12. SEGMENT INFORMATION

In accordance with FASB ASC 280, Segment Reporting (ASC 280) we discuss our business in three segments. 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 ordinary 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 unaudited Consolidated Financial Statements. We have three segments: WSFS Bank, Cash Connect, and Wealth Management.

The WSFS Bank segment provides financial products to commercial and retail customers through its 56 offices located in Delaware (45), Pennsylvania (9) Virginia (1) and Nevada (1). Retail and Commercial Banking, Commercial Real Estate Lending and other banking business units are operating departments of WSFS. 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. Because of these and other reasons, these departments are not considered discrete segments and are appropriately aggregated within the WSFS Bank segment in accordance with ASC 280.

Cash Connect provides turnkey ATM services through strategic partnerships with several of the largest networks, manufacturers and service providers in the ATM industry. 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 fiduciary, investment management, credit and deposit products to clients through four business lines. WSFS Wealth Investments provides insurance and brokerage products primarily to our retail banking clients. Cypress Capital Management, LLC is a registered investment advisor with approximately $655 million in assets under management. Cypress’ primary market segment is high net worth individuals, offering a ‘balanced’ investment style focused on preservation of capital and providing for current income. Christiana Trust, with $8.86 billion in assets under management and administration, provides fiduciary and investment services to personal trust clients, and trustee, agency, bankruptcy, custodial and commercial domicile services to corporate and institutional clients. WSFS Private Banking serves high net worth clients by delivering credit and deposit products and partnering with other business units to deliver investment management and fiduciary products and services.

Segment information for the three months ended June 30, 2015 and 2014 follows:

For the three months ended June 30, 2015:

(In Thousands)

WSFS Bank

Cash
Connect

Wealth
Management

Total

Statement of Operations

External customer revenues:

Interest income

41,043

—

2,012

43,055

Noninterest income

9,482

7,068

5,908

22,458

Total external customer revenues

50,525

7,068

7,920

65,513

Inter-segment revenues:

Interest income

876

—

1,638

2,514

Noninterest income

1,998

214

2,241

Total inter-segment revenues

2,874

214

1,667

4,755

Total revenue

53,399

7,282

9,587

70,268

External customer expenses:

Interest expense

3,822

—

143

3,965

Noninterest expenses

29,921

4,350

4,383

38,654

Provision for loan losses

3,610

—

163

3,773

Total external customer expenses

37,353

4,350

4,689

46,392

Inter-segment expenses:

Interest expense

1,638

389

487

2,514

Noninterest expenses

243

644

1,354

2,241

Total inter-segment expenses

1,881

1,033

1,841

4,755

Total expenses

39,234

5,383

6,530

51,147

Income before taxes

14,165

1,899

3,057

19,121

Income tax provision

6,887

Consolidated net income

12,234

Capital expenditures

299

2,570

2,882

As of June 30, 2015:

Statement of Condition

Cash and cash equivalents

89,298

442,229

2,164

533,691

Goodwill

43,853

—

5,134

48,987

Other segment assets

4,304,300

—

190,505

4,494,805

Total segment assets

4,437,451

442,229

197,803

5,077,483

For the three months ended June 30, 2014:


(In Thousands)	WSFS Bank			Cash Connect		Wealth Management		Total
Statement of Operations
External customer revenues:
Interest income	$	37,480		$	—	$	1,933	$	39,413
Noninterest income		8,778			6,320		4,525		19,623

Total external customer revenues		46,258			6,320		6,458		59,036

Inter-segment revenues:
Interest income		834			—		1,342		2,176
Noninterest income		1,711			204		27		1,942

Total inter-segment revenues		2,545			204		1,369		4,118

Total revenue		48,803			6,524		7,827		63,154

External customer expenses:
Interest expense		3,831			—		105		3,936
Noninterest expenses		28,316			3,882		3,026		35,224
Provision for loan losses		(201	)		—		251		50

Total external customer expenses		31,946			3,882		3,382		39,210

Inter-segment expenses:
Interest expense		1,342			328		506		2,176
Noninterest expenses		231			593		1,118		1,942

