WSFS Financial Corporation 1 2Q 2021 Investor Update July 2021 WSFS bank We Stand For Service Forward Looking Statements & Non-GAAP Forward Looking Statements: This presentation contains estimates, predictions, opinions, projections and other "forward-looking statements" as that phrase is defined in the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, references to the Company's predictions or expectations of future business or financial performance as well as i ...

[PART I. Financial Information](index=5&type=section&id=PART%20I.%20Financial%20Information) This section presents the unaudited consolidated financial statements and management's discussion and analysis for the first quarter [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited consolidated financial statements for WSFS Financial Corporation, including statements of income, comprehensive income, financial condition, changes in stockholders' equity, and cash flows for the three months ended March 31, 2021 and 2020, along with detailed notes [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) This section provides the consolidated statements of income, detailing revenues, expenses, and net income for the specified periods **Consolidated Statements of Income (Three Months Ended March 31):** | Metric | 2021 (Thousands) | 2020 (Thousands) | Change (YoY) (Thousands) | | :--------------------------------- | :--------------- | :--------------- | :----------------------- | | Net Interest Income | $114,185 | $116,150 | -$1,965 | | (Recovery of) Provision for Credit Losses | ($20,160) | $56,646 | -$76,806 | | Noninterest Income | $47,822 | $40,847 | +$6,975 | | Noninterest Expense | $95,619 | $88,496 | +$7,123 | | Income Before Taxes | $86,548 | $11,855 | +$74,693 | | Net Income Attributable to WSFS | $65,082 | $10,927 | +$54,155 | | Basic EPS | $1.37 | $0.21 | +$1.16 | | Diluted EPS | $1.36 | $0.21 | +$1.15 | [Consolidated Statements of Comprehensive (Loss) Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20%28Loss%29%20Income) This section presents the consolidated statements of comprehensive income, including net income and other comprehensive income components **Consolidated Statements of Comprehensive (Loss) Income (Three Months Ended March 31):** | Metric | 2021 (Thousands) | 2020 (Thousands) | | :---------------------------------------------------------------- | :--------------- | :--------------- | | Net income attributable to WSFS | $65,082 | $10,927 | | Net change in unrealized (losses) gains on investment securities available-for-sale | ($69,839) | $45,509 | | Net change in securities held-to-maturity | ($16) | ($65) | | Net change in unfunded pension liability | ($16) | $4 | | Net change in cash flow hedge | ($111) | $1,585 | | Net change in equity method investments | $273 | — | | **Total other comprehensive (loss) income** | **($69,709)** | **$47,033** | | **Total comprehensive (loss) income** | **($4,627)** | **$57,960** | [Consolidated Statements of Financial Condition](index=7&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) This section outlines the consolidated financial position, including assets, liabilities, and equity at specific dates **Consolidated Statements of Financial Condition (As of March 31, 2021 vs. Dec 31, 2020):** | Metric | March 31, 2021 (Thousands) | December 31, 2020 (Thousands) | Change (Thousands) | | :--------------------------------- | :----------------------- | :------------------------ | :----------------- | | Total Assets | $14,730,452 | $14,333,914 | +$396,538 | | Total Loans and Leases, Net | $8,373,766 | $8,795,935 | -$422,169 | | Total Deposits | $12,283,700 | $11,856,664 | +$427,036 | | Total Liabilities | $12,961,998 | $12,544,434 | +$417,564 | | Total Stockholders' Equity | $1,768,454 | $1,789,480 | -$21,026 | [Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) This section details changes in stockholders' equity, reflecting net income, dividends, and other equity transactions **Consolidated Statements of Changes in Stockholders' Equity (Three Months Ended March 31, 2021):** | Metric | Shares | Common Stock (Thousands) | Capital in Excess of Par Value (Thousands) | Accumulated Other Comprehensive (Loss) Income (Thousands) | Retained Earnings (Thousands) | Treasury Stock (Thousands) | Total Stockholders' Equity of WSFS (Thousands) | Noncontrolling Interest (Thousands) | Total Stockholders' Equity (Thousands) | | :--------------------------------- | :------- | :----------------------- | :--------------------------------- | :---------------------------------------- | :---------------------------- | :----------------------- | :----------------------------------- | :-------------------------------- | :----------------------------- | | Balance, December 31, 2020 | 57,575,783 | $576 | $1,053,022 | $56,007 | $977,414 | ($295,293) | $1,791,726 | ($2,246) | $1,789,480 | | Net income | — | — | — | — | $65,082 | — | $65,082 | $59 | $65,141 | | Other comprehensive loss | — | — | — | ($69,709) | — | — | ($69,709) | — | ($69,709) | | Cash dividend, $0.12 per share | — | — | — | — | ($5,699) | — | ($5,699) | — | ($5,699) | | Issuance of common stock | 13,547 | — | $115 | — | — | — | $115 | — | $115 | | Stock-based compensation expense | — | — | $1,155 | — | — | — | $1,155 | — | $1,155 | | Repurchases of common stock | — | — | ($1) | — | — | ($12,028) | ($12,029) | — | ($12,029) | | Balance, March 31, 2021 | 57,589,330 | $576 | $1,054,291 | ($13,702) | $1,036,797 | ($307,321) | $1,770,641 | ($2,187) | $1,768,454 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section presents the consolidated statements of cash flows, categorizing cash movements from operating, investing, and financing activities **Consolidated Statements of Cash Flows (Three Months Ended March 31):** | Metric | 2021 (Thousands) | 2020 (Thousands) | Change (YoY) (Thousands) | | :------------------------------------------------ | :--------------- | :--------------- | :----------------------- | | Net cash provided by operating activities | $69,650 | $62,422 | +$7,228 | | Net cash used in investing activities | ($64,089) | ($119,598) | +$55,509 | | Net cash provided by (used in) financing activities | $403,865 | ($9,466) | +$413,331 | | Increase (decrease) in cash, cash equivalents, and restricted cash | $409,426 | ($66,642) | +$476,068 | | Cash, cash equivalents, and restricted cash at end of period | $2,064,161 | $505,110 | +$1,559,051 | [Notes to the Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed explanatory notes supporting the consolidated financial statements, clarifying accounting policies and specific line items [1. BASIS OF PRESENTATION](index=11&type=section&id=1.%20BASIS%20OF%20PRESENTATION) This note describes the company's structure, primary business activities, and the basis for financial statement presentation - WSFS Financial Corporation is a savings and loan holding company, with its primary subsidiary being Wilmington Savings Fund Society, FSB (WSFS Bank), one of the ten oldest continuously operating banks in the U.S.[30](index=30&type=chunk)[31](index=31&type=chunk) - The Company's core business is commercial lending, funded by customer-generated deposits, complemented by wealth management and trust services[31](index=31&type=chunk) - NewLane Finance, a subsidiary, conducts the Company's leasing business, originating small business leases and commercial financing nationwide, and also offers insurance through Prime Protect[32](index=32&type=chunk) [2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=12&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the significant accounting policies applied in preparing the consolidated financial statements and recent accounting pronouncements - Significant accounting policies remain unchanged from the 2020 Annual Report on Form 10-K[36](index=36&type=chunk) - The Company adopted ASU No. 2019-12 (Income Taxes) and ASU No. 2020-01 (Investments) on January 1, 2021, with no impact on the Consolidated Financial Statements at adoption[37](index=37&type=chunk)[38](index=38&type=chunk) - ASU No. 2021-01 (Reference Rate Reform) was adopted, expanding the scope of optional expedients for derivatives affected by interest rate changes, with no immediate impact[39](index=39&type=chunk) [3. NONINTEREST INCOME](index=13&type=section&id=3.%20NONINTEREST%20INCOME) This note provides a detailed breakdown of the components contributing to noninterest income for the reported periods **Credit/Debit Card and ATM Income (Three Months Ended March 31):** | Component | 2021 (Thousands) | 2020 (Thousands) | Change (YoY) (Thousands) | | :---------------------- | :--------------- | :--------------- | :----------------------- | | Bailment fees | $3,059 | $5,081 | -$2,022 | | Interchange fees | $3,055 | $5,616 | -$2,561 | | Other card and ATM fees | $691 | $662 | +$29 | | **Total** | **$6,805** | **$11,359** | **-$4,554** | - Interchange income decreased due to the Durbin Amendment, effective July 1, 2020, which capped interchange fees for banks over **$10 billion** in assets[44](index=44&type=chunk) **Investment Management and Fiduciary Income (Three Months Ended March 31):** | Component | 2021 (Thousands) | 2020 (Thousands) | Change (YoY) (Thousands) | | :------------------------------ | :--------------- | :--------------- | :----------------------- | | Trust fees | $9,764 | $6,954 | +$2,810 | | Wealth management and advisory fees | $4,489 | $4,008 | +$481 | | **Total** | **$14,253** | **$10,962** | **+$3,291** | **Deposit Service Charges (Three Months Ended March 31):** | Component | 2021 (Thousands) | 2020 (Thousands) | Change (YoY) (Thousands) | | :---------------------- | :--------------- | :--------------- | :----------------------- | | Service fees | $3,422 | $3,211 | +$211 | | Return and overdraft fees | $1,578 | $2,332 | -$754 | | Other deposit service fees | $460 | $104 | +$356 | | **Total** | **$5,460** | **$5,647** | **-$187** | **Other Income (Three Months Ended March 31):** | Component | 2021 (Thousands) | 2020 (Thousands) | Change (YoY) (Thousands) | | :-------------------------- | :--------------- | :--------------- | :----------------------- | | Managed service fees | $3,609 | $4,031 | -$422 | | Currency preparation | $948 | $840 | +$108 | | ATM loss protection | $622 | $647 | -$25 | | Miscellaneous products and services | $3,506 | $1,435 | +$2,071 | | **Total** | **$8,685** | **$6,953** | **+$1,732** | [4. EARNINGS PER SHARE](index=15&type=section&id=4.%20EARNINGS%20PER%20SHARE) This note details the calculation of basic and diluted earnings per share, including the underlying components **Earnings Per Share (Three Months Ended March 31):** | Metric | 2021 | 2020 | | :--------------------------------- | :----- | :----- | | Net income attributable to WSFS (Thousands) | $65,082 | $10,927 | | Weighted average basic shares (Thousands) | 47,509 | 51,086 | | Dilutive potential common shares (Thousands) | 283 | 78 | | Weighted average fully diluted shares (Thousands) | 47,792 | 51,164 | | Basic EPS | $1.37 | $0.21 | | Diluted EPS | $1.36 | $0.21 | [5. INVESTMENTS](index=15&type=section&id=5.%20INVESTMENTS) This note provides a breakdown of the company's investment portfolio, including available-for-sale and held-to-maturity debt securities **Available-for-Sale Debt Securities (March 31, 2021):** | Type | Amortized Cost (Thousands) | Fair Value (Thousands) | | :------------------ | :----------------------- | :--------------------- | | CMO | $564,055 | $554,436 | | FNMA MBS | $1,997,140 | $1,998,045 | | FHLMC MBS | $182,271 | $190,453 | | GNMA MBS | $25,011 | $25,835 | | GSE agency notes | $232,509 | $219,116 | | **Total** | **$3,000,986** | **$2,987,885** | **Held-to-Maturity Debt Securities (March 31, 2021):** | Type | Amortized Cost (Thousands) | Fair Value (Thousands) | | :-------------------------- | :----------------------- | :--------------------- | | State and political subdivisions | $103,027 | $107,129 | | Foreign bonds | $501 | $500 | | **Total** | **$103,528** | **$107,629** | - During Q1 2021, the Company sold **$9.3 million** of available-for-sale debt securities, realizing **$0.3 million** in gains[61](index=61&type=chunk) - Unrealized losses on available-for-sale debt securities totaled **$63.7 million** at March 31, 2021, primarily due to changes in market interest rates, not credit loss[66](index=66&type=chunk) [6. LOANS](index=20&type=section&id=6.%20LOANS) This note details the composition of the loan and lease portfolio by category, including changes over the period **Loan and Lease Portfolio by Category (March 31, 2021 vs. Dec 31, 2020):** | Category | March 31, 2021 (Thousands) | December 31, 2020 (Thousands) | Change (Thousands) | | :-------------------------- | :----------------------- | :------------------------ | :----------------- | | Commercial and industrial | $2,398,535 | $2,700,418 | -$301,883 | | Owner-occupied commercial | $1,333,989 | $1,332,727 | +$1,262 | | Commercial mortgages | $1,975,966 | $2,086,062 | -$110,096 | | Construction | $784,101 | $716,275 | +$67,826 | | Commercial small business leases | $264,937 | $248,885 | +$16,052 | | Residential | $681,022 | $774,455 | -$93,433 | | Consumer | $1,140,034 | $1,165,917 | -$25,883 | | **Total Loans and Leases** | **$8,578,584** | **$9,024,739** | **-$446,155** | | Less: Allowance for credit losses | $204,818 | $228,804 | -$23,986 | | **Net Loans and Leases** | **$8,373,766** | **$8,795,935** | **-$422,169** | - PPP loans included in Commercial and industrial were **$526.8 million** at March 31, 2021, down from **$751.2 million** at December 31, 2020[72](index=72&type=chunk) [7. ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY INFORMATION](index=21&type=section&id=7.