UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K

(Mark One)

(X)  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934 For the fiscal year ended December 31, 2006

                                       OR

( )  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934 
                       For the transition period from to

                         Commission file number 0-16668
                        ________________________________

                           WSFS FINANCIAL CORPORATION
                                                                    

        Delaware                                      22-2866913
  (State or other jurisdiction of        (I.R.S. Employer Identification Number)
  incorporation or organization)

   838 Market Street, Wilmington, Delaware            19899
(Address of principal executive offices)            (Zip Code)

        Registrant's telephone number, including area code (302) 792-6000

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, par value $.01
                                (Title of Class)

   Indicate  by check mark  whether  the  registrant  (1) has filed all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the  preceding  twelve  months (or for such shorter  period that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. YES X NO

   Indicate by check mark if disclosure of  delinquent  filers  pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( )

  Indicate  by  check  mark  whether  the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). YES (X)   NO (  )

   The aggregate  market value of the voting stock held by  nonaffiliates of the
registrant,  based on the  closing  price of the  registrant's  common  stock as
quoted on the Nasdaq National Marketsm as of June 30, 2006 was $382,444,000. For
purposes  of this  calculation  only,  affiliates  are  deemed to be  directors,
executive  officers and beneficial owners of greater than 10% of the outstanding
shares.

   As of March 9, 2007,  there were issued and outstanding  6,307,210  shares of
the registrant's common stock.
                         _______________________________

                       DOCUMENTS INCORPORATED BY REFERENCE
   Portions  of the  Registrant's  Proxy  Statement  for the  Annual  Meeting of
Stockholders to be held on April 26, 2007 are  incorporated by reference in Part
III hereof.  Portions of the 2006 Annual Report to Shareholders are incorporated
by reference in Part II.

<PAGE>

                           WSFS FINANCIAL CORPORATION
                                TABLE OF CONTENTS


                                     Part I

<TABLE>
<CAPTION>
                                                                                                                     Page
                                                                                                                     ----

<S>           <C>                                                                                               <C>

Item 1.           Business  ..............................................................................              3


Item 1A.          Risk Factors  ..........................................................................             19


Item 1B.          Unresolved Staff Comments  .............................................................             21


Item 2.           Properties  ............................................................................             21


Item 3.           Legal Proceedings.......................................................................             24


Item 4.           Submission of Matters to a Vote of Security Holders.....................................             24


                                     Part II


Item 5.           Market for Registrant's Common Equity and Related Stockholder Matters...................             24


Item 6.           Selected Financial Data.................................................................             25


Item 7.           Management's Discussion and Analysis of Financial Condition and
                      Results of Operations...............................................................             25


Item 7A.          Quantitative and Qualitative Disclosures About Market Risk..............................             26


Item 8.           Financial Statements and Supplementary Data.............................................             26


Item 9.           Changes in and Disagreements with Accountants on Accounting and
                      Financial Disclosure................................................................             26


Item 9A.          Controls and Procedures.................................................................             26


Item 9B.          Other Information.......................................................................             26


                                    Part III


Item 10.          Directors and Executive Officers of the Registrant......................................             27


Item 11.          Executive Compensation..................................................................             27


Item 12.          Security Ownership of Certain Beneficial Owners and Management and Related Shareholder
                    Matters...............................................................................             27


Item 13.          Certain Relationships and Related Transactions..........................................             28


Item 14.          Principal Accountant Fees and Services..................................................             28


Item 15.          Exhibits and Financial Statement Schedules..............................................             28

                  Signatures..............................................................................             31
</TABLE>


