrued interest receivable on loans is excluded from the estimate of credit losses and is included in Accrued interest receivable on the Consolidated Statements of Financial Condition. For additional detail regarding the allowance for credit losses and the provision for credit losses, see Note 7. 78 Unfunded Lending Commitments For unfunded lending commitments, the Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The estimate includes consideration of the probability of default and utilization rate at default to calculate expected credit losses on commitments expected to be funded based on historical losses. The allowance for credit losses for off-balance sheet exposures is included in Other liabilities on the Consolidated Statements of Financial Condition and the provision for credit losses for off-balance sheet exposure is included in Loan workout and other credit costs on the Consolidated Statements of Income. For additional detail regarding unfunded lending commitments, see Note 17. Loans Held for Sale Mortgage loans held for sale are recorded at fair value on a loan level basis, using pricing information obtained from secondary markets and brokers and applied to loans with similar interest rates and maturities. Other loans held for sale are carried at the lower of amortized cost or estimated fair value. The estimated fair value is based on pricing information from secondary markets and brokers, when available, or a discounted cash flow analysis when market information is unavailable. Other Real Estate Owned Upon initial receipt, other real estate owned (OREO) is recorded at the estimated fair value less costs to sell. Costs subsequently incurred to improve the assets are capitalized, provided that the resultant carrying value does not exceed the estimated fair value less costs to sell. Costs related to holding or disposing of the assets are charged to expense as incurred. The Company periodically evaluates OREO for impairment and write-down the value of the asset when declines in fair value below the carrying value are identified. Loan workout and other credit costs include costs of holding and operating the assets, net gains or losses on sales of the assets and provisions for losses to reduce such assets to the estimated fair values less costs to sell. For additional detail regarding other real estate owned, see Note 7. Premises, Equipment and Software Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expense are computed on a straight-line basis over the estimated useful lives of the assets or, for leasehold improvements, over the terms of the related lease or effective useful lives of the assets, whichever is less. In general, computer equipment, furniture and equipment and building renovations are depreciated over three , five and ten years , respectively. Software, which includes purchased or externally hosted software is recorded in Other assets and is amortized on a straight-line basis over the lesser of the contract term or estimated useful life of the software. Maintenance and repairs are expensed as incurred, while costs of major replacements, improvements and additions are capitalized. Premises and equipment acquired in business combinations are initially recorded at fair value and subsequently carried at cost less accumulated depreciation and amortization. Assets to be disposed of are recorded at the lower of the carrying amount or fair value less costs to sell. For additional detail regarding premises and equipment, see Note 8. Goodwill and Intangible Assets The Company accounts for goodwill and intangible assets in accordance with ASC 805, Business Combinations and ASC 350, Intangibles-Goodwill and Other . Accounting for goodwill and other intangible assets requires the Company to make significant judgments, for goodwill particularly, with respect to estimating the fair value of each reporting unit. The estimates utilize historical data, cash flows, and market and industry data specific to each reporting unit as well as projected data. Industry and market data are used to develop material assumptions such as transaction multiples, required rates of return, control premiums, long-term growth rates, and capitalization. 79 Goodwill is not amortized, rather it is subject to periodic impairment testing. The Company reviews goodwill for impairment annually on October 1 and more frequently if events and circumstances indicate that the fair value of a reporting unit is less than its carrying value. Other intangible assets with finite lives are amortized over their estimated useful lives. The Company reviews other intangible assets with finite lives for impairment if events and circumstances indicate that the carrying value may not be recoverable. For additional information regarding goodwill and intangible assets, see Note 10. Leases The Company accounts for its leases in accordance with ASC 842 - Leases . Most leases are recognized on the balance sheet by recording a right-of-use asset and lease liability for each lease. The right-of-use asset represents the right to use the asset under lease for the lease term, and the lease liability represents the contractual obligation to make lease payments. The right-of-use asset is tested for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. As a lessee, the Company enters into operating leases for certain bank branches, office space, and office equipment. The right-of-use assets and lease liabilities are initially recognized based on the net present value of the remaining lease payments which include renewal options where the Company is reasonably certain they will be exercised. The net present value is determined using the incremental collateralized borrowing rate at commencement date. The right-of-use asset is measured at the amount of the lease liability adjusted for any prepaid rent, lease incentives and initial direct costs incurred. The right-of-use asset and lease liability is amortized over the individual lease terms. Lease expense for lease payments is recognized on a straight-line basis over the lease term. As a lessor, the Company provides direct financing to clients through the Company's equipment and small-business leasing business. Direct financing leases are recorded at the aggregate of minimum lease payments net of unamortized deferred lease origination fees and costs and unearned income. Interest income on direct financing leases is recognized over the term of the lease. Origination fees and costs are deferred, and the net amount is amortized to interest income over the estimated life of the lease. For additional information regarding leases, see Note 9. Derivative Financial Instruments The Company accounts for derivatives in accordance with ASC 815, Derivatives and Hedging . Derivatives are recognized as either assets or liabilities at fair value in the Consolidated Statements of Financial Condition with changes in fair value recorded to earnings or accumulated other comprehensive income, as appropriate. At the inception of a derivative contract, the Company designates the derivative as a hedging or non-hedging instrument. To qualify for hedge accounting, derivatives must be highly effective at reducing the risk associated with the exposure being hedged and must be designated as a hedge at the inception of the derivative contract. For fair value hedges, changes to the fair value are recorded in earnings, while for cash flow hedges, fair value changes are recorded in accumulated other comprehensive income and subsequently reclassified into earnings in the period that the hedged forecast transaction affects earnings. The ineffective portion of a hedge’s change in fair value is recognized in earnings immediately. For derivatives not designated as hedges, adjustments to fair value are recorded through earnings. For additional detail regarding derivatives, see Note 19. Income Taxes The provision for income taxes includes federal, state and local income taxes currently payable and those deferred due to temporary differences between the financial statement basis and tax basis of assets and liabilities. Income taxes are accounted for in accordance with ASC 740, Income Taxes . ASC 740 requires the recording of deferred income taxes that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. It prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. Benefits from tax positions are recognized in the financial statements only when it is more-likely-than-not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold are derecognized in the first subsequent financial reporting period in which that threshold is no longer met. ASC 740 also provides guidance on the accounting for and disclosure of unrecognized tax benefits, interest and penalties. For additional detail regarding income taxes, see Note 15. 80 Securities Sold Under Agreements to Repurchase The Company enters into sales of securities under agreements to repurchase which are treated as financings, with the obligation to repurchase securities sold reflected as a liability in the Consolidated Statements of Financial Condition. The securities underlying the agreements are assets. For additional detail regarding the securities sold under agreements to repurchase, see Note 12. Stock-Based Compensation Stock-based compensation is accounted for in accordance with ASC 718, Stock Compensation . Compensation expense relating to all share-based payments is recognized on a straight-line basis, over the applicable vesting period. For additional detail regarding stock-based compensation, see Note 16. RECENT ACCOUNTING PRONOUNCEMENTS The following accounting pronouncement was adopted by the Company during the year ended December 31, 2024: ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07): ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07): ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07): In November 2023, the FASB issued ASU 2023-07 to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. The Company adopted this ASU on a retrospective basis for its annual period ending December 31, 2024 and for the interim period beginning January 1, 2025. For further details on the impact of the adoption, see segment information disclosures in Note 21. The following accounting pronouncements were adopted by the Company during the year ended December 31, 2024, but do not have a material impact on the Consolidated Financial Statements: • ASU No. 2023-01, Leases (Topic 842) — Common Control Agreements • ASU No. 2023-02, Investments — Equity Method and Joint Ventures (Topic 323) Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method There were no other applicable material accounting pronouncements adopted by the Company since December 31, 2023. Accounting Guidance Pending Adoption as of December 31, 2024 ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09): In December 2023, the FASB issued ASU 2023-09 to enhance the transparency and decision usefulness of income tax disclosures primarily related to the effective tax rate reconciliation and income taxes paid. The amendments are effective for fiscal years beginning after December 15, 2024. Adoption is permitted on either a prospective or retrospective basis and the Company is currently evaluating this update to determine the impact on the Company’s disclosures. ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03): In November 2024, the FASB issued ASU 2024-03, which requires entities to disclose disaggregated information about certain income statement expense line items in the notes to their financial statements on an annual and interim basis. Subsequently, in January 2025, the FASB issued ASU 2025-01—Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, making ASU 2024-03 effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted. The Company is currently evaluating this update to determine the impact on the Company’s disclosures. ASU No. 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (ASU 2024-04): In November 2024, the FASB issued ASU 2024-04 which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion or extinguishment of convertible debt. The new guidance is effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual periods. The Company is currently evaluating the impact upon adoption and will apply the guidance after completion of its assessment. 81 3. NONINTEREST INCOME Credit/debit card and ATM income The following table presents the components of credit/debit card and ATM income: Twelve Months Ended December 31, (Dollars in thousands) 2024 2023 2022 Bailment fees $ 68,988 $ 40,096 $ 21,173 Interchange fees 15,822 15,684 15,506 Other card and ATM fees 3,900 3,938 3,409 Total credit/debit card and ATM income $ 88,710 $ 59,718 $ 40,088 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 clients. Bailment arrangements are legal relationships in which property is delivered to another party without a transfer of ownership. The party who transferred the property (the bailor) retains ownership interest of the property. In the event that the bailee files for bankruptcy protection, the property is not included in the bailee's assets. The bailee pays an agreed-upon fee for the use of the bailor's property in exchange for the bailor allowing use of the assets at the bailee's site. Bailment fees are earned from cash that is made available for clients' use at an offsite location, such as cash located in an ATM at a client's place of business. These fees are typically indexed to a market interest rate. This revenue stream generates fee income through monthly billing for bailment services. Credit/debit card and ATM income also includes interchange fees. Interchange fees are paid by a merchant's bank to a bank that issued a debit or credit card used in a transaction to compensate the issuing bank for the value and benefit the merchant receives from accepting electronic payments. These revenue streams generate fee income at the time a transaction occurs and are recorded as revenue at the time of the transaction. Investment management and fiduciary income The following table presents the components of investment management and fiduciary income: Twelve Months Ended December 31, (Dollars in thousands) 2024 2023 2022 Trust fees $ 101,514 $ 89,396 $ 79,472 Wealth management and advisory fees 45,431 41,654 42,136 Total investment management and fiduciary income $ 146,945 $ 131,050 $ 121,608 Investment management and fiduciary income is composed of trust fees and wealth management and advisory fees. Trust fees are based on revenue earned from custody, escrow, trustee and trustee related services on structured finance transactions; indenture trustee, administrative agent and collateral agent services to individuals, institutions and corporations; commercial domicile and independent director services; and investment and trustee services to families and individuals. Most fees are flat fees, except for a portion of personal and corporate trustee fees where the Company earns a percentage on the assets under management or assets held within a trust. This revenue stream primarily generates fee income through monthly, quarterly and annual billings for services provided. Wealth management and advisory fees consists of fees from Bryn Mawr Trust ® , BMCM, Powdermill ® , and WSFS Wealth ® Investments. Wealth management and advisory fees are based on revenue earned from services including asset management, financial planning, family office, and brokerage. The fees are based on the market value of assets, are assessed as a flat fee, or are brokerage commissions. This revenue stream primarily generates fee income through monthly, quarterly and annual billings for the services. 82 Deposit service charges The following table presents the components of deposit service charges: Twelve Months Ended December 31, (Dollars in thousands) 2024 2023 2022 Service fees $ 18,166 $ 17,182 $ 16,019 Return and overdraft fees 7,255 7,127 7,651 Other deposit service fees 1,243 1,084 814 Total deposit service charges $ 26,664 $ 25,393 $ 24,484 Deposit service charges includes revenue earned from core deposit products, certificates of deposit, and brokered deposits. The Company generates fee revenues from deposit service charges primarily through service charges and overdraft fees. Service charges consist primarily of monthly account maintenance fees, treasury management fees, foreign ATM fees and other maintenance fees. All of these revenue streams generate fee income through service charges for monthly account maintenance and similar items, transfer fees, late fees, overlimit fees, and stop payment fees. Revenue is recorded at the time of the transaction. Other income The following table presents the components of other income: Twelve Months Ended December 31, (Dollars in thousands) 2024 2023 2022 Managed service fees $ 21,237 $ 20,503 $ 17,991 Currency preparation 7,392 5,429 4,120 ATM loss protection 3,113 2,651 2,627 Capital Markets revenue 11,864 11,847 7,859 Miscellaneous products and services (1) 13,716 8,299 20,027 Total other income $ 57,322 $ 48,729 $ 52,624 (1) Includes commissions income from BMTIA in 2022. The BMTIA business was sold during the second quarter of 2022. Other income consists of managed service fees, which are primarily courier fees related to treasury management and are partially offset in noninterest expense, currency preparation, ATM loss protection, Capital Markets revenue, and other miscellaneous products and services offered by the Bank. These fees are primarily generated through monthly billings or at the time of the transaction. Capital Markets revenue consists of fees related to interest rate swaps, risk participation agreements, foreign exchange contracts, letters of credit, and trade finance products and services offered by the Bank. Arrangements with multiple performance obligations The Company's contracts with clients may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines standalone selling prices based on the prices charged to clients. Practical expedients and exemptions The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed. See Note 21 for further information about the disaggregation of noninterest income by segment. 