Segment Information

12 Months Ended

Dec. 31, 2019

22. SEGMENT INFORMATION

As defined in ASC 280, Segment Reporting, an operating segment is a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the enterprise’s chief operating decision makers to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. We evaluate performance based on pretax net income relative to resources used, and allocate resources based on these results. The accounting policies applicable to our segments are those that apply to our preparation of the accompanying Consolidated Financial Statements. Based on these criteria, we have identified three segments: WSFS Bank, Cash Connect^®, and Wealth Management.

The WSFS Bank segment provides loans and leases and other financial products to commercial and retail customers. Retail and Commercial Banking, Commercial Real Estate Lending and other banking business units are operating departments of WSFS Bank. These departments share the same regulator, the same market, many of the same customers and provide similar products and services through the general infrastructure of the Bank. Accordingly, these departments are not considered discrete segments and are appropriately aggregated within the WSFS Bank segment in accordance with ASC 280.

Our Cash Connect^® segment provides ATM vault cash, smart safe and other cash logistics services in the U.S. through strategic partnerships with several of the largest networks, manufacturers and service providers in the ATM industry. Cash Connect^® services non-bank and WSFS-branded ATMs and retail safes nationwide. The balance sheet category Cash in non-owned ATMs includes cash from which fee income is earned through bailment arrangements with customers of Cash Connect^®.

The Wealth Management segment provides a broad array of planning and advisory services, investment management, trust services, and credit and deposit products to individual, corporate, and institutional clients through multiple integrated businesses. Powdermill is a multi-family office specializing in providing independent solutions to high-net-worth individuals, families and corporate executives through a coordinated, centralized approach. West Capital, a registered investment adviser, is a fee-only wealth management firm operating under a multi-family office philosophy to provide customized solutions to institutions and high-net-worth individuals. Cypress, a registered investment adviser is a fee-only wealth management firm managing a "balanced" investment style portfolio focused on preservation of capital and generating current income. The trust division of WSFS Bank (doing business as WSFS Institutional Services) provides personal trust and fiduciary services, as well as trustee, agency, bankruptcy administration, custodial and commercial domicile services to corporate and institutional clients. WSFS Wealth Investments provides financial advisory services along with insurance and brokerage products. WSFS Wealth Client Management serves high-net-worth clients by delivering credit and deposit products and partnering with other wealth management units to provide comprehensive solutions to clients.

The following tables show segment results for the years ended December 31, 2019, 2018, and 2017:


	Year Ended December 31, 2019
(Dollars in thousands)	WSFS Bank		Cash Connect^®		Wealth Management		Total
Statements of Income
External customer revenues:
Interest income	$	510,492	$	—	$	10,600	$	521,092
Noninterest income	92,898		51,143		44,068		188,109
Total external customer revenues	603,390		51,143		54,668		709,201
Inter-segment revenues:
Interest income	12,380		—		17,081		29,461
Noninterest income	9,654		890		902		11,446
Total inter-segment revenues	22,034		890		17,983		40,907
Total revenue	625,424		52,033		72,651		750,108
External customer expenses:
Interest expense	71,158		—		4,986		76,144
Noninterest expenses	348,351		35,377		29,399		413,127
Provision for loan and lease losses	24,884		—		676		25,560
Total external customer expenses	444,393		35,377		35,061		514,831
Inter-segment expenses
Interest expense	17,081		7,808		4,572		29,461
Noninterest expenses	1,792		2,754		6,900		11,446
Total inter-segment expenses	18,873		10,562		11,472		40,907
Total expenses	463,266		45,939		46,533		555,738
Income before taxes	$	162,158	$	6,094	$	26,118	$	194,370
Income tax provision							46,452
Consolidated net income							147,918
Net loss attributable to noncontrolling interest							(891)
Net income attributable to WSFS							$	148,809


	Year Ended December 31, 2018
(Dollars in thousands)	WSFS Bank		Cash Connect^®		Wealth Management		Total
Statements of Income
External customer revenues:
Interest income	$	282,846	$	—	$	10,127	$	292,973
Noninterest income	70,894		50,679		40,968		162,541
Total external customer revenues	353,740		50,679		51,095		455,514
Inter-segment revenues:
Interest income	14,722		—		11,850		26,572
Noninterest income	8,793		774		145		9,712
Total inter-segment revenues	23,515		774		11,995		36,284
Total revenue	377,255		51,453		63,090		491,798
External customer expenses:
Interest expense	43,671		—		2,828		46,499
Noninterest expenses	172,254		32,378		20,415		225,047
Provision for loan and lease losses	12,934		—		236		13,170
Total external customer expenses	228,859		32,378		23,479		284,716
Inter-segment expenses
Interest expense	11,850		10,417		4,305		26,572
Noninterest expenses	919		2,603		6,190		9,712
Total inter-segment expenses	12,769		13,020		10,495		36,284
Total expenses	241,628		45,398		33,974		321,000
Income before taxes	$	135,627	$	6,055	$	29,116	$	170,798
Income tax provision							36,055
Consolidated net income							134,743
Net loss attributable to noncontrolling interest							—
Net income attributable to WSFS							$	134,743


	Year Ended December 31, 2017
(Dollars in thousands)	WSFS Bank		Cash Connect^®		Wealth Management		Total
Statements of Income
External customer revenues:
Interest income	$	245,932	$	—	$	8,794	$	254,726
Noninterest income	45,749		42,641		36,254		124,644
Total external customer revenues	291,681		42,641		45,048		379,370
Inter-segment revenues:
Interest income	9,567		—		9,012		18,579
Noninterest income	7,651		810		146		8,607
Total inter-segment revenues	17,218		810		9,158		27,186
Total revenue	308,899		43,451		54,206		406,556
External customer expenses:
Interest expense	32,249		—		1,206		33,455
Noninterest expenses	158,942		26,654		40,865		226,461
Provision for loan and lease losses	10,527		—		437		10,964
Total external customer expenses	201,718		26,654		42,508		270,880
Inter-segment expenses
Interest expense	9,012		6,812		2,755		18,579
Noninterest expenses	956		2,603		5,048		8,607
Total inter-segment expenses	9,968		9,415		7,803		27,186
Total expenses	211,686		36,069		50,311		298,066
Income before taxes	$	97,213	$	7,382	$	3,895	$	108,490
Income tax provision							58,246
Consolidated net income							50,244
Net loss attributable to noncontrolling interest							—
Net income attributable to WSFS							$	50,244

The following table shows significant components of segment net assets as of December 31, 2019 and 2018:


	December 31,
	2019														2018
(Dollars in thousands)	WSFS Bank		Cash Connect^®		Wealth Management		Total		WSFS Bank		Cash Connect^®		Wealth Management		Total
Cash and cash equivalents	$	202,792	$	357,494	$	11,466	$	571,752	$	115,147	$	491,863	$	13,747	$	620,757
Goodwill	452,629		—		20,199		472,828		145,808		—		20,199		166,007
Other segment assets	10,982,681		6,555		222,486		11,211,722		6,225,820		7,743		228,543		6,462,106
Total segment assets	$	11,638,102	$	364,049	$	254,151	$	12,256,302	$	6,486,775	$	499,606	$	262,489	$	7,248,870
Capital expenditures	$	11,806	$	2,120	$	272	$	14,198	$	4,779	$	375	$	344	$	5,498