%20ALLOWANCE%20FOR%20CREDIT%20LOSSES%20AND%20CREDIT%20QUALITY%20INFORMATION) This note presents the activity in the allowance for credit losses and provides information on credit quality metrics, including nonaccrual and past due loans **Allowance for Credit Losses Activity (Three Months Ended March 31, 2021):** | Category | Beginning Balance (Thousands) | Charge-offs (Thousands) | Recoveries (Thousands) | Provision (Credit) (Thousands) | Ending Balance (Thousands) | | :-------------------------- | :---------------------------- | :---------------------- | :--------------------- | :----------------------------- | :------------------------- | | Commercial and industrial | $150,875 | ($5,052) | $1,140 | ($21,093) | $125,870 | | Owner-occupied Commercial | $9,615 | — | $90 | ($88) | $9,617 | | Commercial Mortgages | $31,071 | — | $14 | ($540) | $30,545 | | Construction | $12,190 | — | — | $2,097 | $14,287 | | Residential | $6,893 | — | $140 | ($1,331) | $5,702 | | Consumer | $18,160 | ($424) | $266 | $795 | $18,797 | | **Total** | **$228,804** | **($5,476)** | **$1,650** | **($20,160)** | **$204,818** | - The decrease in ACL was primarily due to positive economic developments and improved credit quality metrics[74](index=74&type=chunk) **Nonaccrual and Past Due Loans (March 31, 2021):** | Category | 30-89 Days Past Due (Thousands) | >90 Days Past Due (Thousands) | Nonaccrual Loans (Thousands) | Total Loans (Thousands) | | :-------------------------- | :------------------------------ | :---------------------------- | :----------------------- | :---------------------- | | Commercial and industrial | $22,976 | $352 | $20,637 | $2,663,472 | | Owner-occupied commercial | $1,491 | — | $4,024 | $1,333,989 | | Commercial mortgages | $4,229 | $84 | $1,642 | $1,975,966 | | Construction | — | — | — | $784,101 | | Residential | $967 | $750 | $3,173 | $671,580 | | Consumer | $10,618 | $6,492 | $2,316 | $1,140,034 | | **Total** | **$40,281** | **$7,678** | **$31,792** | **$8,569,142** | - Nonperforming assets decreased by **$11.0 million** from December 31, 2020, primarily due to a **$15.1 million** commercial relationship payoff, partially offset by a **$5.6 million** commercial relationship moving to non-accrual[204](index=204&type=chunk) - Performing Troubled Debt Restructurings (TDRs) were **$15.684 million** at March 31, 2021, and nonperforming TDRs were **$3.101 million**[84](index=84&type=chunk) [8. LEASES](index=27&type=section&id=8.%20LEASES) This note details the company's operating and direct financing lease activities, including associated costs and income **Operating Lease Cost (Three Months Ended March 31):** | Metric | 2021 (Thousands) | 2020 (Thousands) | | :------------------ | :--------------- | :--------------- | | Operating lease cost | $4,654 | $4,550 | | Sublease income | ($107) | ($93) | | **Net lease cost** | **$4,547** | **$4,457** | - Right of use assets were **$151.957 million** and lease liabilities were **$166.410 million** at March 31, 2021[89](index=89&type=chunk) **Direct Financing Lease Net Interest Income (Three Months Ended March 31):** | Metric | 2021 (Thousands) | 2020 (Thousands) | | :------------------------------------ | :--------------- | :--------------- | | Interest income on lease receivable | $4,623 | $3,566 | | Interest income on deferred fees and costs, net | ($318) | $94 | | **Total direct financing lease net interest income** | **$4,305** | **$3,660** | - Net investment in direct financing leases was **$264.937 million** at March 31, 2021[91](index=91&type=chunk) [9. GOODWILL AND INTANGIBLE ASSETS](index=29&type=section&id=9.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) This note provides information on goodwill and other intangible assets, including their carrying values and amortization - Goodwill remained unchanged at **$472.828 million** at March 31, 2021, with no impairment identified[95](index=95&type=chunk)[96](index=96&type=chunk) **Intangible Assets (March 31, 2021):** | Type | Gross Intangible Assets (Thousands) | Accumulated Amortization (Thousands) | Net Intangible Assets (Thousands) | Amortization Period | | :---------------------- | :-------------------------------- | :------------------------------- | :------------------------------ | :------------------ | | Core deposits | $93,811 | ($23,148) | $70,663 | 10 years | | Customer relationships | $15,281 | ($6,919) | $8,362 | 7-15 years | | Non-compete agreements | $221 | ($201) | $20 | 5 years | | Loan servicing rights | $5,511 | ($2,683) | $2,828 | 10-25 years | | **Total** | **$114,824** | **($32,951)** | **$81,873** | | - Amortization expense on intangible assets was **$2.7 million** for Q1 2021, compared to **$2.8 million** for Q1 2020[97](index=97&type=chunk) [10. DEPOSITS](index=31&type=section&id=10.%20DEPOSITS) This note presents a breakdown of deposits by category, illustrating changes in funding sources **Deposits by Category (March 31, 2021 vs. Dec 31, 2020):** | Category | March 31, 2021 (Thousands) | December 31, 2020 (Thousands) | Change (Thousands) | | :-------------------------- | :----------------------- | :------------------------ | :----------------- | | Noninterest demand | $3,857,610 | $3,415,021 | +$442,589 | | Interest-bearing demand | $2,659,336 | $2,635,740 | +$23,596 | | Savings | $1,886,222 | $1,774,332 | +$111,890 | | Money market | $2,721,647 | $2,654,439 | +$67,208 | | Customer time deposits | $1,093,984 | $1,158,845 | -$64,861 | | Brokered deposits | $64,901 | $218,287 | -$153,386 | | **Total Deposits** | **$12,283,700** | **$11,856,664** | **+$427,036** | [11. ASSOCIATE BENEFIT PLANS](index=32&type=section&id=11.%20ASSOCIATE%20BENEFIT%20PLANS) This note details the net periodic benefit costs for postretirement medical and pension plans **Net Periodic Benefit Cost - Postretirement Medical Benefits (Three Months Ended March 31):** | Metric | 2021 (Thousands) | 2020 (Thousands) | | :-------------------------- | :--------------- | :--------------- | | Service cost | $17 | $15 | | Interest cost | $13 | $17 | | Prior service cost amortization | ($19) | ($19) | | Net gain recognition | ($5) | ($9) | | **Net periodic cost (benefit)** | **$6** | **$4** | - The Alliance Associate Pension Plan was terminated in Q2 2020, with no net periodic benefit cost in Q1 2021[106](index=106&type=chunk)[107](index=107&type=chunk) **Net Periodic Benefit Cost - Beneficial Pension & Postretirement Benefits (Three Months Ended March 31, 2021):** | Metric | Pension Benefits (Thousands) | Other Postretirement Benefits (Thousands) | | :-------------------------- | :--------------------------- | :------------------------------------ | | Service cost | — | $14 | | Interest cost | $530 | $77 | | Expected return on plan assets | ($1,705) | — | | Prior service cost amortization | — | ($3) | | Net loss (gain) recognition | $6 | — | | **Net periodic (benefit) cost** | **($1,169)** | **$88** | [12. INCOME TAXES](index=33&type=section&id=12.%20INCOME%20TAXES) This note provides information on income tax provisions, effective tax rates, and deferred tax assets - No unrecognized tax benefits as of March 31, 2021[112](index=112&type=chunk) - The Company recognized an **$8.5 million** income tax credit and deferred tax asset due to the adoption of ASC 326 (Credit Losses) on January 1, 2020[113](index=113&type=chunk) - An additional **$1.8 million** income tax benefit and deferred tax asset were recognized due to revaluing Net Operating Losses (NOLs) carryback claims at a **35%** tax rate under the CARES Act[114](index=114&type=chunk) - Amortization of low-income housing credit investments resulted in **$0.9 million** income tax expense for Q1 2021[115](index=115&type=chunk) [13. FAIR VALUE DISCLOSURES OF FINANCIAL ASSETS AND LIABILITIES](index=34&type=section&id=13.%20FAIR%20VALUE%20DISCLOSURES%20OF%20FINANCIAL%20ASSETS%20AND%20LIABILITIES) This note presents fair value measurements for financial assets and liabilities, categorized by valuation input levels **Assets Measured at Fair Value on a Recurring Basis (March 31, 2021):** | Type | Level 1 (Thousands) | Level 2 (Thousands) | Level 3 (Thousands) | Total Fair Value (Thousands) | | :-------------------------- | :------------------ | :------------------ | :------------------ | :--------------------------- | | Available-for-sale securities | — | $2,999,324 | — | $2,999,324 | | Other assets | — | $11,439 | — | $11,439 | | **Total** | **—** | **$3,010,763** | **—** | **$3,010,763** | **Liabilities Measured at Fair Value on a Recurring Basis (March 31, 2021):** | Type | Level 1 (Thousands) | Level 2 (Thousands) | Level 3 (Thousands) | Total Fair Value (Thousands) | | :---------------- | :------------------ | :------------------ | :------------------ | :--------------------------- | | Other liabilities | — | $3,912 | $22,871 | $26,783 | **Assets Measured at Fair Value on a Nonrecurring Basis (March 31, 2021):** | Type | Level 1 (Thousands) | Level 2 (Thousands) | Level 3 (Thousands) | Total Fair Value (Thousands) | | :-------------------- | :------------------ | :------------------ | :------------------ | :--------------------------- | | Other investments | — | — | $10,227 | $10,227 | | Other real estate owned | — | — | $2,068 | $2,068 | | Loans held for sale | — | $155,447 | — | $155,447 | | **Total** | **—** | **$155,447** | **$12,295** | **$167,742** | - Fair value of available-for-sale securities is determined using Level 2 inputs from an independent pricing service[121](index=121&type=chunk) - Other investments (equity investments without readily determinable fair values and equity method investments) and Other real estate owned are categorized as Level 3[122](index=122&type=chunk)[123](index=123&type=chunk) [14. DERIVATIVE FINANCIAL INSTRUMENTS](index=40&type=section&id=14.%20DERIVATIVE%20FINANCIAL%20INSTRUMENTS) This note details the company's derivative financial instruments, including their fair values and impact on financial statements **Fair Values of Derivative Instruments Not Designated as Hedging (March 31, 2021):** | Type | Notional (Thousands) | Balance Sheet Location | Derivatives (Fair Value) (Thousands) | | :-------------------------------------------------- | :------------------- | :--------------------- | :------------------------------- | | Interest rate products | $58,287 | Other assets | $3,464 | | Interest rate products | $58,287 | Other liabilities | ($3,702) | | Risk participation agreements | $4,333 | Other liabilities | ($6) | | Interest rate lock commitments with customers | $253,235 | Other assets | $4,889 | | Interest rate lock commitments with customers | $14,433 | Other liabilities | ($144) | | Forward sale commitments | $259,014 | Other assets | $3,086 | | Forward sale commitments | $19,755 | Other liabilities | ($60) | | Financial derivatives related to sales of certain Visa Class B shares | $113,177 | Other liabilities | ($22,871) | | **Total Derivatives** | **$780,521** | | **($15,344)** | - In April 2020, the Company terminated three cash flow hedges for a net gain of **$1.3 million**, which will be recognized into earnings on a straight-line basis over the original contract term[153](index=153&type=chunk) - The Company has swap guarantees with a fair value of **$12.8 million** at March 31, 2021, for customer interest rate derivative contracts, with no customer defaults[158](index=158&type=chunk) - Derivative financial instruments related to mortgage banking activities (interest rate lock commitments and forward sale commitments) are recorded at fair value and not designated as accounting hedges[159](index=159&type=chunk) [15. SEGMENT INFORMATION](index=43&type=section&id=15.%20SEGMENT%20INFORMATION) This note provides financial information by operating segment, including revenue, income before taxes, and assets - The Company operates in three segments: WSFS Bank, Cash Connect, and Wealth Management[165](index=165&type=chunk) **Total Revenue by Segment (Three Months Ended March 31):** | Segment | 2021 (Thousands) | 2020 (Thousands) | Change (YoY) (Thousands) | | :-------------- | :--------------- | :--------------- | :----------------------- | | WSFS Bank | $147,018 | $154,231 | -$7,213 | | Cash Connect | $10,257 | $11,908 | -$1,651 | | Wealth Management | $20,018 | $16,664 | +$3,354 | | **Total** | **$177,293** | **$182,803** | **-$5,510** | **Income Before Taxes by Segment (Three Months Ended March 31):** | Segment | 2021 (Thousands) | 2020 (Thousands) | Change (YoY) (Thousands) | | :-------------- | :--------------- | :--------------- | :----------------------- | | WSFS Bank | $75,512 | $6,114 | +$69,398 | | Cash Connect | $1,692 | $1,990 | -$298 | | Wealth Management | $9,344 | $3,751 | +$5,593 | | **Total** | **$86,548** | **$11,855** | **+$74,693** | **Total Segment Assets (March 31, 2021 vs. Dec 31, 2020):** | Segment | March 31, 2021 (Thousands) | December 31, 2020 (Thousands) | Change (Thousands) | | :-------------- | :----------------------- | :------------------------ | :----------------- | | WSFS Bank | $14,032,489 | $13,662,368 | +$370,121 | | Cash Connect | $430,982 | $404,875 | +$26,107 | | Wealth Management | $266,981 | $266,671 | +$310 | | **Total** | **$14,730,452** | **$14,333,914** | **+$396,538** | [16. COMMITMENTS AND CONTINGENCIES](index=45&type=section&id=16.%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines the company's commitments and contingencies, including off-balance sheet arrangements and potential liabilities - The Company sells newly originated residential mortgage loans in the secondary market, typically with servicing retained or released on a nonrecourse basis, except for standard representations and warranties[171](index=171&type=chunk)[172](index=172&type=chunk) - Allowance for credit losses on unfunded lending commitments was **$8.9 million** at March 31, 2021, with a **$0.6 million** provision recognized in Q1 2021[173](index=173&type=chunk) [17. CHANGE IN ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME](index=46&type=section&id=17.