Segment Information

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Segment Information

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. 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 ATM vault cash and smart safe and cash logistics 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. Cypress’ primary market segment is high net worth individuals, offering a ‘balanced’ investment style focused on preservation of capital and current income. Christiana Trust provides fiduciary and investment services to personal trust clients, and trustee, agency, bankruptcy administration, 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, 2016 and 2015 follows:

For the three months ended June 30, 2016:

(In Thousands)	WSFS Bank		Cash Connect		Wealth Management		Total
Statement of Operations
External customer revenues:
Interest income	$	49,492	$	—	$	2,011	$	51,503
Noninterest income		10,173		8,138		6,538		24,849
Total external customer revenues		59,665		8,138		8,549		76,352
Inter-segment revenues:
Interest income		1,135		—		1,652		2,787
Noninterest income		2,011		210		25		2,246
Total inter-segment revenues		3,146		210		1,677		5,033
Total revenue		62,811		8,348		10,226		81,385
External customer expenses:
Interest expense		4,896		—		193		5,089
Noninterest expenses		34,462		4,831		4,734		44,027
Provision for loan losses		1,191		—		63		1,254
Total external customer expenses		40,549		4,831		4,990		50,370
Inter-segment expenses:
Interest expense		1,652		628		507		2,787
Noninterest expenses		235		727		1,284		2,246
Total inter-segment expenses		1,887		1,355		1,791		5,033
Total expenses		42,436		6,186		6,781		55,403
Income before taxes	$	20,375	$	2,162	$	3,445	$	25,982
Income tax provision								8,504
Consolidated net income							$	17,478
Capital expenditures	$	2,235	$	404	$	6	$	2,645
As of June 30, 2016:
Statement of Condition
Cash and cash equivalents	$	84,919	$	617,339	$	1,635	$	703,893
Goodwill		79,718		—		5,134		84,852
Other segment assets		4,843,166		3,419		198,777		5,045,362
Total segment assets	$	5,007,803	$	620,758	$	205,546	$	5,834,107

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		29		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 (1)	$	1,083	$	987	$	12	$	2,082
As of December 31, 2015:
Statement of Condition
Cash and cash equivalents	$	65,663	$	493,165	$	2,351	$	561,179
Goodwill		80,078		—		5,134		85,212
Other segment assets		4,745,670		—		192,576		4,938,246
Total segment assets	$	4,891,411	$	493,165	$	200,061	$	5,584,637

(1) Capital expenditures amounts have been adjusted to correct errors that were not material to our Form 10-Q for the quarterly period ended June 30, 2015. Previously reported capital expenditures were $299,000 for WSFS Bank, $2,570,000 for Cash Connect, $13,000 for Wealth Management, and $2,882,000 for Total Consolidated Company.

Segment information for the six months ended June 30, 2016 and 2015 follows:

For the six months ended June 30, 2016:

(In Thousands)	WSFS Bank		Cash Connect		Wealth Management		Total
Statement of Operations
External customer revenues:
Interest income	$	97,530	$	—	$	4,019	$	101,549
Noninterest income		20,025		15,811		12,083		47,919
Total external customer revenues		117,555		15,811		16,102		149,468
Inter-segment revenues:
Interest income		2,196		—		3,547		5,743
Noninterest income		4,071		403		49		4,523
Total inter-segment revenues		6,267		403		3,596		10,266
Total revenue		123,822		16,214		19,698		159,734
External customer expenses:
Interest expense		9,393		—		386		9,779
Noninterest expenses		68,274		9,681		9,271		87,226
Provision for loan losses		2,006		—		28		2,034
Total external customer expenses		79,673		9,681		9,685		99,039
Inter-segment expenses:
Interest expense		3,547		1,183		1,013		5,743
Noninterest expenses		452		1,442		2,629		4,523
Total inter-segment expenses		3,999		2,625		3,642		10,266
Total expenses		83,672		12,306		13,327		109,305
Income before taxes	$	40,150	$	3,908	$	6,371	$	50,429
Income tax provision								17,181
Consolidated net income							$	33,248
Capital expenditures	$	3,446	$	424	$	8	$	3,878
As of June 30, 2016:
Statement of Condition
Cash and cash equivalents	$	84,919	$	617,339	$	1,635	$	703,893
Goodwill		79,718		—		5,134		84,852
Other segment assets		4,843,166		3,419		198,777		5,045,362
Total segment assets	$	5,007,803	$	620,758	$	205,546	$	5,834,107

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		47		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	$	1,580	$	1,221	$	15	$	2,816
As of December 31, 2015:
Statement of Condition
Cash and cash equivalents	$	65,663	$	493,165	$	2,351	$	561,179
Goodwill		80,078		—		5,134		85,212
Other segment assets		4,745,670		—		192,576		4,938,246
Total segment assets	$	4,891,411	$	493,165	$	200,061	$	5,584,637

(1) Capital expenditures amounts have been adjusted to correct errors that were not material to our Form 10-Q for the six month period ended June 30, 2015. Previously reported capital expenditures were $1,116,000 for WSFS Bank, $2,570,000 for Cash Connect, $13,000 for Wealth Management, and $3,699,000 for Total Consolidated Company.