                                      -2-

<PAGE>


                                     PART I

FORWARD-LOOKING STATEMENTS

         Within this Annual Report on Form 10-K and exhibits thereto, management
  has  included  certain  "forward-looking  statements"  concerning  the  future
  operations of WSFS Financial Corporation ("the Company", "our Company",  "we",
  "our" or  "us").  It is  management's  desire to take  advantage  of the "safe
  harbor"  provisions of the Private  Securities  Litigation Reform Act of 1995.
  This  statement  is for the  express  purpose of  availing  the Company of the
  protections  of  such  safe  harbor  with  respect  to  all   "forward-looking
  statements"  contained  in  its  financial  statements.  Management  has  used
  "forward-looking  statements"  to  describe  the future  plans and  strategies
  including  expectations of our future financial results.  Management's ability
  to predict  results or the effect of future plans and  strategy is  inherently
  uncertain.  Factors that could affect  results  include  interest rate trends,
  competition, the general economic climate in Delaware, the mid-Atlantic region
  and the country as a whole,  asset  quality,  loan  growth,  loan  delinquency
  rates,  operating  risk,  uncertainty  of  estimates in general and changes in
  federal and state  regulations,  among other factors.  These factors should be
  considered in evaluating the "forward-looking  statements," and undue reliance
  should not be placed on such statements.  Actual results may differ materially
  from management  expectations.  We do not undertake and specifically  disclaim
  any  obligation to publicly  release the result of any  revisions  that may be
  made  to  any   forward-looking   statements  to  reflect  the  occurrence  of
  anticipated or unanticipated  events or  circumstances  after the date of such
  statements.


ITEM 1.  BUSINESS
-----------------

GENERAL

         Our Company is a thrift holding  company  headquartered  in Wilmington,
Delaware.  Substantially  all of the our  assets  are  held  by its  subsidiary,
Wilmington  Savings Fund  Society,  FSB ("WSFS Bank" or the "Bank").  Founded in
1832,  we are one of the ten oldest  continuously-operating  banks in the United
States.  As a federal  savings  bank,  which was  formerly  chartered as a state
mutual  savings  bank,  we enjoy  broader  investment  powers  than  most  other
financial institutions.  We have served the residents of the Delaware Valley for
175 years. We are the largest thrift  institution  headquartered in Delaware and
the  fourth  largest  financial  institution  in the state on the basis of total
deposits  traditionally  garnered  in-market.  Our  primary  market  area is the
mid-mid-Atlantic  region  of the  United  States,  which is  characterized  by a
diversified  manufacturing and service economy.  Our long-term business strategy
is to serve small and mid-size businesses through loans, deposits,  investments,
and  related  financial  services,  and to  gather  retail  core  deposits.  Our
strategic focus is to exceed customer expectations,  deliver stellar service and
build customer advocacy through highly trained, relationship oriented, friendly,
knowledgeable, and empowered Associates.

         We provide  residential  and  commercial  real estate,  commercial  and
consumer  lending  services,  as well as  retail  deposit  and  cash  management
services.  In  addition,  we offer a variety of wealth  management  and personal
trust services through the Bank's new division,  Wilmington Advisors,  which was
formed in 2006. Lending activities are funded primarily with retail deposits and
borrowings.  The Federal  Deposit  Insurance  Corporation  ("FDIC")  insures our
customers'  deposits to their legal  maximum.  We serve our customers  primarily
from our main office,  27 retail banking  offices,  loan production  offices and
operations  centers  located in  Delaware  and  southeastern  Pennsylvania.  Our
website is  www.wsfsbank.com.  We post our Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q,  Current Reports on Form 8-K,  amendments to those reports
pursuant to Section 13(a) of the Exchange Act and other information  relating to
us on this website.

COMPETITION

         We are the second largest independent  full-service banking institution
headquartered  and  operating  in  Delaware.  We attract  retail and  commercial
deposits  primarily  through our system of 27 banking  offices at  December  31,
2006.  Nineteen of these banking offices are located in northern  Delaware's New
Castle County,  our primary 

                                      -3-


<PAGE>

market.  In addition to our  business  deposits,  our banking  offices  maintain
approximately  186,000 total deposit account  relationships  with  approximately
76,000 total  households in New Castle County.  Four banking offices are located
in central  Delaware's  Kent County and two of these banking offices are located
in southern  Delaware's Sussex County.  Two other banking offices are located in
southeastern  Pennsylvania.  In addition to our banking offices, we also attract
commercial  loans  through our loan  production  offices.  We also have 258 ATMs
located in Delaware.

