WSFS FINANCIAL CORP MANAGEMENT REPORT AND DISCUSSION OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-Q)

OVERVIEW

WSFS Financial Corporation (WSFS, and together with its subsidiaries, the
Company) is a savings and loan holding company headquartered in Wilmington,
Delaware. Substantially all of our assets are held by our subsidiary, Wilmington
Savings Fund Society, FSB (WSFS Bank or the Bank), one of the ten oldest bank
and trust companies in the United States (U.S.) continuously operating under the
same name. With $20.0 billion in assets and $61.4 billion in assets under
management (AUM) and assets under administration (AUA) at September 30, 2022,
WSFS Bank is the oldest and largest locally-managed bank and trust company
headquartered in the Greater Philadelphia and Delaware region. As a federal
savings bank that was formerly chartered as a state mutual savings bank, WSFS
Bank enjoys a broader scope of permissible activities than most other financial
institutions. A fixture in the community, we have been in operation for more
than 190 years. In addition to our focus on stellar customer experience, we have
continued to fuel growth and remain a leader in our community. We are a
relationship-focused, locally-managed, community banking institution. Our
mission is simple: "We Stand for Service." Our strategy of "Engaged Associates,
living our culture, enriching the communities we serve" focuses on exceeding
customer expectations, delivering stellar experiences and building customer
advocacy through highly-trained, relationship-oriented, friendly, knowledgeable
and empowered Associates.

As of September 30, 2022, we had seven consolidated subsidiaries: WSFS Bank,
WSFS Wealth Management, LLC (Powdermill®), WSFS Capital Management, LLC (West
Capital), Cypress Capital Management, LLC (Cypress), WSFS SPE Services, LLC, The
Bryn Mawr Trust Company of Delaware (BMT-DE), and 601 Perkasie, LLC. The Company
also has three unconsolidated subsidiaries: WSFS Capital Trust III, Royal
Bancshares Capital Trust I, and Royal Bancshares Capital Trust II. WSFS Bank has
two wholly owned subsidiaries: Beneficial Equipment Finance Corporation (BEFC)
and 1832 Holdings, Inc., and one majority-owned subsidiary, NewLane Finance
Company (NewLane Finance®).

On January 1, 2022, WSFS and the Bank acquired certain subsidiaries in the
merger of Bryn Mawr Bank Corporation (BMBC) with and into WSFS, and the merger
of The Bryn Mawr Trust Company with and into the Bank (collectively, the BMBC
Merger), pursuant to the agreement and plan of merger, by and between WSFS and
BMBC, dated as of March 9, 2021 (the BMBC Merger Agreement) that are not named
herein as they are not integral or significant to our business.

On April 1, 2022, WSFS completed the merger of Christiana Trust Company of
Delaware® and BMT-DE. The combined organization will retain and operate under
The Bryn Mawr Trust Company of Delaware name. Additionally on April 1, 2022,
Bryn Mawr Equipment Finance, Inc. merged with and into BEFC. On April 29, 2022,
the portfolio of KCMI Capital, Inc. (KCMI), a specialized commercial lending
unit acquired in the BMBC merger and not core to our overall lending strategy,
was sold at par value for $55.5 million. Finally, on June 30, 2022, the business
of BMT Insurance Advisors (BMTIA), was sold to Patriot Growth Services, LLC.

Our banking business had a total loan and lease portfolio of $11.7 billion as of
September 30, 2022, which was funded primarily through commercial relationships
and retail and customer generated deposits. We have built a $9.3 billion
commercial loan and lease portfolio by recruiting seasoned commercial lenders in
our markets, offering the high level of service and flexibility typically
associated with a community bank and through acquisitions. We also offer a broad
variety of consumer loan products and retail securities brokerage through our
retail branches, in addition to mortgage and title services through our branches
and WSFS Mortgage®, our mortgage banking company specializing in a variety of
residential mortgage and refinancing solutions. Our leasing business, conducted
by NewLane Finance®, originates small business leases and provides commercial
financing to businesses nationwide, targeting various equipment categories
including technology, software, office, medical, veterinary and other areas. In
addition, NewLane Finance® offers captive insurance through its subsidiary,
Prime Protect.

Our Cash Connect® business is a premier provider of ATM vault cash, smart safe
(safes that automatically accept, validate, record and hold cash in a secure
environment) and other cash logistics services through strategic partnerships
with several of the largest networks, manufacturers and service providers in the
ATM industry. Cash Connect® services non-bank and WSFS-branded ATMs and retail
safes nationwide, and manages approximately $1.7 billion in total cash and
services approximately 27,000 non-bank ATMs and 7,300 smart safes nationwide.
Cash Connect® provides related services such as online reporting and ATM cash
management, predictive cash ordering and reconcilement services, armored carrier
management, loss protection, ATM processing equipment sales and deposit safe
cash logistics. Cash Connect® also supports over 600 branded ATMs for WSFS Bank
Customers, which is one of the largest branded ATM networks in our market.
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Our Wealth Management business provides a broad array of planning and advisory
services, investment management, trust services, and credit and deposit products
to individual, corporate and institutional clients through multiple integrated
businesses. Combined, these businesses had $61.4 billion of AUM and AUA at
September 30, 2022. Bryn Mawr Trust® is our predominant Wealth Management brand,
providing advisory, investment management and trustee services to institutions,
affluent and high-net-worth individuals. WSFS Wealth® Investments provides
financial advisory services along with annuities and brokerage
products. Cypress, a registered investment adviser, is a fee-only wealth
management firm managing a "balanced" investment style portfolio focused on
preservation of capital and generating current income. West Capital, a
registered investment adviser, is a fee-only wealth management firm operating
under a multi-family office philosophy to provide customized solutions to
institutions and high-net-worth individuals. WSFS Institutional Services®
provides trustee, agency, bankruptcy administration, custodial and commercial
domicile services to institutional, corporate clients and special purpose
vehicles. BMT-DE provides personal trust and fiduciary services to families and
individuals across the U.S. Powdermill® is a multi-family office specializing in
providing independent solutions to high-net-worth individuals, families and
corporate executives through a coordinated, centralized approach. WSFS Wealth
Private Banking serves high-net-worth clients by delivering credit and deposit
products and partnering with other Wealth Management businesses to provide
comprehensive solutions to clients. As of September 30, 2022, we service our
customers primarily from 119 offices located in Pennsylvania (61), Delaware
(39), New Jersey, (17), Virginia (1) and Nevada (1), our ATM network, our
website at www.wsfsbank.com and our mobile app.

Highlights and Other Notable Items for the Three and Nine Months Ended
September 30, 2022

•Three months completed September 30, 2022

•WSFS repurchased 1,664,550 shares of common stock under the Company's share
repurchase program at an average price of $48.66 per share, for an aggregate
purchase price of $81.0 million.

•The Board of Directors approved a $0.15 quarterly dividend per share.

• Provision for credit losses (ACL) on loans and leases increased $4.2 milliondue to loan growth and the impact of economic forecasts, partially offset by write-ups on criticized and rated loans.

• Value adjustment of $1.8 million related to our derivative liability established from the sale of 360,000 Class B Visa shares in 2Q 2020.

