Business Combinations

3 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

Business Combinations

2. BUSINESS COMBINATIONS

Alliance Bancorp, Inc. of Pennsylvania

On March 3, 2015, we announced the signing of a definitive agreement and plan of reorganization whereby we would acquire Alliance Bancorp Inc. of Pennsylvania and its wholly owned bank subsidiary, Alliance Bank. Upon the closing of the transaction, Alliance Bancorp, Inc. of Pennsylvania will merge into the Company and Alliance Bank will merge into WSFS Bank. Alliance is a locally-managed institution with eight branch locations headquartered in Broomall, PA. It reported approximately $421 million in assets, $310 million in loans and $345 million in deposits as of December 31, 2014. We expect this acquisition to build our market share, expand our customer base and enhance our fee income. The acquisition is subject to approval by the shareholders of Alliance Bancorp, Inc. of Pennsylvania, regulatory approval and other customary closing conditions.

First Wyoming Financial Corporation

On September 5, 2014, the Company completed the merger of First Wyoming Financial Corporation (FNBW) into the Company and the merger of FNBW’s wholly-owned subsidiary, The First National Bank of Wyoming (First Wyoming) into the Bank. In accordance with the terms of the Agreement and Plan of Merger, dated November 25, 2013, holders of shares of FNBW common stock received, in aggregate, $32.0 million in cash and 452,661 shares of WSFS common stock. The transaction was valued at $64.9 million based on WSFS’ September 5, 2014 closing share price of $72.70 as quoted on NASDAQ. The results of the combined entity’s operations are included in our Consolidated Financial Statements since the date of the acquisition.

The acquisition of FNBW was accounted for as a business combination using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed and consideration paid were recorded at their estimated fair values as of the acquisition date. The fair values are preliminary estimates and are subject to adjustment during the one year measurement period after the acquisition. While they are not expected to be materially different than those shown, any adjustments to the estimates will be reflected, retroactively, as of the date of the acquisition. The excess of consideration paid over the preliminary fair value of net assets acquired was recorded as goodwill in the amount of $16.5 million, which will not be amortizable and is not deductible for tax purposes. The Company allocated the total balance of goodwill to its WSFS Bank segment. The Company also recorded $3.2 million in core deposit intangibles which are being amortized over ten years using an accelerated depreciation method. For additional information regarding this business combination, please see Note 2 in our Annual Report on Form 10-K for the year ended December 31, 2014.

In connection with the merger, the consideration paid and the fair value of identifiable assets acquired and liabilities assumed, as of the date of acquisition, are summarized in the following table:

(In Thousands)	Fair Value
Consideration Paid:
Common shares issued (452,661)	$	32,908
Cash paid to FNBW stockholders		32,028
Value of consideration		64,936
Assets acquired:
Cash and due from banks		40,605
Investment securities		41,822
Loans		175,894
Premises and equipment		1,644
Deferred income taxes		3,139
Bank owned life insurance		12,576
Core deposit intangible		3,240
Other Real Estate Owned		1,593
Other assets		4,766
Total assets		285,279
Liabilities assumed:
Deposits		228,844
FHLB advances		5,052
Other liabilities		2,990
Total liabilities		236,886
Net assets acquired:		48,393
Goodwill resulting from acquisition of FNBW:	$	16,543

The following table details the changes to goodwill:

(In Thousands)	Fair Value
Goodwill resulting from the acquisition of FNBW reported as of December 31, 2014	$	16,370
Effects of adjustments to:
Assets		173
Liabilities		—
Final purchase price		—
Adjusted goodwill resulting from the acquisition of FNBW as of March 31, 2015	$	16,543

The adjustments made to goodwill during the first quarter of 2015, reflect new or updated information that resulted from a change in the fair value of the loans acquired, bank owned life insurance and OREO properties.

Direct costs related to the acquisition were expensed as incurred. During the three months ended March 31, 2015, the Company incurred $35,000 in integration expenses, including $16,000 in equipment expense, $10,000 in salary and benefits, $3,000 in professional fees and $3,000 in data processing expense. During the three months ended March 31, 2014, the Company incurred $247,000 in integration expenses of which $237,000 were professional fees.