XML 27 R18.htm IDEA: XBRL DOCUMENT v3.23.3
GOODWILL AND INTANGIBLE ASSETS
 9 Months Ended
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND INTANGIBLE ASSETS
9. GOODWILL AND INTANGIBLE ASSETS
In accordance with ASC 805, Business Combinations (ASC 805) and ASC 350, Intangibles - Goodwill and Other (ASC 350), all assets acquired and liabilities assumed in purchase acquisitions, including goodwill, indefinite-lived intangibles and other intangibles are recorded at fair value as of acquisition date.

WSFS performs its annual goodwill impairment test on October 1 or more frequently if events and circumstances indicate that the fair value of a reporting unit is less than its carrying value. In between annual tests, management performs a qualitative review of goodwill quarterly as part of the Company's review of the overall business to ensure no events or circumstances have occurred that would impact its goodwill evaluation. During the nine months ended September 30, 2023, management determined based on its qualitative assessment that the fair values of our reporting units exceeded their carrying values, and no goodwill impairment existed during the nine months ended September 30, 2023.

The following table shows the allocation of goodwill to the reportable operating segments for purposes of goodwill impairment testing:

(Dollars in thousands)WSFS
Bank
Cash
Connect®
Wealth
Management		Consolidated
Company
December 31, 2022$753,586 $— $130,051 $883,637 
Goodwill from business combinations(1)
— — 2,261 2,261 
September 30, 2023$753,586 $— $132,312 $885,898 
(1)During the third quarter of 2023, BMCM acquired the business of a registered investment advisory firm.
ASC 350 requires that an acquired intangible asset be separately recognized if the benefit of the intangible asset is obtained through contractual or other legal rights, or if the asset can be sold, transferred, licensed, rented or exchanged, regardless of the acquirer’s intent to do so. The following table summarizes the Company's intangible assets:
(Dollars in thousands)Gross
Intangible
Assets		Accumulated
Amortization		Net
Intangible
Assets		Amortization Period
September 30, 2023
Core deposits$104,751 $(48,180)$56,571 10 years
Customer relationships73,880 (16,795)57,085 
7-15 years
Loan servicing rights(1)
12,201 (6,183)6,018 
10-25 years
Tradename2,900 — 2,900 indefinite
Total intangible assets$193,732 $(71,158)$122,574 
December 31, 2022
Core deposits$104,751 $(40,443)$64,308 10 years
Customer relationships68,281 (12,937)55,344 
7-15 years
Loan servicing rights(2)
11,118 (5,075)6,043 
10-25 years
Tradename2,900 — 2,900 indefinite
Non-compete agreements200 (200)— 1 year
Total intangible assets$187,250 $(58,655)$128,595 
(1)Includes a reversal of impairment losses of $0.2 million and less than $0.1 million for the three and nine months ended September 30, 2023, respectively.
(2)Includes impairment losses of $0.3 million for the year ended December 31, 2022.
The Company recognized amortization expense on intangible assets of $3.9 million and $11.6 million for the three and nine months ended September 30, 2023, respectively, compared to $3.9 million and $11.8 million for the three and nine months ended September 30, 2022, respectively.
The following table presents the estimated future amortization expense on definite life intangible assets:
(Dollars in thousands)September 30, 2023
Remaining in 2023$4,239 
202416,793 
202516,451 
202615,775 
202715,337 
Thereafter51,079 
Total$119,674 
Servicing Assets
The Company records mortgage servicing rights on its mortgage loan servicing portfolio, which includes mortgages that it acquires or originates as well as mortgages that it services for others, and servicing rights on Small Business Administration (SBA) loans. Mortgage servicing rights and SBA loan servicing rights are included in Intangible assets in the accompanying unaudited Consolidated Statements of Financial Condition. Mortgage loans which the Company services for others are not included in Loans and leases, net of allowance in the accompanying unaudited Consolidated Statements of Financial Condition. Servicing rights represent the present value of the future net servicing fees from servicing mortgage loans the Company acquires or originates, or that it services for others.
The value of the Company's mortgage servicing rights was $1.8 million and $2.1 million at September 30, 2023 and December 31, 2022, respectively, and the value of its SBA loan servicing rights was $4.2 million and $4.0 million at September 30, 2023 and December 31, 2022, respectively. Changes in the value of the Company's servicing rights resulted in a reversal of impairment losses of $0.2 million and less than $0.1 million for the three and nine months ended September 30, 2023, respectively, and impairment losses of $0.1 million and $0.2 million for the three and nine months ended September 30, 2022, respectively. Revenues from originating, marketing and servicing mortgage loans as well as valuation adjustments related to capitalized mortgage servicing rights are included in Mortgage banking activities, net in the unaudited Consolidated Statements of Income and revenues from the Company's SBA loan servicing rights are included in Loan and lease fee income in the unaudited Consolidated Statements of Income.
Besides the impairment on loan servicing rights noted above, there was no impairment of other intangible assets as of September 30, 2023 or December 31, 2022. Changing economic conditions that may adversely affect the Company's performance and could result in impairment, which could adversely affect earnings in the future.