•Net development and restructuring expenses of $2.6 million mainly related to the BMBC Merger.

• Nine months ended September 30, 2022

•We successfully closed the BMBC Merger on January 1, 2022. The total value of
consideration paid of $908.0 million and $497.2 million in net assets acquired
resulted in $410.8 million of goodwill recognized, as adjusted.

• Originally added BMBC merger $3.5 billion net loans and rentals, $4.1 billion deposits, and $23.6 billion of AUM and AAU.

• We have registered $41.7 million business development costs and $22.8 million
restructuring charges during the nine months ended September 30, 2022mainly related to the BMBC Merger.

•During the nine months ended September 30, 2022, the ACL increased $51.7
million, primarily due to an initial ACL of $49.6 million recorded in connection
with the BMBC Merger. The initial $49.6 million ACL recorded includes $23.5
million related to non-purchase credit deteriorated (PCD) loans, or the initial
provision for credit loss recorded, and $26.1 million related to PCD loans,
which did not have an initial income statement impact, but adjusted the
amortized cost basis of the loans at acquisition (i.e., a balance sheet
gross-up).

• $1.1 billion of available-for-sale mortgage-backed securities (“AFS”), or 19% of the AFS portfolio, have been designated as held-to-maturity (“HTM”) in order to limit the impact on capital of rising interest rates.

• KCMI’s loan portfolio was sold at face value for $55.5 million.

• BMTIA’s business was sold to Patriot Growth Assurance Services, LLC.

•During the nine months ended September 30, 2022, WSFS repurchased 3,789,137
shares of common stock under the Company's share repurchase program at an
average price of $46.68 per share, for an aggregate purchase price of $176.9
million.
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FINANCIAL CONDITION

Total assets increased $4.2 billion at $20.0 billion at September 30, 2022
compared to December 31, 2021. This increase is mainly composed of the following items:

•Net loans and leases, excluding loans held for sale, increased $3.8 billion
primarily driven by the $3.5 billion of loans and leases acquired in the BMBC
Merger partially offset by the initial $49.6 million ACL recorded in connection
with the BMBC Merger.

• Goodwill and intangible assets increased $410.8 million and $58.4 million, respectively, mainly due to the BMBC merger. See Notes 3 and 10 to the unaudited consolidated financial statements for more information.

• Other assets increased $392.3 million mainly due to a $214.0 million
increase in our tax asset related to unrealized capital losses on AFS securities and
$153.6 million assets acquired by BMT.

• Total cash and cash equivalents decreased $501.5 millionmainly due to lower deposits and higher lending activity, offset by $573.8 million
acquired in the BMBC merger.

• Loans held for sale decreased $51.7 million in the nine months ended
September 30, 2022 driven by a combination of lower origination volume and increased loan sales in our mortgage banking business in the nine months ended
September 30, 2022.

• Total marketable securities decreased $20.4 million:

• Marketable securities held to maturity increased $1.0 billion mainly due to the designation of $1.1 billion (book value) of MBS AFS to HTM in order to limit the impact on the capital of the rise in interest rates.

•Investment securities, available-for-sale decreased $1.1 billion during the
nine months ended September 30, 2022, primarily due to the designation of AFS
MBS to HTM as mentioned above, repayments of $911.1 million and decreased market
values on available-for-sale securities of $741.9 million. These decreases were
partially offset by $1.2 billion in purchases and $500.4 million acquired in the
BMBC merger.

Total liabilities increased $4.0 billion at $17.9 billion at September 30, 2022
compared to December 31, 2021. This increase is mainly composed of the following items:

• Total deposits increased $3.5 billionmainly motivated by $4.1 billion deposits supported as part of the BMBC merger, partially offset by declines due to reduced customer balances spread across most lines of business.

•Other liabilities increased $419.4 million primarily due to a net increase of
$323.4 million in collateral held on derivatives and derivative liabilities
driven by rising interest rates and $124.6 million of BMT acquired liabilities,
partially offset by $34.5 million lower accrued expenses reflecting the timing
of settlement for debt security trades.

• Increase in senior and subordinated debt $100.3 million due to the addition of subordinated notes supported as part of the BMBC merger.

For more information, see “Notes to the consolidated financial statements (unaudited)”.

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Loans and leases

The following table shows the remaining contractual maturity and rate
sensitivity of the loan portfolio by loan category as of September 30, 2022.
Loans may be pre-paid, so the actual maturity may differ from the contractual
maturity. Prepayments tend to be highly dependent upon the interest rate
environment. Loans having no stated maturity or repayment schedule are reported
in the "Less than One Year" category.
                                             Less than             One to           Five to Fifteen        Over Fifteen
(Dollars in thousands)                        One Year           Five Years              Years                 Years                 Total
Commercial and industrial(1)
Interest rate:
Fixed                                       $  15,475          $   495,658          $    197,630          $     43,797          $    752,560
Adjustable                                    184,329            1,167,164               467,945                62,788             1,882,226
Total                                       $ 199,804          $ 1,662,822          $    665,575          $    106,585          $  2,634,786
Owner-occupied commercial
Interest rate:
Fixed                                       $  25,640          $   389,029          $    421,245          $    181,722          $  1,017,636
Adjustable                                     30,759              254,097               421,692                64,407               770,955
Total                                       $  56,399          $   643,126          $    842,937          $    246,129          $  1,788,591
Commercial mortgages
Interest rate:
Fixed                                       $  64,581          $   802,113          $    423,043          $    161,740          $  1,451,477
Adjustable                                     61,080              651,929             1,032,873                83,020             1,828,902
Total                                       $ 125,661          $ 1,454,042          $  1,455,916          $    244,760          $  3,280,379
Construction
Interest rate:
Fixed                                       $   1,155          $    34,486          $     38,734          $      6,216          $     80,591
Adjustable                                    177,825              530,558               232,429                 6,800               947,612
Total                                       $ 178,980          $   565,044          $    271,163          $     13,016          $  1,028,203
Commercial small business leases
Interest rate:
Fixed                                       $   5,205          $   469,546          $     59,941          $          -          $    534,692
Adjustable                                          -                    -                     -                     -                     -
Total                                       $   5,205          $   469,546          $     59,941          $          -          $    534,692
Residential(2)
Interest rate:
Fixed                                       $   7,582          $    25,044          $    117,753          $    471,941          $    622,320
Adjustable(3)                                       -                  427                27,236               108,610               136,273
Total                                       $   7,582          $    25,471          $    144,989          $    580,551          $    758,593
Consumer
Interest rate:
Fixed                                       $     247          $   350,159          $    387,132          $    379,972          $  1,117,510
Adjustable                                      4,282               74,580                30,370               450,386               559,618
Total                                       $   4,529          $   424,739          $    417,502          $    830,358          $  1,677,128
Total loans and leases                      $ 578,160          $ 5,244,790          $  3,858,023          $  2,021,399          $ 11,702,372

(1) Includes $4.2 million PPP loans. (2) Excludes reverse mortgages at fair value of $3.0 million. (3) Includes adjustable rate hybrid mortgages.