83 Table of Contents 4. EARNINGS PER SHARE The following table shows the computation of basic and diluted earnings per share: (Dollars and shares in thousands, except per share data) 2024 2023 2022 Numerator: Net income attributable to WSFS $ 263,671 $ 269,156 $ 222,375 Denominator: Weighted average basic shares 59,547 61,108 63,453 Dilutive potential common shares 192 113 206 Weighted average fully diluted shares 59,739 61,221 63,659 Earnings per share: Basic $ 4.43 $ 4.40 $ 3.50 Diluted $ 4.41 $ 4.40 $ 3.49 Outstanding common stock equivalents having no dilutive effect 2 14 9 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 under the 2013 Incentive Plan and the 2018 Incentive Plan and unvested restricted stock units and performance stock units under the 2018 Incentive Plan. 84 5. INVESTMENT SECURITIES The following tables detail the amortized cost, allowance for credit losses and the estimated fair value of the Company's investments in available-for-sale and held-to-maturity debt securities. None of the Company's investments in debt securities are classified as trading. December 31, 2024 (Dollars in thousands) Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Allowance for Credit Losses Fair Value Available-for-Sale Debt Securities Collateralized mortgage obligations (CMO) $ 526,796 $ 113 $ 95,967 $ — $ 430,942 Fannie Mae (FNMA) mortgage-backed securities (MBS) 3,305,418 172 550,011 — 2,755,579 Freddie Mac (FHLMC) MBS 118,605 — 13,091 — 105,514 Ginnie Mae (GNMA) MBS 44,578 — 3,902 — 40,676 Government-sponsored enterprises (GSE) agency notes 222,869 — 44,932 — 177,937 $ 4,218,266 $ 285 $ 707,903 $ — $ 3,510,648 Held-to-Maturity Debt Securities (1) FNMA MBS $ 831,325 $ — $ 116,600 $ — $ 714,725 State and political subdivisions 183,843 247 3,297 7 180,786 $ 1,015,168 $ 247 $ 119,897 $ 7 $ 895,511 (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 losses of $ 100.5 million at December 31, 2024, which are offset in Accumulated other comprehensive loss . At the time of transfer, there was no allowance for credit loss on the available-for-sale securities. Subsequent to transfer, the securities were evaluated for credit loss. December 31, 2023 (Dollars in thousands) Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Allowance for Credit Losses Fair Value Available-for-Sale Debt Securities CMO $ 560,952 $ — $ 96,333 $ — $ 464,619 FNMA MBS 3,544,762 162 502,574 — 3,042,350 FHLMC MBS 126,856 — 11,324 — 115,532 GNMA MBS 46,333 6 2,999 — 43,340 GSE agency notes 225,439 — 44,743 — 180,696 $ 4,504,342 $ 168 $ 657,973 $ — $ 3,846,537 Held-to-Maturity Debt Securities (1) FNMA MBS $ 872,653 $ — $ 74,332 $ — $ 798,321 State and political subdivisions 185,912 2,665 959 8 187,610 $ 1,058,565 $ 2,665 $ 75,291 $ 8 $ 985,931 (1) Held-to–maturity securities transferred from available-for-sale are included in held-to-maturity at amortized cost basis at the time of transfer. The amortized cost of transferred held-to-maturity securities included net unrealized losses of $ 120.4 million at December 31, 2023, which are offset in Accumulated other comprehensive loss . At the time of transfer, there was no allowance for credit loss on the available-for-sale securities. Subsequent to transfer, the securities were evaluated for credit loss. 85 The scheduled maturities of available-for-sale debt securities at December 31, 2024 and December 31, 2023 are presented in the table below: Available-for-Sale (Dollars in thousands) Amortized Cost Fair Value December 31, 2024 (1) Within one year $ 16,833 $ 16,698 After one year but within five years 147,157 138,870 After five years but within ten years 487,921 409,908 After ten years 3,566,355 2,945,172 $ 4,218,266 $ 3,510,648 December 31, 2023 (1) Within one year $ — $ — After one year but within five years 86,224 82,387 After five years but within ten years 569,956 485,593 After ten years 3,848,162 3,278,557 $ 4,504,342 $ 3,846,537 (1) Actual maturities could differ from contractual maturities. As of December 31, 2024, the Company’s available-for-sale investment securities consisted of 991 securities, 976 of which were in an unrealized loss position. As of December 31, 2024, substantially all of the Company’s available-for-sale investment securities were mortgage-backed securities or collateral mortgage obligations which were issued or guaranteed by U.S. government-sponsored entities and agencies. As of December 31, 2024 and December 31, 2023, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholders’ equity. The scheduled maturities of held-to-maturity debt securities at December 31, 2024 and December 31, 2023 are presented in the table below: Held-to-Maturity (Dollars in thousands) Amortized Cost Fair Value December 31, 2024 (1) Within one year $ — $ — After one year but within five years 16,727 16,444 After five years but within ten years 51,671 50,451 After ten years 946,770 828,616 $ 1,015,168 $ 895,511 December 31, 2023 (1) Within one year $ — $ — After one year but within five years 10,932 10,856 After five years but within ten years 46,489 46,246 After ten years 1,001,144 928,829 $ 1,058,565 $ 985,931 (1) Actual maturities could differ from contractual maturities. MBS may have expected maturities that differ from their contractual maturities. These differences arise because issuers may have the right to call securities and borrowers may have the right to prepay obligations with or without prepayment penalty. The estimated weighted average duration of MBS was 5.9 years at December 31, 2024. The held-to-maturity debt securities are not collateral-dependent securities as these are general obligation bonds issued by cities, states, counties, or other local and foreign governments. Investment securities with fair market values aggregating $ 3.3 billion were pledged as collateral for investment sweep repurchase agreements, municipal deposits, and other obligations as of December 31, 2024 and December 31, 2023. 86 During the years ended December 31, 2024, December 31, 2023, and December 31, 2022, the Company had no sales of debt securities categorized as available-for-sale. As of December 31, 2024 and December 31, 2023, the Company's debt securities portfolio had remaining unamortized premiums of $ 48.1 million and $ 56.9 million, respectively, and unaccreted discounts of $ 17.6 million and $ 20.9 million, respectively. For debt securities in an unrealized loss position, the table below shows the gross unrealized losses and fair value by investment category and length of time that individual debt securities were in a continuous unrealized loss position at December 31, 2024. Duration of Unrealized Loss Position Less than 12 months 12 months or longer Total (Dollars in thousands) Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Available-for-sale debt securities: CMO $ — $ — $ 420,663 $ 95,967 $ 420,663 $ 95,967 FNMA MBS 46,971 525 2,691,778 549,486 2,738,749 550,011 FHLMC MBS 6 — 105,508 13,091 105,514 13,091 GNMA MBS 4,404 143 35,054 3,759 39,458 3,902 GSE agency notes — — 177,937 44,932 177,937 44,932 $ 51,381 $ 668 $ 3,430,940 $ 707,235 $ 3,482,321 $ 707,903 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, 2023. Duration of Unrealized Loss Position Less than 12 months 12 months or longer Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) Value Loss Value Loss Value Loss Available-for-sale debt securities: CMO $ — $ — $ 464,619 $ 96,333 $ 464,619 $ 96,333 FNMA MBS 9,068 125 3,026,520 502,449 3,035,588 502,574 FHLMC MBS — — 115,525 11,324 115,525 11,324 GNMA MBS 10,543 217 31,681 2,782 42,224 2,999 GSE agency notes — — 180,696 44,743 180,696 44,743 $ 19,611 $ 342 $ 3,819,041 $ 657,631 $ 3,838,652 $ 657,973 At December 31, 2024, available-for-sale debt securities for which the amortized cost basis exceeded fair value totaled $ 3.5 billion. Total unrealized losses on these securities were $ 707.9 million at December 31, 2024. The Company assessed whether an allowance for credit losses was required on our available-for-sale debt securities and determined no allowance was necessary as of December 31, 2024 as (1) the Company currently does not have the intent to sell, nor is it more likely than not it will be required to sell these securities before it is able to recover the amortized cost basis and (2) the unrealized losses are the result of changes in market interest rates subsequent to purchase, not credit loss, as these are highly rated agency securities with no expected credit loss, in the event of a default. At December 31, 2024 and December 31, 2023, held-to-maturity debt securities had an amortized cost basis of $ 1.0 billion and $ 1.1 billion, respectively. The held-to-maturity debt security portfolio primarily consists of mortgage-backed securities which were issued or guaranteed by U.S. government-sponsored entities and agencies and highly rated municipal bonds. The Company monitors credit quality of its debt securities through credit ratings. 87 The following table summarizes the amortized cost of debt securities held-to-maturity as of December 31, 2024, aggregated by credit quality indicator: (Dollars in thousands) FNMA MBS State and political subdivisions A+ rated or higher $ — $ 183,843 Not rated 831,325 — Ending balance $ 831,325 $ 183,843 The following table summarizes the amortized cost of debt securities held-to-maturity as of December 31, 2023, aggregated by credit quality indicator: (Dollars in thousands) FNMA MBS State and political subdivisions A+ rated or higher $ — $ 185,912 Not rated 872,653 — Ending balance $ 872,653 $ 185,912 The Company reviewed its held-to-maturity debt securities by major security type for potential credit losses. There was no activity in the allowance for credit losses for FNMA MBS debt securities for the twelve months ended December 31, 2024 and 2023. The following table presents the activity in the allowance for credit losses for state and political subdivisions debt securities for the twelve months ended December 31, 2024, 2023, and 2022: Twelve months ended December 31, (Dollars in thousands) 2024 2023 2022 Allowance for credit losses: Beginning balance $ 8 $ 10 $ 4 Provision for credit losses ( 1 ) ( 2 ) 6 Ending balance $ 7 $ 8 $ 10 Accrued interest receivable of $ 3.6 million and $ 3.7 million as of December 31, 2024 and December 31, 2023, respectively, for held-to-maturity debt securities were excluded from the evaluation of allowance for credit losses. There were no nonaccrual or past due held-to-maturity debt securities as of December 31, 2024 and December 31, 2023. Equity Investments The Company had equity investments with a fair value of $ 18.2 million and $ 17.4 million as of December 31, 2024 and December 31, 2023, respectively. During the year ended December 31, 2024, total net gains on equity investments of $ 2.3 million were recorded, driven by an annual earnout distribution related to the Company's investment in Spring EQ presented within Realized gain on sale of equity investment, net in the Consolidated Statements of Income. During the year ended December 31, 2023, total net gains on equity investments of $ 9.8 million were recorded, driven by a realized gain on the Company's investment in Spring EQ presented within Realized gain on sale of equity investment, net in the Consolidated Statements of Income. During the year ended December 31, 2023, the Company recognized $ 2.5 million of net gains related to our equity method investments within Other income on the Consolidated Statements of Income. During the year ended December 31, 2022, total net gains on equity investments of $ 6.0 million were recorded, driven by an unrealized gain on the Company's investment in cred.ai presented within Unrealized gains on equity investment, net in the Consolidated Statements of Income. During the year ended December 31, 2022, the Company recognized $ 5.4 million of net gains related to our equity method investments within Other income on the Consolidated Statements of Income. 88 6. LOANS AND LEASES The following table shows the Company's loan portfolio by category: December 31, (Dollars in thousands) 2024 2023 Commercial and industrial $ 2,656,174 $ 2,540,070 Owner-occupied commercial 1,973,645 1,886,087 Commercial mortgages 4,030,627 3,801,180 Construction 832,093 1,035,530 Commercial small business leases 647,516 623,622 Residential (1) 965,051 870,705 Consumer (2) 2,086,393 2,012,134 13,191,499 12,769,328 Less: Allowance for credit losses 195,281 186,126 Net loans and leases $ 12,996,218 $ 12,583,202 (1) Includes reverse mortgages, at fair value of $ 3.6 million and $ 2.8 million at December 31, 2024 and 2023, respectively . (2) Includes home equity lines of credit, installment loans unsecured lines of credit and education loans. Accrued interest receivable on loans outstanding was $ 67.5 million and $ 69.8 million at December 31, 2024 and 2023, respectively. 89 7. ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY INFORMATION 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, 2024, 2023, and 2022. During 2024, the increase was primarily due to net loan growth, as well as increases in criticized loan levels in the commercial mortgages portfolio and specific reserves on certain commercial loans. (Dollars in thousands) Commercial and Industrial Owner- occupied Commercial Commercial Mortgages Construction Commercial Small Business Leases Residential (1) Consumer (2) Total Year Ended December 31, 2024 Allowance for credit losses Beginning balance $ 49,394 $ 10,719 $ 36,055 $ 10,762 $ 15,170 $ 5,483 $ 58,543 $ 186,126 Charge-offs ( 15,490 ) ( 177 ) ( 5,749 ) — ( 20,033 ) ( 125 ) ( 23,549 ) ( 65,123 ) Recoveries 6,883 217 183 — 2,705 225 2,654 12,867 Provision (release) 16,344 ( 1,620 ) 18,473 ( 1,577 ) 18,123 ( 17 ) 11,685 61,411 Ending balance $ 57,131 $ 9,139 $ 48,962 $ 9,185 $ 15,965 $ 5,566 $ 49,333 $ 195,281 Period-end allowance allocated to: Loans evaluated on an individual basis $ 8,349 $ — $ — $ — $ — $ — $ — $ 8,349 Loans evaluated on a collective basis 48,782 9,139 48,962 9,185 15,965 5,566 49,333 186,932 Ending balance $ 57,131 $ 9,139 $ 48,962 $ 9,185 $ 15,965 $ 5,566 $ 49,333 $ 195,281 Period-end loan balances: Loans evaluated on an individual basis $ 61,674 $ 5,010 $ 22,223 $ 25,600 $ — $ 8,315 $ 2,790 $ 125,612 Loans evaluated on a collective basis 2,594,500 1,968,635 4,008,404 806,493 647,516 953,111 2,083,603 13,062,262 Ending balance $ 2,656,174 $ 1,973,645 $ 4,030,627 $ 832,093 $ 647,516 $ 961,426 $ 2,086,393 $ 13,187,874 (1) Period-end loan balance excludes reverse mortgages at fair value of $ 3.6 million. (2) Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans. (Dollars in thousands) Commercial and Industrial Owner- occupied Commercial Commercial Mortgages Construction Commercial Small Business Leases Residential (1) Consumer (2) Total Year Ended December 31, 2023 Allowance for credit losses Beginning balance $ 49,526 $ 6,019 $ 21,473 $ 6,987 $ 9,868 $ 4,668 $ 53,320 $ 151,861 Charge-offs ( 26,653 ) ( 184 ) ( 300 ) ( 794 ) ( 15,641 ) ( 41 ) ( 22,394 ) ( 66,007 ) Recoveries 7,735 54 7 532 1,986 260 1,625 12,199 Provision 18,786 4,830 14,875 4,037 18,957 596 25,992 88,073 Ending balance $ 49,394 $ 10,719 $ 36,055 $ 10,762 $ 15,170 $ 5,483 $ 58,543 $ 186,126 Period-end allowance allocated to: Loans evaluated on an individual basis $ 1,591 $ — $ — $ — $ — $ — $ — $ 1,591 Loans evaluated on a collective basis 47,803 10,719 36,055 10,762 15,170 5,483 58,543 184,535 Ending balance $ 49,394 $ 10,719 $ 36,055 $ 10,762 $ 15,170 $ 5,483 $ 58,543 $ 186,126 Period-end loan balances: Loans evaluated on an individual basis $ 19,221 $ 5,200 $ 22,295 $ 12,617 $ — $ 5,876 $ 2,287 $ 67,496 Loans evaluated on a collective basis 2,520,849 1,880,887 3,778,885 1,022,913 623,622 862,019 2,009,847 12,699,022 Ending balance $ 2,540,070 $ 1,886,087 $ 3,801,180 $ 1,035,530 $ 623,622 $ 867,895 $ 2,012,134 $ 12,766,518 (1) Period-end loan balance excludes reverse mortgages at fair value of $ 2.8 million. (2) Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans. 90 (Dollars in thousands) Commercial and Industrial Owner- occupied Commercial Commercial Mortgages Construction Commercial Small Business Leases Residential (1) Consumer (2) Total Year Ended December 31, 2022 Allowance for credit losses Beginning balance $ 43,987 $ 4,574 $ 11,623 $ 1,903 $ 5,980 $ 3,352 $ 23,088 $ 94,507 Impact of adoption ASC 326 (3) 22,613 595 2,684 71 1 61 78 26,103 Charge-offs ( 12,500 ) ( 179 ) ( 581 ) — ( 6,504 ) ( 186 ) ( 7,520 ) ( 27,470 ) Recoveries 4,806 278 223 2,567 1,306 665 793 10,638 (Release) provision ( 9,380 ) 751 7,524 2,446 9,085 776 36,881 48,083 Ending balance $ 49,526 $ 6,019 $ 21,473 $ 6,987 $ 9,868 $ 4,668 $ 53,320 $ 151,861 Period-end allowance allocated to: Loans evaluated on an individual basis $ 2,428 $ — $ — $ — $ — $ — $ — $ 2,428 Loans evaluated on a collective basis 47,098 6,019 21,473 6,987 9,868 4,668 53,320 149,433 Ending balance $ 49,526 $ 6,019 $ 21,473 $ 6,987 $ 9,868 $ 4,668 $ 53,320 $ 151,861 Period-end loan balances: Loans evaluated on an individual basis $ 17,572 $ 1,929 $ 6,369 $ 5,143 $ — $ 7,680 $ 2,047 $ 40,740 Loans evaluated on a collective basis 2,557,773 1,807,653 3,344,715 1,038,906 558,981 751,785 1,808,883 11,868,696 Ending balance $ 2,575,345 $ 1,809,582 $ 3,351,084 $ 1,044,049 $ 558,981 $ 759,465 $ 1,810,930 $ 11,909,436 (1) Period-end loan balance excludes reverse mortgages at fair value of $ 2.4 million. (2) Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans. (3) Includes $ 23.5 million initial provision for credit losses on non-PCD loans. The following tables show nonaccrual and past due loans presented at amortized cost at the date indicated: December 31, 2024 (Dollars in thousands) 30–89 Days Past Due and Still Accruing Greater Than 90 Days Past Due and Still Accruing Total Past Due And Still Accruing Accruing Current Balances Nonaccrual Loans With No Allowance Nonaccrual Loans With An Allowance Total Loans Commercial and industrial $ 1,482 $ 488 $ 1,970 $ 2,592,395 $ 43,206 $ 18,603 $ 2,656,174 Owner-occupied commercial 706 196 902 1,968,033 4,710 — 1,973,645 Commercial mortgages 2,621 562 3,183 4,005,221 22,223 — 4,030,627 Construction — — — 806,493 25,600 — 832,093 Commercial small business leases 8,409 566 8,975 638,541 — — 647,516 Residential (1) 4,262 15 4,277 952,138 5,011 — 961,426 Consumer (2) 18,086 7,375 25,461 2,058,104 2,828 — 2,086,393 Total (4) $ 35,566 $ 9,202 $ 44,768 $ 13,020,925 $ 103,578 $ 18,603 $ 13,187,874 % of Total Loans 0.27 % 0.07 % 0.34 % 98.73 % 0.79 % 0.14 % 100.00 % (1) Residential accruing current balances exclude reverse mortgages at fair value of $ 3.6 million. (2) Includes $ 15.6 million of delinquent, but still accruing, U.S. government-guaranteed student loans that carry little risk of credit loss. 91 December 31, 2023 (Dollars in thousands) 30–89 Days Past Due and Still Accruing Greater Than 90 Days Past Due and Still Accruing Total Past Due And Still Accruing Accruing Current Balances Nonaccrual Loans With No Allowance (1) Nonaccrual Loans With An Allowance Total Loans Commercial and industrial (2) $ 1,630 $ 293 $ 1,923 $ 2,518,934 $ 13,645 $ 5,568 $ 2,540,070 Owner-occupied commercial 1,786 487 2,273 1,878,952 4,862 — 1,886,087 Commercial mortgages 1,190 — 1,190 3,777,698 22,292 — 3,801,180 Construction — — — 1,022,913 12,617 — 1,035,530 Commercial small business leases 6,697 772 7,469 616,153 — — 623,622 Residential (2) 9,261 — 9,261 856,055 2,579 — 867,895 Consumer (3) 15,249 10,032 25,281 1,984,407 2,446 — 2,012,134 Total $ 35,813 $ 11,584 $ 47,397 $ 12,655,112 $ 58,441 $ 5,568 $ 12,766,518 % of Total Loans 0.28 % 0.09 % 0.37 % 99.13 % 0.46 % 0.04 % 100.00 % (1) Excludes nonaccruing loans held-for-sale. (2) Residential accruing current balances exclude reverse mortgages at fair value of $ 2.8 million. (3) Includes $ 14.5 million of delinquent, but still accruing, U.S. government-guaranteed student loans that carry little risk of credit loss. The following table presents the amortized cost basis of nonaccruing collateral-dependent loans by class at December 31, 2024 and December 31, 2023: December 31, 2024 December 31, 2023 (Dollars in thousands) Property Equipment and other Property Equipment and other Commercial and industrial (1) $ 41,105 $ 20,704 $ 17,230 $ 1,983 Owner-occupied commercial 4,710 — 4,862 — Commercial mortgages 22,223 — 22,292 — Construction 25,600 — 12,617 — Residential (2) 5,011 — 2,579 — Consumer (3) 2,828 — 2,446 — Total $ 101,477 $ 20,704 $ 62,026 $ 1,983 (1) Excludes nonaccruing loans held-for-sale in 2023. (2) Excludes reverse mortgages at fair value. (3) Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans . As of December 31, 2024, there were 31 residential loans and 15 commercial loans in the process of foreclosure. The total outstanding balance on the loans was $ 5.6 million and $ 6.6 million, respectively. As of December 31, 2023, there were 31 residential loans and 9 commercial loans in the process of foreclosure. The total outstanding balance on the loans was $ 3.2 million and $ 1.1 million, respectively. Loan workout and other real estate owned (OREO) expenses were $ 1.7 million in 2024, $ 0.6 million in 2023, and $ 0.4 million in 2022. Loan workout and OREO expenses are included in Loan workout and other credit costs on the Consolidated Statements of Income. 