LEGAL AND OTHER PROCEEDINGS

6 Months Ended

Jun. 30, 2025

Commitments and Contingencies Disclosure [Abstract]

LEGAL AND OTHER PROCEEDINGS

17. LEGAL AND OTHER PROCEEDINGS

In accordance with the current accounting standards for loss contingencies, the Company establishes reserves for litigation-related matters that arise in the ordinary course of its business activities when it is probable that a loss associated with a claim or proceeding has been incurred and the amount of the loss can be reasonably estimated. Litigation claims and proceedings of all types are subject to many uncertain factors that generally cannot be predicted with assurance. In addition, the Company's defense of litigation claims may result in legal fees, which it expenses as incurred.

On May 7, 2025, the Bank entered into a settlement agreement with Prophet Mortgage Opportunities, LP (Prophet) to resolve a complaint filed on November 16, 2022 against WSFS Bank and the RBSHD 2013-1 Trust in the United States District Court for the Southern District of New York alleging that the Bank, in its capacity as owner trustee and indenture trustee in a Residential Mortgage-Backed Securities (RMBS) trust, was responsible for certain actions directed by the trust’s majority certificate holder, which allegedly diminished the value of the notes and depleted the value of the trust’s assets. As previously disclosed, Prophet sought damages of not less than $40.0 million. Under the settlement agreement, the Bank incurred a loss of $1.5 million to fully settle the claims. The Bank recognized losses of $0.3 million and $0.5 million for the three and six months ended June 30, 2025, and $1.0 million in the fourth quarter of 2024.

On October 3, 2022, Mary Elizabeth Gibbons filed a petition against WSFS Bank, in its individual capacity, in the Circuit Court of St. Louis County for the State of Missouri asserting claims and seeking damages related to an alleged injury that occurred on a property that was allegedly held by the Bank as owner trustee of a RMBS trust. The Plaintiff sought in excess of $25 thousand in damages and other equitable relief. On June 6, 2023, the court entered a default judgment against the Bank in the amount of $15.0 million, plus post-judgment interest. On January 3, 2025, the Bank received notice that the plaintiff seeks to domesticate and execute on the Missouri judgment by filing an action in the Philadelphia Court of Common Pleas. Based on the inherent uncertainty of this matter, it is reasonably possible that the Bank may incur a loss in the range of $0.0-$15.0 million. The Bank, in accordance with its normal procedures, notified its insurance carriers of a possible claim. The Bank disputes the judgment, the Bank's connection to the property, and denies liability.

There were no material changes or additions to other significant pending legal or other proceedings involving the Company other than those arising out of routine operations.