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Deposits

The following table shows the maturities of the certificates of deposit of $250,000
or more from September 30, 2022:

(Dollars in thousands)
Maturity Period               September 30, 2022
Less than 3 months           $           60,704
Over 3 months to 6 months                17,287
Over 6 months to 12 months               48,388
Over 12 months                           41,338
Total                        $          167,717


The estimated amount of total uninsured deposits at September 30, 2022 has been
$10.3 billion compared to $7.5 billion at December 31, 2021.

CASH AND CAPITAL RESOURCES

Capital resources

Stockholders' equity of WSFS increased $164.5 million between December 31, 2021
and September 30, 2022. This increase was primarily due to $908.0 million of
WSFS common shares issued in connection with the BMBC Merger and $137.9 million
of earnings, offset by a decrease of $677.7 million in accumulated other
comprehensive income from market value decreases on investment securities
resulting from the current rising interest rate environment, $176.9 million from
the repurchase of shares of common stock under our stock repurchase plan, and
the payment of dividends on our common stock of $26.5 million.

During the third quarter of 2022, our Board of Directors approved a quarterly
cash dividend of $0.15 per share of common stock. This dividend will be paid on
November 18, 2022 to stockholders of record as of November 4, 2022.

Book value per share of common stock was $33.96 at September 30, 2022, a
decrease of $6.77 from $40.73 at December 31, 2021. Tangible book value per
share of common stock (a non-GAAP financial measure) was $17.55 at September 30,
2022, a decrease of $11.69 from $29.24 at December 31, 2021. These decreases are
primarily due to increases in our outstanding shares, goodwill, and intangible
assets as a result of the BMBC Merger. We believe tangible book value per common
share helps management and investors better understand and assess changes from
period to period in stockholders' equity exclusive of changes in intangible
assets. This non-GAAP measure should be considered in addition to results
prepared in accordance with Generally Accepted Accounting Principles in the U.S.
(GAAP), and is not a substitute for, or superior to, GAAP results. For a
reconciliation of tangible book value per common share to book value per share
in accordance with GAAP, see "Reconciliation of Non-GAAP Measure to GAAP
Measure."
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The table below compares the consolidated capital position of the Bank and the Company to the minimum regulatory requirements as of September 30, 2022:

                                                                                                                                                         To be Well-Capitalized
                                                                     Consolidated                          Minimum For Capital                  

Under Prompt Fix

                                                                       Capital                              Adequacy Purposes                               Action Provisions
(Dollars in thousands)                                        Amount              Percent              Amount               Percent                   Amount                     Percent
Total Capital (to Risk-Weighted Assets)
Wilmington Savings Fund Society, FSB                      $ 2,064,364               13.34  %       $  1,238,255                8.00  %       $            1,547,819                 10.00  %
WSFS Financial Corporation                                  2,163,310               13.94             1,241,408                8.00                       1,551,760                 10.00
Tier 1 Capital (to Risk-Weighted Assets)
Wilmington Savings Fund Society, FSB                        1,915,598               12.38               928,691                6.00                       1,238,255                  8.00
WSFS Financial Corporation                                  1,844,792               11.89               931,056                6.00                       1,241,408                  8.00
Common Equity Tier 1 Capital (to Risk-Weighted
Assets)
Wilmington Savings Fund Society, FSB                        1,915,598               12.38               696,518                4.50                       1,006,082                  6.50
WSFS Financial Corporation                                  1,844,792               11.89               698,292                4.50                       1,008,644                  6.50
Tier 1 Leverage Capital
Wilmington Savings Fund Society, FSB                        1,915,598                9.76               784,766                4.00                         980,957                  5.00
WSFS Financial Corporation                                  1,844,792                9.39               785,658                4.00                         982,073                  5.00


Under the prompt corrective action regime, regulators have established five
capital tiers: well-capitalized, adequately-capitalized, under-capitalized,
significantly under-capitalized, and critically under-capitalized. A depository
institution's capital tier depends on its capital levels in relation to various
relevant capital measures, which include leverage and risk-based capital
measures and certain other factors. Depository institutions that are not
classified as well-capitalized are subject to various restrictions, which may
include restrictions on capital distributions, payment of management fees,
acceptance of brokered deposits and other operating activities.

Regulatory capital requirements for the Bank and the Company include a minimum
common equity Tier 1 capital ratio of 4.50% of risk-weighted assets, a Tier 1
capital ratio of 6.00% of risk-weighted assets, a minimum Total capital ratio of
8.00% of risk-weighted assets and a minimum Tier 1 leverage capital ratio of
4.00% of average assets. In order to avoid limits on capital distributions and
discretionary bonus payments, the Bank and the Company must maintain a capital
conservation buffer of 2.5% of common equity Tier 1 capital over each of the
risk-based capital requirements. As of September 30, 2022, the Bank and the
Company were in compliance with the regulatory capital requirements and met or
exceeded the amounts required to be considered "well-capitalized" as defined in
the regulations.

Not included in the Bank’s capital, WSFS held separately $239.4 million cash to support stock buybacks, potential dividends, acquisitions, strategic growth plans and other general corporate purposes.

As part of our adoption of the Current Expected Credit Losses (CECL) methodology
in 2020, we elected to phase in the day-one adverse effects on regulatory
capital that may result from the adoption of CECL over a three-year period, as
permitted under a final rule of the federal banking agencies.



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  Table of Contents
Liquidity

We manage our liquidity and funding needs through our Treasury function and our
Asset/Liability Committee. We have a policy that separately addresses liquidity,
and management monitors our adherence to policy limits. Also, liquidity risk
management is a primary area of examination by the banking regulators.

Funding sources to support growth and meet our liquidity needs include cash from
operations, retail deposit programs, loan repayments, FHLB borrowings,
repurchase agreements, access to the Federal Reserve Discount Window, and access
to the brokered deposit market as well as other wholesale funding avenues. In
addition, we have a large portfolio of high-quality, liquid investments,
primarily short-duration mortgage-backed securities, that provide a
near-continuous source of cash flow to meet current cash needs, or can be sold
to meet larger discrete needs for cash. We believe these sources are sufficient
to meet our funding needs as well as maintain required and prudent levels of
liquidity over the next twelve months and beyond.

As of September 30, 2022, the Corporation has $1.0 billion in cash, cash
equivalents, and restricted cash. Additionally, the maximum borrowing capacity
with the FHLB was $4.9 billion with an unused borrowing availability of $4.9
billion. Borrowing availability at the Federal Reserve Discount Window was
$213.3 million, and borrowing availability through the overnight fed funds lines
totaled $1.3 billion.