%20CHANGE%20IN%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20%28LOSS%29%20INCOME) This note details the changes in accumulated other comprehensive income, including components like unrealized gains and losses **Accumulated Other Comprehensive (Loss) Income (March 31, 2021 vs. Dec 31, 2020):** | Component | March 31, 2021 (Thousands) | December 31, 2020 (Thousands) | Change (Thousands) | | :---------------------------------------------------------------- | :----------------------- | :------------------------ | :----------------- | | Net change in investment securities available-for-sale | ($9,957) | $59,882 | -$69,839 | | Net change in investment securities held-to-maturity | $260 | $276 | -$16 | | Net change in defined benefit plan | ($4,804) | ($4,788) | -$16 | | Net change in fair value of derivatives used for cash flow hedges | $535 | $646 | -$111 | | Net change in equity method investments | $264 | ($9) | +$273 | | **Total** | **($13,702)** | **$56,007** | **-$69,709** | - Total reclassifications from accumulated other comprehensive (loss) income to the Consolidated Statements of Income were **($393) thousand** for Q1 2021[177](index=177&type=chunk) [18. RELATED PARTY TRANSACTIONS](index=48&type=section&id=18.%20RELATED%20PARTY%20TRANSACTIONS) This note discloses transactions and balances with related parties, such as loans and deposits - Outstanding balances of loans to related parties were **$0.2 million** at March 31, 2021 and December 31, 2020[180](index=180&type=chunk) - Total deposits from related parties were **$7.1 million** at March 31, 2021, down from **$8.3 million** at December 31, 2020[180](index=180&type=chunk) [19. LEGAL AND OTHER PROCEEDINGS](index=48&type=section&id=19.%20LEGAL%20AND%20OTHER%20PROCEEDINGS) This note provides information on ongoing legal and other proceedings affecting the company - The Company is pursuing recovery of remaining amounts related to the Universitas settlement (**$12.0 million** paid in 2018, **$7.9 million** recovered from insurance) by enforcing an indemnity right[183](index=183&type=chunk) - WSFS Bank is defending against a complaint filed by Nature's Healing Trust (NHT) regarding alleged failure to provide timely notice for life settlement policies, seeking **$6.3 million**[184](index=184&type=chunk) [20. SUBSEQUENT EVENTS](index=48&type=section&id=20.%20SUBSEQUENT%20EVENTS) This note discloses significant events that occurred after the balance sheet date but before the financial statements were issued - On May 7, 2021, the Board approved the repayment of **$100.0 million** of 2016 senior notes due 2026, with a fixed coupon rate of **4.50%** until June 15, 2021, then variable[187](index=187&type=chunk) - The Company expects to incur an additional **$1.1 million** in interest expense in Q2 2021 related to unamortized debt issuance costs from the senior notes repayment[187](index=187&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial performance and condition, highlighting key financial results, capital resources, liquidity, asset quality, and operational drivers for the first quarter of 2021 [Overview](index=48&type=section&id=Overview) This section provides a high-level summary of the company's business, mission, and segment operations - WSFS Financial Corporation is a savings and loan holding company with **$14.7 billion** in assets and **$24.7 billion** in assets under management (AUM) and assets under administration (AUA) at March 31, 2021[188](index=188&type=chunk) - The Company's mission is "We Stand for Service," with a strategy focused on "Engaged Associates, living our culture, making a better life for all we serve"[188](index=188&type=chunk) - The banking business had a total loan and lease portfolio of **$8.6 billion** as of March 31, 2021, primarily funded by commercial relationships and customer-generated deposits[189](index=189&type=chunk) - Cash Connect manages over **$1.7 billion** in total cash and services approximately **28,100** non-bank ATMs and **4,900** smart safes nationwide[189](index=189&type=chunk) - The Wealth Management business had **$24.7 billion** of AUM and AUA at March 31, 2021, offering planning, investment management, and trust services[189](index=189&type=chunk) [Highlights for First Quarter 2021](index=50&type=section&id=Highlights%20for%20First%20Quarter%202021) This section summarizes key financial and operational achievements and changes during the first quarter of 2021 - Total assets increased by **$396.5 million** to **$14.7 billion** at March 31, 2021[190](index=190&type=chunk) - Allowance for credit losses (ACL) was reduced by **$24.0 million** due to improving credit trends and economic forecasts[190](index=190&type=chunk) - The Company supported nearly **$300 million** in second-round PPP loans, generating **$2.2 million** in referral fees, and saw **$231.4 million** in forgiveness for first-round PPP loans[190](index=190&type=chunk) - WSFS signed a Merger Agreement with Bryn Mawr Bank Corporation, expected to close in Q4 2021, incurring **$1.8 million** in related corporate development and restructuring expense[190](index=190&type=chunk) - Investment securities, available-for-sale, increased by **$458.8 million**, while net loans and leases decreased by **$422.2 million**, partly due to PPP loan forgiveness and lower commercial loan demand[190](index=190&type=chunk) [Financial Condition, Capital Resources and Liquidity](index=50&type=section&id=Financial%20Condition%2C%20Capital%20Resources%20and%20Liquidity) This section discusses the company's financial position, capital adequacy, and liquidity management strategies [Financial Condition](index=50&type=section&id=Financial%20Condition) This subsection analyzes changes in total assets, loans, and deposits, reflecting the company's financial standing - Total assets increased **$396.5 million** to **$14.7 billion** at March 31, 2021[190](index=190&type=chunk) - Net loans and leases decreased **$422.2 million**, primarily due to **$231.4 million** in PPP loan forgiveness and a **$203.5 million** decline in residential and commercial real estate loans[190](index=190&type=chunk) - Total deposits increased by **$427.0 million**, driven by customer funding, government stimulus, and reduced customer spending[191](index=191&type=chunk) [Capital Resources](index=51&type=section&id=Capital%20Resources) This subsection details changes in stockholders' equity, dividend policy, and regulatory capital ratios - Stockholders' equity of WSFS decreased **$21.1 million**, primarily due to decreased market values on available-for-sale securities (**$69.8 million**) and share repurchases (**$12.0 million**), partially offset by net income (**$65.1 million**)[191](index=191&type=chunk) - The Board approved an **8%** increase in the quarterly cash dividend to **$0.13 per share**[192](index=192&type=chunk) - Book value per share decreased to **$37.27**, and tangible book value per share decreased to **$25.60** at March 31, 2021[193](index=193&type=chunk) **Regulatory Capital Ratios (March 31, 2021):** | Metric | WSFS Bank | WSFS Financial Corporation | Well-Capitalized Minimum | | :------------------------------------ | :-------- | :----------------------- | :----------------------- | | Total Capital (to Risk-Weighted Assets) | 14.46% | 14.28% | 10.00% | | Tier 1 Capital (to Risk-Weighted Assets) | 13.20% | 13.02% | 8.00% | | Common Equity Tier 1 Capital (to Risk Weighted Assets) | 13.20% | 12.38% | 6.50% | | Tier 1 Leverage Capital | 9.82% | 9.71% | 5.00% | - The Company and Bank were in compliance with and exceeded "well-capitalized" regulatory capital requirements[196](index=196&type=chunk) [Liquidity](index=53&type=section&id=Liquidity) This subsection examines the company's cash flows and funding sources to meet short-term and long-term obligations - Cash, cash equivalents, and restricted cash increased **$409.4 million** to **$2.1 billion** at March 31, 2021[201](index=201&type=chunk) - Net cash provided by operating activities was **$69.7 million**, while net cash used in investing activities was **$64.1 million**, and net cash provided by financing activities was **$403.9 million**[201](index=201&type=chunk) - Funding sources include retail deposits, loan repayments, FHLB borrowings, repurchase agreements, and access to the Federal Reserve Discount Window[200](index=200&type=chunk) [Nonperforming Assets](index=54&type=section&id=Nonperforming%20Assets) This section provides an overview of nonperforming assets, including nonaccruing loans and other real estate owned **Nonperforming Assets (March 31, 2021 vs. Dec 31, 2020):** | Metric | March 31, 2021 (Thousands) | December 31, 2020 (Thousands) | Change (Thousands) | | :--------------------------------- | :----------------------- | :------------------------ | :----------------- | | Total Nonaccruing Loans | $31,792 | $41,908 | -$10,116 | | Other Real Estate Owned | $2,068 | $3,061 | -$993 | | Restructured Loans (Accruing only) | $15,684 | $15,539 | +$145 | | **Total Nonperforming Assets** | **$49,544** | **$60,508** | **-$10,964** | - Ratio of nonperforming assets to total assets decreased from **0.42%** at December 31, 2020, to **0.34%** at March 31, 2021[204](index=204&type=chunk) - Nonperforming assets decreased primarily due to the payoff of one commercial relationship (**$15.1 million**) and continued collection activity, partially offset by a **$5.6 million** commercial relationship moving to non-accrual[204](index=204&type=chunk) - COVID-19 related loan modifications were **$110.9 million** at March 31, 2021[206](index=206&type=chunk) [Interest Rate Sensitivity](index=56&type=section&id=Interest%20Rate%20Sensitivity) This section assesses the company's exposure to interest rate fluctuations and their potential impact on net interest margin and economic value of equity - Interest-earning assets exceeded interest-bearing liabilities that mature or reprice within one year by **$2.0 billion** at March 31, 2021[208](index=208&type=chunk) - The one-year interest-sensitive assets as a percentage of interest-sensitive liabilities was **135.63%** at March 31, 2021[208](index=208&type=chunk) **Estimated Impact of Immediate Changes in Interest Rates (March 31, 2021):** | % Change in Interest Rate (Basis Points) | % Change in Net Interest Margin | Economic Value of Equity | | :--------------------------------------- | :------------------------------ | :----------------------- | | +300 | 22.3% | 19.89% | | +200 | 14.7% | 19.52% | | +100 | 7.2% | 19.08% | | -100 | (3.3)% | 16.80% | [Results of Operations](index=57&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including net income, net interest income, and key expense categories - Net income for Q1 2021 was **$65.1 million**, up from **$10.9 million** in Q1 2020[211](index=211&type=chunk) [Net Interest Income](index=58&type=section&id=Net%20Interest%20Income) This subsection discusses the drivers of net interest income and changes in net interest margin - Net interest income decreased **$2.0 million**, primarily due to a lower interest rate environment and decreased purchase accounting accretion, partially offset by **$9.4 million** from PPP loans[212](index=212&type=chunk)[214](index=214&type=chunk) - Net interest margin was **3.59%** for Q1 2021, a **79 basis point** decrease from **4.38%** in Q1 2020[214](index=214&type=chunk) [Allowance for Credit Losses](index=59&type=section&id=Allowance%20for%20Credit%20Losses) This subsection details the provision for credit losses and the overall allowance balance, reflecting credit quality trends - A recovery of credit losses of **$20.2 million** was recorded in Q1 2021, a **$76.8 million** change from a **$56.6 million** provision in Q1 2020, reflecting positive economic outlook and improved credit quality[212](index=212&type=chunk)[216](index=216&type=chunk) - The allowance for credit losses decreased to **$204.8 million** at March 31, 2021, from **$228.8 million** at December 31, 2020[217](index=217&type=chunk) - Net charge-offs totaled **$3.8 million** in Q1 2021, compared to **$1.0 million** in Q1 2020[217](index=217&type=chunk) [Noninterest Income](index=59&type=section&id=Noninterest%20Income) This subsection analyzes the components and changes in noninterest income, including fees and other revenue streams - Noninterest income increased **$7.0 million** to **$47.8 million**, driven by higher mortgage banking activities (**$5.1 million** increase), investment management and fiduciary revenue (**$3.3 million** increase), and PPP 2.0 referral fees (**$2.2 million**)[212](index=212&type=chunk)[219](index=219&type=chunk) - This increase was partially offset by a **$4.6 million** decrease in Credit/debit card and ATM income, mainly due to the Durbin Amendment and lower interest rates impacting Cash Connect[219](index=219&type=chunk) [Noninterest Expense](index=59&type=section&id=Noninterest%20Expense) This subsection examines the trends and drivers of noninterest expenses, such as salaries, benefits, and equipment costs - Noninterest expense increased **$7.1 million** to **$95.6 million**, primarily due to a **$7.8 million** increase in salaries and benefits and a **$2.4 million** increase in equipment expense[212](index=212&type=chunk)[220](index=220&type=chunk) - These increases were partially offset by a **$5.8 million** decrease in other operating expenses, which included a **$3.0 million** contribution to the WSFS Community Foundation in the prior year[220](index=220&type=chunk) [Income Taxes](index=60&type=section&id=Income%20Taxes) This subsection discusses the income tax provision and effective tax rate, explaining significant changes - Income tax provision increased **$20.1 million** to **$21.4 million**, primarily due to a **$74.7 million** increase in pre-tax income[212](index=212&type=chunk)[221](index=221&type=chunk) - The effective tax rate increased to **24.7%** from **10.9%**, partly due to **$1.8 million** in tax benefits recognized in Q1 2020 from CARES Act NOL carryback provisions[222](index=222&type=chunk) [Contractual Obligations](index=60&type=section&id=Contractual%20Obligations) This subsection provides an update on the company's