92 Credit Quality Indicators Below is a description of each of the risk ratings for all commercial loans: • Pass . These borrowers currently show no indication of deterioration or potential problems and their loans are considered fully collectible. • Special Mention. These borrowers have potential weaknesses that deserve management’s close attention. Borrowers in this category may be experiencing adverse operating trends, for example, declining revenues or margins, high leverage, tight liquidity, or increasing inventory without increasing sales. These adverse trends can have a potential negative effect on the borrower’s repayment capacity. These assets are not adversely classified and do not expose the Bank to significant risk that would warrant a more severe rating. Borrowers in this category may also be experiencing significant management problems, pending litigation, or other structural credit weaknesses. • Substandard or Lower . These borrowers have well-defined weaknesses that require extensive oversight by management. Borrowers in this category may exhibit one or more of the following: inadequate debt service coverage, unprofitable operations, insufficient liquidity, high leverage, and weak or inadequate capitalization. Relationships in this category are not adequately protected by the sound financial worth and paying capacity of the obligor or the collateral pledged on the loan, if any. A distinct possibility exists that the Bank will sustain some loss if the deficiencies are not corrected. In addition, some borrowers in this category could have the added characteristic that the possibility of loss is extremely high. Current circumstances in the credit relationship make collection or liquidation in full highly questionable. Such impending events include: perfecting liens on additional collateral, obtaining collateral valuations, an acquisition or liquidation preceding, proposed merger, or refinancing plan. Residential and Consumer Loans The residential and consumer loan portfolios are monitored on an ongoing basis using delinquency information and loan type as credit quality indicators. These credit quality indicators are assessed in the aggregate in these relatively homogeneous portfolios. Loans that are greater than 90 days past due are generally considered nonperforming and placed on nonaccrual status. 93 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, 2024. Term Loans Amortized Cost Basis by Origination Year (1) 2024 2023 2022 2021 2020 Prior Revolving loans amortized cost basis Revolving loans converted to term Total (Dollars in thousands) Commercial and industrial: Risk Rating Pass $ 662,723 $ 542,655 $ 345,370 $ 126,173 $ 155,137 $ 309,445 $ 8,744 $ 252,524 $ 2,402,771 Special mention 18,861 386 4,147 1,176 2,490 607 — 1,868 29,535 Substandard or Lower 68,282 28,707 19,960 4,587 21,589 29,785 27 50,931 223,868 $ 749,866 $ 571,748 $ 369,477 $ 131,936 $ 179,216 $ 339,837 $ 8,771 $ 305,323 $ 2,656,174 Current-period gross writeoffs $ 102 $ 1,303 $ 4,276 $ 706 $ 275 $ 8,828 $ — $ — $ 15,490 Owner-occupied commercial: Risk Rating Pass $ 285,146 $ 296,339 $ 224,797 $ 225,086 $ 168,368 $ 404,515 $ — $ 238,356 $ 1,842,607 Special mention — — 498 — 25,220 — — 756 26,474 Substandard or Lower 3,501 9,044 21,913 8,885 4,807 41,044 — 15,370 104,564 $ 288,647 $ 305,383 $ 247,208 $ 233,971 $ 198,395 $ 445,559 $ — $ 254,482 $ 1,973,645 Current-period gross writeoffs $ — $ 114 $ — $ — $ — $ 63 $ — $ — $ 177 Commercial mortgages: Risk Rating Pass $ 546,404 $ 740,711 $ 396,458 $ 414,546 $ 379,637 $ 858,744 $ — $ 506,394 $ 3,842,894 Special mention 15,606 3,389 — 1,962 2,356 2,136 — 36,738 62,187 Substandard or Lower 43,572 23,996 16,328 2,077 20,880 18,165 — 528 125,546 $ 605,582 $ 768,096 $ 412,786 $ 418,585 $ 402,873 $ 879,045 $ — $ 543,660 $ 4,030,627 Current-period gross writeoffs $ — $ 62 $ — $ — $ 97 $ 5,590 $ — $ — $ 5,749 Construction: Risk Rating Pass $ 318,363 $ 277,130 $ 161,517 $ 3,112 $ 87 $ 3,319 $ — $ 22,416 $ 785,944 Special mention — — — — — — — — — Substandard or Lower 19,759 — 20,779 791 — — — 4,820 46,149 $ 338,122 $ 277,130 $ 182,296 $ 3,903 $ 87 $ 3,319 $ — $ 27,236 $ 832,093 Current-period gross writeoffs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial small business leases: Risk Rating Performing $ 247,583 $ 189,509 $ 121,990 $ 56,998 $ 14,569 $ 16,867 $ — $ — $ 647,516 Nonperforming — — — — — — — — — $ 247,583 $ 189,509 $ 121,990 $ 56,998 $ 14,569 $ 16,867 $ — $ — $ 647,516 Current-period gross writeoffs $ 1,018 $ 5,442 $ 8,216 $ 3,645 $ 1,235 $ 477 $ — $ — $ 20,033 Residential (2) : Risk Rating Performing $ 170,647 $ 176,923 $ 62,833 $ 92,574 $ 49,994 $ 399,981 $ — $ — $ 952,952 Nonperforming — 120 360 3,468 983 3,543 — — 8,474 $ 170,647 $ 177,043 $ 63,193 $ 96,042 $ 50,977 $ 403,524 $ — $ — $ 961,426 Current-period gross writeoffs $ — $ — $ — $ — $ — $ 125 $ — $ — $ 125 Consumer (3) : Risk Rating Performing $ 282,465 $ 350,605 $ 446,701 $ 116,890 $ 85,633 $ 229,340 $ 564,839 $ 7,124 $ 2,083,597 Nonperforming — 249 96 265 192 — 1,697 297 2,796 $ 282,465 $ 350,854 $ 446,797 $ 117,155 $ 85,825 $ 229,340 $ 566,536 $ 7,421 $ 2,086,393 Current-period gross writeoffs $ 1,282 $ 3,942 $ 13,955 $ 2,837 $ 863 $ 670 $ — $ — $ 23,549 (1) Origination date represent the most recent underwriting of the loan which includes new relationships, renewals and extensions. (2) Excludes reverse mortgages at fair value. (3) Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans. 94 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, 2023. Term Loans Amortized Cost Basis by Origination Year (1) (Dollars in thousands) 2023 2022 2021 2020 2019 Prior Revolving loans amortized cost basis Revolving loans converted to term Total Commercial and industrial: Risk Rating Pass $ 716,848 $ 490,934 $ 180,343 $ 211,151 $ 90,522 $ 383,609 $ 8,785 $ 237,786 $ 2,319,978 Special mention 7,209 11,860 2,804 463 735 743 — 1,649 25,463 Substandard or Lower 72,993 54,024 5,951 10,224 22,046 17,906 — 11,485 194,629 $ 797,050 $ 556,818 $ 189,098 $ 221,838 $ 113,303 $ 402,258 $ 8,785 $ 250,920 $ 2,540,070 Current-period gross writeoffs $ — $ 568 $ 5,214 $ 1,747 $ 7,567 $ 11,557 $ — $ — $ 26,653 Owner-occupied commercial: Risk Rating Pass $ 346,908 $ 264,895 $ 251,262 $ 212,365 $ 194,153 $ 313,801 $ — $ 178,150 $ 1,761,534 Special mention 2,885 3,115 5,419 1,105 11,002 5,559 — 1,393 30,478 Substandard or Lower 996 18,865 11,109 6,787 8,019 35,330 — 12,969 94,075 $ 350,789 $ 286,875 $ 267,790 $ 220,257 $ 213,174 $ 354,690 $ — $ 192,512 $ 1,886,087 Current-period gross writeoffs $ — $ — $ — $ — $ 184 $ — $ — $ — $ 184 Commercial mortgages: Risk Rating Pass $ 847,137 $ 464,895 $ 526,280 $ 465,354 $ 486,855 $ 619,448 $ — $ 290,083 $ 3,700,052 Special mention 20,632 — 67 1,837 10,666 — — — 33,202 Substandard or Lower 9,862 1,153 1,047 13,837 14,352 12,212 — 15,463 67,926 $ 877,631 $ 466,048 $ 527,394 $ 481,028 $ 511,873 $ 631,660 $ — $ 305,546 $ 3,801,180 Current-period gross writeoffs $ — $ 83 $ — $ 217 $ — $ — $ — $ — $ 300 Construction: Risk Rating Pass $ 429,055 $ 319,958 $ 111,333 $ 3,030 $ 388 $ 7,016 $ — $ 87,741 $ 958,521 Special mention 28,718 19,769 8,227 — — — — — 56,714 Substandard or Lower 5,698 — 3,308 8,598 2,134 — — 557 20,295 $ 463,471 $ 339,727 $ 122,868 $ 11,628 $ 2,522 $ 7,016 $ — $ 88,298 $ 1,035,530 Current-period gross writeoffs $ — $ — $ 794 $ — $ — $ — $ — $ — $ 794 Commercial small business leases: Risk Rating Performing $ 260,348 $ 191,746 $ 103,428 $ 40,697 $ 15,411 $ 11,992 $ — $ — $ 623,622 Nonperforming — — — — — — — — — $ 260,348 $ 191,746 $ 103,428 $ 40,697 $ 15,411 $ 11,992 $ — $ — $ 623,622 Current-period gross writeoffs $ 1,528 $ 7,250 $ 4,447 $ 1,454 $ 735 $ 227 $ — $ — $ 15,641 Residential (2) : Risk Rating Performing $ 188,644 $ 67,358 $ 102,982 $ 57,273 $ 33,499 $ 412,099 $ — $ — $ 861,855 Nonperforming — 170 713 486 1,251 3,420 — — 6,040 $ 188,644 $ 67,528 $ 103,695 $ 57,759 $ 34,750 $ 415,519 $ — $ — $ 867,895 Current-period gross writeoffs $ 33 $ — $ — $ — $ — $ 8 $ — $ — $ 41 Consumer (3) : Risk Rating Performing $ 391,580 $ 568,919 $ 153,930 $ 104,248 $ 44,996 $ 245,849 $ 494,663 $ 5,662 $ 2,009,847 Nonperforming — — 135 352 176 30 1,362 232 2,287 $ 391,580 $ 568,919 $ 154,065 $ 104,600 $ 45,172 $ 245,879 $ 496,025 $ 5,894 $ 2,012,134 Current-period gross writeoffs $ 1,790 $ 15,227 $ 4,411 $ 313 $ 198 $ 455 $ — $ — $ 22,394 (1) Origination date represents the most recent underwriting of the loan which includes new relationships, renewals and extensions. (2) Excludes reverse mortgages at fair value. (3) Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans. 95 Troubled Loans The Company offers loan modifications to commercial and consumer borrowers that may result in a payment delay, interest rate reduction, term extension, principal forgiveness, or combination thereof. Loan modifications are offered on a case-by-case basis and are generally term extension, payment delay, and interest rate reduction modification types. Forbearance (due to hardship) programs result in modification types including payment delay and/or term extension. In addition, certain reorganization bankruptcy judgments may result in interest rate reduction, term extension, or principal forgiveness modification types. The following tables show the amortized cost basis of troubled loans modified during the twelve months ended December 31, 2024 and 2023, disaggregated by portfolio segment and type of modification granted: Twelve Months Ended December 31, 2024 (Dollars in thousands) Term Extension Interest Rate Reduction More-Than-Insignificant Payment Delay Combination- Term Extension and Payment Delay Combination- Term Extension and Interest Rate Reduction Combination- Payment Delay and Interest Rate Reduction Total % of Total Loan Category Commercial and industrial $ 62,314 $ — $ 15,682 $ 19,261 $ 27 $ — $ 97,284 3.66 % Owner-occupied commercial 3,606 — — — — — 3,606 0.18 % Commercial mortgages 22,421 — — — — — 22,421 0.56 % Construction 1,188 — — — — 19,405 20,593 2.47 % Residential — 120 24 — — — 144 0.01 % Consumer (1) 716 — 2,821 3,703 — — 7,240 0.35 % Total $ 90,245 $ 120 $ 18,527 $ 22,964 $ 27 $ 19,405 $ 151,288 1.15 % Twelve Months Ended December 31, 2023 (Dollars in thousands) Term Extension Interest Rate Reduction More-Than-Insignificant Payment Delay Combination- Term Extension and Payment Delay Combination- Term Extension and Interest Rate Reduction Combination - Payment Delay and Interest Rate Reduction Total % of Total Loan Category Commercial and industrial $ 44,123 $ — $ 10,523 $ 5,568 $ 27 $ — $ 60,241 1.90 % Owner-occupied commercial 66 — — — 138 — 204 0.01 % Commercial mortgages 9,386 — — — — — 9,386 0.25 % Construction 15,411 — — — — — 15,411 1.49 % Residential 561 — 216 — — — 777 0.09 % Consumer (1) 1,782 — 1,937 5,092 156 194 9,161 0.46 % Total $ 71,329 $ — $ 12,676 $ 10,660 $ 321 $ 194 $ 95,180 0.75 % (1) Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans. 96 The following table describes the financial effect of the modifications made to troubled loans during the twelve months ended December 31, 2024 and 2023: Twelve Months Ended December 31, 2024 Twelve Months Ended December 31, 2023 Term Extension ( 1) Interest Rate Reduction (2) More-Than-Insignificant Payment Delay (3) Term Extension (1) Interest Rate Reduction (2) More-Than-Insignificant Payment Delay (3) Commercial and industrial 0.92 6.11 % 0.26 % 1.34 4.00 % 0.13 % Owner-occupied commercial 0.90 — — 0.95 2.59 — Commercial mortgages 0.48 — — 1.33 — — Construction 1.00 0.52 0.15 1.00 — — Residential — 4.25 — 20.18 — — Consumer 0.49 — 0.05 3.08 2.65 0.06 (1) Represents the weighted-average increase in the life of modified loans measured in years, which reduces monthly payment amounts for borrowers. (2) Represents the weighted-average decrease in the contractual interest rate on the modified loans. (3) Represents the percentage of loans deferred over the total loan portfolio excluding reverse mortgages at fair value. As of December 31, 2024 and December 31, 2023, the Company had commitments to extend credit of $ 18.6 million and $ 18.4 million, respectively, to borrowers experiencing financial difficulty whose terms had been modified. Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. The following tables show the amortized cost of loans that received a modification that had a payment default during the twelve months ended December 31, 2024 and 2023 and were modified in the 12 months before default to borrowers experiencing financial difficulty. Twelve Months Ended December 31, 2024 Interest Rate Reduction More-Than-Insignificant Payment Delay Total Residential $ 120 $ 24 $ 144 Consumer — 96 96 Total $ 120 $ 120 $ 240 Twelve Months Ended December 31, 2023 More-Than-Insignificant Payment Delay Combination Term Extension & Payment Delay Total Commercial and industrial $ — $ 5,568 $ 5,568 Consumer 98 — 98 Total $ 98 $ 5,568 $ 5,666 97 The Company closely monitors the performance of troubled loans to understand the effectiveness of its modification efforts. The following tables show the performance of loans that have been modified in the last 12 months as of December 31, 2024 and 2023: December 31, 2024 (Dollars in thousands) 30-89 Days Past Due and Still Accruing 90+ Days Past Due and Still Accruing Accruing Current Balances Nonaccrual Loans Total Commercial and industrial $ — $ — $ 42,552 $ 54,732 $ 97,284 Owner-occupied commercial — — 3,606 — 3,606 Commercial mortgages — — 22,421 — 22,421 Construction — — 20,593 — 20,593 Residential — — — 144 144 Consumer (3) 780 546 5,715 199 7,240 Total $ 780 $ 546 $ 94,887 $ 55,075 $ 151,288 (1) Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans. December 31, 2023 30-89 Days Past Due and Still Accruing 90+ Days Past Due and Still Accruing Accruing Current Balances Nonaccrual Loans Total Commercial and industrial $ 21 $ 293 $ 53,989 $ 5,938 $ 60,241 Owner-occupied commercial — — — 204 204 Commercial mortgages — — 9,386 — 9,386 Construction — — 15,411 — 15,411 Residential — — 607 170 777 Consumer (1) 1,021 205 7,539 396 9,161 Total $ 1,042 $ 498 $ 86,932 $ 6,708 $ 95,180 (1) Includes home equity lines of credit, installment loans and unsecured lines of credit. 98 8. PREMISES AND EQUIPMENT The following table shows the components of premises and equipment, at cost, summarized by major classifications: December 31, (Dollars in thousands) 2024 2023 Land $ 23,685 $ 33,919 Buildings 36,508 49,262 Leasehold improvements 76,685 70,431 Furniture and equipment 63,994 57,555 Gross premises and equipment 200,872 211,167 Less: Accumulated depreciation 114,844 106,683 Net premises and equipment $ 86,028 $ 104,484 The Company recognized depreciation expense of $ 13.4 million, $ 17.9 million and $ 20.9 million for the years ended December 31, 2024, 2023 and 2022, respectively. During the year, the Company transferred $ 18.8 million of land and building assets to held for sale as part of an optimization plan of WSFS-owned real estate properties. The Company recognized a $ 2.2 million loss on the transfer, which is reflected in restructuring expense on the Company's Consolidated Statements of Income. The Company is actively working to dispose of the assets. 99 9. LEASES As a lessee, the Company enters into leases for its bank branches, corporate offices, and certain equipment. As a lessor, the Company primarily provides financing through its equipment leasing business. Lessee The Company's ongoing leases have remaining lease terms of less than one year to 21 years, which includes renewal options that are exercised at its discretion. The Company's lease terms to calculate the lease liability and right-of-use asset include options to extend the lease when it is reasonably certain that the Company will exercise the option. The lease liability and right-of-use asset is included in Other liabilities and Other assets , respectively, in the Consolidated Statement of Financial Condition. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense is recognized on a straight-line basis over the lease term. Operating lease expense is included in Occupancy expense in the Consolidated Statement of Income. 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 were as follows: Twelve months ended (Dollars in thousands) December 31, 2024 December 31, 2023 December 31, 2022 Operating lease cost (1) $ 16,830 $ 18,972 $ 20,123 Sublease income ( 117 ) ( 161 ) ( 280 ) Net lease cost $ 16,713 $ 18,811 $ 19,843 (1) Includes variable lease cost and short-term lease cost. Supplemental balance sheet information related to operating leases was as follows: (Dollars in thousands) December 31, 2024 December 31, 2023 Right-of-use assets $ 131,126 $ 130,601 Lease liabilities $ 152,364 $ 151,596 Lease term and discount rate of operating leases Weighted average remaining lease term (in years) 12.62 13.01 Weighted average discount rate 5.28 % 5.20 % Maturities of operating lease liabilities were as follows: (Dollars in thousands) December 31, 2024 2025 $ 18,083 2026 17,447 2027 16,571 2028 16,471 2029 16,052 After 2029 127,885 Total lease payments 212,509 Less: Interest ( 60,145 ) Present value of lease liabilities $ 152,364 100 Supplemental cash flow information related to leases was as follows: Twelve months ended (Dollars in thousands) December 31, 2024 December 31, 2023 December 31, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 19,488 $ 19,104 $ 20,987 Right of use assets obtained in exchange for new operating lease liabilities (non-cash) — — 13,707 As of December 31, 2024, the Company had not entered into any material leases that have not yet commenced. Lessor Equipment Leasing The Company provides equipment and small business lease financing through its leasing subsidiary, NewLane Finance ® . Interest income from direct financing leases where the Company is a lessor is recognized in Interest and fees on loans and leases on the 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 components of direct finance lease income are summarized in the table below: Twelve months ended (Dollars in thousands) December 31, 2024 December 31, 2023 December 31, 2022 Direct financing leases: Interest income on lease receivable $ 62,881 $ 53,572 $ 42,542 Amortization of deferred fees and costs ( 7,977 ) ( 6,301 ) ( 3,718 ) Total direct financing lease income $ 54,904 $ 47,271 $ 38,824 Equipment leasing receivables relate to direct financing leases. The composition of the net investment in direct financing leases was as follows: (Dollars in thousands) December 31, 2024 December 31, 2023 Lease receivables $ 749,968 $ 721,338 Unearned income ( 122,846 ) ( 114,341 ) Deferred fees and costs 20,394 16,625 Net investment in direct financing leases $ 647,516 $ 623,622 Future minimum lease payments to be received for direct financing leases were as follows: (Dollars in thousands) December 31, 2024 2025 $ 246,265 2026 204,537 2027 151,729 2028 95,712 2029 42,896 After 2029 8,829 Total lease payments $ 749,968 101 10. GOODWILL AND INTANGIBLE ASSETS In accordance with ASC 805, Business Combinations (ASC 805) and ASC 350, Intangibles - Goodwill and Other (ASC 350), all assets acquired and liabilities assumed in purchase acquisitions, including goodwill, indefinite-lived intangibles and other intangibles are recorded at fair value as of acquisition date. WSFS performs its annual goodwill impairment test on October 1 or more frequently if events and circumstances indicate that the fair value of a reporting unit is less than its carrying value. 