Our primary cash contractual obligations relate to operating leases, long-term
debt, credit obligations, and data processing. At September 30, 2022, we had
$245.4 million in total contractual payments for ongoing leases that have
remaining lease terms of less than one year to 39 years, which includes renewal
options that are exercised at our discretion. For additional information on our
operating leases see Note 9 to the unaudited Consolidated Financial Statements.
At September 30, 2022, we had no FHLB advances, and obligations for principal
payments on long-term debt included $67.0 million for our trust preferred
borrowings, due June 1, 2035, and $150.0 million for our senior debt, due
December 15, 2030. In connection with the BMBC Merger, we assumed debt in the
form of $30.0 million in aggregate principal amount of fixed-to-floating rate
subordinated notes due 2025 and $70.0 million in aggregate principal amount of
fixed-to-floating rate subordinated notes due 2027. We also acquired Royal
Bancshares Capital Trust I (Trust I) and Royal Bancshares Capital Trust II
(Trust II) (collectively, the Trusts), which were utilized for the sole purpose
of issuing and selling capital securities representing preferred beneficial
interests. Although WSFS owns an aggregate of $774.0 thousand of the common
securities of Trust I and Trust II, the Trusts are not consolidated into the
Company's Consolidated Financial Statements. Inclusive of the fair value marks,
WSFS assumed junior subordinated debentures owed to the Trusts with a carrying
value of $11.7 million each, totaling $23.4 million. The Company records its
investments in the Trusts' common securities of $387.0 thousand each as
investments in unconsolidated entities and records dividend income upon
declaration by Trust I and Trust II. The Company has fully and unconditionally
guaranteed all of the obligations of the Trusts, including any distributions and
payments on liquidation or redemption of the capital securities.

We are also contractually obligated to make interest payments on our long-term
debt through their respective maturities. For additional information regarding
long-term debt, see Note 12 to the unaudited Consolidated Financial Statements.
At September 30, 2022, the Company had total commitments to extend credit of
$3.6 billion, which are generally one year commitments.

In 2022, we plan to invest approximately $13.0 million in our Delivery
Transformation initiative to increase adoption and usage of digital channels
aligned with our strategy. Our organization is committed to product and service
innovation as a means to drive growth and to stay ahead of changing customer
demands and emerging competition. We are focused on developing and maintaining a
strong "culture of innovation" that solicits, captures, prioritizes and executes
innovation initiatives, including feedback from our customers, as well as
leveraging technology from product creation to process improvement.


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NON-PERFORMING ASSETS

Nonperforming assets include nonaccruing loans, OREO and restructured loans.
Nonaccruing loans are those on which we no longer accrue interest. Loans are
placed on nonaccrual status immediately if, in the opinion of management,
collection is doubtful, or when principal or interest is past due 90 days or
more and the value of the collateral is insufficient to cover principal and
interest. Interest accrued but not collected at the date a loan is placed on
nonaccrual status is reversed and charged against interest income. In addition,
the amortization of net deferred loan fees is suspended when a loan is placed on
nonaccrual status. Subsequent cash receipts are applied either to the
outstanding principal balance or recorded as interest income, depending on
management's assessment of the ultimate collectability of principal and
interest. Past due loans are defined as loans contractually past due 90 days or
more as to principal or interest payments but which remain in accrual status
because they are considered well secured and in the process of collection.

The following table shows our non-performing assets and past due loans as of the dates indicated:

(Dollars in thousands)                                          September 30, 2022         December 31, 2021
Nonaccruing loans:
Commercial and industrial                                      $          4,837           $          8,211
Owner-occupied commercial                                                   339                        811
Commercial mortgages                                                      5,060                      2,070
Construction                                                              5,158                         12
Residential                                                               2,023                      3,125
Consumer                                                                  1,952                      2,380
Total nonaccruing loans                                                  19,369                     16,609
Other real estate owned                                                     840                      2,320
Restructured loans(1)(6)                                                 17,108                     14,204
Total nonperforming assets                                     $         37,317           $         33,133
Past due loans:
Commercial                                                     $         10,351           $          1,357
Residential                                                               1,094                          -
Consumer (2)                                                             13,309                      8,634
Total past due loans                                           $         24,754           $          9,991

Ratio of allowance for credit losses to total loans and leases(3)

                                                                  1.14   %                   1.19  %

Ratio of non-current loans to total gross loans and leases(4)

                                                                  0.17                       0.21
Ratio of nonperforming assets to total assets                              0.19                       0.21

Ratio of allowance for credit losses to unearned loans

                                                                       755                        569
Ratio of allowance for credit losses to total
nonperforming assets(5)                                                     392                        285


(1)Accruing loans only, which includes acquired nonimpaired loans. Nonaccruing
Troubled Debt Restructurings (TDRs) are included in their respective categories
of nonaccruing loans.
(2)Includes U.S. government guaranteed student loans with little risk of credit
loss.
(3)Represents amortized cost basis for loans, leases and held-to-maturity
securities.
(4)Total loans exclude loans held for sale and reverse mortgages.
(5)Excludes acquired impaired loans.
(6)Balance excludes COVID-19 modifications.

Nonperforming assets increased $4.2 million between December 31, 2021 and
September 30, 2022. This increase was primarily due to the transfer in of one
commercial relationship totaling $5.5 million and one CRE relationship totaling
$2.6 million during the period. These inflows were partially offset by a partial
charge-off on the CRE relationship of $0.5 million, several smaller payoffs and
the continued collection of principal payments on the majority of these loans.
The ratio of nonperforming assets to total assets decreased from 0.21% at
December 31, 2021 to 0.19% at September 30, 2022.
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The following table summarizes the changes in nonperforming assets during the
periods indicated:

                                      Nine Months Ended September 30,
(Dollars in thousands)                      2022                      2021
Beginning balance             $         33,133                     $ 60,508
Additions                               24,513                       42,159
Collections                            (15,909)                     (29,669)
Transfers to accrual                      (922)                        (494)
Charge-offs                             (3,498)                     (20,674)
Ending balance                $         37,317                     $ 51,830


The timely identification of problem loans is a key element in our strategy to
manage our loan portfolio. Problem loans are all criticized, classified and
nonperforming loans and other real estate owned. Timely identification enables
us to take appropriate action and accordingly, minimize losses. An asset review
system established to monitor the asset quality of our loans and investments in
real estate portfolios facilitates the identification of problem assets. In
general, this system uses guidelines established by federal regulation.


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INTEREST RATE SENSITIVITY

Our primary objective in managing interest rate risk is to minimize the adverse
impact of changes in interest rates on net interest income and capital, while
maximizing the yield/cost spread on our asset/liability structure. Interest
rates are partly a function of decisions by the Federal Open Market Committee
(FOMC) on the target range for the federal funds rate, and these decisions are
sometimes difficult to anticipate. In response to the economic and financial
effects of COVID-19, the FOMC reduced interest rates through 2020 and 2021 and
instituted quantitative easing measures as well as domestic and global capital
market support programs. The FOMC raised the federal funds target rate six times
in 2022 for a total of 375 basis points, and has suggested it may continue
raising interest rates further in 2022. In order to manage the risks associated
with changes or possible changes in interest rates, we rely primarily on our
asset/liability structure.

Our primary tool for achieving our asset/liability management strategies is to
match maturities or repricing periods of interest rate-sensitive assets and
liabilities to promote a favorable interest rate spread and mitigate exposure to
fluctuations in interest rates. We regularly review our interest rate
sensitivity and adjust the sensitivity within acceptable tolerance ranges. At
September 30, 2022, interest-earning assets exceeded interest-bearing
liabilities that mature or reprice within one year (interest-sensitive gap) by
$1.8 billion. Our interest-sensitive assets as a percentage of
interest-sensitive liabilities within the one-year window was 125.53% at
September 30, 2022 compared with 120.40% at December 31, 2021. Likewise, the
one-year interest-sensitive gap as a percentage of total assets was 8.82% at
September 30, 2022 compared with 7.28% at December 31, 2021.