contractual obligations, noting any material changes - No significant changes in contractual obligations from December 31, 2020[225](index=225&type=chunk) [Reconciliation of Non-GAAP Measure to GAAP Measure](index=61&type=section&id=Reconciliation%20of%20Non-GAAP%20Measure%20to%20GAAP%20Measure) This section reconciles non-GAAP financial measures, such as tangible book value per share, to their most directly comparable GAAP measures **Tangible Book Value Per Share Reconciliation (March 31, 2021 vs. Dec 31, 2020):** | Metric | March 31, 2021 (Thousands) | December 31, 2020 (Thousands) | | :------------------------------------ | :----------------------- | :------------------------ | | Stockholders' equity of WSFS | $1,770,641 | $1,791,726 | | Less: Goodwill and other intangible assets | $554,701 | $557,386 | | **Tangible common equity** | **$1,215,940** | **$1,234,340** | | Shares of common stock outstanding | 47,502 | 47,756 | | Book value per share of common stock | $37.27 | $37.52 | | **Tangible book value per share of common stock** | **$25.60** | **$25.85** | [Critical Accounting Estimates](index=61&type=section&id=Critical%20Accounting%20Estimates) This section discusses the critical accounting estimates that require significant judgment and their potential impact on financial results - Critical accounting estimates at March 31, 2021, did not significantly change from December 31, 2020[230](index=230&type=chunk) - Estimates are based on historical experience, various factors, and assumptions, but actual results may differ, especially if economic conditions are worse than anticipated[229](index=229&type=chunk) [Recent Regulatory Developments](index=62&type=section&id=Recent%20Regulatory%20Developments) This section details recent regulatory changes concerning the Paycheck Protection Program (PPP) and the transition away from LIBOR, outlining the Company's involvement and exposure to these developments [Paycheck Protection Program (PPP)](index=62&type=section&id=Paycheck%20Protection%20Program%20%28PPP%29) This subsection provides updates on the Paycheck Protection Program, including legislative changes and the company's participation - The American Rescue Plan Act of 2021 expanded eligibility for PPP loans, and the PPP Extension Act of 2021 extended the program through May 31, 2021[233](index=233&type=chunk) - In Q1 2021, WSFS Bank facilitated nearly **$300 million** in PPP 2.0 loans through third-party providers, generating **$2.2 million** in referral fees[234](index=234&type=chunk) [Transition from London Inter-Bank Offered Rate (LIBOR)](index=62&type=section&id=Transition%20from%20London%20Inter-Bank%20Offered%20Rate%20%28LIBOR%29) This subsection discusses the ongoing transition from LIBOR to alternative reference rates and its implications for the company's financial instruments - Most LIBOR term rates will cease publication on June 30, 2023, with some U.S. LIBOR rates ending December 31, 2021[235](index=235&type=chunk) - New York legislation provides for the substitution of SOFR (Secured Overnight Funding Rate) in LIBOR-based contracts without clear fallback language[235](index=235&type=chunk) - As of March 31, 2021, the Company had approximately **$2.2 billion** of loans and **$1.0 billion** of derivatives indexed to LIBOR that mature after 2021[236](index=236&type=chunk) - The Company expects its LIBOR transition to span several reporting periods beyond 2021, with a cross-functional team leading the effort[237](index=237&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=63&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section incorporates by reference the market risk disclosures from the Management's Discussion and Analysis, specifically the Interest Rate Sensitivity section, detailing the Company's exposure to market price and rate changes - The information required by this Item is incorporated by reference to the "Interest Rate Sensitivity" section within Item 2, Part I of this Quarterly Report on Form 10-Q[239](index=239&type=chunk) [Item 4. Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) The Company's principal executive and financial officers concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes in internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of March 31, 2021[246](index=246&type=chunk) - There was no material change in internal control over financial reporting during the three months ended March 31, 2021[246](index=246&type=chunk) [PART II. Other Information](index=63&type=section&id=PART%20II.%20Other%20Information) This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, and other disclosures [Item 1. Legal Proceedings](index=63&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 19 of the financial statements for details on legal proceedings, which include ongoing efforts to recover funds from a 2018 settlement and defense against a complaint regarding life settlement policies - Information on legal proceedings is incorporated by reference from Note 19 to the unaudited Consolidated Financial Statements[242](index=242&type=chunk) [Item 1A. Risk Factors](index=63&type=section&id=Item%201A.%20Risk%20Factors) The Company updated its risk factors, primarily focusing on strategic risks related to the pending merger with Bryn Mawr Bank Corporation, including potential delays, failure to complete, integration difficulties, and associated expenses - Material changes to risk factors primarily relate to the pending merger with Bryn Mawr Bank Corporation[243](index=243&type=chunk) - Risks include the failure to complete the merger, termination of the merger agreement, or significant delays, which could negatively impact the Company's business, financial condition, and stock price[244](index=244&type=chunk)[245](index=245&type=chunk) - Combining businesses may be more difficult, costly, or time-consuming than expected, potentially leading to loss of key employees, business disruption, or failure to realize anticipated benefits and cost savings[248](index=248&type=chunk)[249](index=249&type=chunk) - The Company expects to incur substantial expenses related to the merger, which could exceed anticipated savings[250](index=250&type=chunk) - Regulatory approvals may be delayed, not received, or impose burdensome conditions, potentially affecting the merger's completion or the combined company's operations[251](index=251&type=chunk) - Business uncertainties and contractual restrictions during the merger's pendency may adversely affect employee and customer relationships and divert management attention[252](index=252&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company's Board approved a share repurchase program in Q1 2020, authorizing the repurchase of up to 7,594,977 shares. In Q1 2021, 267,309 shares were repurchased for $44.97 per share, but repurchases are currently suspended due to the pending merger with Bryn Mawr - The Board approved a share repurchase program in Q1 2020, authorizing the repurchase of **7,594,977** shares (**15%** of outstanding shares as of March 31, 2020)[253](index=253&type=chunk) - In Q1 2021, **267,309** shares were repurchased at an average price of **$44.97 per share**[255](index=255&type=chunk) - Share repurchases are suspended following the announcement of the merger agreement with Bryn Mawr and are expected to remain suspended until the merger closes[255](index=255&type=chunk) [Item 3. Defaults upon Senior Securities](index=65&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reported period - None[256](index=256&type=chunk) [Item 4. Mine Safety Disclosures](index=65&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the Company - Not applicable[257](index=257&type=chunk) [Item 5. Other Information](index=65&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report - None[258](index=258&type=chunk) [Item 6. Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section lists various exhibits filed with the 10-Q report, including the Merger Agreement, organizational documents, incentive plan, certifications, and XBRL documents - This section lists various exhibits filed with the 10-Q report, including the Merger Agreement, organizational documents, incentive plan, certifications, and XBRL documents[259](index=259&type=chunk) [SIGNATURES](index=67&type=section&id=SIGNATURES) This section contains the official signatures certifying the accuracy and completeness of the report [Signatures](index=67&type=section&id=Signatures) This section contains the signatures of the principal executive officer and principal financial officer, certifying the report's submission - The report is signed by Rodger Levenson, Chairman, President and Chief Executive Officer, and Dominic C. Canuso, Executive Vice President and Chief Financial Officer, on May 7, 2021[265](index=265&type=chunk)

Financial Highlights - The company's core Return on Average Assets (ROA) was 189%, an increase from 167% in 4Q 2020[19] - Net credit costs (recoveries) amounted to ($190) million, while net charge-offs were $38 million, representing 018% of average gross loans[19] - The Allowance for Credit Losses (ACL) coverage ratio stood at 251%, excluding PPP loans as of March 31, 2021[19] - Core fee revenue accounted for 293% of total core net revenue[19] Loan and Deposit Portfolio - Commercial run-off portfolios acquired from Beneficial Bancorp Inc decreased to $55 million[22] - Total core deposits increased by $646 million, representing a 25% growth, and $2973 billion, representing a 36% growth year-over-year[24] - Noninterest demand deposits increased by $443 million, representing a 53% growth, and $1543 billion, representing a 67% growth year-over-year[24] Net Interest Margin (NIM) - The Net Interest Margin (NIM) was 359%[19] - Negative excess liquidity impacted NIM by 039%[29] Strategic Initiatives and Outlook - The company supported nearly $300 million in second-round PPP loans to over 1,800 customers[19] - The Board of Directors approved an 8% increase in the quarterly cash dividend, setting it at $013 per share, and repurchased 267,309 shares, totaling $120 million[19] - The company announced an agreement to acquire Bryn Mawr Bank Corporation, with the transaction expected to close in early 4Q 2021[19]

Financial Data and Key Metrics Changes - The reported net income for Q1 2021 was $65.1 million, with earnings per share of $1.36 and $1.39 on a core basis, excluding corporate development costs related to the Bryn Mawr Trust transaction [6][15] - Return on assets (ROA) was 1.85% and 1.89% on a core basis, while net interest margin was 3.59%, impacted by excess liquidity [6][11] - Customer deposits increased by $580 million or 5% in the quarter, totaling a year-over-year increase of $2.8 billion or 30% [7] Business Line Data and Key Metrics Changes - Net loans decreased by $84 million or 1%, excluding PPP forgiveness and runoff portfolio performance, with line utilization dropping from over 45% to just under 36% since Q1 2020 [9] - Core fee revenue grew by 20% or $8 million year-over-year, driven by strength in mortgage banking and wealth fees, with a core fee revenue percentage of just over 29% [13] - The allowance for credit losses (ACL) at quarter-end was approximately $205 million, with a coverage ratio of 2.51% excluding PPP, down from $229 million and a coverage ratio of 2.73% at year-end [14][15] Market Data and Key Metrics Changes - The company noted an increase in customer liquidity due to PPP funding and stimulus checks, contributing to a conservative spending environment [6][5] - The economic recovery and reopening of local economies are beginning to show positive signs, reflected in improved credit quality metrics [5][14] Company Strategy and Development Direction - The company is focused on the integration efforts for the pending combination with Bryn Mawr Trust, expected to close in early Q4 2021 [4] - The strategy includes disciplined expense management and investments in franchise growth, with a core efficiency ratio of 57.9% [14] - The company anticipates continued loan growth in the mid-single digits, contingent on economic recovery and customer liquidity utilization [17][38] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about near-term and long-term prospects, although performance will be influenced by the pace of economic recovery and excess liquidity in the markets [17] - The company expects to continue leveraging excess liquidity to optimize its balance sheet strategy, despite the drag on net interest margin [20][21] Other Important Information - The company repurchased 267,000 shares at an average price of $44.97, totaling $12 million in capital return, with no further repurchases anticipated until the Bryn Mawr transaction closes [16] - A quarterly cash dividend of $0.13 per share was approved, representing an 8% increase from the previous year [15] Q&A Session Summary Question: Thoughts on liquidity deployment - Management anticipates excess liquidity to remain for a couple of quarters and plans to evaluate its deployment to generate net interest income [20] Question: Update on cash connect and mortgage outlook - Cash connect fees decreased due to seasonality, but top-line growth is expected to continue. Mortgage refinancing remains strong with a 70% refi mix [22][24] Question: Deferral numbers and provision costs - Approximately 1% of the total book remains in modification, with no uptick in deferrals noted [27] Question: Fee income sustainability - Management aims to maintain a core fee revenue percentage above 30% through growth in cash connect and wealth services [35] Question: Growth guidance and loan origination yields - The company remains comfortable with mid-single digit growth expectations, with a strong pipeline and favorable loan origination yields of 3.67% [38][39]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-35638 WSFS FINANCIAL CORPORATION (Exact Name of Registrant as Specified in its Charter) Delaware 22-2866913 (State or other Jurisdict ...