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, 2024, 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 existed during the year ended December 31, 2024. The following table shows the allocation of goodwill to the reportable operating segments for purposes of goodwill impairment testing: ( Dollars in thousands ) WSFS Bank Wealth Management Consolidated Company December 31, 2022 $ 753,586 $ 130,051 $ 883,637 Goodwill from business combinations (1) — 2,261 2,261 December 31, 2023 753,586 132,312 885,898 Goodwill adjustments — — — December 31, 2024 $ 753,586 $ 132,312 $ 885,898 (1) During the third quarter of 2023, BMCM acquired the business of a registered investment advisory firm. ASC 350 requires that an acquired intangible asset be separately recognized if the benefit of the intangible asset is obtained through contractual or other legal rights, or if the asset can be sold, transferred, licensed, rented or exchanged, regardless of the acquirer’s intent to do so. The following table summarizes the Company's intangible assets: (Dollars in thousands) Gross Intangible Assets Accumulated Amortization Net Intangible Assets Amortization Period December 31, 2024 Core deposits $ 104,751 $ ( 60,999 ) $ 43,752 10 years Customer relationships 73,880 ( 23,588 ) 50,292 7 - 15 years Tradename 2,900 — 2,900 indefinite Loan servicing rights (1) 11,220 ( 5,901 ) 5,319 10 - 25 years Total intangible assets $ 192,751 $ ( 90,488 ) $ 102,263 December 31, 2023 Core deposits $ 104,751 $ ( 50,754 ) $ 53,997 10 years Customer relationships 73,880 ( 18,153 ) 55,727 7 - 15 years Tradename 2,900 — 2,900 indefinite Loan servicing rights (2) 12,613 ( 6,575 ) 6,038 10 - 25 years Total intangible assets $ 194,144 $ ( 75,482 ) $ 118,662 (1) Includes impairment losses of $ 0.6 million for the year ended December 31, 2024. (2) Includes impairment losses of less than $ 0.1 million for the year ended December 31, 2023. The Company recognized amortization expense on other intangible assets of $ 15.7 million, $ 15.5 million and $ 15.7 million for the years ended December 31, 2024, 2023 and 2022, respectively. 102 The following presents the estimated amortization expense of intangibles: (Dollars in thousands) Amortization of Intangibles 2025 $ 16,635 2026 15,916 2027 15,435 2028 14,596 2029 10,312 Thereafter 26,469 Total $ 99,363 Servicing Assets The Company records mortgage servicing rights and servicing rights on Small Business Administration (SBA) loans. The Company's mortgage loan servicing portfolio includes acquired servicing portfolios, mortgages it originates, and mortgages that it services for others. Mortgage servicing rights and SBA loan servicing rights are included are in Intangible assets in the accompanying Consolidated Statements of Financial Condition. Mortgage loans which the Company services for others are not included in Loans and leases, net of allowance in the accompanying Consolidated Statements of Financial Condition. Servicing rights represent the present value of the future net servicing fees from servicing mortgage loans the Company acquires or originates, or that it services for others. The value of the Company's mortgage servicing rights was $ 1.3 million and $ 1.7 million at December 31, 2024 and 2023, respectively, and the value of its SBA loan servicing rights was $ 4.0 million and $ 4.3 million at December 31, 2024 and 2023, respectively. Changes in the value of these servicing rights resulted in an impairment reversal of $ 0.6 million during 2024 and impairment losses of less than $ 0.1 million during 2023. Revenues from originating, marketing and servicing mortgage loans as well as valuation adjustments related to capitalized mortgage servicing rights are included in Mortgage Banking Activities, Net in the Consolidated Statements of Income and revenues from the Company's SBA loan servicing rights are included in Loan and lease fee income, in the Consolidated Statements of Income. Besides the impairment on loan servicing rights noted above, there was no impairment of other intangible assets as of December 31, 2024 or 2023. Changing economic conditions that may adversely affect the Company's performance and could result in impairment, which could adversely affect earnings in the future. 103 11. DEPOSITS The following table is a summary of the Company's deposits by category: December 31, (Dollars in thousands) 2024 2023 Noninterest-bearing: Noninterest-bearing demand $ 4,987,753 $ 4,917,297 Total noninterest-bearing $ 4,987,753 $ 4,917,297 Interest-bearing: Interest-bearing demand $ 2,973,431 $ 2,935,530 Savings 1,466,289 1,610,143 Money market 5,471,611 5,175,123 Customer time deposits 2,130,724 1,784,317 Brokered deposits — 51,676 Total interest-bearing $ 12,042,055 $ 11,556,789 Total deposits $ 17,029,808 $ 16,474,086 The following table is a summary of the remaining time to maturity for customer time deposits: December 31, (Dollars in thousands) 2024 2023 Certificates of deposit (not jumbo): Less than one year $ 1,568,970 $ 1,391,157 One year to two years 87,276 47,336 Two years to three years 11,734 14,375 Three years to four years 9,894 9,207 Over four years 6,410 10,166 Total certificates of deposit (not jumbo) $ 1,684,284 $ 1,472,241 Jumbo certificates of deposit (1) Less than one year $ 427,841 $ 305,511 One year to two years 17,373 4,486 Two years to three years 684 662 Three years to four years — 689 Over four years 542 728 Total jumbo certificates of deposit $ 446,440 $ 312,076 Total certificates of deposit $ 2,130,724 $ 1,784,317 (1) Represents certificates of deposit balances in excess of $ 250 thousand from individuals, businesses and municipalities. The following table is a summary of interest expense on deposits by category: Year Ended December 31, (Dollars in thousands) 2024 2023 2022 Interest-bearing demand $ 33,007 $ 26,671 $ 7,441 Money market 183,306 122,168 13,536 Savings 7,314 5,733 965 Time deposits 84,871 45,184 5,626 Total customer interest expense $ 308,498 $ 199,756 $ 27,568 Brokered deposits 178 10,064 613 Total interest expense on deposits $ 308,676 $ 209,820 $ 28,181 104 12. BORROWED FUNDS The following is a summary of borrowed funds by type, at or for the twelve months ended: (Dollars in thousands) Balance at End of Period Weighted Average Interest Rate Maximum Outstanding at Month End During the Period Average Amount Outstanding During the Year Weighted Average Interest Rate During the Year December 31, 2024 Federal funds purchased $ — — % $ 170,000 $ 6,735 5.09 % FHLB advances 51,040 4.33 172,306 56,855 5.22 Trust preferred borrowings 90,834 6.59 90,834 90,730 7.62 Senior and subordinated debt 218,631 4.01 218,631 218,507 4.43 Other borrowed funds 23,102 0.30 825,152 639,186 4.62 December 31, 2023 Federal funds purchased $ — — % $ 130,000 $ 33,195 5.04 % FHLB advances — — 800,000 103,268 5.18 Trust preferred borrowings 90,638 7.51 90,638 90,534 7.44 Senior and subordinated debt 218,400 4.34 248,189 221,975 4.42 Other borrowed funds 586,038 0.28 739,346 409,002 4.41 Federal Home Loan Bank Advances Advances from the FHLB with ranges ranging from 3.77 % to 4.72 % at December 31, 2024 are due as follows: (Dollars in thousands) Amount Weighted Average Rate 2025 $ 7,882 4.30 % 2026 16,261 3.96 2027 26,897 4.56 $ 51,040 4.33 % Pursuant to collateral agreements with the FHLB, advances are secured by qualifying loan collateral, qualifying fixed-income securities, FHLB stock and an interest-bearing demand deposit account with the FHLB. As a member of the FHLB, the Company is required to purchase and hold shares of capital stock in the FHLB and was in compliance with this requirement with a stock investment in FHLB of $ 11.8 million at December 31, 2024 and $ 15.4 million at December 31, 2023. This stock is carried on the accompanying Consolidated Statements of Financial Condition at cost, which approximates liquidation value. The Company received dividends on its stock investment in FHLB of $ 1.5 million and $ 1.1 million for the years ended December 31, 2024 and 2023, respectively. For additional information regarding FHLB Stock, see Note 18. Trust Preferred Borrowings In 2005, the Trust issued Pooled Floating Rate Securities at a variable interest rate of 177 basis points over the three-month LIBOR rate with a scheduled maturity of June 1, 2035. The reference rate on these securities was updated to three-month term SOFR upon the discontinuation of LIBOR on June 30, 2023. These securities are currently callable and have a maturity date of June 1, 2035. Royal Bancshares Capital Trust I (Trust I) and Royal Bancshares Capital Trust II (Trust II) (collectively, the RBC Trusts), which were acquired from Bryn Mawr Bank Corporation, were utilized for the sole purpose of issuing and selling capital securities representing preferred beneficial interests. Although WSFS owns an aggregate of $ 0.8 million of the common securities of Trust I and Trust II, the RBC Trusts are not consolidated into the Company’s Consolidated Financial Statements as the Company is not deemed to be the primary beneficiary of these entities. Inclusive of the fair value marks, WSFS assumed junior subordinated debentures to the RBC Trusts with a current carrying value of $ 11.9 million each, totaling $ 23.8 million. The junior subordinated debentures incur interest at a coupon rate of 6.77 % as of December 31, 2024. The rate resets quarterly based on three-month term SOFR plus 2.41 %. 105 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 $ 0.4 million 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 RBC Trusts, including any distributions and payments on liquidation or redemption of the capital securities. The rights of holders of common securities of the RBC 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 RBC Trusts are subject to mandatory redemption upon the maturity or call of the junior subordinated debentures held by each. Unless earlier dissolved, the RBC 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 RBC Trusts’ common securities of $ 0.4 million each as investments in unconsolidated entities and records dividend income upon declaration by Trust I and Trust II. Federal Funds Purchased and Securities Sold Under Agreements to Repurchase During 2024 and 2023, the Company purchased federal funds as a short-term funding source. The Company had no securities sold under agreements to repurchase at December 31, 2024 and December 31, 2023. 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 by the Company 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. The carrying value of the 2030 Notes, inclusive of deferred issuance costs, was $ 148.6 million as of December 31, 2024 and $ 148.4 million as of December 31, 2023. The Company assumed $ 30.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes due 2025 (the 2025 Notes) from Bryn Mawr Bank Corporation, which were issued in a private placement to institutional accredited investors on August 6, 2015. Effective February 15, 2023, the Company redeemed all remaining outstanding principal amount of the 2025 Notes. The 2025 Notes bore interest at a variable rate that reset quarterly to a level equal to the then-current three-month LIBOR plus an issuance spread of 3.068 %. The Company assumed $ 70.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes due 2027 (the 2027 Notes) from Bryn Mawr Bank Corporation, which were issued by Bryn Mawr Bank Corporation in an underwritten public offering on December 13, 2017. The 2027 Notes mature on December 15, 2027, and had a fixed annual interest of 4.25 % until and including December 14, 2022, and currently bear interest at a variable rate of 6.67 %. The variable rate will reset quarterly to a level equal to the three-month term SOFR rate plus 2.31 % until December 15, 2027, or any early redemption date. The carrying value of the 2027 Notes was $ 70.0 million as of December 31, 2024 and December 31, 2023. Other Borrowed Funds Included in other borrowed funds are collateralized borrowings of $ 23.1 million and $ 586.0 million at December 31, 2024 and 2023, respectively, primarily consisting of outstanding retail repurchase agreements, contractual arrangements under which portions of certain securities are sold overnight to retail clients under agreements to repurchase. Other borrowed funds at December 31, 2023 included $ 565.0 million of Bank Term Funding Program borrowings. Such borrowings were collateralized by mortgage-backed securities. Borrower in Custody The Company had $ 2.5 billion and $ 2.1 billion of loans and securities pledged to the Federal Reserve of Philadelphia (FRB) at December 31, 2024 and December 31, 2023, respectively. The Company had no borrowings outstanding from the FRB at December 31, 2024 and $ 565.0 million in borrowings outstanding from the FRB as of December 31, 2023. 106 13. STOCKHOLDERS' EQUITY AND REGULATORY CAPITAL Savings associations such as the Bank are subject to regulatory capital requirements administered by various banking regulators. Failure to meet minimum capital requirements could result in certain actions by regulators that could have a material effect on the Company’s Consolidated Financial Statements. 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, 2024 and 2023, 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, 2024 and 2023: Consolidated Capital Minimum For Capital Adequacy Purposes To Be Well-Capitalized Under Prompt Corrective Action Provisions (Dollars in thousands) Amount Percent Amount Percent Amount Percent December 31, 2024 Total Capital (to risk-weighted assets) Wilmington Savings Fund Society, FSB $ 2,470,183 15.13 % $ 1,306,507 8.00 % $ 1,633,133 10.00 % WSFS Financial Corporation 2,575,170 15.77 1,306,677 8.00 1,633,346 10.00 Tier 1 Capital (to risk-weighted assets) Wilmington Savings Fund Society, FSB 2,265,995 13.88 979,880 6.00 1,306,507 8.00 WSFS Financial Corporation 2,254,907 13.81 980,008 6.00 1,306,677 8.00 Common Equity Tier 1 Capital (to risk-weighted assets) Wilmington Savings Fund Society, FSB 2,265,995 13.88 734,910 4.50 1,061,537 6.50 WSFS Financial Corporation 2,254,907 13.81 735,006 4.50 1,061,675 6.50 Tier 1 Leverage Capital Wilmington Savings Fund Society, FSB 2,265,995 11.03 822,045 4.00 1,027,556 5.00 WSFS Financial Corporation 2,254,907 10.96 822,637 4.00 1,028,296 5.00 December 31, 2023 Total Capital (to risk-weighted assets) Wilmington Savings Fund Society, FSB $ 2,382,514 14.96 % $ 1,273,856 8.00 % $ 1,592,320 10.00 % WSFS Financial Corporation 2,426,577 15.23 1,274,611 8.00 1,593,264 10.00 Tier 1 Capital (to risk-weighted assets) Wilmington Savings Fund Society, FSB 2,184,193 13.72 955,392 6.00 1,273,856 8.00 WSFS Financial Corporation 2,098,403 13.17 955,958 6.00 1,274,611 8.00 Common Equity Tier 1 Capital (to risk-weighted assets) Wilmington Savings Fund Society, FSB 2,184,193 13.72 716,544 4.50 1,035,008 6.50 WSFS Financial Corporation 2,098,403 13.17 716,969 4.50 1,035,621 6.50 Tier 1 Leverage Capital Wilmington Savings Fund Society, FSB 2,184,193 10.92 800,021 4.00 1,000,026 5.00 WSFS Financial Corporation 2,098,403 10.48 800,934 4.00 1,001,168 5.00 The Holding Company As of December 31, 2024, the Company's capital structure includes one class of stock, $ 0.01 par common stock outstanding with each share having equal voting rights. In 2005, the Trust issued Pooled Floating Rate Securities at a variable interest rate of 177 basis points over the three-month LIBOR rate with a scheduled maturity of June 1, 2035. The reference rate on these securities was updated to three-month term SOFR upon the discontinuation of LIBOR on June 30, 2023. The par value of these securities is $ 2.0 million and the aggregate principal is $ 67.0 million. The proceeds from the issue were invested in junior subordinated debentures issued by the Company. At December 31, 2024, the coupon rate of the Trust securities was 6.53 %. The effective rate will vary due to fluctuations in interest rates. 107 The RBC Trusts, which were acquired from Bryn Mawr Bank Corporation, were utilized for the sole purpose of issuing and selling capital securities representing preferred beneficial interests. Although WSFS owns an aggregate of $ 0.8 million of the common securities of Trust I and Trust II, the RBC Trusts are not consolidated into the Company’s Consolidated Financial Statements as the Company is not deemed to be the primary beneficiary of these entities. Inclusive of the fair value marks, WSFS assumed junior subordinated debentures to the RBC Trusts with a current carrying value of $ 11.9 million each, totaling $ 23.8 million. The junior subordinated debentures incur interest at a coupon rate of 6.77 % as of December 31, 2024. The rate resets quarterly based on three-month term SOFR plus 2.41 %. These securities are treated as borrowings with interest included in Interest on trust preferred borrowings on the Consolidated Statements of Income and included in Trust preferred borrowings in the Consolidated Statements of Financial Condition. The Trust preferred borrowings qualify as Tier 2 capital. The Trust preferred borrowings issued in 2005 were previously Tier 1 capital, but migrated to Tier 2 capital following the acquisition of Bryn Mawr Bank Corporation and impacts of 12 C.F.R. § 217.300(c)(2)(i). The Bank is prohibited from paying any dividend or making any other capital distribution if, after making the distribution, the Bank would be under-capitalized within the meaning of the Prompt Corrective Action regulations. At December 31, 2024, $ 275.4 million in cash remains at the holding company to support the parent company’s needs. Pursuant to federal laws and regulations, the Company's ability to engage in transactions with affiliated corporations, including the loan of funds to, or guarantee of the indebtedness of, an affiliate, is limited. During the year ended December 31, 2024, the Company repurchased 2,049,739 common shares at an average price of $ 46.55 per share as part of its share buy-back program approved by the Board of Directors. The program is consistent with the Company's intent to return 35 % of annual net income to stockholders through routine share repurchases and common equity dividends, along with incremental capital return as appropriate through additional share repurchases, while maintaining capital ratios in excess of the “well-capitalized” benchmarks. 108 14. ASSOCIATE BENEFIT PLANS Associate 401(k) Savings Plan Certain subsidiaries of ours maintain a qualified plan in which Associates may participate. Participants in the plan may elect to direct a portion of their wages into investment accounts that include professionally managed mutual and money market funds and the Company's common stock. Generally, the principal and related earnings are tax deferred until withdrawn. The Company matches a portion of the Associates’ contributions. As a result, the Company's total cash contributions to the plan on behalf of its Associates resulted in an expense of $ 10.7 million, $ 10.1 million, and $ 9.1 million for 2024, 2023, and 2022, respectively. All contributions are invested in accordance with the Associates’ selection of investments. If Associates do not designate how discretionary contributions are to be invested, 100 % is invested in target-date fund that corresponds with the participant’s age. Associates may generally make transfers to various other investment vehicles within the plan. The plan’s yearly activity includes net sales of 65,000 , 14,000 and 8,000 shares of the Company's common stock in 2024, 2023 and 2022 respectively. There were no purchases in 2024, 2023 or 2022. Postretirement Medical Benefits The Company shares certain costs of providing health and life insurance benefits to eligible retired Associates (employees) and their eligible dependents. 