BUSINESS COMBINATIONS

Penn Liberty Financial Corporation

On August 12, 2016, we completed the acquisition of Penn Liberty Financial Corporation (Penn Liberty) conducted its primary business operations through its subsidiary Penn Liberty Bank, which was merged into WSFS Bank. At closing, Penn Liberty had 11 banking offices in Montgomery and Chester counties, Pennsylvania, which are suburbs of Philadelphia. WSFS acquired Penn Liberty to expand the scale and efficiency of its operations in southeastern Pennsylvania in addition to the opportunity to generate additional revenue by providing its full suite of banking, mortgage banking, wealth management and insurance services to the Penn Liberty markets.

The acquisition of Penn Liberty was accounted for as a business combination using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed and consideration transferred were recorded at their estimated fair values as of the acquisition date. The excess of consideration transferred over the fair value of net assets acquired is recorded as goodwill, which is not amortizable and is not deductible for tax purposes. The Company allocated the total balance of this goodwill to its WSFS Bank segment. The fair values of assets acquired and liabilities assumed are now considered final.

In connection with the acquisition of Penn Liberty, the consideration transferred and the final fair values of identifiable assets acquired and liabilities assumed, are summarized in the following table:




(Dollars in thousands)	Fair Value
Consideration Transferred:
Common shares issued (1,806,748), including replacement equity awards	$	68,352
Cash paid to Penn Liberty stock and option holders	40,549
Value of consideration	108,901
Assets acquired:
Cash and due from banks	102,301
Investment securities	627
Loans	483,203
Premises and equipment	6,817
Deferred income taxes	6,542
Bank owned life insurance	8,666
Core deposit intangible	2,882
Other real estate owned	996
Other assets	12,085
Total assets	624,119
Liabilities assumed:
Deposits	568,706
Other borrowings	10,000
Other liabilities	3,738
Total liabilities	582,444
Net assets acquired:	41,675
Goodwill resulting from acquisition of Penn Liberty	$	67,226

The following table details the changes to goodwill recorded subsequent to acquisition:



(Dollars in thousands)	Fair Value
Goodwill resulting from the acquisition of Penn Liberty as of December 31, 2016	$	68,814
Effects of adjustments to:
Deferred income taxes	880
Loans	279
Other assets	(1,440		)
Other liabilities	(1,307		)
Adjusted goodwill resulting from the acquisition of Penn Liberty as of December 31, 2017	$	67,226

The adjustments made to goodwill during 2017 reflect a change in the initially recorded fair values of replacement equity awards, deferred federal income taxes, other assets and other liabilities.

Powdermill Financial Solutions LLC

On August 1, 2016, we acquired the assets of Powdermill Financial Solutions, LLC, a multi-family office serving an affluent clientele in the local community and throughout the U.S. This acquisition aligns with our strategic plan to expand our wealth offerings and diversify our fee-income generating business. The excess of consideration paid over the preliminary fair value of the net assets acquired was recorded as goodwill, which is not amortizable but is deductible for tax purposes. We allocated the total balance of goodwill to the Wealth Management segment. The fair values of assets acquired and liabilities assumed are now considered final.

West Capital Management, Inc.

On October 14, 2016, we acquired the assets of West Capital Management, Inc., an independent, fee-only wealth management firm providing fully-customized solutions tailored to the unique needs of institutions and high net worth individuals which operates under a multi-family office philosophy. This acquisition aligns with our strategic plan to expand our wealth offerings and diversify our fee-income generating business. The excess of consideration paid over the preliminary fair value of the net assets acquired was recorded as goodwill, which is not amortizable but is deductible for tax purposes. We allocated the total balance of goodwill to the Wealth Management segment. The fair values of assets acquired and liabilities assumed are now considered final.