WSFS Financial Corporation 1 4Q 2020 Earnings Supplement1 January 25, 2021 WS = 5 bank We Stand For Service 1 4Q 2020 Earnings Release Supplement is for the purpose and use in conjunction with our Earnings Release furnished as Exhibit 99.1 to our Form 8-K on January 25, 2021 Forward Looking Statements & Non-GAAP Forward Looking Statements: This presentation contains estimates, predictions, opinions, projections and other "forward-looking statements" as that phrase is defined in the Private Securities Litiga ...

WSFS Financial Corporation (NASDAQ:WSFS) Q4 2020 Earnings Conference Call January 26, 2021 1:00 PM ET Company Participants Dominic Canuso - CFO Rodger Levenson - Chairman, President and CEO Arthur Bacci - Chief Wealth Officer Steve Clark - Chief Commercial Officer Rick Wright - Chief Retail Banking Officer Conference Call Participants Frank Schiraldi - Piper Sandler Michael Perito - KBW Erik Zwick - Boenning & Scattergood Russell Gunther - Davidson Brody Preston - Stephens Inc. Operator Ladies and gentlemen ...

[Filing Information](index=1&type=section&id=Filing%20Information) This section details the company's Form 10-Q filing, filer status, and outstanding common stock - WSFS FINANCIAL CORPORATION filed its Quarterly Report on Form 10-Q for the period ended September 30, 2020[1](index=1&type=chunk)[2](index=2&type=chunk) - The registrant is a **large accelerated filer** and is not a shell company[4](index=4&type=chunk) - As of October 31, 2020, there were **50.4 million shares of common stock outstanding**[4](index=4&type=chunk) Securities Registered | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Common Stock, par value $0.01 per share | WSFS | Nasdaq Global Select Market | [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section outlines the inherent risks and uncertainties associated with forward-looking statements, disclaiming any duty to update them - The report contains forward-looking statements based on various assumptions and subject to risks and uncertainties, including difficult market conditions, loan losses due to COVID-19, changes in interest rates, regulatory compliance, and integration of acquisitions[7](index=7&type=chunk)[8](index=8&type=chunk)[11](index=11&type=chunk) - The Company disclaims any duty to revise or update any forward-looking statement, except as required by law[10](index=10&type=chunk) [PART I. Financial Information](index=5&type=section&id=PART%20I.%20Financial%20Information) This part presents the company's unaudited consolidated financial statements and related notes, along with management's discussion and analysis [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited consolidated financial statements for WSFS Financial Corporation, including statements of income, comprehensive income, financial condition, changes in stockholders' equity, and cash flows for the periods ended September 30, 2020 and 2019, and as of December 31, 2019 [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) This section provides the unaudited consolidated statements of income for the three and nine months ended September 30, 2020 and 2019 Consolidated Statements of Income (Three Months Ended September 30) (Dollars in thousands) | (Dollars in thousands) | 2020 | 2019 | | :--------------------- | :--- | :--- | | Interest income | $123,370 | $141,262 | | Interest expense | $10,322 | $20,429 | | Net interest income | $113,048 | $120,833 | | Provision for credit losses | $2,716 | $4,121 | | Noninterest income | $49,171 | $62,346 | | Noninterest expense | $93,540 | $109,561 | | Net income attributable to WSFS | $51,145 | $53,882 | | Basic EPS | $1.01 | $1.02 | | Diluted EPS | $1.01 | $1.02 | Consolidated Statements of Income (Nine Months Ended September 30) (Dollars in thousands) | (Dollars in thousands) | 2020 | 2019 | | :--------------------- | :--- | :--- | | Interest income | $383,108 | $383,742 | | Interest expense | $40,154 | $56,363 | | Net interest income | $342,954 | $327,379 | | Provision for credit losses | $154,116 | $23,970 | | Noninterest income | $154,393 | $146,339 | | Noninterest expense | $275,471 | $315,001 | | Net income attributable to WSFS | $54,961 | $103,105 | | Basic EPS | $1.08 | $2.13 | | Diluted EPS | $1.08 | $2.12 | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents the unaudited consolidated statements of comprehensive income for the three and nine months ended September 30, 2020 and 2019 Consolidated Statements of Comprehensive Income (Three Months Ended September 30) (Dollars in thousands) | (Dollars in thousands) | 2020 | 2019 | | :--------------------- | :--- | :--- | | Net income attributable to WSFS | $51,145 | $53,882 | | Total other comprehensive (loss) income | $(6,185) | $9,531 | | Total comprehensive income | $44,960 | $63,413 | Consolidated Statements of Comprehensive Income (Nine Months Ended September 30) (Dollars in thousands) | (Dollars in thousands) | 2020 | 2019 | | :--------------------- | :--- | :--- | | Net income attributable to WSFS | $54,961 | $103,105 | | Total other comprehensive (loss) income | $43,094 | $47,613 | | Total comprehensive income | $98,055 | $150,718 | [Consolidated Statements of Financial Condition](index=7&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) This section provides the unaudited consolidated statements of financial condition as of September 30, 2020, and December 31, 2019 Consolidated Statements of Financial Condition (As of September 30, 2020 vs. December 31, 2019) (Dollars in thousands) | (Dollars in thousands) | Sep 30, 2020 | Dec 31, 2019 | | :--------------------- | :----------- | :----------- | | Total assets | $13,830,108 | $12,256,302 | | Total liabilities | $11,968,806 | $10,406,811 | | Total stockholders' equity | $1,861,302 | $1,849,491 | | Loans and leases, net | $9,102,332 | $8,424,464 | | Total deposits | $11,391,345 | $9,586,857 | [Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) This section presents the unaudited consolidated statements of changes in stockholders' equity for the nine months ended September 30, 2020 Changes in Stockholders' Equity (Nine Months Ended September 30, 2020) (Dollars in thousands) | (Dollars in thousands) | Amount | | :--------------------- | :----- | | Balance, December 31, 2019 | $1,849,491 | | Cumulative change in accounting principle (ASC 326) | $(30,368) | | Net income (loss) | $53,579 | | Other comprehensive income | $43,094 | | Cash dividend | $(18,319) | | Issuance of common stock | $1,359 | | Stock-based compensation expense | $1,954 | | Repurchases of common shares | $(39,488) | | Balance, September 30, 2020 | $1,861,302 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section provides the unaudited consolidated statements of cash flows for the nine months ended September 30, 2020 and 2019 Consolidated Statements of Cash Flows (Nine Months Ended September 30) (Dollars in thousands) | (Dollars in thousands) | 2020 | 2019 | | :--------------------- | :--- | :--- | | Net cash provided by operating activities | $48,854 | $74,500 | | Net cash (used in) provided by investing activities | $(1,010,571) | $260,563 | | Net cash provided by (used in) financing activities | $1,462,885 | $(375,521) | | Increase (decrease) in cash, cash equivalents, and restricted cash | $501,168 | $(40,458) | | Cash, cash equivalents, and restricted cash at end of period | $1,072,920 | $580,299 | [Notes to the Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed notes to the unaudited consolidated financial statements, covering presentation, accounting policies, financial line items, and disclosures [1. Basis of Presentation](index=12&type=section&id=1.%20BASIS%20OF%20PRESENTATION) This section outlines the entities included in WSFS Financial Corporation's consolidated financial statements and key business operations - WSFS Financial Corporation (WSFS) includes its subsidiaries WSFS Bank, WSFS Wealth Management, WSFS Capital Management, Cypress Capital Management, Christiana Trust Company of Delaware, and WSFS SPE Services, LLC[27](index=27&type=chunk) - The Company's core banking business focuses on commercial lending funded by customer-generated deposits, complemented by wealth management and trust services, operating primarily from **115 offices across five states**[28](index=28&type=chunk) - NewLane Finance, a majority-owned subsidiary, conducts the Company's leasing business, originating small business leases and commercial financing nationwide[29](index=29&type=chunk) - Significant estimates in financial statements include allowance for credit losses, goodwill, intangible assets, post-retirement benefit obligations, fair value of financial instruments, and income taxes[30](index=30&type=chunk) [2. Summary of Significant Accounting Policies](index=13&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section details the company's significant accounting policies, including the adoption of CECL and classification of debt securities - The Company adopted ASC 326, Current Expected Credit Losses (CECL) methodology, on January 1, 2020, resulting in a **$30.4 million decrease to the beginning balance of retained earnings**[65](index=65&type=chunk) - The allowance for credit losses for loans and leases is established based on quantitative and qualitative factors, including portfolio mix, historical loss experience, and economic forecasts, segmented into commercial and retail loans[34](index=34&type=chunk)[35](index=35&type=chunk) - Debt securities are classified as trading, held-to-maturity, or available-for-sale, with available-for-sale securities reported at fair value with unrealized gains/losses in other comprehensive income[51](index=51&type=chunk) Impact of ASC 326 Adoption on January 1, 2020 (Dollars in thousands) | Item | Pre-ASC 326 Adoption | Impact of ASC 326 Adoption | | :------------------------------------------ | :------------------- | :------------------------- | | Allowance for credit losses on held-to-maturity debt securities | $0 | $(8) | | Allowance for credit losses on loans and leases | $(47,576) | $(35,855) | | Deferred tax assets | $9,991 | $8,461 | | Allowance for credit losses on unfunded lending commitments | $(1,547) | $(2,966) | | Total ASC 326 impact to retained earnings | | $(30,368) | [3. Noninterest Income](index=19&type=section&id=3.%20NONINTEREST%20INCOME) This section provides a breakdown of noninterest income components, including credit/debit card, investment management, and deposit service charges - Interchange income decreased quarter-to-date and year-to-date in 2020 compared to 2019 due to the **Durbin amendment**, effective July 1, 2020[78](index=78&type=chunk) Credit/Debit Card and ATM Income (Dollars in thousands) | Component | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Bailment fees | $3,311 | $6,580 | $11,472 | $20,387 | | Interchange fees | $3,267 | $6,234 | $14,514 | $17,073 | | Other card and ATM fees | $673 | $301 | $1,930 | $847 | | Total | $7,251 | $13,115 | $27,916 | $38,307 | Investment Management and Fiduciary Income (Dollars in thousands) | Component | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Trust fees | $9,303 | $6,632 | $23,565 | $19,884 | | Wealth management and advisory fees | $3,963 | $3,827 | $11,592 | $11,104 | | Total | $13,266 | $10,459 | $35,157 | $30,988 | Deposit Service Charges (Dollars in thousands) | Component | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :---------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Service fees | $3,116 | $3,188 | $9,246 | $9,083 | | Return and overdraft fees | $1,532 | $2,797 | $4,998 | $7,341 | | Other deposit service fees | $124 | $154 | $350 | $564 | | Total | $4,772 | $6,139 | $14,594 | $16,988 | [4. Earnings Per Share](index=21&type=section&id=4.