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 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. The Company accounts for its obligations under the provisions of ASC 715, Compensation - Retirement Benefits (ASC 715). ASC 715 requires that the Company recognized the costs of these benefits over an Associate's active working career. Amortization of unrecognized net gains or losses resulting from experience different from that assumed and from changes in assumptions is included as a component of net periodic benefit cost over the remaining service period of active employees to the extent that such gains and losses exceed 10 % of the accumulated postretirement benefit obligation, as of the beginning of the year. The Company recognizes its service cost in Salaries, benefits and other compensation and the other components of net periodic benefit cost in Other operating expenses in the Consolidated Statements of Income. ASC 715 requires that the Company recognizes the funded status of its defined benefit postretirement plan in the statement of financial condition, with a corresponding adjustment to accumulated other comprehensive income (loss), net of tax. The adjustment to accumulated other comprehensive income (loss) at adoption represented the net unrecognized actuarial losses and unrecognized transition obligation remaining from the initial adoption of ASC 715, all of which were previously netted against the plan’s funded status in the statement of financial condition pursuant to the provisions of ASC 715. These amounts will be subsequently recognized as net periodic pension costs pursuant to the Company's historical accounting policy for amortizing such amounts. Further, actuarial gains and losses that arise in subsequent periods, and are not recognized as net periodic pension cost in the same periods, will be recognized as a component of other comprehensive income (loss). Those amounts will be subsequently recognized as a component of net periodic pension cost on the same basis as the amounts recognized in accumulated other comprehensive income (loss) at adoption of ASC 715. 109 The following disclosures relating to postretirement medical benefits were measured at December 31: (Dollars in thousands) 2024 2023 2022 Change in benefit obligation: Benefit obligation at beginning of year $ 1,311 $ 1,331 $ 2,138 Service cost 32 33 52 Interest cost 66 65 51 Actuarial gain ( 40 ) ( 68 ) ( 833 ) Benefits paid ( 83 ) ( 50 ) ( 77 ) Benefit obligation at end of year $ 1,286 $ 1,311 $ 1,331 Change in plan assets: Fair value of plan assets at beginning of year $ — $ — $ — Employer contributions 83 50 77 Benefits paid ( 83 ) ( 50 ) ( 77 ) Fair value of plan assets at end of year $ — $ — $ — Unfunded status $ ( 1,286 ) $ ( 1,311 ) $ ( 1,331 ) Amounts recognized in accumulated other comprehensive income (1) : Net prior service credit $ 131 $ 207 $ 283 Net gain 1,132 1,263 1,625 Net amount recognized $ 1,263 $ 1,470 $ 1,908 Components of net periodic benefit income: Service cost $ 32 $ 33 $ 52 Interest cost 66 65 51 Amortization of prior service credit ( 76 ) ( 76 ) ( 76 ) Net gain recognition ( 147 ) ( 160 ) ( 84 ) Net periodic benefit income $ ( 125 ) $ ( 138 ) $ ( 57 ) Assumption used to determine net periodic benefit cost: Discount rate 4.80 % 5.00 % 2.80 % Assumption used to value the Accumulated Postretirement Benefit Obligation (APBO): Discount rate 5.50 % 5.30 % 5.00 % (1) Before tax effects Estimated future benefit payments: The following table shows the expected future payments for the next 10 years: (Dollars in thousands) During 2025 $ 57 During 2026 60 During 2027 64 During 2028 67 During 2029 69 During 2029 through 2033 406 $ 723 The Company assumes medical benefits will increase at an average rate of less than 10 % per annum. The costs incurred for retirees’ health care are limited since certain current and all future retirees are restricted to an annual medical premium cap indexed (since 1995) by the lesser of 4 % or the actual increase in medical premiums paid by us. For 2024, this annual premium cap amounted to $ 4,496 per retiree. The Company estimates that it will contribute approximately $ 4,676 per retiree to the plan during fiscal 2025. 110 Beneficial Associate Pension and other postretirement benefit plans On March 1, 2019, the Company closed the acquisition of Beneficial. At the time of acquisition, the Company assumed the pension plan covering certain eligible Beneficial Associates. The plan was frozen in 2008. The following disclosures relating to Beneficial pension benefits and other postretirement benefit plans were measured at December 31: 2024 2023 2022 (Dollars in thousands) Pension Benefits Other Postretirement Benefits Pension Benefits Other Postretirement Benefits Pension Benefits Other Postretirement Benefits Change in benefit obligation: Benefit obligation at beginning of year $ 76,119 $ 13,471 $ 75,151 $ 13,894 $ 104,695 $ 18,105 Service cost — 8 — 14 — 33 Interest cost 3,581 648 3,700 659 2,425 383 Plan participants' contributions — 41 — 63 — 55 Actuarial (gain) loss ( 5,481 ) 68 1,604 256 ( 26,233 ) ( 3,346 ) Benefits paid ( 5,035 ) ( 1,382 ) ( 4,336 ) ( 1,415 ) ( 5,736 ) ( 1,336 ) Benefit obligation at end of year $ 69,184 $ 12,854 $ 76,119 $ 13,471 $ 75,151 $ 13,894 Change in plan assets: Fair value of plan assets at beginning of year $ 82,090 $ — $ 79,287 $ — $ 108,242 $ — Actual return on plan assets 1,439 — 7,499 — ( 22,867 ) — Employer contribution 126 1,341 240 1,352 225 1,281 Participants' contributions — 41 — 63 — 55 Benefits paid ( 5,035 ) ( 1,382 ) ( 4,336 ) ( 1,415 ) ( 5,736 ) ( 1,336 ) Administrative expenses ( 571 ) — ( 600 ) — ( 577 ) — Fair value of plan assets at end of year $ 78,049 $ — $ 82,090 $ — $ 79,287 $ — Funded (unfunded) status $ 8,865 $ ( 12,854 ) $ 5,971 $ ( 13,471 ) $ 4,136 $ ( 13,894 ) Amounts recognized in accumulated other comprehensive income (1) : Net loss (gain) $ 8,370 $ ( 2,386 ) $ 9,920 $ ( 2,612 ) $ 10,658 $ ( 3,259 ) Components of net periodic benefit (income) cost: Service cost $ — $ 8 $ — $ 14 $ — $ 33 Interest cost 3,581 648 3,700 659 2,425 383 Expected return on plan assets ( 4,924 ) — ( 4,793 ) — ( 6,586 ) — Net loss (gain) recognition 129 ( 158 ) 281 ( 392 ) 16 — Net periodic benefit (income) cost $ ( 1,214 ) $ 498 $ ( 812 ) $ 281 $ ( 4,145 ) $ 416 (1) Before tax effects 111 Significant assumptions used to calculate the net periodic benefit cost and obligation for Beneficial postretirement plans as of December 31, 2024 are as follows: Consolidated Pension Plan 2024 2023 2022 Discount rate for net periodic benefit cost 5.01 % 5.24 % 2.82 % Expected return on plan assets 6.25 % 6.25 % 6.25 % Discount rate for disclosure obligations 5.60 % 5.01 % 5.24 % Beneficial Bank Other Postretirement Discount rate for net periodic benefit cost 4.96 % 5.18 % 2.69 % Discount rate for disclosure obligations 5.51 % 4.96 % 5.18 % FMS Other Postretirement Discount rate for net periodic benefit cost 4.73 % 4.93 % 2.07 % Discount rate for disclosure obligations 5.15 % 4.73 % 4.93 % Split-Dollar Plan Discount rate for net periodic benefit cost 4.72 % 4.92 % 2.05 % Discount rate for disclosure obligations 5.13 % 4.73 % 4.92 % Estimated future benefit payments: The following table shows the expected future payments for the next 10 years: (Dollars in thousands) Pension Benefits Other Postretirement Benefits During 2025 $ 4,536 $ 1,228 During 2026 5,120 1,220 During 2027 5,497 1,202 During 2028 5,020 1,185 During 2029 4,641 1,150 During 2029 through 2033 25,894 5,129 $ 50,708 $ 11,114 112 The fair values and weighted average asset allocations in plan assets of all pension and postretirement plan assets at December 31, 2024 and 2023 by asset category are as follows: Category Used for Fair Value Measurement December 31, 2024 (Dollars in thousands) Level 1 Level 2 Level 3 Total Percent Assets: Mutual Funds: Large cap $ 3,406 $ — $ — $ 3,406 4.4 % International 6,252 — — 6,252 8.0 Global Managed Volatility 5,546 — — 5,546 7.1 U.S. Managed Volatility 2,070 — — 2,070 2.7 Fixed Income 51,592 — — 51,592 66.1 U.S. Government Agencies — 8,958 — 8,958 11.5 Pooled separate accounts 13 — — 13 — Accrued Income 212 — — 212 0.2 Total $ 69,091 $ 8,958 $ — $ 78,049 100.0 % Category Used for Fair Value Measurement December 31, 2023 (Dollars in thousands) Level 1 Level 2 Level 3 Total Percent Assets: Mutual Funds: Large cap $ 3,215 $ — $ — $ 3,215 3.9 % International 5,839 — — 5,839 7.1 Global Managed Volatility 5,177 — — 5,177 6.3 U.S. Managed Volatility 1,932 — — 1,932 2.4 Fixed Income 54,878 — — 54,878 66.9 U.S. Government Agencies — 10,743 — 10,743 13.1 Pooled Separate Accounts 98 — — 98 0.1 Accrued Income 208 — — 208 0.2 Total $ 71,347 $ 10,743 $ — $ 82,090 100.0 % As of December 31, 2024, pension and postretirement plan assets were comprised of investments in equity mutual funds, fixed income mutual funds, and pooled separate accounts. The Bank’s consolidated pension plan investment policy pro vides that assets are to be managed over a long-term investment horizon to ensure that the chances and duration of investment losses are carefully weighed against the long-term potential for asset appreciation. The primary objective of managing a plan’s assets is to improve the plan’s funded status. A secondary financial objective is, where possible, to minimize pension expense volatility. The Company’s pension plan allocates assets based on the plan’s funded status to risk management and return enhancement asset classes. The risk management class is comprised of a long duration fixed income fund while the return enhancement class consists of equity and other fixed income funds. Asset allocation ranges are generally 40 % to 80 % for risk management and 20 % to 60 % for return enhancement when the funded status is less than 110 %, and 50 % to 90 % in risk management and 10 % to 50 % for return enhancement when the funded status reaches 110 % , subject to the discretion of the Company. Also, a small portion is maintained in cash reserves when appropriate. The Company has four additional plans which are no longer being provided to current Associates: (1) a Supplemental Pension Plan with a corresponding liability of $ 0.1 million and $ 0.2 million for December 31, 2024 and 2023 respectively; (2) an Early Retirement Window Plan with a corresponding liability of $ 0.1 million for both December 31, 2024 and 2023; (3) a Supplemental Executive Retirement Plan with a corresponding liability of $ 1.3 million for both December 31, 2024 and 2023, and; (4) a Post-Retirement Medical Plan with a corresponding liability of less than $ 0.1 million and $ 0.1 million for December 31, 2024 and 2023, respectively. 113 15. INCOME TAXES The Company and its subsidiaries file a consolidated federal income tax return and separate state income tax returns. The Company's income tax provision consists of the following: Year ended December 31, (Dollars in thousands) 2024 2023 2022 Current income taxes: Federal taxes $ 69,589 $ 81,674 $ 63,203 State and local taxes 22,337 19,968 18,763 Deferred income taxes: Federal taxes ( 6,817 ) ( 5,331 ) ( 4,094 ) State and local taxes ( 1,345 ) ( 66 ) 89 Total $ 83,764 $ 96,245 $ 77,961 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following is a summary of the significant components of the Company's deferred tax assets and liabilities as of December 31, 2024 and 2023: (Dollars in thousands) 2024 2023 Deferred tax assets: Allowance for credit losses $ 42,441 $ 40,518 Purchase accounting adjustments—loans 8,094 10,285 Reserves and other accruals 33,250 25,093 Net operating losses 2,131 2,725 Derivatives 3,258 2,806 Lease liabilities 31,996 31,835 Unrealized losses on available-for-sale securities 193,956 186,775 Other (1) 1,379 1,422 Total deferred tax assets $ 316,505 $ 301,459 Deferred tax liabilities: Accelerated depreciation ( 5,735 ) ( 5,790 ) Right of use assets ( 27,536 ) ( 27,426 ) Intangibles ( 31,278 ) ( 33,675 ) Other (2) ( 3,795 ) ( 4,306 ) Total deferred tax liabilities ( 68,344 ) ( 71,197 ) Net deferred tax asset $ 248,161 $ 230,262 (1) Other deferred tax assets includes investments, deferred gains, tax credits in 2024 and 2023, and reverse mortgages in 2023. (2) Other deferred tax liabilities includes derivatives, partnership investments, and employee benefit plans in 2024 and 2023, reverse mortgages in 2024, and deferred loan costs in 2023. 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 $ 248.2 million at December 31, 2024. The Company reduces the carrying amounts of deferred tax assets by a valuation allowance if, based on the available evidence, it is more likely than not that such assets will not be realized. The need to establish valuation allowances for deferred tax assets is assessed quarterly. In assessing the requirement for, and amount of, a valuation allowance in accordance with the more likely than not standard for all periods, the Company considers all positive and negative evidence related to the realization of the deferred tax assets. This assessment considers, among other matters, the generation of future profitability, the reversal of deferred tax liabilities, and tax planning strategies. The Company has $ 10.1 million of remaining Federal net operating losses (NOLs). Such NOLs expire beginning in 2030 and, due to Internal Revenue Service (IRS) limitations, $ 2.8 million are being utilized each year. Accordingly, the Company fully expects to utilize all of these NOLs. The Company has no state NOLs. Finally, the Company has $ 0.5 million of alternative minimum tax credits that have no expiration date and are fully expected to be utilized. 114 A reconciliation showing the differences between the Company's effective tax rate and the U.S. Federal statutory tax rate is as follows: Year ended December 31, Year Ended December 31, 2024 2023 2022 Statutory federal income tax rate 21.0 % 21.0 % 21.0 % State tax, net of federal tax benefit 4.7 4.4 5.1 Tax-exempt interest ( 0.7 ) ( 0.6 ) ( 0.5 ) Bank-owned life insurance income ( 0.1 ) ( 0.1 ) — Nondeductible acquisition costs — — 0.1 Federal tax credits, net of amortization ( 1.3 ) ( 0.5 ) ( 0.4 ) Nondeductible compensation 0.1 0.1 0.2 Nondeductible goodwill — — 0.5 Surrender of bank-owned life insurance policies — 1.9 — Other 0.4 0.1 ( 0.1 ) Effective tax rate 24.1 % 26.3 % 25.9 % ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. Benefits from tax positions are recognized in the financial statements only when it is more-likely-than-not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold are derecognized in the first subsequent financial reporting period in which that threshold is no longer met. ASC 740 also provides guidance on the accounting for and disclosure of unrecognized tax benefits, interest and penalties. Based on recent changes in the interest rate environment lowering our yields on our Bank Owned Life Insurance (BOLI) policies and the termination of a stable value protection wrap policy, during 2023, we surrendered $ 65.5 million of previously acquired BOLI policies. This resulted in a taxable gain of $ 22.6 million and corresponding income tax charge of $ 7.1 million There were no unrecognized tax benefits as of December 31, 2024. The Company records interest and penalties on potential income tax deficiencies as income tax expense. The Company's federal and state tax returns for the 2021 through 2024 tax years are subject to examination as of December 31, 2024. No federal or state income tax return examinations are currently in process. The Company does no t expect to record or realize any material unrecognized tax benefits during 2025. The amortization of the low-income housing credit investments has been reflected as income tax expense in the amount of $ 5.3 million for the year ended December 31, 2024, compared to $ 3.9 million and $ 4.8 million for the years ended December 31, 2023 and December 31, 2022, respectively. The amount of affordable housing tax credits, amortization and tax benefits recorded as income tax expense for the year ended December 31, 2024 were $ 5.8 million, $ 5.3 million and $ 1.7 million respectively. The carrying value of the investment in affordable housing credits is $ 94.3 million at December 31, 2024, compared to $ 87.1 million at December 31, 2023. 115 16. STOCK-BASED COMPENSATION The Company's stock incentive plans provide for the granting of stock options, stock appreciation rights, performance awards, restricted stock, restricted stock units (RSUs), performance-based restricted stock units (PSUs) and other stock based awards or cash incentives that are consistent with the purpose of the incentive plans and interests of the Company. Generally, all time-based awards become fully vested and outstanding stock options and stock appreciation rights become exercisable immediately in the event of a change in control, as defined in the plans. Upon stockholder approval in 2018, the 2013 Incentive Plan (2013 Plan) was replaced by the 2018 Incentive Plan (2018 Plan). However, outstanding awards under the 2013 Plan remain in effect in accordance with their original terms. The 2018 Plan was amended in 2023 to increase the number of shares of Common Stock available for issuance. The 2018 Plan also includes 261,709 shares from the Bryn Mawr Incentive Plan and the Bryn Mawr Retainer Plan, which were assumed by the Company in connection with the acquisition of Bryn Mawr Bank Corporation. The number of shares reserved for issuance under the 2018 Plan is 6,261,709 . The 2018 Plan will terminate on the tenth anniversary of its effective date, after which no awards may be granted. At December 31, 2024, 2,321,904 shares were available for future grants under the 2018 Plan. During February 2022, the Board of Directors and the Leadership and Compensation Committee (the Committee) approved the Executive Leadership Team Incentive Plan (ELTIP), which provides for new cash and equity awards designed to recognize the rewards and efforts of the Company's executive leadership team for the Company's achievement of certain key measures of short-term success and the value of such success to the Company's longer-term performance. Awards under the ELTIP include short-term incentive (STI) cash bonus awards and long-term incentive (LTI) awards of RSUs and PSUs that will be issued under the Company's 2018 Incentive Plan. LTI awards under the ELTIP will be awarded to the CEO and Executive Vice Presidents that directly report to the CEO or COO in the form of RSUs that vest in equal annual installments over a three-year service period, and PSUs that vest based on a service condition defined as the achievement of a three-year service period and a performance condition based on the Company's cumulative core ROA performance over a three-year period relative to the KBW Nasdaq Regional Bank Index (the KRX Index) for the same period. Total stock-based compensation expense recognized was $ 12.7 million ($ 9.6 million after tax) for 2024, $ 10.0 million ($ 7.6 million after tax) for 2023, and $ 9.0 million ($ 6.7 million after tax) for 2022. As part of the expense calculation, the Company has elected to recognize forfeitures as they occur. Stock-based compensation expense related to awards granted to Associates is recorded in Salaries, benefits and other compensation ; expense related to awards granted to directors and advisory board members is recorded in Other operating expense in the Company's Consolidated Statements of Income. Stock Options Stock options are granted with an exercise price not less than the fair market value of the Company's common stock on the date of the grant. No stock options were granted during 2024, 2023, or 2022. A summary of option activity as of December 31, 2024, and changes during the year the ended December 31, 2024, is presented below: 2024 Shares Weighted- Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In Thousands) Stock Options: Outstanding at beginning of year 252,851 $ 43.49 2.57 $ 1,106 Less: Exercised ( 49,505 ) 37.64 Expired ( 32,726 ) 48.62 Outstanding at end of year 170,620 44.20 2.01 1,524 Nonvested at end of year 14,913 51.84 0.28 19 Exercisable at end of year 155,707 43.46 1.90 1,505 The aggregate intrinsic value of options exercised was $ 0.8 million in 2024, $ 0.5 million in 2023, and $ 0.8 million in 2022. 