GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2025

Goodwill and Intangible Assets Disclosure [Abstract]

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, 2025, management determined based on its qualitative assessment that the fair values of our reporting units exceeded their carrying values, and no goodwill impairment existed.

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


(Dollars in thousands)	WSFS Bank		Wealth and Trust		Consolidated Company
December 31, 2024	$	753,586	$	132,312	$	885,898

Goodwill adjustments(1)	—		(674)		(674)
June 30, 2025	$	753,586	$	131,638	$	885,224

(1)During the second quarter of 2025, the Company completed the sale of the WSFS Wealth Management, LLC (dba Powdermill Financial Solutions) business.

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, 2025
Core deposits	$	104,751	$	(66,076)	$	38,675	10 years
Client relationships	68,270		(22,136)		46,134		7-15 years

Loan servicing rights(1)	11,080		(6,467)		4,613		10-25 years
Tradename	2,900		—		2,900		indefinite
Total intangible assets	$	187,001	$	(94,679)	$	92,322
December 31, 2024
Core deposits	$	104,751	$	(60,999)	$	43,752	10 years
Client relationships	73,880		(23,588)		50,292		7-15 years
Loan servicing rights(2)	11,220		(5,901)		5,319		10-25 years
Tradename	2,900		—		2,900		indefinite

Total intangible assets	$	192,751	$	(90,488)	$	102,263

(1)Includes impairment losses of $0.2 million and $0.3 million for the three and six months ended June 30, 2025, respectively.

(2)Includes reversal of impairment losses of $0.6 million for the year ended December 31, 2024.

The Company recognized amortization expense on intangible assets of $3.9 million and $7.8 million for the three and six months ended June 30, 2025, respectively, compared to $3.9 million and $7.9 million for the three and six months ended June 30, 2024, respectively.

The following table presents the estimated future amortization expense on definite life intangible assets:


(Dollars in thousands)	June 30, 2025
Remaining in 2025	$	8,086
2026	15,546
2027	15,030
2028	14,359
2029	7,121
Thereafter	29,280
Total	$	89,422

Servicing Assets

The Company records servicing rights on Small Business Administration (SBA) loans and mortgage servicing rights on its mortgage loan servicing portfolio. This includes loans that it acquires or originates as well as loans that it services for others. SBA loan servicing rights and Mortgage servicing rights are included in Goodwill and 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 SBA loan servicing rights was $3.4 million and $4.0 million at June 30, 2025 and December 31, 2024, respectively, and the value of its mortgage servicing rights was $1.2 million and $1.3 million at June 30, 2025 and December 31, 2024, respectively. Changes in the value of the Company's servicing rights resulted in impairment losses of less than $0.2 million and $0.3 million for the three and six months ended June 30, 2025, respectively, and impairment losses of $0.1 million and $0.2 million for the three and six months ended June 30, 2024, respectively. Revenues from the Company's SBA loan servicing rights are included in Loan and lease fee income in the unaudited Consolidated Statements of Income, and 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.

Besides the impairment on loan servicing rights noted above, there was no impairment of other intangible assets as of June 30, 2025 or December 31, 2024. Changing economic conditions that may adversely affect the Company's performance and could result in impairment, which could adversely affect earnings in the future.

WSFS FINANCIAL CORP 10-Q