Total inter-segment expenses		1,573			921		1,624		4,118

Total expenses		33,519			4,803		5,006		43,328

Income before taxes	$	15,284		$	1,721	$	2,821	$	19,826
Income tax provision									7,101

Consolidated net income									12,725

Capital expenditures	$	815		$	33	$	—	$	848

As of December 31, 2014:
Statement of Condition
Cash and cash equivalents	$	73,395		$	431,527	$	3,117	$	508,039
Goodwill		43,517			—		5,134		48,651
Other segment assets		4,107,212			2,006		187,412		4,296,630

Total segment assets	$	4,224,124		$	433,533	$	195,663	$	4,853,320

Segment information for the six months ended June 30, 2015 and 2014 follows:

For the six months ended June 30, 2015:

(In Thousands)

WSFS Bank

Cash
Connect

Wealth
Management

Total

Statement of Operations

External customer revenues:

Interest income

81,866

—

4,040

85,906

Noninterest income

18,671

13,707

11,175

43,553

Total external customer revenues

100,537

13,707

15,215

129,459

Inter-segment revenues:

Interest income

1,747

—

3,085

4,832

Noninterest income

3,782

382

4,211

Total inter-segment revenues

5,529

382

3,132

9,043

Total revenue

106,066

14,089

18,347

138,502

External customer expenses:

Interest expense

7,734

—

265

7,999

Noninterest expenses

61,000

8,525

8,042

77,567

Provision for loan losses

4,343

—

216

4,559

Total external customer expenses

73,077

8,525

8,523

90,125

Inter-segment expenses:

Interest expense

3,085

762

985

4,832

Noninterest expenses

429

1,258

2,524

4,211

Total inter-segment expenses

3,514

2,020

3,509

9,043

Total expenses

76,591

10,545

12,032

99,168

Income before taxes

29,475

3,544

6,315

39,334

Income tax Provision

14,211

Consolidated net income

25,123

Capital expenditures

1,116

2,570

3,699

As of June 30, 2015:

Statement of Condition

Cash and cash equivalents

89,298

442,229

2,164

533,691

Goodwill

43,853

—

5,134

48,987

Other segment assets

4,304,300

—

190,505

4,494,805

Total segment assets

4,437,451

442,229

197,803

5,077,483

For the six months ended June 30, 2014:


(In Thousands)	WSFS Bank		Cash Connect		Wealth Management		Total
Statement of Operations
External customer revenues:
Interest income	$	73,401	$	—	$	3,797	$	77,198
Noninterest income		17,173		12,334		8,480		37,987

Total external customer revenues		90,574		12,334		12,277		115,185

Inter-segment revenues:
Interest income		1,665		—		2,763		4,428
Noninterest income		3,449		397		53		3,899

Total inter-segment revenues		5,114		397		2,816		8,327

Total revenue		95,688		12,731		15,093		123,512

External customer expenses:
Interest expense		7,461		—		216		7,677
Noninterest expenses		55,634		7,432		6,042		69,108
Provision for loan losses		2,122		—		558		2,680

Total external customer expenses		65,217		7,432		6,816		79,465

Inter-segment expenses:
Interest expense		2,763		659		1,006		4,428
Noninterest expenses		450		1,179		2,270		3,899

Total inter-segment expenses		3,213		1,838		3,276		8,327

Total expenses		68,430		9,270		10,092		87,792

Income before taxes	$	27,258	$	3,461	$	5,001	$	35,720
Income tax Provision								6,084

Consolidated net income							$	29,636

Capital expenditures	$	1,293	$	89	$	3	$	1,385

As of December 31, 2014:
Statement of Condition
Cash and cash equivalents	$	73,395	$	431,527	$	3,117	$	508,039
Goodwill		43,517		—		5,134		48,651
Other segment assets		4,107,212		2,006		187,412		4,296,630

Total segment assets	$	4,224,124	$	433,533	$	195,663	$	4,853,320