Business Combinations

6 Months Ended

Jun. 30, 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 and its wholly owned bank subsidiary, Alliance Bank. Upon the closing of the transaction, Alliance 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 and reported approximately $415 million in assets, $315 million in loans and $338 million in deposits as of June 30, 2015. We expect this acquisition to build our market share, expand our customer base and enhance our fee income. The acquisition has been approved by the shareholders of Alliance and is subject to 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 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 1,357,983 shares (adjusted for our 3-for-1 stock split) of WSFS common stock. The transaction was valued at $64.9 million based on WSFS’ September 5, 2014 closing share price of $24.23 (adjusted for our 3-for-1 stock split) 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. The excess of consideration paid over the preliminary fair value of net assets acquired was recorded as goodwill in the amount of $16.7 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 (1,357,983)	$	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		175,578
Premises and equipment		1,611
Deferred income taxes		3,139
Bank owned life insurance		12,576
Core deposit intangible		3,240
Other Real Estate Owned		1,593
Other assets		4,952
Total assets		285,116
Liabilities assumed:
Deposits		228,844
FHLB advances		5,052
Other liabilities		2,990
Total liabilities		236,886
Net assets acquired:		48,230
Goodwill resulting from acquisition of FNBW	$	16,706
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		336
Liabilities		—
Final purchase price		—
Adjusted goodwill resulting from the acquisition of FNBW as of June 30, 2015	$	16,706

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

Direct costs related to the acquisition were expensed as incurred. During the three months ended June 30, 2015, the Company incurred $62,000 in integration expenses related to FNBW compared to the three months ended June 30, 2014 in which the Company incurred $157,000 in integration expenses. During the six months ended June 30, 2015, the Company incurred $97,000 in integration expense, compared to $412,000 during the same time period in 2014.