116 The following table summarizes the non-vested stock option activity during the year the ended December 31, 2024: 2024 Shares Weighted-Average Exercise Price Weighted-Average Grant Date Fair Value Stock Options: Nonvested at beginning of period 49,857 $ 45.52 $ 9.17 Less: Vested ( 34,944 ) 42.82 8.63 Nonvested at end of period 14,913 51.84 10.44 The total amount of unrecognized compensation cost related to non-vested stock options as of December 31, 2024 was less than $ 0.1 million. The weighted-average period over which the expense is expected to be recognized is 0.28 years. During 2024, the Company recognized $ 0.2 million of compensation expense related to these awards compared to $ 0.3 million in 2023 and $ 0.7 million in 2022. Restricted Stock Units RSUs are granted at no cost to the recipient and generally vest over a three year period, with the exception of RSUs from the ELTIP which vest over a three year period. Most outstanding awards granted to senior executives vest over no less than a three year period. The 2013 and 2018 Plans allow for awards with vesting periods less than three years , subject to Board approval. The fair value of RSUs is equal to the fair value of the common stock on the date of grant. The expense related to RSUs granted to Associates is recognized in Salaries, benefits and other compensation and granted to directors in Other operating expense on an accrual basis over the requisite service period for the entire award. When restricted stock is awarded to individuals from whom the Company may not receive services in the future, the expense is recognized when the award is granted, instead of amortizing the expense over the vesting period of the award. The weighted-average fair value of RSUs granted was $ 44.93 in 2024, $ 47.68 in 2023, and $ 49.24 in 2022. The total amount of compensation cost to be recognized relating to nonvested restricted stock units as of December 31, 2024 was $ 11.8 million. The weighted-average period over which the cost is expected to be recognized is 1.89 years. During 2024, the Company recognized $ 8.2 million of compensation expense related to these awards compared to $ 6.3 million in 2023 and $ 7.5 million in 2022.. The following table summarizes the Company’s RSUs and changes during the year: Units (in whole) Weighted Average Grant-Date Fair Value per Unit Balance at December 31, 2023 335,751 $ 47.85 Plus: Granted 214,816 44.93 Less: Vested ( 143,722 ) 47.68 Forfeited ( 17,033 ) 46.93 Balance at December 31, 2024 389,812 46.77 The total fair value of RSUs that vested was $ 7.0 million in 2024, $ 5.1 million in 2023, and $ 4.5 million in 2022. Performance Stock Units PSUs are granted at no cost to the recipient and vest based on both service and performance conditions. The service condition is defined as the achievement of a three-year service period beginning January 1 of the year of the award and ending on December 31 of the third year. The service condition can be waived at the discretion of the Committee. The performance condition is based on the Company's cumulative core ROA performance over a three-year period relative to the KRX Index for the same period. The actual number of shares that will vest at the end of the three-year period will be based on the core ROA performance over the three-year period relative to the KRX Index. If such performance is at the 25th percentile, 50th percentile, 75th percentile and 100th percentile, grantees will receive 25 %, 50 %, 75 %, and 100 % of their maximum award grant, respectively. The fair value of PSUs is equal to the fair value of the common stock on the date of grant. The expense related to PSUs granted to Associates is recognized in Salaries, benefits and other compensation on an accrual basis over the requisite service period if the performance condition is probable and the service condition is met. 117 The weighted-average fair value of PSUs granted was $ 42.39 in 2024, $ 49.69 in 2023, and $ 49.76 in 2022. The total amount of compensation cost to be recognized relating to nonvested performance stock units (based on current performance estimates) was $ 10.7 million as of December 31, 2024. The weighted-average period over which the cost is expected to be recognized is 1.73 years. During 2024, the Company recognized $ 3.4 million of compensation expense related to these awards compared to $ 1.6 million in 2023 and $ 0.9 million in 2022.. The following table summarizes the Company’s PSUs and changes during the year: Units (in whole) Weighted Average Grant-Date Fair Value per Unit Balance at December 31, 2023 157,748 $ 49.72 Plus: Granted 129,802 42.39 Balance at December 31, 2024 287,550 46.78 Integration Performance RSU Plan : In February 2019, the Board of Directors approved the Integration Performance RSU Plan (“the Integration Plan”), in which certain senior executives were granted awards based on the achievement of three defined goals measuring the success of the integration of Beneficial and execution of the Company's strategic goals over the five-year period ending 2023. The Plan provided for a three-year performance achievement period beginning in 2021 and ending in 2023. In February 2022, the Integration Plan was terminated. In connection with the termination of the Integration Plan, the portion of the related Integration Performance-Based RSU Awards (the Integration Awards) attributable to core ROA was terminated, the Gallup Q12 performance goal was met, and the Committee exercised its discretion under the Integration Plan to deem the Gallup CE3 performance goal met. Thus, 20 % of the restricted stock units subject to the Integration Awards will performance vest and become subject to service-based vesting conditions. During 2024 and 2023, the Company recognized $ 0.1 million of compensation expense related to these awards. Beneficial Acquisition Success Plan: On December 10, 2020, the Board of Directors approved the Beneficial Acquisition Success Plan (the Success Plan) and granted 66,703 RSUs, vesting in equal installments over three years . The Success Plan was designed to recognize and reward the Company’s achievement of certain key measures of near-term success related to Beneficial and the efforts of the Company’s senior leaders and the value of such success to the Company’s longer term performance. The key measures of success related to Beneficial include acquisition economics, one-time acquisition costs, banking location integration and optimization, customer deposit retention, and cost synergies. During 2023, the RSUs previously issued under the Success Plan fully vested. Awards from the Integration Plan and the Success Plan were issued under the Company’s 2018 Incentive Plan. 17. COMMITMENTS AND CONTINGENCIES Legal Proceedings In the ordinary course of business, the Company is subject to legal actions that involve claims for monetary relief. See Note 24 for additional information. Financial Instruments With Off-Balance Sheet Risk In the ordinary course of business, the Company is a party to financial instruments with off-balance sheet risk, primarily to meet the financing needs of its Clients. To varying degrees, these financial instruments involve elements of credit risk that are not recognized in the Consolidated Statements of Financial Condition. Exposure to loss for commitments to extend credit and standby letters of credit written is represented by the contractual amount of those instruments. The Company generally requires collateral to support such financial instruments in excess of the contractual amount of those instruments and use the same credit policies in making commitments as it does for on-balance sheet instruments. 118 The following represents a summary of off-balance sheet financial instruments at year-end: December 31, (Dollars in thousands) 2024 2023 Financial instruments with contract amounts which represent potential credit risk: Commercial and industrial loan commitments $ 1,841,169 $ 1,717,924 Owner-occupied commercial loan commitments 54,162 57,013 Commercial mortgages loan commitments 132,276 136,379 Construction loan commitments 626,847 725,591 Commercial standby letters of credit 101,448 107,031 Residential loan commitments (1) 12,751 11,797 Consumer loan commitments (2) 1,476,847 1,363,458 Total $ 4,245,500 $ 4,119,193 (1) Not reflected in the table above are commitments to sell residential loans of $ 18.2 million and $ 16.3 million at December 31, 2024 and 2023, respectively. (2) Consumer loan commitments of $ 1.0 billion and $ 0.6 billion were secured by real estate at December 31, 2024 and 2023, respectively.. Commitments provide for financing on predetermined terms as long as the client continues to meet specific criteria. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being completely drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Standby letters of credit are conditional commitments issued to guarantee the performance of a client to a third party. The Company evaluates each client’s creditworthiness and obtain collateral based on its credit evaluation of the counterparty. 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 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. Rate-locked loan commitments that the Company intends to sell in the secondary market are accounted for as derivatives under ASC 815, Derivatives and Hedging (ASC 815). The Company does not sell loans with recourse, except for standard loan sale contract provisions covering violations of representations and warranties and, under certain circumstances, early payment default by the borrower. These are customary repurchase provisions in the secondary market for residential 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 three repurchases for $ 0.7 million during the year ended December 31, 2024 and one repurchase for $ 0.8 million during the same period in 2023. Unfunded Lending Commitments At December 31, 2024 and December 31, 2023, the allowance for credit losses of unfunded lending commitments was $ 12.5 million and $ 12.1 million, respectively. A provision expense for unfunded lending commitments of $ 0.4 million was recognized during the year ended December 31, 2024, compared to provision expenses for unfunded lending commitments of $ 0.2 million and $ 0.3 million during years ended December 31, 2023 and December 31, 2022, respectively. 119 18. FAIR VALUE DISCLOSURES OF FINANCIAL ASSETS AND LIABILITIES FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES ASC 820-10, Fair Value Measurement (ASC 820-10) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820-10 establishes a fair value hierarchy that prioritizes the use of inputs used in valuation methodologies into the following three levels: • Level 1: Inputs to the valuation methodology are quoted prices, unadjusted, for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available. • Level 2: Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; inputs to the valuation methodology include quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs to the valuation methodology that are derived principally from or can be corroborated by observable market data by correlation or other means. • Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using discounted cash flow methodologies, as well as instruments for which the determination of fair value requires significant management judgment or estimation. The following tables present financial instruments carried at fair value as of December 31, 2024 and December 31, 2023 by level in the valuation hierarchy (as described above): December 31, 2024 (Dollars in thousands) Quoted Prices in Active Markets for Identical Asset (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value Assets measured at fair value on a recurring basis: Available-for-sale securities: CMO $ — $ 430,942 $ — $ 430,942 FNMA MBS — 2,755,579 — 2,755,579 FHLMC MBS — 105,514 — 105,514 GNMA MBS — 40,676 — 40,676 GSE agency notes — 177,937 — 177,937 Other assets — 170,464 25 170,489 Total assets measured at fair value on a recurring basis $ — $ 3,681,112 $ 25 $ 3,681,137 Liabilities measured at fair value on a recurring basis: Other liabilities $ — $ 155,242 $ 5,270 $ 160,512 Assets measured at fair value on a nonrecurring basis: Other investments $ — $ — $ 15,516 $ 15,516 Other real estate owned — — 5,204 5,204 Loans held for sale — 49,699 — 49,699 Total assets measured at fair value on a nonrecurring basis $ — $ 49,699 $ 20,720 $ 70,419 120 December 31, 2023 (Dollars in thousands) Quoted Prices in Active Markets for Identical Asset (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value Assets measured at fair value on a recurring basis: Available-for-sale securities: CMO $ — $ 464,619 $ — $ 464,619 FNMA MBS — 3,042,350 — 3,042,350 FHLMC MBS — 115,532 — 115,532 GNMA MBS — 43,340 — 43,340 GSE agency notes — 180,696 — 180,696 Other assets — 153,569 78 153,647 Total assets measured at fair value on a recurring basis $ — $ 4,000,106 $ 78 $ 4,000,184 Liabilities measured at fair value on a recurring basis: Other liabilities $ — $ 137,616 $ 14,026 $ 151,642 Assets measured at fair value on a nonrecurring basis: Other investments $ — $ — $ 15,206 $ 15,206 Other real estate owned — — 1,569 1,569 Loans held for sale — 29,268 — 29,268 Total assets measured at fair value on a nonrecurring basis $ — $ 29,268 $ 16,775 $ 46,043 Fair value is based on quoted market prices, where available. If such quoted market prices are not available, fair value is based on internally developed models or obtained from third parties that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include unobservable parameters. The Company's valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While the Company believes its valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Available-for-sale securities Securities classified as available-for-sale are reported at fair value using Level 2 inputs. The Company believes that this Level 2 designation is appropriate under ASC 820-10, as these securities are GSEs and GNMA securities with almost all fixed income securities, none are exchange traded, and all are priced by correlation to observed market data. For these securities the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, U.S. government and agency yield curves, live trading levels, trade execution data, market consensus prepayment speeds, credit information, and the security’s terms and conditions, among other factors. Other investments Other investments includes equity investments without readily determinable fair values, which are categorized as Level 3. The Company’s equity investments without readily determinable fair values are held at cost, and are adjusted for any observable price changes in orderly transactions for the identical or a similar investment of the same issuer during the reporting period. Other real estate owned Other real estate owned consists of loan collateral which has been repossessed through foreclosure or other measures. Initially, foreclosed assets are recorded at the fair value of the collateral less estimated selling costs. Subsequent to foreclosure, valuations are updated periodically and the assets may be marked down further, reflecting a new cost basis. The fair value of other real estate owned was estimated using Level 3 inputs based on appraisals obtained from third parties. Loans held for sale The fair value of loans held for sale is based on estimates using Level 2 inputs. These inputs are based on pricing information obtained from wholesale mortgage banks and brokers and applied to loans with similar interest rates and maturities. 121 Other assets Other assets include the fair value of interest rate products, derivatives on the residential mortgage held for sale loan pipeline, foreign exchange forward contracts, and risk participation agreements. Valuation of interest rate products is obtained from an independent pricing service and also from the derivative counterparty. Valuation of the derivative related to the residential mortgage held for sale loan pipeline is based on valuation of the loans held for sale portfolio as described above in Loans held for sale . Valuation of foreign exchange forward contracts and risk participation agreements are obtained from an independent pricing service. Other liabilities Other liabilities include the fair value of interest rate products, derivatives on the residential mortgage held for sale loan pipeline, foreign exchange forward contracts, risk participation agreements, and derivative related to the sale of certain Visa Class B common shares. Valuation of interest rate products is obtained from an independent pricing service and also from the derivative counterparty. Valuation of the derivative related to the residential mortgage held for sale loan pipeline is based on valuation of the loans held for sale portfolio as described above in Loans held for sale. Valuation of foreign exchange forward contracts and risk participation agreements are obtained from an independent pricing service. Valuation of the derivative related to the sale of certain Visa Class B common shares is based on: (i) the agreed upon graduated fee structure; (ii) the length of time until the resolution of the Visa covered litigation; and (iii) the estimated impact of dilution in the conversion ratio of Class B shares resulting from changes in the Visa covered litigation. FAIR VALUE OF FINANCIAL INSTRUMENTS The reported fair values of financial instruments are based on a variety of factors. In certain cases, fair values represent quoted market prices for identical or comparable instruments. In other cases, fair values have been estimated based on assumptions regarding the amount and timing of estimated future cash flows that are discounted to reflect current market rates and varying degrees of risk. Accordingly, the fair values may not represent actual values of the financial instruments that could have been realized as of period-end or that will be realized in the future. The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: Cash, cash equivalents, and restricted cash For cash and short-term investment securities, including due from banks, federal funds sold or purchased under agreements to resell and interest-bearing deposits with other banks, the carrying amount is a reasonable estimate of fair value. Investment securities Investment securities include debt securities classified as held-to-maturity or available-for-sale. Fair value is estimated using quoted prices for similar securities, which the Company obtains from a third party vendor. The Company uses one of the largest providers of securities pricing to the industry and management periodically assesses the inputs used by this vendor to price the various types of securities owned by the Company to validate the vendor’s methodology as described above in available-for-sale securities. Other investments Other investments includes equity investments without readily determinable fair values (see discussion in “Fair Value of Financial Assets and Liabilities” section above) as well as equity method investments. Loans held for sale Loans held for sale are carried at their fair value (see discussion in “Fair Value of Financial Assets and Liabilities” section above). 