%20EARNINGS%20PER%20SHARE) This section presents the basic and diluted earnings per share for the three and nine months ended September 30, 2020 and 2019 Earnings Per Share (Three Months Ended September 30) (Dollars in thousands) | Metric | 2020 | 2019 | | :---------------------------------- | :--- | :--- | | Net income attributable to WSFS (thousands) | $51,145 | $53,882 | | Weighted average basic shares (thousands) | 50,665 | 52,863 | | Basic EPS | $1.01 | $1.02 | | Diluted EPS | $1.01 | $1.02 | Earnings Per Share (Nine Months Ended September 30) (Dollars in thousands) | Metric | 2020 | 2019 | | :---------------------------------- | :--- | :--- | | Net income attributable to WSFS (thousands) | $54,961 | $103,105 | | Weighted average basic shares (thousands) | 50,802 | 48,381 | | Basic EPS | $1.08 | $2.13 | | Diluted EPS | $1.08 | $2.12 | [5. Investments](index=21&type=section&id=5.%20INVESTMENTS) This section details the company's available-for-sale and held-to-maturity debt securities, including sales and unrealized gains/losses - During the nine months ended September 30, 2020, the Company sold **$198.9 million of available-for-sale debt securities**, realizing **$5.9 million in gains**[95](index=95&type=chunk) - At September 30, 2020, available-for-sale debt securities with unrealized losses totaled **$161.9 million**, with total unrealized losses of **$0.5 million**, primarily due to changes in market interest rates, not credit loss[100](index=100&type=chunk) - The Company recorded a **net realized gain of $22.1 million** from the sale of Visa Class B shares during the nine months ended September 30, 2020[103](index=103&type=chunk) Available-for-Sale Debt Securities (September 30, 2020) (Dollars in thousands) | (Dollars in thousands) | Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | | :--------------------- | :------------- | :-------------------- | :-------------------- | :--------- | | CMO | $417,162 | $11,455 | $84 | $428,533 | | FNMA MBS | $1,393,291 | $61,809 | $192 | $1,454,908 | | FHLMC MBS | $232,056 | $14,277 | $109 | $246,224 | | GNMA MBS | $25,637 | $993 | $0 | $26,630 | | GSE agency notes | $176,395 | $2,329 | $97 | $178,627 | | Total | $2,244,541 | $90,863 | $482 | $2,334,922 | Held-to-Maturity Debt Securities (September 30, 2020) (Dollars in thousands) | (Dollars in thousands) | Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Allowance for Credit Losses | Fair Value | | :--------------------- | :------------- | :-------------------- | :-------------------- | :-------------------------- | :--------- | | State and political subdivisions | $113,115 | $4,504 | $0 | $7 | $117,612 | | Foreign bonds | $501 | $0 | $0 | $0 | $501 | | Total | $113,616 | $4,504 | $0 | $7 | $118,113 | [6. Loans](index=26&type=section&id=6.%20LOANS) This section provides a breakdown of the loan and lease portfolio by category, including the impact of Paycheck Protection Program loans - The commercial and industrial loan category includes **$954.2 million in Paycheck Protection Program (PPP) loans** at September 30, 2020[105](index=105&type=chunk) Loan and Lease Portfolio by Category (Dollars in thousands) | Category | September 30, 2020 | December 31, 2019 | | :-------------------------- | :----------------- | :------------------ | | Commercial and industrial | $2,902,815 | $2,046,798 | | Owner-occupied commercial | $1,344,494 | $1,296,466 | | Commercial mortgages | $2,167,508 | $2,222,976 | | Construction | $666,317 | $581,082 | | Commercial small business leases | $227,539 | $188,630 | | Residential | $857,494 | $1,016,500 | | Consumer | $1,168,891 | $1,128,731 | | Total loans and leases | $9,335,058 | $8,481,183 | | Less: Allowance for credit losses | $232,726 | $47,576 | | Net loans and leases | $9,102,332 | $8,424,464 | [7. Allowance for Credit Losses and Credit Quality Information](index=27&type=section&id=7.%20ALLOWANCE%20FOR%20CREDIT%20LOSSES%20AND%20CREDIT%20QUALITY%20INFORMATION) This section details the allowance for credit losses activity, nonaccrual and past due loans, and troubled debt restructurings - During the nine months ended September 30, 2020, the Company provided various customer relief programs, such as payment deferrals, which are not classified as TDRs under the CARES Act[128](index=128&type=chunk)[49](index=49&type=chunk) Allowance for Credit Losses Activity (Nine Months Ended September 30, 2020) (Dollars in thousands) | Category | Beginning Balance (prior to ASC 326) | Impact of Adopting ASC 326 | Charge-offs | Recoveries | Provision (credit) | Ending Balance | | :------------------------ | :--------------------------------- | :------------------------- | :---------- | :--------- | :----------------- | :------------- | | Commercial and industrial | $22,849 | $19,747 | $(7,390) | $4,038 | $109,285 | $148,529 | | Owner-occupied commercial | $4,616 | $(1,472) | $(336) | $133 | $7,443 | $10,384 | | Commercial mortgages | $7,452 | $1,662 | $(55) | $38 | $25,162 | $34,259 | | Construction | $3,891 | $681 | $0 | $5 | $5,653 | $10,230 | | Residential | $1,381 | $7,522 | $(175) | $141 | $(415) | $8,454 | | Consumer | $7,387 | $7,715 | $(1,955) | $735 | $6,988 | $20,870 | | Total | $47,576 | $35,855 | $(9,911) | $5,090 | $154,116 | $232,726 | Nonaccrual and Past Due Loans (September 30, 2020) (Dollars in thousands) | Category | 30–89 Days Past Due and Still Accruing | Greater Than 90 Days Past Due and Still Accruing | Total Past Due And Still Accruing | Current Balances | Nonaccrual Loans | Total Loans | | :------------------------ | :------------------------------------- | :----------------------------------------------- | :-------------------------------- | :--------------- | :--------------- | :---------- | | Commercial and industrial | $17,314 | $1,040 | $18,354 | $3,097,310 | $14,690 | $3,130,354 | | Owner-occupied commercial | $3,073 | $3,171 | $6,244 | $1,334,228 | $4,022 | $1,344,494 | | Commercial mortgages | $15,290 | $1,399 | $16,689 | $2,149,167 | $1,652 | $2,167,508 | | Construction | $2,799 | $0 | $2,799 | $663,518 | $0 | $666,317 | | Residential | $2,673 | $0 | $2,673 | $839,240 | $3,082 | $844,995 | | Consumer | $10,282 | $6,276 | $16,558 | $1,149,944 | $2,389 | $1,168,891 | | Total | $51,431 | $11,886 | $63,317 | $9,233,407 | $25,835 | $9,322,559 | Troubled Debt Restructurings (TDRs) (Dollars in thousands) | Category | September 30, 2020 | December 31, 2019 | | :----------------- | :----------------- | :------------------ | | Performing TDRs | $15,670 | $14,281 | | Nonperforming TDRs | $4,136 | $5,896 | | Total TDRs | $19,806 | $20,177 | [8. Leases](index=36&type=section&id=8.%20LEASES) This section provides details on operating lease costs, balance sheet information, and direct financing lease income Operating Lease Cost (Dollars in thousands) | Component | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :---------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Operating lease cost | $4,723 | $5,596 | $14,224 | $14,610 | | Sublease income | $(93) | $(105) | $(279) | $(381) | | Net lease cost | $4,630 | $5,491 | $13,945 | $14,229 | Operating Lease Balance Sheet Information (Dollars in thousands) | Item | September 30, 2020 | December 31, 2019 | | :------------------ | :----------------- | :------------------ | | Right of use assets | $154,007 | $166,221 | | Lease liabilities | $169,058 | $181,814 | | Weighted average remaining lease term | 19.37 years | 19.06 years | | Weighted average discount rate | 4.25% | 4.17% | Direct Financing Lease Income (Dollars in thousands) | Component | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Interest income on lease receivable | $3,965 | $2,048 | $11,344 | $5,826 | | Interest income on deferred fees and costs | $117 | $63 | $304 | $326 | | Total | $4,082 | $2,111 | $11,648 | $6,152 | [9. Goodwill and Intangible Assets](index=39&type=section&id=9.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) This section details goodwill and intangible assets, including their carrying values, amortization, and impairment assessment - Goodwill remained at **$472.8 million** at September 30, 2020, with no impairment recognized during the nine months ended September 30, 2020, following management's qualitative assessment considering the COVID-19 economic environment[141](index=141&type=chunk)[142](index=142&type=chunk) - Amortization expense on intangible assets was **$2.7 million** for the three months and **$8.2 million** for the nine months ended September 30, 2020[143](index=143&type=chunk) Intangible Assets (September 30, 2020) (Dollars in thousands) | Intangible Asset | Gross Intangible Assets | Accumulated Amortization | Net Intangible Assets | Amortization Period | | :------------------- | :---------------------- | :----------------------- | :-------------------- | :------------------ | | Core deposits | $95,711 | $(20,384) | $75,327 | 10 years | | Customer relationships | $15,281 | $(6,281) | $9,000 | 7-15 years | | Non-compete agreements | $221 | $(179) | $42 | 5 years | | Loan servicing rights | $4,819 | $(2,210) | $2,609 | 10-25 years | | Total | $116,032 | $(29,054) | $86,978 | | [10. Deposits](index=41&type=section&id=10.%20DEPOSITS) This section provides a breakdown of total deposits by category as of September 30, 2020, and December 31, 2019 Deposits by Category (Dollars in thousands) | Category | September 30, 2020 | December 31, 2019 | | :-------------------------- | :----------------- | :------------------ | | Noninterest-bearing demand | $3,196,967 | $2,189,573 | | Interest-bearing demand | $2,521,030 | $2,129,725 | | Savings | $1,717,952 | $1,563,000 | | Money market | $2,488,794 | $2,100,188 | | Customer time deposits | $1,223,843 | $1,356,610 | | Brokered deposits | $242,759 | $247,761 | | Total deposits | $11,391,345 | $9,586,857 | [11. Associate Benefit Plans](index=42&type=section&id=11.%20ASSOCIATE%20BENEFIT%20PLANS) This section details the net periodic benefit costs for postretirement medical benefits and the Alliance Associate Pension Plan - The Company completed the termination of the Alliance pension plan in the first quarter of 2020, contributing **$0.5 million** to settle the obligation[155](index=155&type=chunk) Net Periodic Benefit Cost - Postretirement Medical Benefits (Dollars in thousands) | Component | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Service cost | $15 | $13 | $45 | $40 | | Interest cost | $17 | $20 | $51 | $58 | | Prior service cost amortization | $(19) | $(19) | $(57) | $(57) | | Net gain recognition | $(9) | $(16) | $(27) | $(47) | | Net periodic cost (benefit) | $4 | $(2) | $12 | $(6) | Net Periodic Benefit Cost - Alliance Associate Pension Plan (Dollars in thousands) | Component | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Service cost | $0 | $10 | $17 | $30 | | Interest cost | $0 | $70 | $105 | $208 | | Expected return on plan assets | $0 | $(150) | $(196) | $(445) | | Plan settlement loss | $0 | $0 | $1,431 | $0 | | Net periodic cost (benefit) | $0 | $(70) | $1,357 | $(207) | [12. Income Taxes](index=44&type=section&id=12.%20INCOME%20TAXES) This section discusses income tax benefits, deferred tax assets, and expenses related to NOL carryback claims and low-income housing credits - The Company recognized an additional **$1.7 million income tax benefit** and deferred tax asset at September 30, 2020, due to the revaluation of Net Operating Losses (NOLs) carryback claims under the CARES Act from 21% to 35% tax rate[162](index=162&type=chunk) - The tax impact relating to the adoption of ASC 326 resulted in an **$8.5 million income tax credit** and deferred tax asset[161](index=161&type=chunk) - Amortization of low-income housing credit investments resulted in income tax expense of **$0.8 million** and **$2.4 million** for the three and nine months ended September 30, 2020, respectively[163](index=163&type=chunk) [13. Fair Value Disclosures of Financial Assets and Liabilities](index=45&type=section&id=13.