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 55 offices located in Delaware (44), 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 $615 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 $8.75 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.

For the three months ended September 30, 2015:

(In Thousands)

WSFS Bank

Cash
Connect

Wealth
Management

Total

Statement of Operations

External customer revenues:

Interest income

42,873

—

1,984

44,857

Noninterest income

8,944

7,138

5,583

21,665

Total external customer revenues

51,817

7,138

7,567

66,522

Inter-segment revenues:

Interest income

879

—

1,697

2,576

Noninterest income

2,028

219

2,273

Total inter-segment revenues

2,907

219

1,723

4,849

Total revenue

54,724

7,357

9,290

71,371

External customer expenses:

Interest expense

3,688

—

172

3,860

Noninterest expenses

30,066

4,255

4,384

38,705

Provision for loan losses

1,345

—

108

1,453

Total external customer expenses

35,099

4,255

4,664

44,018

Inter-segment expenses:

Interest expense

1,697

394

485

2,576

Noninterest expenses

245

624

1,404

2,273

Total inter-segment expenses

1,942

1,018

1,889

4,849

Total expenses

37,041

5,273

6,553

48,867

Income before taxes

17,683

2,084

2,737

22,504

Income tax provision

8,078

Consolidated net income

14,426

Capital expenditures

3,487

1,466

4,969

As of September 30, 2015:

Statement of Condition

Cash and cash equivalents

78,209

448,594

2,234

529,037

Goodwill

43,653

—

5,134

48,787

Other segment assets

4,305,469

—

184,649

4,490,118

Total segment assets

4,427,331

448,594

192,017

5,067,942


For the three months ended September 30, 2014: (In Thousands)
	WSFS Bank		Cash Connect		Wealth Management		Total
Statement of Operations
External customer revenues:
Interest income	$	38,777	$	—	$	2,022	$	40,799
Noninterest income		9,161		6,640		4,503		20,304

Total external customer revenues		47,938		6,640		6,525		61,103

Inter-segment revenues:
Interest income		880		—		1,361		2,241
Noninterest income		1,602		204		32		1,838

Total inter-segment revenues		2,482		204		1,393		4,079

Total revenue		50,420		6,844		7,918		65,182

External customer expenses:
Interest expense		3,952		—		100		4,052
Noninterest expenses		32,033		3,993		3,137		39,163
Provision for loan losses		198		—		135		333

Total external customer expenses		36,183		3,993		3,372		43,548

Inter-segment expenses
Interest expense		1,361		360		520		2,241
Noninterest expenses		236		509		1,093		1,838

Total inter-segment expenses		1,597		869		1,613		4,079

Total expenses		37,780		4,862		4,985		47,627

Income before taxes	$	12,640	$	1,982	$	2,933	$	17,555
Income tax provision								6,142

Consolidated net income								11,413

Capital expenditures	$	914	$	67	$	—	$	981

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

For the nine months ended September 30, 2015:

(In Thousands)

WSFS Bank

Cash
Connect

Wealth
Management

Total

Statement of Operations

External customer revenues:

Interest income

124,739

—

6,024

130,763

Noninterest income

27,615

20,845

16,758

65,218

Total external customer revenues

152,354

20,845

22,782

195,981

Inter-segment revenues:

Interest income

2,626

—

4,782

7,408

Noninterest income

5,810

601

6,484

Total inter-segment revenues

8,436

601

4,855

13,892

Total revenue

160,790

21,446

27,637

209,873

External customer expenses:

Interest expense

11,422

—

437

11,859

Noninterest expenses

91,066

12,780

12,426

116,272

Provision for loan losses

5,688

—

324

6,012

Total external customer expenses

108,176

12,780

13,187

134,143

Inter-segment expenses:

Interest expense

4,782

1,156

1,470

7,408

Noninterest expenses

674

1,882

3,928

6,484

Total inter-segment expenses

5,456

3,038

5,398

13,892

Total expenses

113,632

15,818

18,585

148,035

Income before taxes

47,158

5,628

9,052

61,838

Income tax provision

22,289

Consolidated net income

39,549

Capital expenditures

4,603

4,036

8,668

As of September 30, 2015:

Statement of Condition

Cash and cash equivalents

78,209

448,594

2,234

529,037

Goodwill

43,653

—

5,134

48,787

Other segment assets

4,305,469

—

184,649

4,490,118

Total segment assets

4,427,331

448,594

192,017

5,067,942


For the nine months ended September 30, 2014: (In Thousands)
	WSFS Bank		Cash Connect		Wealth Management		Total
Statement of Operations
External customer revenues:
Interest income	$	112,178	$	—	$	5,819	$	117,997
Noninterest income		26,334		18,974		12,983		58,291

Total external customer revenues		138,512		18,974		18,802		176,288

Inter-segment revenues:
Interest income		2,545		—		4,124		6,669
Noninterest income		5,041		601		85		5,727

Total inter-segment revenues		7,586		601		4,209		12,396

Total revenue		146,098		19,575		23,011		188,684

External customer expenses:
Interest expense		11,413		—		316		11,729
Noninterest expenses		87,668		11,425		9,179		108,272
Provision for loan losses		2,320		—		693		3,013

Total external customer expenses		101,401		11,425		10,188		123,014

Inter-segment expenses:
Interest expense		4,124		1,019		1,526		6,669
Noninterest expenses		686		1,688		3,353		5,727

Total inter-segment expenses		4,810		2,707		4,879		12,396

Total expenses		106,211		14,132		15,067		135,410


Income before taxes	$	39,887	$	5,443	$	7,944	$	53,274
Income tax provision								12,225

Consolidated net income							$	41,049

Capital expenditures	$	2,207	$	156	$	3	$	2,366

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