         The  competition for deposit and loan products comes from other insured
financial  institutions such as commercial banks, thrift institutions and credit
unions  in our  market  area.  Deposit  competition  also  includes  a number of
insurance  products sold by local agents and investment  products such as mutual
funds and other securities sold by local and regional brokers.

SUBSIDIARIES

         WSFS Bank's subsidiary companies include WSFS Investment Group and WSFS
Reit, Inc.

         WSFS  Investment  Group,  Inc.  was formed in 1989 and markets  various
third-party investment and insurance products, such as single-premium annuities,
whole life policies and securities  primarily  through the Bank's retail banking
system and directly to the public.

         WSFS Reit,  Inc. is a real estate  investment  trust formed in 2002. It
holds  qualifying  real  estate  assets  and may be used in the  future to raise
capital.

         In addition to WSFS bank,  we have one other  consolidated  subsidiary,
Montchanin Capital  Management,  Inc.  ("Montchanin"),  which was formed in late
2003 to provide  asset  management  services  in the our  primary  market  area.
Montchanin has one  consolidated  non-wholly owned  subsidiary,  Cypress Capital
management,  LLC. As of December 31, 2006  Montchanin  owned 90% of Cypress.  In
January 2007,  Montchanin increased its ownership in Cypress to 100%. Cypress is
a Wilmington based investment advisory firm servicing high net-worth individuals
and institutions and had  approximately  $455 million in assets under management
at December 31, 2006.

DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY

         Condensed  average  balance sheets for each of the last three years and
analyses  of net  interest  income  and  changes in net  interest  income due to
changes in volume and rate are presented in "Results of Operations"  included in
the section entitled "Management's Discussion and Analysis."

                                      -4-


<PAGE>

INVESTMENT ACTIVITIES

         Our  short-term  investment  portfolio  is  intended to keep the Bank's
funds  fully  employed  at  the  maximum  after-tax  return,  while  maintaining
acceptable  credit,  market and interest-rate  risk limits, and providing needed
liquidity under current circumstances.  Book values of investment securities and
short-term investments by category, stated in dollar amounts and as a percent of
total assets, follow:


<TABLE>
<CAPTION>
                                                                               December 31,
                                             ----------------------------------------------------------------------------------
                                                       2006                        2005                         2004
                                             -------------------------    ------------------------    -------------------------
                                                            Percent                    Percent                     Percent
                                                              of                         of                           of
                                                 Amount     Assets            Amount    Assets          Amount     Assets
                                                 ------     ------            ------    ------          ------     ------
                                                                          (Dollars in Thousands)
<S>                                            <C>          <C>            <C>            <C>           <C>           <C> 
Held-to-Maturity:
-----------------

Corporate bonds .........................       $     -         -%           $     -         -%           $   310        -%
State and political subdivisions.........         4,219       0.1              4,806       0.2              7,457      0.4
                                                -------      ---            --------       ---           --------      --- 
                                                  4,219       0.1              4,806       0.2              7,767      0.4
                                                -------      ---            --------       ---           --------      --- 
Available-for-Sale:
-------------------

Reverse Mortgages........................           598         -               785          -               (109)       -
State and political subdivisions.........         2,785       0.1               975          -                  -        -
U.S. Government and agencies.............        46,920       1.6            51,702        1.8             90,730      3.6
                                                -------      ---            --------       ---           --------      --- 
                                                 50,303       1.7            53,462        1.8             90,621      3.6
                                                -------      ---            --------       ---           --------      --- 
Short-term investments:
-----------------------

Interest-bearing deposits in other banks            243        -                148          -                531        -
                                                -------      ---            --------       ---           --------      --- 
                                                $54,765      1.8%           $ 58,416       2.0%          $ 98,919      4.0%
                                                =======      ===            ========       ===           ========      === 
</TABLE>



         Proceeds  from  the  sale  of  investment   securities   classified  as
available-for-sale  during  2006  were  $11.0  million,  with a loss of  $41,000
realized on these sales.  Municipal  bonds totaling  $610,000 were called by the
issuers.  Proceeds from the sale of investments  during 2005 and 2004 were $60.7
million  and  $25.0  million  respectively.  There  was a net  loss of  $609,000
realized  on sales in 2005 and $1,000 net gain on sales in 2004.  The cost basis
for all  investment  security  sales  was based on the  specific  identification
method (actual costs are matched to specific securities). There were no sales of
investment securities classified as held-to-maturity.

