WSFS FINANCIAL CORP

Previous wording

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 $20.9 billion in assets and $87.2 billion in assets under management (AUM) and assets under administration (AUA) at September 30, 2024, 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 192 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.

Current wording

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 $20.5 billion in assets and $89.6 billion in assets under management (AUM) and assets under administration (AUA) at March 31, 2025, 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 193 years. In addition to our focus on stellar client 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 and strategy is simple: “We Stand for Service.”

Previous wording

Our banking business had a total loan and lease portfolio of $13.3 billion as of September 30, 2024, which was funded primarily through commercial relationships and consumer and customer generated deposits. We have built a $10.2 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.

Current wording

Our banking business had a total loan and lease portfolio of$12.7 billion as of March 31, 2025, which was funded primarily through commercial relationships and consumer client generated deposits. We have built a$9.8 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, through acquisitions, and through our leasing business conducted by NewLane Finance®. NewLane Finance®originates small business leases and provides commercial financing to businesses nationwide, targeting various equipment categories. 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 business specializing in a variety of residential mortgage and refinancing solutions. In addition, NewLane Finance® offers captive insurance through its subsidiary, Prime Protect.

Previous wording

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 smart safes nationwide, and manages approximately $1.6 billion in total cash and services approximately 32,400 non-bank ATMs and 9,700 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, and deposit safe cash logistics. Cash Connect®also supports 569 owned or branded ATMs for WSFS Bank Customers, which is one of the largest branded ATM networks in our market.

Current wording

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 smart safes nationwide, and manages approximately $1.4 billion in total cash and services approximately 27,800 non-bank ATMs and 10,400 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, and deposit safe cash logistics. Cash Connect®also supports 580 owned or branded ATMs for WSFS Bank Clients, which is one of the largest branded ATM networks in our market.

Previous wording

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. Combined, these businesses had$87.2 billion of AUM and AUA at September 30, 2024.

Current wording

Our Wealth and Trust 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. Combined, these businesses had$89.6 billion of AUM and AUA at March 31, 2025.

Previous wording

Bryn Mawr Trust® is our predominant Private Wealth Management brand, providing advisory, investment management and trustee services to institutions, affluent and high-net-worth individuals. Private Wealth Management serves high-net-worth clients and institutions by providing trustee and advisory services, financial planning, customized investment strategies, brokerage products such as annuities and traditional banking services such as credit and deposit products tailored to its clientele. Private Wealth Management includes businesses that operate under the Bank’s charter, through a broker/dealer and as a registered investment advisor (RIA). It generates revenue through a percentage fee based on account assets, fee-only arrangements, net interest income and other fee-only services such as estate administration, trust tax planning and custody. 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.

Current wording

Bryn Mawr Trust® is our predominant Private Wealth Management brand, providing advisory, investment management and trustee services to institutions, affluent and high-net-worth individuals. Private Wealth Management serves high-net-worth clients and institutions by providing trustee and advisory services, financial planning, customized investment strategies, brokerage products such as annuities and traditional banking services such as credit and deposit products tailored to its clientele. Private Wealth Management includes businesses that operate under the Bank’s charter, through a third-party broker/dealer and as a registered investment advisor (RIA). It generates revenue through a percentage fee based on account assets, fee-only arrangements, net interest income and other fee-only services such as estate administration, trust tax planning and custody. 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.

Previous wording

As of September 30, 2024, we service our customers primarily from 114 offices located in Pennsylvania (57), Delaware (39), New Jersey (14), Florida (2) Nevada (1) and Virginia (1), our ATM network, our website atwww.wsfsbank.com and our mobile app.

Current wording

As of March 31, 2025, we service our clients primarily from 115 offices located in Pennsylvania (58), Delaware (39), New Jersey (14), Florida (2) Nevada (1) and Virginia (1), our ATM network, our website atwww.wsfsbank.com and our mobile app.

Previous wording

Highlights and Other Notables Items for Three and Nine Months Ended September 30, 2024

Current wording

Highlights and Other Notables Items for Three Months Ended March 31, 2025

Previous wording

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

Current wording

◦The Board of Directors approved a 13% increase in the quarterly cash dividend to $0.17 per share of common stock as well as an incremental share repurchase authorization of 10% of outstanding shares as of March 31, 2025.

Previous wording

◦WSFS repurchased 266,672 sharesof common stock under the Company's share repurchase programs at an average price of$51.82 per share, for an aggregate purchase price of approximately$13.8 million.

Current wording

◦WSFS repurchased 1,027,214 sharesof common stock under the Company's share repurchase programs at an average price of$52.37 per share, for an aggregate purchase price of approximately$53.8 million, and paid quarterly dividends of $8.8 million, for a total capital return of $62.6 million.