The repricing and maturities of our interest-rate sensitive assets and
interest-rate sensitive liabilities at September 30, 2022 are shown in the
following table:

                                                Less than           One to Five         Five to Fifteen       Over Fifteen
(Dollars in thousands)                           One Year              Years                 Years                Years                Total
Interest-rate sensitive assets:
Loans:
Commercial loans and leases(2)                $ 4,377,434          $ 1,383,350          $    309,062          $    9,782          $  6,079,628
Commercial mortgage loans(2)                    2,289,686              812,905               186,985               4,379             3,293,955
Residential(1)(2)                                 161,847              280,689               264,627              81,090               788,253
Consumer(2)                                       902,140              552,287               184,645               3,846             1,642,918
Loans held for sale(2)                             63,564                1,671                 2,274               1,500                69,009
Investment securities,
available-for-sale                                760,150            2,058,029             2,132,124             194,734             5,145,037
Investment securities, held-to-maturity            91,667              333,596               528,240             168,402             1,121,905
Other interest-earning assets                      24,117                    -                     -                   -                24,117
Total interest-rate sensitive assets:         $ 8,670,605          $ 5,422,527          $  3,607,957          $  463,733          $ 18,164,822
Interest-rate sensitive liabilities:
Interest-bearing deposits:
Interest-bearing demand                       $ 1,730,882          $         -          $          -          $        -          $  1,730,882
Savings                                         1,270,812                    -                     -                   -             1,270,812
Money market                                    2,911,497                    -                     -                   -             2,911,497
Customer time deposits                            747,654              311,708                 2,029                   -             1,061,391

Trust preferred borrowings                         90,393                    -                     -                   -                90,393
Senior and subordinated debt                      100,143              148,112                     -                   -               248,255
Other borrowed funds                               55,893                    -                     -                   -                55,893
Total interest-rate sensitive
liabilities:                                  $ 6,907,274          $   459,820          $      2,029          $        -          $  7,369,123

Excess of interest-rate sensitive
assets over interest-rate liabilities
(interest-rate sensitive gap)                 $ 1,763,331          $ 4,962,707          $  3,605,928          $  463,733          $ 10,795,699
One-year interest-rate sensitive
assets/interest-rate sensitive
liabilities                                        125.53  %
One-year interest-rate sensitive gap as
a percent of total assets                            8.82  %


(1)Includes reverse mortgage loans
(2)Loan balances exclude nonaccruing loans, deferred fees and costs
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Market risk is the risk of loss from adverse changes in market prices and rates.
Our market risk arises primarily from interest rate risk inherent in our
lending, investing, and funding activities. To that end, we actively monitor and
manage our interest rate risk exposure. One measure evaluates the impact of an
immediate change in interest rates in 100 basis point increments on the economic
value of equity ratio. The economic value of the equity ratio is defined as the
economic value of the estimated cash flows from assets and liabilities as a
percentage of economic value of cash flows from total assets.

The following table shows the estimated impact of immediate changes in interest rates on our net interest margin and economic value of equity ratio at the levels specified in September 30, 2022 and December 31, 2021:

                                                      September 30, 2022                                                     December 31, 2021
 % Change in Interest             % Change in Net                                                            % Change in Net                   Economic Value of
 Rate (Basis Points)             Interest Margin(1)                Economic Value of Equity(2)              Interest Margin(1)                     Equity(2)
         +300                          20.4%                                  29.53%                              25.1%                              24.27%
         +200                          13.5%                                  28.36%                              16.6%                              23.07%
         +100                           6.8%                                  27.08%                               8.2%                              21.76%
         +50                            3.4%                                  25.60%                               4.1%                              20.33%
         +25                            1.7%                                  25.38%                               2.0%                              20.05%
          -                              -%                                   25.14%                                -%                               19.73%
         -25                           (1.8)%                                 24.88%                              (1.4)%                             19.28%
         -50                           (3.7)%                                 24.57%                              (2.2)%                             18.72%
         -100                          (7.7)%                                 23.85%                              (3.8)%                             17.36%
       '-200(3)                       (15.9)%                                 22.08%                               NMF                                NMF
       '-300(4)                         NMF                                    NMF                                 NMF                                NMF


(1)The percentage difference between net interest margin in a stable interest
rate environment and net interest margin as projected under the various rate
change environments.
(2)The economic value of equity ratio in a stable interest rate environment and
the economic value of equity ratio as projected under the various rate change
environments.
(3)At December 31, 2021, sensitivity indicated by a decrease of 200 basis points
is not deemed meaningful (NMF) given the low absolute level of interest rates in
the period.
(4)Sensitivity indicated by a decrease of 300 basis points is not deemed
meaningful (NMF) given the low absolute level of interest rates in the periods
presented.

We also engage in other business activities that are sensitive to changes in interest rates. For example, mortgage banking income and expenses may fluctuate with changes in interest rates. These fluctuations are difficult to model and estimate.

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RESULTS OF OPERATIONS

Three months ended September 30, 2022: Net income for the three months ended
September 30, 2022 was $73.4 million, compared to $54.4 million for the three
months ended September 30, 2021.

•Net interest income increased $72.3 million during the three months ended
September 30, 2022 compared to the three months ended September 30, 2021,
primarily due to an increase from the balance sheet size and mix from the BMBC
Merger and the rising interest rate environment, offset by lower purchase
accounting accretion and the impact of PPP loans. See "Net Interest Income" for
further information.

•Our provision for credit losses for the three months ended September 30, 2022
increased $28.8 million compared to the three months ended September 30, 2021,
primarily due to the release of ACL reserves that occurred in 2021 as a result
of positive economic forecasts following the impact of the COVID-19 pandemic.
See "Allowance for Credit Losses" for further information.

•Noninterest income for the three months ended September 30, 2022 increased
$20.0 million compared to the three months ended September 30, 2021, due to
increased Wealth Management revenue that is primarily attributable to the BMBC
Merger, higher other banking fees, Cash Connect®, and capital markets income,
partially offset by a decline in our mortgage banking business. See "Noninterest
Income" for further information.

•Noninterest expense increased $36.5 million during the three months ended
September 30, 2022 compared to the three months ended September 30, 2021,
primarily due to higher costs after the BMBC Merger. These increases include
salaries and benefits and variable operating costs. See "Noninterest Expense"
for further information.

•Income tax provision for the three months ended September 30, 2022 increased
$8.3 million compared to the three months ended September 30, 2021, primarily
due to the $27.1 million increase in pre-tax income.

End of nine months September 30, 2022: Net profit for the nine months ended
September 30, 2022 has been $137.9 millioncompared to $215.2 million for the nine months ended September 30, 2021.

• Net interest income increased $143.6 million in the nine months ended
September 30, 2022 compared to the nine months ended September 30, 2021, mainly for the reasons described above. See “Net interest income” for more information.

