Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

11. GOODWILL AND INTANGIBLE ASSETS

As of December 31, 2019, we had three reportable segments: WSFS Bank, Cash Connect^®, and Wealth Management. Our reportable segments may contain one or more reporting units depending on economic characteristics, products and customers. When we acquire a business, we assign it to a reporting unit and allocate its goodwill to that reporting unit based on its relative fair value. Should we have a significant business reorganization, we may reallocate the goodwill. See Note 22 for additional information on management reporting.

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


(Dollars in thousands)	WSFS Bank		Wealth Management		Consolidated Company
December 31, 2017	$	145,808	$	20,199	$	166,007

Goodwill adjustments	—		—		—
December 31, 2018	145,808		20,199		166,007
Goodwill from business combinations	309,486		—		309,486
Remeasurement period adjustments	(2,665)		—		(2,665)
December 31, 2019	$	452,629	$	20,199	$	472,828

During the fourth quarter of 2019, we completed a qualitative assessment and determined no impairment indicators exists as of the year-ended December 31, 2019. No impairment losses related to our goodwill were recorded in 2019 or 2018, however, there can be no assurances that impairments to our goodwill will not occur in the future periods.

Other intangible assets

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

The following table summarizes our intangible assets:


(Dollars in thousands)	Gross Intangible Assets		Accumulated Amortization		Net Intangible Assets		Amortization Period
December 31, 2019
Core deposits	$	95,711	$	(13,326)	$	82,385	10 years
Customer relationships	17,561		(7,416)		10,145		7-15 years
Non-compete agreements	221		(146)		75		5 years
Loan servicing rights⁽¹⁾	4,880		(1,568)		3,312		10-25 years
Total other intangible assets	$	118,373	$	(22,456)	$	95,917
December 31, 2018
Core deposits	$	10,658	$	(5,285)	$	5,373	10 years
Customer relationships	17,561		(5,815)		11,746		7-15 years
Non-compete agreements	221		(101)		120		5 years
Loan servicing rights	2,652		(1,301)		1,351		10-30 years
Favorable lease asset⁽²⁾	1,932		(506)		1,426		10 months-18 years
Total other intangible assets	$	33,024	$	(13,008)	$	20,016

⁽¹⁾Includes impairment losses of $0.5 million for the year ended December 31, 2019

⁽²⁾The favorable lease asset was fully amortized and written off during the year ended December 31, 2019 as a result of our adoption of ASU 2016-02 on January 1, 2019. See Note 2 for further information.

We recognized amortization expense on other intangible assets of $9.7 million, and $2.9 million and $3.0 million for the years ended December 31, 2019, 2018 and 2017, respectively.

The following presents the estimated amortization expense of intangibles:


(Dollars in thousands)	Amortization of Intangibles
2020	$	11,603
2021	11,160
2022	10,989
2023	10,870
2024	10,725
Thereafter	40,570
Total	$	95,917

Besides the impairment on loan servicing rights noted in the table above, there was no impairment of other intangible assets as of December 31, 2019 or 2018. Changing economic conditions that may adversely affect our performance and stock price could result in impairment, which could adversely affect earnings in the future.