                                      -5-


<PAGE>

         The  following  table shows the terms to maturity and related  weighted
average yields of investment  securities and short-term  investments at December
31, 2006.  Substantially  all of the related  interest and  dividends  represent
taxable income.


<TABLE>
<CAPTION>
                                                               At December 31, 2006
                                                            -------------------------
                                                                           Weighted
                                                                           Average
                                                             Amount        Yield (1)
                                                             ------        ---------
                                                            (Dollars In Thousands)

<S>                                                        <C>              <C>  
Held-to-Maturity:
----------------

State and political subdivisions (2):
      Within one year .................................      $ 2,050          7.29%
      After one but within five years .................        1,085          7.53
      After ten years .................................        1,084          5.35
                                                             -------  
Total debt securities, held-to-maturity ...............        4,219          6.85
                                                             -------  

Available-for-Sale:
------------------

Reverse Mortgages (3):
      Within one year .................................      $   598             -
                                                             -------  
                                                                 598             -
                                                             -------  
State and political subdivisions (2):
      Within one year .................................          100          3.69
      After one but within five years .................          635          3.83
      After five but within ten years .................        2,050          4.25
                                                             -------  
                                                               2,785          4.13
                                                             -------  

U.S. Government and agencies:
----------------------------
      Within one year .................................      $38,979          2.74
      After one but within five years .................        7,941          5.35
                                                             -------  
                                                              46,920          3.18
                                                             -------  

Total debt securities, available-for-sale .............       50,303          3.20
                                                             -------  

Total debt securities .................................       54,522          3.48
                                                             -------  

Short-term investments:
----------------------

      Interest-bearing deposits in other banks ........          243          5.20
                                                             -------  

Total short-term investments ..........................          243          5.20
                                                             -------  

                                                             $54,765          3.49%
                                                             =======
</TABLE>


(1)  Reverse   mortgages   have  been  excluded  from  weighted   average  yield
     calculations because income can vary significantly from reporting period to
     reporting  period  due to the  volatility  of  factors  used to  value  the
     portfolio.
(2)  Yields  on  state  and  political  subdivisions  are  not  calculated  on a
     tax-equivalent basis since the effect would be immaterial.
(3)  Reverse  mortgages do not have  contractual  maturities.  We have  included
     reverse  mortgages in maturities  within one year. 

                                      -6-

<PAGE>

         In addition to the these investment  securities,  we have maintained an
investment  portfolio of mortgage-backed  securities,  $12.4 million of which is
classified as "trading." At December 31, 2006 mortgage-backed  securities with a
par value of $183.2  million  were  pledged as  collateral  for retail  customer
repurchase agreements,  and municipal deposits.  Accrued interest receivable for
mortgage-backed  securities  was $2.0  million and $2.4  million at December 31,
2006  and  2005,  respectively.   Proceeds  from  the  sale  of  mortgage-backed
securities available-for-sale in 2006 were $49.4 million, resulting in a loss of
$1.9 million. No mortgage-backed securities were sold during 2005.

         The following table shows the book value of mortgage-backed  securities
and their  related  weighted  average  contractual  rates at the end of the last
three fiscal years.


