Business Combinations

9 Months Ended

Sep. 30, 2015

Business Combinations [Abstract]

Business Combinations

2. BUSINESS COMBINATIONS

Alliance Bancorp, Inc. of Pennsylvania

On October 9, 2015 we completed the acquisition of Alliance and its wholly owned subsidiary, Alliance Bank, headquartered in Broomall, Pennsylvania. At that time Alliance merged into the Company and Alliance Bank merged into WSFS Bank. For additional information see Note 16. Subsequent Events.

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 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 (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		175,895
Premises and equipment		1,611
Deferred income taxes		3,216
Bank owned life insurance		12,576
Core deposit intangible		3,240
Other real estate owned		1,593
Other assets		4,659
Total assets		285,217
Liabilities assumed:
Deposits		228,844
FHLB advances		5,052
Other liabilities		2,891
Total liabilities		236,787
Net assets acquired:		48,430
Goodwill resulting from acquisition of FNBW	$	16,506

The following table details the changes to goodwill in 2015:

(In Thousands)	Fair Value
Goodwill resulting from the acquisition of FNBW reported as of December 31, 2014	$	16,370
Effects of adjustments to:
Assets		236
Liabilities		(100	)
Final purchase price		—
Adjusted goodwill resulting from the acquisition of FNBW as of September 30, 2015	$	16,506

The adjustments made to goodwill during the first nine months of 2015, reflect a change in the fair value of the loans acquired, accrued expenses, bank owned life insurance, computer equipment, deferred federal income taxes, and OREO properties during the measurement period. The fair value of acquired assets and liabilities is now considered final.

Direct costs related to the acquisition were expensed as incurred. During the three and nine months ended September 30, 2015, the Company incurred $12,000 and $109,000 in merger expenses related to FNBW compared to $2.5 million and $2.9 million for the three and nine months ended September 30, 2014.