•Our provision for credit losses for the nine months ended September 30, 2022
increased $143.7 million compared to the nine months ended September 30, 2021,
due to the reasons described above and the initial provision for credit losses
of $23.5 million recorded in connection with the BMBC Merger. See "Allowance for
Credit Losses" for further information.

•Noninterest income for the nine months ended September 30, 2022 increased $55.8
million compared to the nine months ended September 30, 2021, primarily due to
the reasons described above. See "Noninterest Income" for further information.

•Noninterest expense increased $153.3 million during the nine months ended
September 30, 2022 compared to the nine months ended September 30, 2021, due to
the reasons described above, including increases in net corporate development
and restructuring costs, salaries and benefits, and variable operating costs.
See "Noninterest Expense" for further information.

•Income tax provision for the nine months ended September 30, 2022 decreased
$20.7 million compared to the nine months ended September 30, 2021, primarily
due to the $97.7 million decrease in pre-tax income.


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Net interest income

The following tables provide information concerning the balances, yields and
rates on interest-earning assets and interest-bearing liabilities during the
periods indicated:

                                                                                                Three months ended September 30,
                                                                               2022                                                          2021
                                                          Average                                  Yield/               Average                                  Yield/
(Dollars in thousands)                                    Balance             Interest            Rate(1)               Balance             Interest            Rate(1)
Assets:
Interest-earning assets:
Loans:(2)
Commercial loans and leases                           $  4,895,972          $  67,060                 5.45  %       $  3,623,187          $  43,335                 4.75  %
Commercial real estate loans                             4,262,599             53,096                 4.94             2,788,963             28,454                 4.05
Residential loans                                          769,151              8,379                 4.36               601,998              9,245                 6.14
Consumer loans                                           1,594,673             23,384                 5.82             1,109,188             11,639                 4.16
Loans held for sale                                         66,103                968                 5.81                90,635                787                 3.44
Total loans and leases                                  11,588,498            152,887                 5.24             8,213,971             93,460                 4.52
Mortgage-backed securities(3)                            5,243,169             28,338                 2.16             3,397,297             13,947                 1.64
Investment securities(3)                                   361,113              1,981                 2.57               319,226              1,353                 1.89
Other interest-earning assets                              460,124              3,359                 2.90             1,697,840                691                 0.16
Total interest-earning assets                         $ 17,652,904          $ 186,565                 4.21  %       $ 13,628,334          $ 109,451                 3.19  %
Allowance for credit losses                               (143,943)                                                     (125,830)
Cash and due from banks                                    242,734                                                       145,547
Cash in non-owned ATMs                                     603,780                                                       481,755
Bank-owned life insurance                                  100,863                                                        33,349
Other noninterest-earning assets                         1,779,411                                                       974,417
Total assets                                          $ 20,235,749                                                  $ 15,137,572
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing demand                               $  3,370,158          $   2,179                 0.26  %       $  2,698,391          $     573                 0.08  %
Savings                                                  2,287,227                185                 0.03             1,931,433                139                 0.03
Money market                                             3,833,113              2,907                 0.30             2,761,222                780                 0.11
Customer time deposits                                   1,083,290              1,230                 0.45             1,045,746              1,646                 0.62
Total interest-bearing customer deposits                10,573,788              6,501                 0.24             8,436,792              3,138                 0.15
Brokered deposits                                           24,184                142                 2.33                58,645                412                 2.79
Total interest-bearing deposits                         10,597,972              6,643                 0.25             8,495,437              3,550                 0.17
Federal Home Loan Bank advances                              4,979                 42                 3.35                     -                  -                    -
Trust preferred borrowings                                  90,361                951                 4.18                67,011                316                 1.87
Senior and subordinated debt                               248,332              2,061                 3.32               147,730              1,089                 2.95
Other borrowed funds(4)                                     39,745                 37                 0.37                23,324                  5                 0.09
Total interest-bearing liabilities                    $ 10,981,389          $   9,734                 0.35  %       $  8,733,502          $   4,960                 0.23  %
Noninterest-bearing demand deposits                      6,319,755                                                     4,177,984
Other noninterest-bearing liabilities                      589,817                                                       320,421
Stockholders' equity                                     2,347,178                                                     1,907,868
Noncontrolling interest                                     (2,390)                                                       (2,203)
Total liabilities and stockholders' equity            $ 20,235,749                                                  $ 15,137,572
Excess of interest-earning assets over
interest-bearing liabilities                          $  6,671,515                                                  $  4,894,832
Net interest income                                                         $ 176,831                                                     $ 104,491
Interest rate spread                                                                                  3.86  %                                                       2.96  %
Net interest margin                                                                                   3.99  %                                                       3.05  %


(1)Weighted average yields for tax-exempt securities and loans have been
computed on a tax-equivalent basis.
(2)Average balances are net of unearned income and include nonperforming loans.
(3)Includes securities available-for-sale at fair value.
(4)Includes federal funds purchased.
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                                                                                                 Nine months ended September 30,
                                                                               2022                                                          2021
                                                          Average                                  Yield/               Average                                  Yield/
(Dollars in thousands)                                    Balance             Interest            Rate(1)               Balance             Interest            Rate(1)
Assets:
Interest-earning assets:
Loans:(2)
Commercial loans and leases                           $  4,860,079          $ 176,476                 4.87  %       $  3,885,392          $ 141,994                 4.89  %
Commercial real estate loans                             4,263,906            137,183                 4.30             2,794,540             85,922                 4.11
Residential loans                                          799,980             26,810                 4.47               660,858             33,380                 6.73
Consumer loans                                           1,472,878             57,900                 5.26             1,130,554             36,425                 4.31
Loans held for sale                                         69,068              2,741                 5.31               127,535              3,236                 3.39
Total loans and leases                                  11,465,911            401,110                 4.68             8,598,879            300,957                 4.68
Mortgage-backed securities(3)                            5,253,248             78,828                 2.00             2,964,437             37,157                 1.67
Investment securities                                      325,960              4,642                 2.21               324,620              4,185                 1.95
Other interest-earning assets                            1,124,922              6,142                 0.73             1,407,422              1,335                 0.13
Total interest-earning assets                         $ 18,170,041          $ 490,722                 3.62  %       $ 13,295,358          $ 343,634                 3.46  %
Allowance for credit losses                               (138,532)                                                     (181,947)
Cash and due from banks                                    240,421                                                       145,571
Cash in non-owned ATMs                                     560,202                                                       448,244
Bank-owned life insurance                                  100,659                                                        32,615
Other noninterest-earning assets                         1,728,847                                                       990,187
Total assets                                          $ 20,661,638                                                  $ 14,730,028
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing demand                               $  3,384,443          $   3,701                 0.15  %       $  2,610,795          $   1,722                 0.09  %
Savings                                                  2,276,861                506                 0.03             1,895,221                438                 0.03
Money market                                             3,969,219              5,063                 0.17             2,733,068              2,435                 0.12
Customer time deposits                                   1,132,489              3,826                 0.45             1,080,149              5,865                 0.73
Total interest-bearing customer deposits                10,763,012             13,096                 0.16             8,319,233             10,460                 0.17
Brokered deposits                                           40,866                441                 1.44                86,050              1,364                 2.12
Total interest-bearing deposits                         10,803,878             13,537                 0.17             8,405,283             11,824                 0.19
Federal Home Loan Bank advances                              1,678                 42                 3.35                   243                  5                 2.63
Trust preferred borrowings                                  90,313              2,146                 3.18                67,011                957                 1.91
Senior debt                                                248,448              5,939                 3.19               207,186              5,408                 3.48
Other borrowed funds(4)                                     36,401                 54                 0.20                21,561                 15                 0.09
Total interest-bearing liabilities                    $ 11,180,718          $  21,718                 0.26  %       $  8,701,284          $  18,209                 0.28  %
Noninterest-bearing demand deposits                      6,466,720                                                     3,879,948
Other noninterest-bearing liabilities                      526,945                                                       324,011
Stockholders' equity                                     2,489,860                                                     1,827,007
Noncontrolling interest                                     (2,605)                                                       (2,222)
Total liabilities and stockholders' equity            $ 20,661,638                                                  $ 14,730,028
Excess of interest-earning assets over
interest-bearing liabilities                          $  6,989,323                                                  $  4,594,074
Net interest and dividend income                                            $ 469,004                                                     $ 325,425
Interest rate spread                                                                                  3.36  %                                                       3.18  %
Net interest margin                                                                                   3.46  %                                                       3.28  %