<TABLE>
<CAPTION>
                                                                                 December 31,
                                                -------------------------------------------------------------------------------
                                                         2006                       2005                        2004
                                                -----------------------    ------------------------    ------------------------
                                                  Amount        Rate          Amount       Rate             Amount      Rate
                                                  ------        ----          ------       ----             ------      ----
                                                                            (Dollars in Thousands)
<S>                                            <C>             <C>          <C>            <C>            <C>          <C>  
Held-to-Maturity:
----------------

Collateralized mortgage obligations .......     $       -          -%        $      -          -%          $      -        -%
FHLMC .....................................             -          -                -          -                  4     6.06
                                                ---------       ----         --------       ----           --------     ---- 
                                                $       -          -%        $      -          -%          $      4     6.06
                                                =========       ====         ========       ====           ========     ==== 
Available-for-Sale:
------------------

Collateralized mortgage obligations .......     $ 424,748       4.88%        $526,546       4.73%          $402,513     4.38%
FNMA ......................................        42,254       4.05           49,785       3.98             59,774     3.86
FHLMC .....................................        31,121       4.29           32,211       4.05             34,731     3.80
GNMA ......................................        19,115       4.72           14,643       4.37             18,408     4.15
                                                ---------       ----         --------       ----           --------     ---- 
                                                $ 517,238       4.77%        $623,185       4.63%          $515,426     4.27%
                                                =========       ====         ========       ====           ========     ==== 

Trading:
-------

Collateralized mortgage obligations........     $  12,364       8.35%        $ 11,951        7.38%         $ 11,951     5.32%
                                                =========       ====         ========        ====          ========     ==== 
</TABLE>



CREDIT EXTENSION ACTIVITIES

         Over the past  several  years we have  focused on  increasing  the more
profitable  segments  of our loan  portfolio.  Our current  lending  activity is
concentrated  on lending to small to mid-sized  businesses  in the  mid-Atlantic
region of the United  States  primarily in Delaware and  contiguous  counties in
Pennsylvania, Maryland and New Jersey. In 2002, residential first mortgage loans
comprised 45.2% of the loan portfolio, while the combination of commercial loans
and commercial  real estate loans made up only 41.6%.  In contrast,  at December
31, 2006,  residential  loans  totaled only 23.5%,  while  commercial  loans and
commercial  real estate loans have increased to a combined total of 64.8% of the
loan portfolio. Traditionally, the majority of typical thrift institutions' loan
portfolios have consisted of first mortgage loans on residential properties.

                                      -7-

<PAGE>


         The  following  table shows the  composition  of our loan  portfolio at
year-end for the last five years.


<TABLE>
<CAPTION>
                                                                            December 31,
                             -------------------------------------------------------------------------------------------------------
                                       2006                 2005                  2004                 2003               2002
                             --------------------  -------------------  --------------------- --------------------    --------------
Types of Loans                   Amount   Percent     Amount   Percent       Amount   Percent    Amount    Percent    Amount Percent
--------------                   ------   -------     ------   -------       ------   -------    ------    -------    ------ -------
                                                                                 (Dollars in Thousands)
<S>                         <C>           <C>    <C>           <C>      <C>           <C>   <C>            <C>   <C>          <C>  
Residential real estate (1). $  474,871    23.5%  $  457,651    25.8%    $  443,023    28.9% $  458,408     35.1% $  541,465   45.2%
Commercial real estate:      
  Commercial mortgage ......    422,089    20.9      410,552    23.1        416,287    27.1     335,050     25.7     228,089   19.1
  Construction .............    241,931    12.0      178,418    10.1        120,604     7.9      54,742      4.2      59,555    5.0
                             ----------   -----   ----------   -----     ----------   -----  ----------    -----  ----------  ----- 
    Total commercial         
      real estate...........    664,020    32.9      588,970    33.2        536,891    35.0     389,792     29.9     287,644   24.1
Commercial .................    643,918    31.9      508,930    28.6        368,752    24.0     292,516     22.4     209,567   17.5
Consumer ...................    263,478    13.0      244,820    13.8        210,959    13.7     186,133     14.3     181,851   15.2
                             ----------   -----   ----------   -----     ----------   -----  ----------    -----  ----------  ----- 
                             
Gross loans ................  2,046,287   101.3    1,800,371   101.4      1,559,625   101.6   1,326,849    101.7   1,220,527  102.0
                             