%20FAIR%20VALUE%20DISCLOSURES%20OF%20FINANCIAL%20ASSETS%20AND%20LIABILITIES) This section categorizes fair value measurements into a three-level hierarchy and presents assets measured at fair value on recurring and nonrecurring bases - Fair value measurements are categorized into a three-level hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable market data), and Level 3 (significant unobservable inputs)[167](index=167&type=chunk) - Available-for-sale securities are primarily valued using **Level 2 inputs** from independent pricing services, while other investments and other real estate owned use **Level 3 inputs**[170](index=170&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk) Assets Measured at Fair Value on a Recurring Basis (September 30, 2020) (Dollars in thousands) | Asset | Level 1 | Level 2 | Level 3 | Total Fair Value | | :-------------------------- | :------ | :------ | :------ | :--------------- | | Available-for-sale securities | $0 | $2,334,922 | $0 | $2,334,922 | | Other assets | $0 | $18,448 | $0 | $18,448 | | Total | $0 | $2,353,370 | $0 | $2,353,370 | Assets Measured at Fair Value on a Nonrecurring Basis (September 30, 2020) (Dollars in thousands) | Asset | Level 1 | Level 2 | Level 3 | Total Fair Value | | :------------------ | :------ | :------ | :------ | :--------------- | | Other investments | $0 | $0 | $10,436 | $10,436 | | Other real estate owned | $0 | $0 | $3,000 | $3,000 | | Loans held for sale | $0 | $152,453 | $0 | $152,453 | | Total | $0 | $152,453 | $13,436 | $165,889 | [14. Derivative Financial Instruments](index=51&type=section&id=14.%20DERIVATIVE%20FINANCIAL%20INSTRUMENTS) This section provides fair value disclosures for derivative instruments, including interest rate products, risk participation agreements, and forward sale commitments - In April 2020, the Company terminated three interest rate derivatives designated as cash flow hedges for a **net gain of $1.3 million**, which will be reclassified into earnings over the original contract term[203](index=203&type=chunk) - The Company has swap guarantees with a fair value of **$12.2 million** at September 30, 2020, for customer interest rate swap transactions with third-party financial institutions, with an initial notional aggregate amount of approximately **$1.1 billion**[205](index=205&type=chunk) Fair Values of Derivative Instruments (September 30, 2020) (Dollars in thousands) | Instrument | Notional | Balance Sheet Location | Derivatives (Fair Value) | | :------------------------------------------ | :------- | :--------------------- | :----------------------- | | Interest rate products (asset) | $65,068 | Other assets | $6,339 | | Interest rate products (liability) | $65,068 | Other liabilities | $(7,067) | | Risk participation agreements | $4,410 | Other liabilities | $(12) | | Interest rate lock commitments with customers (asset) | $308,807 | Other assets | $11,606 | | Interest rate lock commitments with customers (liability) | $22,134 | Other liabilities | $(174) | | Forward sale commitments (asset) | $56,290 | Other assets | $503 | | Forward sale commitments (liability) | $245,224 | Other liabilities | $(1,097) | | Financial derivatives related to sales of certain Visa Class B shares | $113,177 | Other liabilities | $(25,205) | | Total derivatives | $880,178 | | $(15,107) | [15. Segment Information](index=54&type=section&id=15.%20SEGMENT%20INFORMATION) This section outlines the company's three operating segments: WSFS Bank, Cash Connect®, and Wealth Management, and their respective income before taxes - The Company operates through three segments: **WSFS Bank**, **Cash Connect®**, and **Wealth Management**, with performance evaluated based on pretax net income[211](index=211&type=chunk) - WSFS Bank segment provides financial products to commercial and retail customers, including commercial real estate lending and other banking services[211](index=211&type=chunk) - Cash Connect® provides ATM vault cash, smart safe, and other cash logistics services nationwide, managing over **$1.4 billion in total cash**[212](index=212&type=chunk) - Wealth Management segment offers planning, advisory, investment management, and trust services to individual, corporate, and institutional clients[212](index=212&type=chunk) Income Before Taxes by Segment (Nine Months Ended September 30) (Dollars in thousands) | Segment | 2020 | 2019 | | :-------------- | :----- | :------ | | WSFS Bank | $47,026 | $108,890 | | Cash Connect® | $7,073 | $4,981 | | Wealth Management | $13,661 | $20,876 | | Total | $67,760 | $134,747 | [16. Commitments and Contingencies](index=57&type=section&id=16.%20COMMITMENTS%20AND%20CONTINGENCIES) This section discusses the company's commitments and contingencies, including residential mortgage loan sales and the allowance for unfunded lending commitments - The Company typically sells newly originated residential mortgage loans in the secondary market, retaining servicing rights periodically or selling with servicing released on a nonrecourse basis, except for standard representations and warranties[218](index=218&type=chunk) - The allowance for credit losses for unfunded lending commitments was **$8.6 million** at September 30, 2020, an increase from **$1.5 million** at December 31, 2019, primarily due to the CECL methodology adoption[220](index=220&type=chunk) [17. Change in Accumulated Other Comprehensive Income](index=58&type=section&id=17.%20CHANGE%20IN%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20INCOME) This section details the changes in accumulated other comprehensive income, including reclassifications to the Consolidated Statements of Income - Total reclassifications from accumulated other comprehensive income to the Consolidated Statements of Income were **$(2.76) million** for the three months and **$(4.81) million** for the nine months ended September 30, 2020[225](index=225&type=chunk)[226](index=226&type=chunk) Accumulated Other Comprehensive Income (September 30, 2020) (Dollars in thousands) | Component | Balance, June 30, 2020 | Net current-period other comprehensive loss | Balance, September 30, 2020 | | :------------------------------------------------ | :--------------------- | :---------------------------------------- | :-------------------------- | | Net change in investment securities available-for-sale | $74,689 | $(5,999) | $68,690 | | Net change in investment securities held-to-maturity | $346 | $(39) | $307 | | Net change in defined benefit plan | $(3,127) | $(25) | $(3,152) | | Net change in fair value of derivatives used for cash flow hedges | $872 | $(113) | $759 | | Net change in equity method investments | $0 | $(9) | $(9) | | Total | $72,780 | $(6,185) | $66,595 | [18. Related Party Transactions](index=61&type=section&id=18.%20RELATED%20PARTY%20TRANSACTIONS) This section provides information on outstanding balances of loans to and deposits from related parties - Outstanding balances of loans to related parties were **$0.2 million** at September 30, 2020, down from **$1.0 million** at December 31, 2019[229](index=229&type=chunk) - Total deposits from related parties increased to **$9.2 million** at September 30, 2020, from **$4.9 million** at December 31, 2019[229](index=229&type=chunk) [19. Legal and Other Proceedings](index=61&type=section&id=19.%20LEGAL%20AND%20OTHER%20PROCEEDINGS) This section outlines ongoing legal proceedings, including recovery efforts related to a settlement and defense against a complaint - The Company is pursuing recovery of remaining amounts related to the Universitas settlement, including the settlement payment, legal fees, and related costs[232](index=232&type=chunk) - WSFS Bank is vigorously defending itself against a complaint filed by Nature's Healing Trust (NHT) alleging failure to provide timely notice concerning the possible lapse of two life settlement policies[233](index=233&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=61&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the company's financial condition, capital, liquidity, nonperforming assets, interest rate sensitivity, and results of operations, highlighting COVID-19 impacts [Overview](index=62&type=section&id=OVERVIEW) This section provides an overview of WSFS Financial Corporation, its business segments, and the significant impact of the COVID-19 pandemic - WSFS Financial Corporation is a savings and loan holding company, with WSFS Bank being the largest bank and trust company headquartered in the Delaware Valley, operating for over **188 years**[236](index=236&type=chunk) - The Company's business segments include banking (commercial and consumer lending, retail deposits), Cash Connect® (ATM vault cash, smart safe, cash logistics), and Wealth Management (advisory, investment, trust services)[238](index=238&type=chunk)[239](index=239&type=chunk) - The COVID-19 pandemic led to a **$154.1 million increase in provision for credit losses** for the nine months ended September 30, 2020, due to acute deterioration in economic forecasts and portfolio credit migration[240](index=240&type=chunk) - WSFS provided nearly **$1.0 billion in PPP loans** to over **5,400 customers** and recorded **$2.4 million in PPP-related costs** for the nine months ended September 30, 2020[240](index=240&type=chunk) - Net realized gains of **$22.1 million** were recorded from the sale of Visa Class B shares during the nine months ended September 30, 2020[240](index=240&type=chunk) [Financial Condition, Capital Resources and Liquidity](index=64&type=section&id=FINANCIAL%20CONDITION%2C%20CAPITAL%20RESOURCES%20AND%20LIQUIDITY) This section analyzes the company's financial condition, capital resources, and liquidity, including asset and liability changes and regulatory capital ratios - Total assets increased by **$1.6 billion** to **$13.8 billion** at September 30, 2020, driven by increases in net loans (including **$954.2 million from PPP loans**), cash and cash equivalents, and available-for-sale investment securities[242](index=242&type=chunk) - Total liabilities increased by **$1.6 billion** to **$12.0 billion**, primarily due to a **$1.8 billion increase in total deposits**, reflecting elevated customer funding from PPP loans and government stimulus[243](index=243&type=chunk) - The Company temporarily suspended share repurchases through Q3 2020 due to COVID-19 but approved resumption in Q4 2020, having completed a **$38.7 million repurchase program** in Q1 2020[244](index=244&type=chunk) - Cash, cash equivalents, and restricted cash increased by **$501.2 million** to **$1.1 billion** at September 30, 2020, with cash provided by financing activities totaling **$1.5 billion**, primarily from increased deposits[254](index=254&type=chunk) Regulatory Capital Ratios (September 30, 2020) | Capital Ratio | Wilmington Savings Fund Society, FSB | WSFS Financial Corporation | | :------------------------------------ | :--------------------------------- | :------------------------- | | Total Capital (to Risk-Weighted Assets) | 14.50% | 14.47% | | Tier 1 Capital (to Risk-Weighted Assets) | 13.24% | 13.21% | | Common Equity Tier 1 Capital (to Risk-Weighted Assets) | 13.24% | 12.57% | | Tier 1 Leverage Capital | 10.31% | 10.30% | [Nonperforming Assets](index=67&type=section&id=NONPERFORMING%20ASSETS) This section details nonperforming assets, past due loans, and the impact of COVID-19 loan modifications on the portfolio - Nonperforming assets increased by **$4.7 million** between December 31, 2019, and September 30, 2020, primarily due to one commercial relationship moving to non-accrual status[257](index=257&type=chunk) Nonperforming Assets and Past Due Loans (Dollars in thousands) | Category | September 30, 2020 | December 31, 2019 | | :-------------------------- | :----------------- | :------------------ | | Total nonaccruing loans | $25,835 | $22,922 | | Other real estate owned | $3,000 | $2,605 | | Restructured loans (accruing only) | $15,670 | $14,281 | | Total nonperforming assets | $44,505 | $39,808 | | Total past due loans | $11,886 | $16,150 | | Ratio of allowance for credit losses to total loans and leases | 2.47% | 0.56% | | Ratio of nonperforming assets to total assets | 0.32% | 0.32% | COVID-19 Loan Modifications by Portfolio Segment (Dollars in thousands) | Portfolio Segment | October 15, 2020 Loan Balances | September 30, 2020 Loan Balances | June 30, 2020 Loan Balances | | :-------------------------- | :----------------------------- | :----------------------------- | :-------------------------- | | Commercial and industrial | $94,278 | $139,856 | $675,724 | | Owner-occupied commercial | $9,764 | $10,643 | $380,432 | | Commercial mortgages | $53,005 | $53,122 | $700,889 | | Construction | $1,744 | $1,748 | $109,861 | | Residential | $34,954 | $34,985 | $86,581 | | Consumer | $38,304 | $42,406 | $65,162 | | Total | $232,049 | $282,760 | $2,018,649 | [Interest Rate Sensitivity](index=70&type=section&id=INTEREST%20RATE%20SENSITIVITY) This section discusses the company's management of interest rate risk and the estimated impact of rate changes on net interest margin and economic value of equity - The Company manages interest rate risk primarily through its asset/liability structure, aiming to minimize adverse impacts on net interest income and capital[261](index=261&type=chunk) - At September 30, 2020, interest-earning assets exceeded interest-bearing liabilities maturing or repricing within one year by **$1.0 billion**, with an interest-sensitive assets to liabilities ratio of **118.92%**[262](index=262&type=chunk) Estimated Impact of Immediate Changes in Interest Rates on Net Interest Margin (NIM) and Economic Value of Equity (EVE) (September 30, 2020) | % Change in Interest Rate (Basis Points) | % Change in Net Interest Margin | Economic Value of Equity | | :--------------------------------------- | :------------------------------ | :----------------------- | | +300 | 13.9% | 18.16% | | +200 | 9.2% | 17.74% | | +100 | 4.4% | 17.05% | | +50 | 2.1% | 16.57% | | +25 | 1.0% | 16.30% | | — | —% | 16.02% | | -25 | (0.7)% | 15.68% | | -50 | (1.1)% | 15.17% | | -100 | (1.3)% | 14.77% | [Results of Operations](index=71&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's net income, net interest income, net interest margin, and provision for credit losses for the periods presented - Net interest income decreased by **$7.8 million** for the three months ended September 30, 2020, primarily due to a lower interest rate environment, partially offset by **$6.4 million from PPP loans**[272](index=272&type=chunk) - Net interest margin was **3.66%** for Q3 2020, a **72 basis point decrease YoY**, mainly due to lower interest rates, reduced purchase accounting accretion, and increased short-term liquidity[272](index=272&type=chunk) - Provision for credit losses increased by **$130.1 million** for the nine months ended September 30, 2020, to **$154.1 million**, primarily due to the COVID-19 pandemic's impact on CECL models and loan migration[276](index=276&type=chunk) - The allowance for credit losses increased to **$232.7 million** at September 30, 2020, from **$47.6 million** at December 31, 2019, with **$35.9 million from CECL adoption** and **$154.1 million from additional provision**[277](index=277&type=chunk) Net Income Attributable to WSFS (Dollars in millions) | Period | 2020 | 2019 | | :-------------------------- | :--- | :--- | | Three months ended Sep 30 | $51.1 | $53.9 | | Nine months ended Sep 30 | $55.0 | $103.1 | [Noninterest Income and Noninterest Expense](index=75&type=section&id=NONINTEREST%20INCOME%20AND%20NONINTEREST%20EXPENSE) This section analyzes changes in noninterest income and noninterest expense, highlighting key drivers such as equity investments, interchange fees, and restructuring costs - Noninterest income decreased by **$13.2 million** for the three months ended September 30, 2020, primarily due to lower unrealized gains on equity investments and reduced interchange fees (Durbin amendment), partially offset by increased mortgage banking activities and trust services revenue[280](index=280&type=chunk) - Noninterest expense decreased by **$16.0 million** for the three months ended September 30, 2020, mainly due to lower corporate development and restructuring costs related to the Beneficial acquisition, partially offset by a **$2.3 million loss on early extinguishment of debt**[283](index=283&type=chunk) - For the nine months ended September 30, 2020, noninterest income increased by **$8.1 million**, driven by mortgage banking activities, securities gains, and investment management/fiduciary revenue, despite lower interchange fees and deposit service charges[281](index=281&type=chunk) - Noninterest expense decreased by **$39.5 million** for the nine months ended September 30, 2020, primarily due to lower corporate development and restructuring costs, partially offset by higher employee-related costs, professional fees, credit-related costs, and a **$3.0 million contribution to the WSFS Community Foundation**[284](index=284&type=chunk) [Income Taxes and Contractual Obligations](index=76&type=section&id=INCOME%20TAXES%20AND%20CONTRACTUAL%20OBLIGATIONS) This section discusses the effective tax rate, its drivers, and the stability of contractual obligations for the periods presented - The effective tax rate was **23.0%** for the three months and **20.9%** for the nine months ended September 30, 2020, compared to **22.9%** and **23.9%** for the same periods in 2019[287](index=287&type=chunk) - The decrease in the effective tax rate for the nine months was due to the absence of non-deductible acquisition costs (Beneficial acquisition in 2019) and a **$1.7 million tax benefit** from NOL carryback claims under the CARES Act[287](index=287&type=chunk) - Contractual obligations at September 30, 2020, did not significantly change from December 31, 2019[290](index=290&type=chunk) [Reconciliation of Non-GAAP Measure to GAAP Measure and Critical Accounting Estimates](index=77&type=section&id=RECONCILIATION%20OF%20NON-GAAP%20MEASURE%20TO%20GAAP%20MEASURE%20AND%20CRITICAL%20ACCOUNTING%20ESTIMATES) This section reconciles tangible book value per share and discusses critical accounting estimates, noting their consistency with prior periods - Critical accounting estimates, including those for allowance for credit losses, deferred taxes, fair value measurements, goodwill, and other intangible assets, did not significantly change from prior periods, but actual conditions may differ from estimates[294](index=294&type=chunk)[295](index=295&type=chunk) Tangible Book Value Per Share Reconciliation (Dollars and share amounts in thousands) | Metric | September 30, 2020 | December 31, 2019 | | :------------------------------------ | :----------------- | :------------------ | | Stockholders' equity of WSFS | $1,863,499 | $1,850,306 | | Less: Goodwill and other intangible assets | $559,806 | $568,745 | | Tangible common equity | $1,303,693 | $1,281,561 | | Shares of common stock outstanding | 50,673 | 51,567 | | Book value per share of common stock | $36.77 | $35.88 | | Tangible book value per share of common stock | $25.73 | $24.85 | [Recent Regulatory Developments](index=78&type=section&id=RECENT%20REGULATORY%20DEVELOPMENTS) This section discusses recent regulatory developments, including the CARES Act, PPP loans, loan modifications, and the transition away from LIBOR - The CARES Act led to the Paycheck Protection Program (PPP), through which WSFS Bank provided nearly **$1.0 billion in loans** to over **5,400 customers**[298](index=298&type=chunk)[299](index=299&type=chunk) - The Company modified approximately **$2.1 billion of loans and leases** under customer relief programs due to COVID-19, which are generally not required to be reported as troubled debt restructurings[300](index=300&type=chunk) - The CARES Act allowed the Company to revalue NOL carryback claims at a **35% tax rate**, resulting in an additional tax benefit[301](index=301&type=chunk) - The Company is actively monitoring and managing the transition away from LIBOR to alternative reference rates like SOFR, with approximately **$1.7 billion in LIBOR-indexed loans** and **$1.0 billion in derivatives** maturing after 2021[303](index=303&type=chunk)[304](index=304&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=79&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section incorporates market risk disclosures by reference from the 'Interest Rate Sensitivity' section of Management's Discussion and Analysis - Information on quantitative and qualitative disclosures about market risk is incorporated by reference from the 'Interest Rate Sensitivity' section in Item 2 Part I of this report[305](index=305&type=chunk) [Item 4. Controls and Procedures](index=79&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures and reports no material changes in internal control over financial reporting - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were **effective** as of September 30, 2020[309](index=309&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended September 30, 2020[309](index=309&type=chunk) [PART II. Other Information](index=79&type=section&id=PART%20II.%20Other%20Information) This part includes legal proceedings, risk factors, equity security sales, and other required disclosures [Item 1. Legal Proceedings](index=79&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 19 of the Consolidated Financial Statements for information regarding legal proceedings - Information on legal proceedings is incorporated by reference from Note 19 to the unaudited Consolidated Financial Statements[308](index=308&type=chunk) [Item 1A. Risk Factors](index=80&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, emphasizing the adverse impact of the COVID-19 pandemic on the company's business, financial condition, and operations - The COVID-19 pandemic and mitigation actions could adversely affect the Company's business, financial condition, and results of operations[311](index=311&type=chunk) - Key impacts of COVID-19 include impaired borrower repayment ability, reduced collateral value, increased allowance for credit losses (especially with CECL adoption), adverse effects on liquidity and fee-based revenues, and increased compliance and operational risks[313](index=313&type=chunk)[314](index=314&type=chunk) - A substantial portion of loans currently in forbearance may need to be classified as problem loans when forbearance periods end[316](index=316&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=81&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's share repurchase programs, including completion, new approvals, and temporary suspension/resumption due to COVID-19 - The Company completed its share repurchase program (approved in Q4 2018) in Q1 2020[319](index=319&type=chunk) - A new share repurchase program authorizing **15% of outstanding shares** was approved in Q1 2020 but was temporarily suspended due to COVID-19[319](index=319&type=chunk) - The Board of Directors approved the resumption of share repurchases in Q4 2020, consistent with the intent to return a minimum of **25% of annual net income** to stockholders[320](index=320&type=chunk) [Item 3. Defaults upon Senior Securities](index=82&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) This section states that there were no defaults upon senior securities [Item 4. Mine Safety Disclosures](index=82&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the Company [Item 5. Other Information](index=82&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report [Item 6. Exhibits](index=82&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including certifications and XBRL documents - The report includes certifications from the CEO and CFO (Exhibits 31.1, 31.2, 32) and XBRL Instance, Schema, Calculation, Labels, Presentation, and Definition Linkbase Documents (Exhibits 101.INS to 101.DEF)[325](index=325&type=chunk) [Signatures](index=83&type=section&id=Signatures) This section indicates the report was signed by the Chairman, President, CEO, and Executive Vice President, CFO on November 4, 2020 - The report was signed on **November 4, 2020**, by Rodger Levenson, Chairman, President and Chief Executive Officer, and Dominic C. Canuso, Executive Vice President and Chief Financial Officer[331](index=331&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-35638 WSFS FINANCIAL CORPORATION (Exact name of registrant as specified in its charter) Delaware 22-2866913 (State or other juris ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-35638 WSFS FINANCIAL CORPORATION (Exact name of registrant as specified in its charter) Delaware 22-2866913 (State or other juri ...