(1)Weighted average yields for tax-exempt securities and loans have been
computed on a tax-equivalent basis.
(2)Average balances are net of unearned income and include nonperforming loans.
(3)Includes securities available-for-sale at fair value.
(4)Includes federal funds purchased.


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Three months ended September 30, 2022: During the three months ended
September 30, 2022, net interest income increased $72.3 million from the three
months ended September 30, 2021 primarily due to a $74.6 million increase from
the balance sheet size and mix from the BMBC Merger and the rising interest rate
environment, offset by $2.6 million from the impact of PPP loans and a $2.2
million decrease in purchase accounting accretion. Net interest margin was 3.99%
for the third quarter of 2022, a 94 basis point increase compared to 3.05% for
the third quarter of 2021 due to a favorable increase of 70 basis points from
rising interest rate environment and 38 basis points from the balance sheet size
and mix, offset by reductions of 9 basis points from lower purchase accounting
accretion and 5 basis points from PPP loans.

Nine months ended September 30, 2022: During the nine months ended September 30,
2022, net interest income increased $143.6 million from the nine months ended
September 30, 2021. This increase included $174.0 million from balance sheet
size and mix from the BMBC Merger and the rising interest rate environment,
partially offset by $17.7 million of PPP income recognized during the nine
months ended September 30, 2021 and a $12.7 million decrease in purchase
accounting accretion. Net interest margin was 3.46% for the nine months ended
September 30, 2022, an 18 basis point increase compared to 3.28% for the nine
months ended September 30, 2021 reflecting a 42 basis point increase due to
balance sheet size and mix and the rising interest rate environment, partially
offset by a 16 basis points decrease from lower purchase accounting accretion
and 8 basis points from PPP loans.

The following table provides certain information regarding changes in net
interest income attributable to changes in the volumes of interest-earning
assets and interest-bearing liabilities and changes in the rates for the periods
indicated. For each category of interest-earning assets and interest-bearing
liabilities, information is provided on the changes that are attributable to:
(i) changes in volume (change in volume multiplied by prior year rate); (ii)
changes in rates (change in rate multiplied by prior year volume on each
category); and (iii) net change (the sum of the change in volume and the change
in rate). Changes due to the combination of rate and volume changes (changes in
volume multiplied by changes in rate) are allocated proportionately between
changes in rate and changes in volume.
Nine Months Ended September 30,                    2022 vs. 2021
(Dollars in thousands)                Volume        Yield/Rate          Net
Interest Income:
Loans:
Commercial loans and leases(1)      $  35,458      $      (976)     $  34,482
Commercial mortgage loans              47,118            4,143         51,261
Residential                             8,978          (15,548)        (6,570)
Consumer                               12,428            9,047         21,475
Loans held for sale                    (2,412)           1,917           (495)
Mortgage-backed securities             33,179            8,492         41,671
Investment securities(2)                   14              443            457
Other interest-earning assets            (503)           5,310          4,807
Favorable (unfavorable)               134,260           12,828        147,088
Interest expense:
Deposits:
Interest-bearing demand                   609            1,370          1,979
Money market                            1,367            1,261          2,628
Savings                                    68                -             68
Customer time deposits                    450           (2,489)        (2,039)
Brokered certificates of deposits        (573)            (350)          (923)
FHLB advances                              36                2             38
Trust preferred borrowings                408              781          1,189
Senior and subordinated debt            1,222             (691)           531
Other borrowed funds                       14               25             39
Unfavorable (favorable)                 3,601              (91)         3,510
Net change, as reported             $ 130,659      $    12,919      $ 143,578

(1)Includes income adjustment equivalent to tax related to commercial loans. (2)Includes income adjustment equivalent to municipal bond tax.

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Provision for credit losses

We maintain the allowance for credit losses at an appropriate level based on our
assessment of estimable and expected losses in the loan portfolio. Our allowance
for credit losses is based on our historical loss experience that includes the
inherent risk of our loans and various other factors including but not limited
to, collateral values, trends in asset quality, level of delinquent loans and
concentrations. Further, regional and national economic forecasts are considered
in our expected credit losses. Our evaluation is based on a review of the
portfolio and requires significant, complex and difficult judgments.

During the three months ended September 30, 2022, we recorded a provision for
credit losses of $7.5 million, a net change of $28.8 million, as compared with
the recovery of credit losses of $21.3 million for the three months ended
September 30, 2021. The increase is primarily due to the release of ACL reserves
in 2021 from positive economic forecasts following the impact of the COVID-19
pandemic.

During the nine months ended September 30, 2022, we recorded a provision for
credit losses of $34.7 million, a net change of $143.7 million, as compared with
the recovery of credit losses of $109.0 million for the nine months ended
September 30, 2021. The increase was primarily due to the reasons described
above and the initial provision for credit losses of $23.5 million recorded in
connection with the BMBC Merger.

The allowance for credit losses increased to $146.2 million at September 30,
2022 from $94.5 million at December 31, 2021. The increase was primarily due to
an initial ACL of $49.6 million recorded in connection with the BMBC Merger. The
initial $49.6 million ACL recorded includes $23.5 million related to non-PCD
loans, or the initial provision for credit loss recorded, and $26.1 million
related to PCD loans, which does not have an initial income statement impact,
but adjusts the amortized cost basis of the loans at acquisition (i.e., a
balance sheet gross-up). The ratio of allowance for credit losses to total loans
and leases was 1.14% at September 30, 2022 and 1.19% at December 31, 2021.

