XML 27 R18.htm IDEA: XBRL DOCUMENT v3.23.2
GOODWILL AND INTANGIBLE ASSETS
 6 Months Ended
Jun. 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 six months ended June 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 exists during the six months ended June 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 adjustments— — — — 
June 30, 2023$753,586 $— $130,051 $883,637 
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
June 30, 2023
Core deposits$104,751 $(45,602)$59,149 10 years
Customer relationships68,281 (15,467)52,814 
7-15 years
Loan servicing rights(1)
11,593 (5,815)5,778 
10-25 years
Tradename2,900 — 2,900 indefinite
Total intangible assets$187,525 $(66,884)$120,641 
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 impairment losses of $0.2 million for both the three and six months ended June 30, 2023.
(2)Includes impairment losses of $0.3 million for the year ended December 31, 2022
The Company recognized amortization expense on intangible assets of $3.8 million and $7.7 million for the three and six months ended June 30, 2023, respectively, compared to $3.9 million and $7.9 million for the three and six months ended June 30, 2022, respectively.
The following table presents the estimated future amortization expense on definite life intangible assets:
(Dollars in thousands)June 30, 2023
Remaining in 2023$8,272 
202416,351 
202516,016 
202615,348 
202714,920 
Thereafter46,834 
Total$117,741 
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 $1.9 million and $2.1 million at June 30, 2023 and December 31, 2022, respectively, and the value of its SBA loan servicing rights was $3.9 million and $4.0 million at June 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 less than $0.2 million for the three and six months ended June 30, 2023, and impairment losses of $0.1 million for the three and six months ended June 30, 2022. 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 June 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.