Previous wording

◦The Bank and the Company continue to be well above well-capitalized across all measures of regulatory capital, with total common equity Tier 1 capital of 13.46% and 13.56%, respectively, and total risk-based capital of 14.71% and 15.61%, respectively.

Current wording

◦The Bank and the Company continue to be well above well-capitalized across all measures of regulatory capital, with total common equity Tier 1 capital of 14.12% and 14.10%, respectively, and total risk-based capital of 15.36% and 15.89%, respectively.

Previous wording

Our primary cash contractual obligations relate to operating leases, long-term debt, credit obligations, and data processing. At September 30, 2024, we had $219.9 million in total contractual payments for ongoing leases that have remaining lease terms of less than one year to 21 years, which includes renewal options that are exercised at our discretion. For additional information on our operating leases, see Note 8 to the unaudited Consolidated Financial Statements. At September 30, 2024, we had obligations for principal payments on long-term debt including $43.2 million of FHLB advances, $67.0 million for our trust preferred borrowings, due June 1, 2035, $70.0 million of fixed-to-floating rate subordinated notes due 2027, and $150.0 million for our senior debt, due December 15, 2030. At September 30, 2024, we had advances of $700.0 million under the BTFP, due January 2025. On October 11, 2024 and October 18, 2024, WSFS Bank executed repayments of advances under the Bank Term Funding Program (BTFP) totaling $700.0 million of principal and $25.1 million of accrued interest. Royal Bancshares Capital Trust I (Trust I) and Royal Bancshares Capital Trust II (Trust II) (collectively, the RBC Trusts), which were acquired from Bryn Mawr Bank Corporation, were utilized for the sole purpose of issuing and selling capital securities representing preferred beneficial interests. Although WSFS owns an aggregate of $0.8 million of the common securities of Trust I and Trust II, the RBC 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 RBC Trusts with a current carrying value of $11.9 million each, totaling $23.8 million. The Company records its investments in the RBC Trusts’ common securities of $0.4 million 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 RBC 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.

Current wording

◦WSFS completed the redemption of the $70.0 million of fixed-to-floating rate subordinated notes due 2027 (the 2027 Notes) acquired from Bryn Mawr Trust using our operating cash flows.

Previous wording

Total assets increased $310.5 million to $20.9 billion at September 30, 2024 compared to December 31, 2023. This increase is primarily comprised of the following:

Current wording

Total assets decreased $265.4 million to $20.5 billion at March 31, 2025 compared to December 31, 2024. This decrease is primarily comprised of the following:

Previous wording

◦Investment securities, available-for-sale decreased $109.4 million, primarily due to repayments, maturities and calls of $262.8 million, partially offset by increased market values of $104.1 million and purchases of $51.6 million.

Current wording

◦Investment securities available-for-sale increased $37.4 million, primarily due to increased market values of $92.2 million and purchases of $36.1 million, partially offset by repayments, maturities and calls of $90.0 million.

Previous wording

◦Investment securities, held-to-maturity decreased $32.3 million, primarily due to repayments, maturities and calls of $45.8 million, partially offset by $11.2 million of amortization of net unrealized losses on available-for-sale securities transferred to held-to-maturity.

Current wording

◦Investment securities held-to-maturity decreased $8.8 million, due to repayments, maturities and calls of $12.5 million, partially offset by $3.7 million of amortization of net unrealized losses on available-for-sale securities transferred to held-to-maturity.

Previous wording

Total liabilities increased $113.3 million to $18.2 billion at September 30, 2024 compared to December 31, 2023. This increase is primarily comprised of the following:

Current wording

Total liabilities decreased $347.2 million to $17.9 billion at March 31, 2025 compared to December 31, 2024. This decrease is primarily comprised of the following:

Previous wording

•Other liabilities decreased $46.4 million, primarily due to a decrease of $54.4 million in collateral held on derivatives and derivative liabilities, partially offset by an increase of $5.7 million in our lease liabilities related to new leases and extensions.

Current wording

•Other liabilities decreased $128.7 million, primarily due to a decrease of $74.7 million in collateral held on derivatives and derivative liabilities and $40.6 million in our accrued expenses primarily related to incentive payments.

Previous wording

Stockholders’ equity of WSFS increased $200.6 million between December 31, 2023 and September 30, 2024. This increase was primarily due to $199.5 million of earnings and a decrease of $94.0 million in accumulated other comprehensive loss driven by market value increases on available-for-sale mortgage-backed securities, partially offset by $74.5 million from the repurchase of shares of common stock under our stock repurchase plan and the payment of dividends on our common stock of $27.0 million.

Current wording

Stockholders’ equity of WSFS increased $81.9 million to $2.7 billion at March 31, 2025 compared to December 31, 2024. This increase was primarily due to $65.9 million of earnings and a decrease of $75.4 million in accumulated other comprehensive loss driven by market value increases on available-for-sale mortgage-backed securities, partially offset by $53.8 million from the repurchase of shares of common stock under our stock repurchase plan and the payment of dividends on our common stock of $8.8 million.