The following tables detail the ACL allocation and show our net charges (recoveries) by portfolio category:

                                                                 Owner-
                                       Commercial and           occupied            Commercial
(Dollars in thousands)                 Industrial(1)           Commercial           Mortgages           Construction         Residential(2)          Consumer(3)              Total
As of September 30, 2022
Allowance for credit losses           $      59,884          $     6,003          $    21,534          $     6,499          $        4,818          $    47,457          $    146,195
% of ACL to total ACL                            41  %                 5  %                15  %                 4  %                    3  %                32  %                100  %
Loan portfolio balance                $   3,169,478          $ 1,788,591          $ 3,280,379          $ 1,028,203          $      758,593          $ 1,677,128          $ 11,702,372
% to total loans and leases                      27  %                15  %                28  %                 9  %                    7  %                14  %                100  %
Three months ended September
30, 2022
Charge-offs                           $       5,120          $         -          $       544          $         -          $            -          $     1,834          $      7,498
Recoveries                                    3,194                    4                  101                  653                     207                  114                 4,273
Net charge-offs (recoveries)          $       1,926          $        (4)         $       443          $      (653)         $         (207)         $     1,720          $      3,225
Average loan balance                  $   3,098,451          $ 1,797,521          $ 3,294,284          $   968,315          $      766,320          $ 1,594,674          $ 11,519,565
Ratio of net charge-offs
(recoveries) to average gross
loans                                          0.25  %                  NMF              0.05  %             (0.27) %                (0.11) %              0.43  %               0.11  %
Nine months ended September 30,
2022
Charge-offs                           $      11,308          $       179          $       581          $         -          $          186          $     4,062          $     16,316
Recoveries                                    4,667                  271                  223                  653                     737                  663                 7,214
Net charge-offs (recoveries)          $       6,641          $       (92)         $       358          $      (653)         $         (551)         $     3,399          $      9,102
Average loan balance                  $   3,017,771          $ 1,842,307   
      $ 3,332,108          $   931,799          $      796,323          $ 1,472,879          $ 11,393,186
Ratio                                          0.29  %             (0.01) %              0.01  %             (0.09) %                (0.09) %              0.31  %               0.11  %


(1)Includes commercial small business leases and PPP loans.
(2)Excludes reverse mortgages.
(3)Includes home equity lines of credit, installment loans unsecured lines of
credit and education loans.
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                                                                Owner-
                                      Commercial and           occupied            Commercial
(Dollars in thousands)                Industrial(1)           Commercial           Mortgages           Construction          Residential(2)          Consumer(3)             Total
As of December 31, 2021
Allowance for credit losses          $      49,967          $     4,574          $    11,623          $      1,903          $        3,352          $    23,088          $    94,507
% of ACL to total ACL                           53  %                 5  %                12  %                  2  %                    4  %                24  %               100  %
Loan portfolio balance               $   2,270,319          $ 1,341,707          $ 1,881,510          $    687,213          $      542,733          $ 1,158,573          $ 7,882,055
% to total loans and leases                     28  %                17  %                24  %                  9  %                    7  %                15  %               100  %
Year ended December 31, 2021
Charge-offs                          $      23,592          $        83          $        73          $      2,473          $            -          $     2,094          $    28,315
Recoveries                                   8,756                  160                  269                     -                     789                1,131               11,105
Net charge-offs (recoveries)         $      14,836          $       (77)         $      (196)         $      2,473          $         (789)         $       963          $    17,210
Average loan balance                 $   2,463,933          $ 1,337,883          $ 1,994,995          $    775,246          $      628,411          $ 1,134,569          $ 8,335,037
Ratio of net charge-offs
(recoveries) to average gross
loans                                         0.60  %             (0.01) %             (0.01) %               0.32  %                (0.13) %              0.08  %              0.21  %


(1)Includes commercial small business leases and PPP loans.
(2)Excludes reverse mortgages.
(3)Includes home equity lines of credit, installment loans unsecured lines of
credit and education loans.

See Note 8 to the unaudited consolidated financial statements and non-performing assets above for more information.

Non-interest income

Three months ended September 30, 2022: During the three months ended
September 30, 2022, noninterest income was $62.7 million, an increase of $20.0
million from $42.6 million during the three months ended September 30, 2021. The
increase was driven by a $14.2 million increase in Wealth Management revenue, of
which $12.3 million was attributable to the combination with Bryn Mawr Trust. In
addition, year-over-year increase included $6.5 million of other banking fees,
including fees associated with our consumer lending partnerships, gain on sale
of SBA loans and traditional bank service fees, $4.2 million in Cash Connect®,
and $0.8 million in capital markets income. Partially offsetting the increase
was a $4.2 million decline in mortgage banking fees primarily resulting from the
decline in refinancing originations compared to the historically higher levels
in 3Q 2021.

Nine months ended September 30, 2022: During the nine months ended September 30,
2022, noninterest income was $195.3 million, an increase of $55.8 million from
$139.5 million during the nine months ended September 30, 2021. This increase
reflects a $48.3 million increase in Wealth Management revenue, of which $42.1
million was attributable to the combination with Bryn Mawr Trust, $12.1 million
in other banking fees as described above, $5.8 million in capital markets
income, and $5.4 million from Cash Connect®, partially offset by a $12.2 million
decrease in mortgage banking activities as described above.

For more information, see note 4 of the unaudited consolidated financial statements.

Non-interest expenses

Three months ended September 30, 2022: During the three month ended
September 30, 2022, noninterest expense was $132.9 million, an increase of $36.5
million from $96.4 million for the three months ended September 30, 2021. The
increase was primarily due to higher costs after the BMBC Merger. These higher
costs included $19.0 million in salaries and benefits and $8.7 million of higher
variable operating costs, including $2.1 million from Cash Connect®.

Nine months ended September 30, 2022: During the nine months ended September 30,
2022, noninterest expense was $441.4 million, an increase of $153.3 million from
$288.1 million for the nine months ended September 30, 2021. The increase is due
to the same reasons described above, which included net corporate development
and restructuring costs of $58.2 million, salaries and benefits of $52.5
million, and higher variable operating costs of $27.7 million.


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Income taxes

We and our subsidiaries file a consolidated federal income tax return and
separate state income tax returns. Income taxes are accounted for in accordance
with ASC 740, Income Taxes, which requires the recording of deferred income
taxes for tax consequences of temporary differences. We recorded income tax
expense of $25.8 million and $49.9 million during the three and nine months
ended September 30, 2022 compared to income tax expense of $17.5 million and
$70.6 million for the same period in 2021.

Our effective tax rate was 26.0% and 26.5% for the three and nine months ended
September 30, 2022 compared to 24.3% and 24.7% for the same period in 2021. The
effective tax rate for both the three and nine months ended September 30, 2022
increased primarily due to higher state tax expense resulting from the
acquisition of BMT. In addition, we recognized $0.4 million of tax expense
related to nondeductible acquisition costs during the nine months ended
September 30, 2022 combined with $1.9 million of tax expense related to
nondeductible costs incurred from the sale of the BMTIA business during 2022.

The effective tax rate reflects the recognition of certain tax benefits in the
financial statements including those benefits from tax-exempt interest income,
federal low-income housing tax credits, research and development tax credits and
excess tax benefits from recognized stock compensation. These tax benefits are
offset by the tax effect of stock-based compensation expense related to
incentive stock options, nondeductible acquisition costs and a provision for
state income tax expense. We frequently analyze our projections of taxable
income and make adjustments to our provision for income taxes accordingly.


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