122 Loans and leases 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. The fair value of nonperforming loans is based on recent external appraisals of the underlying collateral, if the loan is collateral dependent. Estimated cash flows, discounted using a rate commensurate with current rates and the risk associated with the estimated cash flows, are used if appraisals are not available. This technique does contemplate an exit price. Stock in the Federal Home Loan Bank (FHLB) of Pittsburgh The fair value of FHLB stock is assumed to be equal to its cost basis, since the stock is non-marketable but redeemable at its par value. Accrued interest receivable The carrying amounts of interest receivable approximate fair value. Other assets Other assets include the fair value of interest rate products, derivatives on the residential mortgage held for sale loan pipeline, foreign exchange forward contracts, and risk participation agreements (see discussion in “Fair Value of Financial Assets and Liabilities” section above). Deposits The fair value of deposits with no stated maturity, such as noninterest-bearing demand deposits, money market and interest-bearing demand deposits, is assumed to be equal to the amount payable on demand. The fair value of time deposits is based on the discounted value of contractual cash flows. The discount rate is estimated using rates currently offered for deposits with comparable remaining maturities. Borrowed funds Rates currently available to the Company for debt with similar terms and remaining maturities are used to estimate the fair value of existing debt. Off-balance sheet instruments The fair value of off-balance sheet instruments, including swap guarantees of $ 5.5 million and $ 7.3 million at December 31, 2024 and December 31, 2023, respectively, and standby letters of credit, approximates the recorded net deferred fee amounts. Because letters of credit are generally not assignable by either the Company or the borrower, they only have value to the Company and the borrower. In determining the fair value of the swap guarantees, the Company assesses the underlying credit risk exposure for each borrower in a paying position to the third-party financial institution. Accrued interest payable The carrying amounts of interest payable approximate fair value. Other liabilities Other liabilities include the fair value of interest rate products, derivatives on the residential mortgage held for sale loan pipeline, foreign exchange forward contracts, risk participation agreements, and derivative related to the sale of certain Visa Class B common shares (see discussion in “Fair Value of Financial Assets and Liabilities” section above). 123 Financial instruments measured at fair value using significant unobservable inputs (Level 3) The following table provides a description of the valuation techniques and significant unobservable inputs for the Company's financial instruments classified as Level 3 as of December 31, 2024 and December 31, 2023: (Dollars in thousands) December 31, 2024 Financial Instrument Fair Value Valuation Technique(s) Unobservable Input Range (Weighted Average) Other investments $ 15,516 Observed market comparable transactions Period of observed transactions December 2023 Other real estate owned 5,204 Fair market value of collateral Costs to sell 10.0 % Other assets (Risk participation agreements purchased) 25 Credit Value Adjustment CDS Spread and Loss Given Default (LGD) CDS spread: 110 - 360 bps ( 192 bps) LGD: — % - 30 % ( 30 %) Other liabilities (Risk participation agreements sold) 90 Credit Value Adjustment CDS Spread and Loss Given Default (LGD) CDS spread: 1 - 250 bps ( 207 bps) LGD: 30 % Other liabilities (Financial derivative related to sales of certain Visa Class B shares) 5,180 Discounted cash flow Timing of Visa litigation resolution 2.50 years or 2Q 2027 (Dollars in thousands) December 31, 2023 Financial Instrument Fair Value Valuation Technique(s) Unobservable Input Range (Weighted Average) Other investments $ 15,206 Observed market comparable transactions Period of observed transactions December 2023 Other real estate owned 1,569 Fair market value of collateral Costs to sell 10.0 % - 20.0 % ( 18.1 %) Other assets (Risk participation agreements purchased) 78 Credit Value Adjustment CDS Spread and Loss Given Default (LGD) CDS spread: 110 - 360 bps ( 195 bps) LGD: – % - 30 % ( 30 %) Other liabilities (Risk participation agreements sold) 3 Credit Value Adjustment CDS Spread and Loss Given Default (LGD) CDS spread: 1 - 250 bps ( 95 bps) LGD: 30 % Other liabilities (Financial derivative related to sales of certain Visa Class B shares) 14,023 Discounted cash flow Timing of Visa litigation resolution 1.00 - 4.75 years ( 3.06 years or 4Q 2025) 124 The book value and estimated fair value of the Company's financial instruments are as follows: December 31, Fair Value Measurement 2024 2023 (Dollars in thousands) Book Value Fair Value Book Value Fair Value Financial assets: Cash, cash equivalents and restricted cash Level 1 $ 1,154,818 $ 1,154,818 $ 1,092,900 $ 1,092,900 Investment securities, available for sale Level 2 3,510,648 3,510,648 3,846,537 3,846,537 Investment securities, held to maturity, net Level 2 1,015,161 895,511 1,058,557 985,931 Other investments Level 3 18,184 18,184 17,434 17,434 Loans, held for sale Level 2 49,699 49,699 29,268 29,268 Loans and leases, net (1) Level 3 12,996,218 13,100,492 12,583,202 12,514,431 Stock in FHLB of Pittsburgh Level 2 11,805 11,805 15,398 15,398 Accrued interest receivable Level 2 84,671 84,671 85,979 85,979 Other assets Levels 2, 3 170,489 170,489 153,647 153,647 Financial liabilities: Deposits Level 2 $ 17,029,808 $ 17,016,839 $ 16,474,086 $ 16,449,198 Borrowed funds Level 2 383,607 379,154 895,076 912,760 Standby letters of credit Level 3 776 776 814 814 Accrued interest payable Level 2 38,173 38,173 46,684 46,684 Other liabilities Levels 2, 3 160,512 160,512 151,642 151,642 (1) Includes reverse mortgage loans. At December 31, 2024 and December 31, 2023 the Company had no commitments to extend credit measured at fair value. 125 19. DERIVATIVE FINANCIAL INSTRUMENTS Risk Management Objective of Using Derivatives The Company is exposed to certain risks arising from both economic conditions and its business operations. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities. The Company manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions. The Company does not use derivative financial instruments for proprietary or speculative trading. Fair Values of Derivative Instruments The table below presents the fair value of derivative financial instruments as well as their location on the Consolidated Statements of Financial Condition as of December 31, 2024. Fair Values of Derivative Instruments (Dollars in thousands) Count Notional Balance Sheet Location Derivatives (Fair Value) Derivatives designated as hedging instruments: Interest rate products 18 $ 1,500,000 Other assets $ 14,265 Total $ 1,500,000 $ 14,265 Derivatives not designated as hedging instruments: Interest rate products $ 2,942,675 Other assets $ 153,980 Interest rate products 2,942,675 Other liabilities ( 153,980 ) Interest rate lock commitments with clients 41,238 Other assets 612 Interest rate lock commitments with clients 3,658 Other liabilities ( 18 ) Forward sale commitments 28,927 Other assets 200 Forward sale commitments 27,071 Other liabilities ( 39 ) FX forwards 26,716 Other assets 1,407 FX forwards 25,924 Other liabilities ( 1,205 ) Risk participation agreements sold 110,948 Other liabilities ( 90 ) Risk participation agreements purchased 97,201 Other assets 25 Financial derivative related to sales of certain Visa Class B shares 55,358 Other liabilities ( 5,180 ) Total derivatives $ 7,802,391 $ 9,977 126 The table below presents the fair value of derivative financial instruments as well as their location on the Consolidated Statements of Financial Condition as of December 31, 2023. Fair Values of Derivative Instruments (Dollars in thousands) Count Notional Balance Sheet Location Derivatives (Fair Value) Derivatives designated as hedging instruments: Interest rate products 9 $ 750,000 Other assets $ 15,578 Total $ 750,000 $ 15,578 Derivatives not designated as hedging instruments: Interest rate products $ 2,428,306 Other assets $ 136,924 Interest rate products 2,383,443 Other liabilities ( 136,924 ) Interest rate lock commitments with clients 34,651 Other assets 637 Forward sale commitments 1,000 Other assets 1 Forward sale commitments 37,348 Other liabilities ( 283 ) FX forwards 15,812 Other assets 429 FX forwards 13,064 Other liabilities ( 409 ) Risk participation agreements sold 103,648 Other liabilities ( 3 ) Risk participation agreements purchased 116,804 Other assets 78 Financial derivative related to sales of certain Visa Class B shares 113,177 Other liabilities ( 14,023 ) Total derivatives $ 5,997,253 $ 2,005 Effect of Derivative Instruments on the Income Statement The table below presents the effect of the derivative financial instruments on the Consolidated Statements of Income for the years ended December 31, 2024, 2023, and 2022. Amount of (Loss) Gain Recognized in OCI on Derivative (Effective Portion) Location of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion) (Dollars in thousands) Year Ended December 31, Derivatives in Cash Flow Hedging Relationships 2024 2023 2022 Interest Rate Products $ ( 8,894 ) $ 1,596 $ — Interest income Total $ ( 8,894 ) $ 1,596 $ — Amount of Gain (Loss) Recognized in Income Location of Gain (Loss) Recognized in Income (Dollars in thousands) Year Ended December 31, Derivatives Not Designated as a Hedging Instrument 2024 2023 2022 Interest rate products $ 9,412 $ 10,294 $ 7,576 Other income Interest rate lock commitments with clients ( 34 ) 274 ( 2,072 ) Mortgage banking activities, net Forward sale commitments 175 65 4,863 Mortgage banking activities, net FX forwards 524 130 80 Other income Risk participation agreements ( 63 ) ( 5 ) ( 195 ) Other income Total $ 10,014 $ 10,758 $ 10,252 127 Derivatives designated as hedging instruments: Cash Flow Hedges of Interest Rate Risk The Company's objectives in using interest rate derivatives are to add stability to interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate options, including floors, caps, collars, or swaps as part of its interest rate risk management strategy. Interest rate options designated as cash flow hedges involve the receipt of fixed amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company has agreements with certain derivative counterparties that contain a provision under which, if it defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. The Company also has agreements with certain derivative counterparties that contain a provision where if it fails to maintain its status as a well-capitalized or adequately capitalized institution, then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements. As of December 31, 2024, the Company had 18 interest rate floors purchased at an aggregate premium of $ 29.7 million with an aggregate notional amount of $ 1.5 billion to hedge variable cash flows associated with a variable rate loan pool through the third quarter of 2027. Changes to the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecast transaction affects earnings. If the Company determines that a cash flow hedge is no longer highly effective, future changes in the fair value of the hedging instrument would be reported in earnings. As of December 31, 2024, the Company determined the cash flow hedges remain highly effective. During the year ended December 31, 2024, $ 4.6 million of amortization expense on the premium was reclassified into interest income compared to $ 1.2 million during the year ended December 31, 2023. The Company does not expect any unrealized gains or losses related to cash flow hedges to be reclassified into earnings in the next twelve months. Derivatives not designated as hedging instruments: Client Derivatives – Interest Rate Swaps The Company enters into interest rate swaps with commercial loan clients wishing to manage interest rate risk. The Company then enters into corresponding swap agreements with swap dealer counterparties to economically hedge the exposure arising from these contracts. The interest rate swaps with both the clients and third parties are not designated as hedges under ASC 815, Derivatives and Hedging (ASC 815) and are marked to market through earnings. As the interest rate swaps are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by ASC 820. As of December 31, 2024, there were no fair value adjustments related to credit quality. Derivative Financial Instruments from Mortgage Banking Activities Derivative financial instruments related to mortgage banking activities are recorded at fair value and are not designated as accounting hedges. This includes commitments to originate certain fixed-rate residential loans to clients, also referred to as interest rate lock commitments. The Company may also enter into forward sale commitments to sell loans to investors at a fixed price at a future date and trade asset-backed securities to mitigate interest rate risk. Foreign Exchange Forward Contracts The Company enters into foreign exchange forward contracts (FX forwards) with clients to exchange one currency for another on an agreed date in the future at an agreed exchange rate. The Company then enters into corresponding FX forwards with swap dealer counterparties to economically hedge its exposure on the exchange rate component of the client agreements. The FX forwards with both the clients and third parties are not designated as hedges under ASC 815 and are marked to market through earnings. Exposure to gains and losses on these contracts increase or decrease over their respective lives as currency exchange and interest rates fluctuate. As the FX forwards are structured to offset each other, changes to the underlying term structure of currency exchange rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by ASC 820. As of December 31, 2024, there were no fair value adjustments related to credit quality. Risk Participation Agreements The Company may enter into a risk participation agreement (RPA) with another institution as a means to assume a portion of the credit risk associated with a loan structure which includes a derivative instrument, in exchange for fee income 128 commensurate with the risk assumed. This type of derivative is referred to as an “RPA sold.” In addition, in an effort to reduce the credit risk associated with an interest rate swap agreement with a borrower for whom the Company has provided a loan structured with a derivative, the Company may purchase an RPA from an institution participating in the facility in exchange for a fee commensurate with the risk shared. This type of derivative is referred to as an “RPA purchased.” The following are not included in the tables in Fair Values of Derivative Instruments : Swap Guarantees The Company entered into an agreement with one unrelated financial institution whereby that financial institution entered into interest rate derivative contracts (interest rate swap transactions) directly with clients 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 client 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 Clients without creating the swap ourselves. These swap guarantees are accounted for as credit derivatives. At December 31, 2024 and December 31, 2023, there were 154 and 188 variable-rate to fixed-rate swap transactions between the third-party financial institutions and the Company's Clients, respectively. The initial notional aggregate amount was approximately $ 0.6 billion and $ 0.7 billion at December 31, 2024 and December 31, 2023, respectively. At December 31, 2024, the swap transactions remaining maturities ranged from under 1 year to 11 years. At December 31, 2024, none of these client swaps were in a paying position to third parties, with our swap guarantees having a fair value of $ 5.5 million. At December 31, 2023, none of these client swaps were in a paying position to third parties, with the Company's swap guarantees having a fair value of $ 7.3 million. For both periods, none of the Company's Clients were in default of the swap agreements. Credit-risk-related Contingent Features The Company has agreements with certain derivative counterparties that contain a provision under which, if it defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. The Company also has agreements with certain derivative counterparties that contain a provision where if it fails to maintain its status as a well-capitalized or adequately capitalized institution, then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements. The Company has minimum collateral posting thresholds with certain of its derivative counterparties, and has posted collateral of $ 1.7 million in cash against its obligations under these agreements which meets or exceeds the minimum collateral posting requirements. If the Company had breached any of these provisions at December 31, 2024, it could have been required to settle its obligations under the agreements at the termination value. 129 Table of Contents 20. RELATED PARTY TRANSACTIONS 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. 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 $ 0.5 million require review and approval by the Board of Directors. There were no extensions of credit to related parties exceeding $ 0.5 million originated during the year ended December 31, 2024 and one extension of credit to related parties exceeding $ 0.5 million originated during the year ended December 31, 2023. During 2024, all new loans and credit line advances to related parties were $ 0.2 million and repayments were $ 0.1 million. The outstanding balances of loans to related parties at both December 31, 2024 and 2023 were $ 0.4 million. Total deposits from related parties at December 31, 2024 and 2023 were $ 6.4 million and $ 9.7 million, respectively. 