Previous wording

During the three months ended September 30, 2024, our Board of Directors approved a quarterly cash dividend of $0.15 per share of common stock. This dividend will be paid on November 22, 2024 to stockholders of record as of November 8, 2024.

Current wording

In line with our annual capital planning process, the Board of Directors approved a 13% increase in the quarterly cash dividend to$0.17 per share of common stock as well as anincremental share repurchase authorization of 10% of outstanding shares as of March 31, 2025. The dividend will be paid on May 23, 2025 to stockholders of record as of May 9, 2025.

Previous wording

Book value per share of common stock was $45.37 at September 30, 2024, an increase of $4.44 from $40.93 at December 31, 2023. Tangible book value per share of common stock (a non-GAAP financial measure) was $28.56 at September 30, 2024, an increase of $4.23 from $24.33 at December 31, 2023. 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."

Current wording

Book value per share of common stock was $46.31 at March 31, 2025, an increase of $2.16 from $44.15 at December 31, 2024. Tangible book value per share of common stock (a non-GAAP financial measure) was $29.25 at March 31, 2025, an increase of $1.95 from $27.30 at December 31, 2024. 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."

Previous wording

Not included in the Bank’s capital, WSFS separately held $307.4 million in cash to support share repurchases, potential dividends, acquisitions, strategic growth plans and other general corporate purposes.

Current wording

Not included in the Bank’s capital, WSFS separately held $230.2 million in cash to support share repurchases, potential dividends, acquisitions, strategic growth plans and other general corporate purposes.

Previous wording

As of September 30, 2024, the Company had$1.0 billion in cash, cash equivalents, and restricted cash. As of September 30, 2024, our estimated uninsured deposits were $6.1 billion, or 37% of total customer deposits, and our estimated unprotected deposits (uninsured and uncollateralized) were $4.9 billion, or 30% of total customer deposits.

Current wording

As of March 31, 2025, the Company had$1.0 billion in cash, cash equivalents, and restricted cash. As of March 31, 2025, our estimated uninsured deposits were $6.3 billion, or 37% of total client deposits, and our estimated unprotected deposits (uninsured and uncollateralized) were $5.1 billion, or 30% of total client deposits.

Previous wording

As of September 30, 2024, the Company had a readily available, secured borrowing capacity of $5.6 billion from the FHLB and $2.0 billion through the Federal Reserve Discount Window. In addition, the Company had $1.4 billion in unpledged securities that could be used to support additional borrowings and $0.3 billion of cash deposited with the Federal Reserve Bank.

Current wording

As of March 31, 2025, the Company had a readily available, secured borrowing capacity of $5.6 billion from the FHLB and $2.2 billion through the Federal Reserve Discount Window. In addition, the Company had $1.3 billion in unpledged securities that could be used to support additional borrowings and $0.5 billion of cash deposited with the Federal Reserve Bank.

Previous wording

Commitments to extend credit provide for financing on predetermined terms as long as the customer continues to meet specific criteria. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being completely drawn upon, the total commitment amounts do not necessarily represent future cash requirements. At September 30, 2024, the Company had total commitments to extend creditof $4.1 billion, which are generally one year commitments.

Current wording

Commitments to extend credit provide for financing on predetermined terms as long as the client continues to meet specific criteria. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being completely drawn upon, the total commitment amounts do not necessarily represent future cash requirements. At March 31, 2025, the Company had total commitments to extend credit, including cancellable commitments, of $4.2 billion, which are generally one year commitments.

Previous wording

(3)Includes U.S. government guaranteed student loans with little risk of credit loss.

Current wording

(2)Includes U.S. government guaranteed student loans with little risk of credit loss.

Previous wording

(5)Total loans exclude loans held for sale and reverse mortgages.

Current wording

(4)Total loans exclude loans held for sale and reverse mortgages.

Previous wording

(6)Excludes acquired purchase credit deteriorated loans.

Current wording

(5)Excludes acquired purchase credit deteriorated loans.

Previous wording

Nonperforming assets increased $15.6 million between December 31, 2023 and September 30, 2024. This increase was primarily driven by the addition of two C&I relationships during the third quarter, partially offset by favorable resolutions and paydowns of multiple loans during the year and a charge-off on a commercial mortgage relationship. The ratio of nonperforming assets to total assets increased from 0.37% at December 31, 2023 to 0.44% at September 30, 2024.

Current wording

Nonperforming assets decreased $10.5 million between December 31, 2024 and March 31, 2025. This decrease was primarily driven by the charge-off of an existing nonperforming C&I loan to a fund that is invested in office properties, partially offset by the migration of a land development loan. The ratio of nonperforming assets to total assets decreased from 0.61% at December 31, 2024 to 0.57% at March 31, 2025.