130 21. SEGMENT INFORMATION As defined in ASC 280, Segment Reporting (ASC 280), an operating segment is a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the enterprise’s chief operating decision maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. The Company evaluates performance based on pretax net income relative to resources used, and allocate resources based on these results. The accounting policies applicable to the Company's segments are those that apply to its preparation of the accompanying Consolidated Financial Statements. Based on these criteria, the Company has identified three segments: WSFS Bank, Cash Connect ® , and Wealth Management. The WSFS Bank segment provides financial products to Commercial and Consumer Clients. Commercial and Consumer Banking and other banking business units are operating departments of WSFS Bank. These departments share the same regulators, the same market, many of the same Clients and provide similar products and services through the general infrastructure of the Bank. Accordingly, these departments are not considered discrete segments and are appropriately aggregated in the WSFS Bank segment. The Company's Cash Connect ® segment provides ATM vault cash, smart safe and other cash logistics services through strategic partnerships with several of the largest networks, manufacturers and service providers in the ATM industry. Cash Connect ® services non-bank and WSFS-branded ATMs and smart safes nationwide. The balance sheet category Cash in non-owned ATMs includes cash from which fee income is earned through bailment arrangements with clients of Cash Connect ® . The Wealth Management segment provides a broad array of planning and advisory services, investment management, trust services, and credit and deposit products to individual, corporate, and institutional clients. Bryn Mawr Trust ® is our predominant Private Wealth Management brand, providing advisory, investment management and trustee services to institutions, affluent and high-net-worth individuals. Private Wealth Management, which includes Private Banking, serves high-net-worth clients and institutions by providing trustee and advisory services, financial planning, customized investment strategies, brokerage products such as annuities and customized banking services including credit and deposit products tailored to its clientele. Private Wealth Management includes businesses that operate under the bank’s charter, through a broker/dealer and as a registered investment advisor (RIA). It generates revenue through fee-only arrangements, net interest income and other fee-only services such as estate administration, trust tax planning and custody. Powdermill ® is a multi-family office specializing in providing independent solutions to high-net-worth individuals, families and corporate executives through a coordinated, centralized approach. The Bryn Mawr Trust Company of Delaware provides personal trust and fiduciary services to families and individuals across the U.S. and internationally. WSFS Institutional Services ® provides trustee, agency, bankruptcy administration, custodial and commercial domicile services to institutional, corporate clients and special purpose vehicles. 131 The following tables show segment results for the years ended December 31, 2024, 2023, and 2022, and represent amounts included in management's reports that are regularly provided to the Company's CODM: Rodger Levenson, Chairman, President and Chief Executive Officer. The CODM evaluates performance based on pretax net income relative to resources used, and allocates resources based on these results. Year Ended December 31, 2024 (Dollars in thousands) WSFS Bank Cash Connect ® Wealth Management Total Statements of Income External client revenues: Interest income $ 1,040,192 $ — $ 23,390 $ 1,063,582 Interest expense 318,484 — 39,660 358,144 Net interest income 721,708 — ( 16,270 ) 705,438 Noninterest income 78,249 114,539 148,132 340,920 Total external client revenues 799,957 114,539 131,862 1,046,358 Inter-segment revenues: Interest income 31,036 1,441 113,329 145,806 Interest expense 114,770 16,645 14,391 145,806 Net interest income ( 83,734 ) ( 15,204 ) 98,938 — Noninterest income 33,933 1,835 1,112 36,880 Total inter-segment revenues ( 49,801 ) ( 13,369 ) 100,050 36,880 Total revenue 750,156 101,170 231,912 1,083,238 External client expenses: Provision for credit losses 60,710 — 700 61,410 Noninterest expenses: Salaries, benefits and other compensation 264,281 10,209 58,192 332,682 Occupancy expense 36,486 28 1,065 37,579 Equipment expense 38,607 — 9,137 47,744 Professional fees 15,286 — 4,878 20,164 Other segment items (1) 104,180 83,641 11,699 199,520 Total external client expenses 519,550 93,878 85,671 699,099 Inter-segment expenses Noninterest expenses 2,947 6,293 27,640 36,880 Total inter-segment expenses 2,947 6,293 27,640 36,880 Total expenses 522,497 100,171 113,311 735,979 Income before taxes $ 227,659 $ 999 $ 118,601 $ 347,259 Income tax provision 83,764 Consolidated net income $ 263,495 Net loss attributable to noncontrolling interest ( 176 ) Net income attributable to WSFS $ 263,671 Supplemental Information Capital expenditures for the period ended $ 12,305 $ 204 $ 1,749 $ 14,258 (1) Other segment items for each reportable segment includes: WSFS Bank - data processing and operation expense, marketing expense, FDIC expense, loan workout and other credit costs, corporate development expense, restructuring expense, and certain other noninterest expenses. Cash Connect ® - data processing and operation expense, marketing expense, and certain other noninterest expenses, which includes external funding costs. Wealth Management - data processing and operation expense, marketing expense, FDIC expense, loan workout and other credit costs, and certain other noninterest expenses. 132 Year Ended December 31, 2023 (Dollars in thousands) WSFS Bank Cash Connect ® Wealth Management Total Statements of Income External client revenues: Interest income $ 955,050 $ — $ 21,472 $ 976,522 Interest expense 221,713 — 29,706 251,419 Net interest income 733,337 — ( 8,234 ) 725,103 Noninterest income 74,951 82,468 132,452 289,871 Total external client revenues 808,288 82,468 124,218 1,014,974 Inter-segment revenues: Interest income 28,202 1,384 98,895 128,481 Interest expense 100,279 16,348 11,854 128,481 Net interest income ( 72,077 ) ( 14,964 ) 87,041 — Noninterest income 29,199 1,930 568 31,697 Total inter-segment revenues ( 42,878 ) ( 13,034 ) 87,609 31,697 Total revenue 765,410 69,434 211,827 1,046,671 External client expenses: Provision for credit losses 87,529 — 542 88,071 Noninterest expenses: Salaries, benefits and other compensation 229,740 9,395 50,058 289,193 Occupancy expense 40,694 296 1,194 42,184 Equipment expense 35,657 — 6,585 42,242 Professional fees 11,418 — 7,636 19,054 Other segment items (1) 108,194 49,794 10,972 168,960 Total external client expenses 513,232 59,485 76,987 649,704 Inter-segment expenses Noninterest expenses 2,498 5,714 23,485 31,697 Total inter-segment expenses 2,498 5,714 23,485 31,697 Total expenses 515,730 65,199 100,472 681,401 Income before taxes $ 249,680 $ 4,235 $ 111,355 $ 365,270 Income tax provision 96,245 Consolidated net income $ 269,025 Net loss attributable to noncontrolling interest ( 131 ) Net income attributable to WSFS $ 269,156 Supplemental Information Capital expenditures for the period ended $ 6,335 $ — $ 71 $ 6,406 (1) Other segment items for each reportable segment includes: WSFS Bank - data processing and operation expense, marketing expense, FDIC expense, loan workout and other credit costs, corporate development expense, restructuring expense, and certain other noninterest expenses. Cash Connect ® - data processing and operation expense, marketing expense, and certain other noninterest expenses, which includes external funding costs. Wealth Management - data processing and operation expense, marketing expense, FDIC expense, loan workout and other credit costs, and certain other noninterest expenses. 133 Year Ended December 31, 2022 (Dollars in thousands) WSFS Bank Cash Connect ® Wealth Management Total Statements of Income External client revenues: Interest income $ 690,780 $ — $ 13,035 $ 703,815 Interest expense 37,393 — 3,532 40,925 Net interest income 653,387 — 9,503 662,890 Noninterest income 79,800 55,519 124,815 260,134 Total external client revenues 733,187 55,519 134,318 923,024 Inter-segment revenues: Interest income 14,348 1,536 46,539 62,423 Interest expense 48,075 9,831 4,517 62,423 Net interest income ( 33,727 ) ( 8,295 ) 42,022 — Noninterest income 27,534 1,610 654 29,798 Total inter-segment revenues ( 6,193 ) ( 6,685 ) 42,676 29,798 Total revenue 726,994 48,834 176,994 952,822 External client expenses: Provision for credit losses 47,921 — 168 48,089 Noninterest expenses: Salaries, benefits and other compensation 226,354 8,113 49,438 283,905 Occupancy expense 39,362 299 1,224 40,885 Equipment expense 37,280 — 3,714 40,994 Professional fees 15,485 — 5,391 20,876 Other segment items (1) 147,518 28,365 11,783 187,666 Total external client expenses 513,920 36,777 71,718 622,415 Inter-segment expenses Noninterest expenses 2,264 4,720 22,814 29,798 Total inter-segment expenses 2,264 4,720 22,814 29,798 Total expenses 516,184 41,497 94,532 652,213 Income before taxes $ 210,810 $ 7,337 $ 82,462 $ 300,609 Income tax provision 77,961 Consolidated net income $ 222,648 Net income attributable to noncontrolling interest 273 Net income attributable to WSFS $ 222,375 Supplemental Information Capital expenditures for the period ended $ 8,793 $ 16 $ — $ 8,809 (1) Other segment items for each reportable segment includes: WSFS Bank - data processing and operation expense, marketing expense, FDIC expense, loan workout and other credit costs, corporate development expense, restructuring expense, and certain other noninterest expenses. Cash Connect ® - data processing and operation expense, marketing expense, and certain other noninterest expenses, which includes external funding costs. Wealth Management - data processing and operation expense, marketing expense, FDIC expense, loan workout and other credit costs, and certain other noninterest expenses. The following table shows significant components of segment net assets as of December 31, 2024 and 2023: December 31, 2024 2023 (Dollars in thousands) WSFS Bank Cash Connect ® Wealth Management Total WSFS Bank Cash Connect ® Wealth Management Total Cash and cash equivalents $ 686,735 $ 424,907 $ 43,176 $ 1,154,818 $ 600,483 $ 443,431 $ 48,986 $ 1,092,900 Goodwill 753,586 — 132,312 885,898 753,586 — 132,312 885,898 Other segment assets 18,292,205 12,536 468,846 18,773,587 18,191,585 15,654 408,635 18,615,874 Total segment assets $ 19,732,526 $ 437,443 $ 644,334 $ 20,814,303 $ 19,545,654 $ 459,085 $ 589,933 $ 20,594,672 134 22. PARENT COMPANY FINANCIAL INFORMATION Condensed Statements of Income Year Ended December 31, (Dollars in thousands) 2024 2023 2022 Income: Interest income $ 1,252 $ 817 $ 374 Realized gain on sale of equity investment 2,105 9,493 — Unrealized gains on equity investments, net — 2,489 5,379 Other noninterest income 219,063 98,067 251,382 222,420 110,866 257,135 Expense: Interest expense 16,661 16,610 11,763 Other operating expense 7,651 6,965 11,489 24,312 23,575 23,252 Income before equity in undistributed income of subsidiaries 198,108 87,291 233,883 Equity in undistributed income (loss) of subsidiaries 64,429 182,396 ( 12,672 ) Income before taxes 262,537 269,687 221,211 Income tax (benefit) expense ( 1,134 ) 531 ( 1,164 ) Net income attributable to WSFS $ 263,671 $ 269,156 $ 222,375 Condensed Statements of Financial Condition December 31, (Dollars in thousands) 2024 2023 Assets: Cash and cash equivalents $ 275,431 $ 197,270 Investment in subsidiaries 2,620,282 2,585,151 Investment in Trusts (1) 2,785 2,785 Other assets 3,943 5,869 Total assets $ 2,902,441 $ 2,791,075 Liabilities: Trust preferred borrowings $ 90,834 $ 90,638 Senior and subordinated debt 218,631 218,400 Accrued interest payable 822 949 Other liabilities 2,402 3,452 Total liabilities 312,689 313,439 Stockholders’ equity: Common stock 763 761 Capital in excess of par value 1,996,191 1,984,746 Accumulated other comprehensive loss ( 624,877 ) ( 593,991 ) Retained earnings 1,871,523 1,643,657 Treasury stock ( 653,848 ) ( 557,537 ) Total stockholders’ equity of WSFS 2,589,752 2,477,636 Total liabilities and stockholders’ equity of WSFS $ 2,902,441 $ 2,791,075 (1) Includes WSFS Capital Trust III, Royal Bancshares Capital Trust I, and Royal Bancshares Capital Trust II. 135 Condensed Statements of Cash Flows Year Ended December 31, (Dollars in thousands) 2024 2023 2022 Operating activities: Net income attributable to WSFS $ 263,671 $ 269,156 $ 222,375 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed (income) loss of subsidiaries ( 64,429 ) ( 182,396 ) 12,672 Realized gain on sale of equity investments ( 2,105 ) ( 9,493 ) — Unrealized gains on equity investments — ( 2,489 ) ( 5,379 ) Decrease in other assets 15,932 31,254 2,569 (Decrease) increase in other liabilities ( 747 ) 3,488 812 Net cash provided by operating activities $ 212,322 $ 109,520 $ 233,049 Investing activities: Payments for investment in and advances to subsidiaries ( 2,511 ) — — Net cash for business combinations $ — $ — $ 101,734 Net cash (used for) provided by investing activities $ ( 2,511 ) $ — $ 101,734 Financing activities: Issuance of common stock and exercise of common stock options $ 466 $ 3,298 $ 3,179 Redemption of senior and subordinated debt — ( 30,000 ) — Purchase of treasury stock ( 96,311 ) ( 54,647 ) ( 200,083 ) Dividends paid ( 35,805 ) ( 36,742 ) ( 35,746 ) Net cash used for financing activities $ ( 131,650 ) $ ( 118,091 ) $ ( 232,650 ) Increase (decrease) in cash and cash equivalents $ 78,161 $ ( 8,571 ) $ 102,133 Cash and cash equivalents at beginning of period 197,270 205,841 103,708 Cash and cash equivalents at end of period $ 275,431 $ 197,270 $ 205,841 136 23. CHANGE IN ACCUMULATED OTHER COMPREHENSIVE LOSS Accumulated other comprehensive loss includes unrealized gains and losses on available-for-sale investments, unrealized gains and losses on cash flow hedges, as well as unrecognized prior service costs, and actuarial gains and losses on defined benefit post-retirement plans. Changes to accumulated other comprehensive loss are presented net of tax as a component of stockholders' equity. Amounts that are reclassified out of accumulated other comprehensive loss are recorded on the Consolidated Statement of Income either as a gain or loss. Changes to accumulated other comprehensive loss by component are shown net of taxes in the following tables for the period indicated: (Dollars in thousands) Net change in investment securities available for sale Net change in investment securities held to maturity Net change in defined benefit plan Net change in fair value of derivatives used for cash flow hedges (1) Net change in equity method investments Total Balance, December 31, 2021 $ ( 33,873 ) $ 175 $ ( 4,691 ) $ 268 $ 353 $ ( 37,768 ) Other comprehensive (loss) income before reclassifications (2) ( 529,660 ) ( 119,769 ) 318 — 213 ( 648,898 ) Less: Amounts reclassified from accumulated other comprehensive income (loss) — 11,091 ( 109 ) ( 160 ) — 10,822 Net current-period other comprehensive (loss) income ( 529,660 ) ( 108,678 ) 209 ( 160 ) 213 ( 638,076 ) Balance, December 31, 2022 $ ( 563,533 ) $ ( 108,503 ) $ ( 4,482 ) $ 108 566 $ ( 675,844 ) Other comprehensive income (loss) before reclassifications 63,601 — 132 1,596 ( 85 ) 65,244 Less: Amounts reclassified from accumulated other comprehensive income (loss) — 16,980 ( 264 ) ( 107 ) — 16,609 Net current-period other comprehensive income (loss) 63,601 16,980 ( 132 ) 1,489 ( 85 ) 81,853 Balance, December 31, 2023 $ ( 499,932 ) $ ( 91,523 ) $ ( 4,614 ) $ 1,597 $ 481 $ ( 593,991 ) Other comprehensive (loss) income before reclassifications ( 37,857 ) — 991 ( 8,894 ) ( 52 ) ( 45,812 ) Less: Amounts reclassified from accumulated other comprehensive income (loss) — 15,118 ( 192 ) — — 14,926 Net current-period other comprehensive (loss) income ( 37,857 ) 15,118 799 ( 8,894 ) ( 52 ) ( 30,886 ) Balance, December 31, 2024 $ ( 537,789 ) $ ( 76,405 ) $ ( 3,815 ) $ ( 7,297 ) $ 429 $ ( 624,877 ) (1) Includes amortization of net gain for cash flow hedges terminated as of April 1, 2020. (2) Includes $ 119.8 million, net of tax, of unrealized losses on transferred investment securities from available-for-sale to held-to-maturity. 137 Components of other comprehensive income (loss) that impact the Consolidated Statements of Income are presented in the table below. Twelve Months Ended December 31, Affected line item in Consolidated Statements of Income (Dollars in thousands) 2024 2023 2022 Net unrealized holding losses on securities transferred between available-for-sale and held-to-maturity: Amortization of net unrealized losses to income during the period $ 19,892 $ 22,343 $ 14,593 Net interest income Income taxes ( 4,774 ) ( 5,363 ) ( 3,502 ) Income tax provision Net of tax $ 15,118 $ 16,980 $ 11,091 Amortization of defined benefit pension plan-related items: Prior service credits $ ( 76 ) $ ( 76 ) $ ( 76 ) Actuarial gains ( 176 ) ( 271 ) ( 68 ) Total before tax $ ( 252 ) $ ( 347 ) $ ( 144 ) Salaries, benefits and other compensation Income taxes 60 83 35 Income tax provision Net of tax $ ( 192 ) $ ( 264 ) $ ( 109 ) Net unrealized gains on terminated cash flow hedges: Amortization of net unrealized gains to income during the period $ — $ ( 141 ) $ ( 211 ) Interest and fees on loans and leases Income taxes — 34 51 Income tax provision Net of tax $ — $ ( 107 ) $ ( 160 ) Total reclassifications $ 14,926 $ 16,609 $ 10,822 24. LEGAL AND OTHER PROCEEDINGS In accordance with the current accounting standards for loss contingencies, the Company establishes liabilities for litigation-related matters that arise in the ordinary course of its business activities when it is probable that a loss associated with a claim or proceeding has been incurred and the amount of the loss can be reasonably estimated. Litigation claims and proceedings of all types are subject to many uncertain factors that generally cannot be predicted with assurance. In addition, the Company's defense of litigation claims may result in legal fees, which it expenses as incurred. On November 16, 2022, Prophet Mortgage Opportunities, LP (Prophet) filed a a complaint against WSFS Bank and the RBSHD 2013-1 Trust in the United States District Court for the Southern District of New York alleging that the Bank, in its capacity as owner trustee and indenture trustee in a Residential Mortgage-Backed Securities (RMBS) trust, was responsible for certain actions directed by the trust’s majority certificate holder, which allegedly diminished the value of the notes and depleted the value of the trust’s assets. The complaint seeks damages in an amount to be proven at trial of not less than $ 40.0 million. The Bank disputes the factual allegations and denies liability. Based on the inherent uncertainty of this matter, it is reasonably possible that the Bank may incur a loss and has recorded an estimated liability of $ 1.0 million for this matter. The Bank, in accordance with its normal procedures, has notified its insurance carriers of a possible claim. The Bank is vigorously defending itself in this matter and believes it has valid factual and legal defenses. 138 Table of Contents On October 3, 2022, Mary Elizabeth Gibbons filed a petition against WSFS Bank, in its individual capacity, in the Circuit Court of St. Louis County for the State of Missouri asserting claims and seeking damages related to an alleged injury that occurred on a property that was allegedly held by the Bank as owner trustee of a RMBS trust. The Plaintiff sought in excess of $ 25.0 thousand in damages and other equitable relief. On June 6, 2023, the court entered a default judgment against the Bank in the amount of $ 15.0 million, plus post-judgment interest. On January 3, 2025, the Bank received notice that the plaintiff seeks to domesticate and execute on the Missouri judgment by filing an action in the Philadelphia Court of Common Pleas. Based on the inherent uncertainty of this matter, it is reasonably possible that the Bank may incur a loss in the range of $ 0.0 -$ 15.0 million. The Bank, in accordance with its normal procedures, notified its insurance carriers of a possible claim. The Bank disputes the judgment, the Bank's connection to the property, and denies liability. 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. 25. 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: Extinguishment of Debt On January 30, 2025, the Company notified holders of the $ 70.0 million of fixed-to-floating rate subordinated notes due 2027 (the 2027 Notes) acquired from Bryn Mawr Trust that it would be redeeming the outstanding 2027 Notes. The Company anticipates completing the redemption in the first quarter of 2025 at a price of 100 % of the outstanding principal amount of the 2027 Notes, plus accrued and unpaid interest through the date of redemption. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.