Previous wording

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. The FOMC lowered the federal funds target rate once in 2024 for a total of 50 basis points and increased the target rate four times in 2023 for a total of 100 basis points, and has suggested it may continue lowering interest rates further in 2024. In order to manage the risks associated with changes or possible changes in interest rates, we rely primarily on our asset/liability structure.

Current wording

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. The FOMC lowered the federal funds target rate three times in 2024 for a total of 100 basis points after they increased the target rate four times in 2023 for a total of 100 basis points. In order to manage the risks associated with changes or possible changes in interest rates, we rely primarily on our asset/liability structure.

Previous wording

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, 2024, interest-bearing liabilities exceeded interest-earning assets that mature or reprice within one year (interest-sensitive gap) by $162.4 million. Our interest-sensitive assets as a percentage of interest-sensitive liabilities within the one-year window was 98.25% at September 30, 2024 compared with 99.67% at December 31, 2023. Likewise, the one-year interest-sensitive gap as a percentage of total assets was (0.78)% at September 30, 2024 compared with (0.14)% at December 31, 2023.

Current wording

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 March 31, 2025, interest-earning assets exceeded interest-bearing liabilities that mature or reprice within one year (interest-sensitive gap) by $473.6 million. Our interest-sensitive assets as a percentage of interest-sensitive liabilities within the one-year window was 105.39% at March 31, 2025 compared with 105.28% at December 31, 2024. Likewise, the one-year interest-sensitive gap as a percentage of total assets was 2.30% at March 31, 2025 compared with 2.26% at December 31, 2024.

Previous wording

Three months ended September 30, 2024: Net income for the three months ended September 30, 2024 was $64.4 million, compared to $74.2 million for the three months ended September 30, 2023.

Current wording

Three months ended March 31, 2025: Net income attributable to WSFS for the three months ended March 31, 2025 was $65.9 million, compared to $65.8 million for the three months ended March 31, 2024.

Previous wording

•Noninterest expense increased $24.0 million, primarily due to higher salaries and benefits from annual performance-based increases and talent additions in key business lines and Cash Connect® funding costs associated with a shift towards external funding.

Current wording

•Noninterest expense increased $2.7 million, primarily due to higher salaries and benefits from talent additions in key business lines, performance-based increases, and higher medical costs. The increase was partially offset by Cash Connect® external funding costs.

Previous wording

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

Current wording

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

Previous wording

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.

Current wording

We maintain the allowance for credit losses at an appropriate level based on our assessment of estimable and expected losses related to various portfolios subject to credit risk. Our allowance for credit losses is based on our historical loss experience that includes the inherent risk of our loans and leases, HTM securities, and other account receivables, along with various other factors including but not limited to, collateral values, trends in asset quality, level of delinquent loans and concentrations, consideration of past events, current conditions, and reasonable and supportable forecasts. 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.

Previous wording

During the three months ended September 30, 2024, we recorded a provision for credit losses of $18.4 million, which was flat compared to the provision for credit losses for the three months ended September 30, 2023.

Current wording

During the three months ended March 31, 2025, we recorded a provision for credit losses of $17.4 million, an increase of $2.2 million, compared to the provision for credit losses of $15.1 million for the three months ended March 31, 2024. This increase was primarily due to a charge-off of an existing nonperforming C&I loan to a fund that is invested in office properties, partially offset by a lower provision on our consumer portfolio driven by runoff of the Upstart portfolio.

Previous wording

The allowance for credit losses increased to $197.5 million at September 30, 2024 from $186.1 million at December 31, 2023. The ratio of allowance for credit losses to total loans and leases was 1.48% at September 30, 2024 and 1.46% at December 31, 2023.

Current wording

The total allowance for credit losses decreased to $188.1 million at March 31, 2025 from $195.3 million at December 31, 2024. The ratio of allowance for credit losses to total loans and leases decreased to 1.43% at March 31, 2025 from 1.48% at December 31, 2024, due to a decrease of 6bps from the C&I charge-off mentioned above and 2bps from continued runoff of the Upstart portfolio.

Previous wording

The following tables detail the allocation of the ACL and show our net charge-offs (recoveries) by portfolio category:

Current wording

The following tables detail the allocation of the ACL related to loans and leases and show our net charge-offs (recoveries) by portfolio category:

Previous wording

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 $21.1 million and $63.6 million during the three and nine months ended September 30, 2024, respectively, compared to income tax expense of $22.9 million and $66.9 million for the same periods in 2023, respectively.

Current wording

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 $21.1 million during the three months ended March 31, 2025 compared to income tax expense of $21.2 million for the same period in 2024.