Less:                        
(Deferred fees) unearned     
  income ...................       (838)    0.0         (304)    0.0            (64)    0.0        (414)     0.0       2,043    0.2
Allowance for loan losses...     27,384     1.3       25,381     1.4         24,222     1.6      22,386      1.7      21,452    1.8
                             ----------   -----   ----------   -----     ----------   -----  ----------    -----  ----------  ----- 

Net loans .................. $2,019,741   100.0%  $1,775,294   100.0%    $1,535,467   100.0% $1,304,877    100.0% $1,197,032  100.0%
                             ==========   =====   ==========   =====     ==========   =====  ==========    =====  ==========  ===== 
</TABLE>

                             
                           
(1)  Includes $925, $438, $3,249,  $1,465, and $121,349 of residential  mortgage
     loans  held-for-sale  at December 31, 2006,  2005,  2004,  2003,  and 2002,
     respectively.

                                      -8-


<PAGE>

         The following tables show how much time remains until our loans mature.
The first table  details the total loan  portfolio  by type of loan.  The second
table details the total loan  portfolio by loans with fixed  interest  rates and
loans with  adjustable  interest  rates.  The tables  show loans by  contractual
maturity.  Loans may be pre-paid so that the actual maturity is earlier than 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.


<TABLE>
<CAPTION>

                                                 Less than     One to        Over
                                                 One Year     Five Years  Five Years     Total
                                                 ---------   ----------   ----------   ----------
                                                                 (Dollars in Thousands)
<S>                                             <C>         <C>          <C>          <C>       
Real estate loans (1) ......................     $  82,287   $  274,161   $  539,587   $  896,035
Construction loans ..........................      145,841       89,037        7,053      241,931
Commercial loans ............................      246,622      223,954      173,342      643,918
Consumer loans ..............................      126,888       55,057       81,533      263,478
                                                 ---------   ----------   ----------   ----------
                                                 $ 601,638   $  642,209   $  801,515   $2,045,362
                                                 ---------   ----------   ----------   ----------

Rate sensitivity::
  Fixed ....................................     $  59,338   $  282,265   $  319,194   $  660,797
  Adjustable (2) ............................      542,300      359,944      482,321    1,384,565
                                                 ---------   ----------   ----------   ----------
Gross loans .................................    $ 601,638   $  642,209   $  801,515   $2,045,362
                                                 =========   ==========   ==========   ==========
</TABLE>


(1)  Includes commercial mortgage loans; does not include loans held-for-sale.
(2)  Includes hybrid adjustable rate mortgages


Residential Real Estate Lending.

         We originate residential mortgage loans with loan-to-value ratios up to
100% and  generally  require  private  mortgage  insurance  for up to 30% of the
mortgage amount for mortgage loans with  loan-to-value  ratios exceeding 80%. We
do not  have  any  significant  concentrations  of such  insurance  with any one
insurer.  On a limited basis, we originate or purchase loans with  loan-to-value
ratios  exceeding  80%  without a private  mortgage  insurance  requirement.  At
December 31, 2006, the balance of all such loans was approximately $6.2 million.

         Generally,   our  residential   mortgage  loans  are  underwritten  and
documented in accordance with standard  underwriting  criteria  published by the
Federal Home Loan Mortgage  Corporation  ("FHLMC") to assure maximum eligibility
for subsequent sale in the secondary  market.  However,  we generally retain for
long-term investment in our portfolio the loans we originate. We sell only those
loans that are originated specifically with the intention to sell.

         To protect the propriety of our liens,  we require that title insurance
be obtained.  We also require fire and extended coverage casualty  insurance for
properties securing residential loans. All properties securing residential loans
made by us are  appraised  by  independent,  licensed and  certified  appraisers
selected by us and are subject to review in accordance with our standards.

         The majority of our adjustable-rate  residential real estate loans have
interest rates that adjust yearly after an initial period. Typically, the change
in rate is limited to two percentage points at the adjustment date.  Adjustments
are  generally  based upon a margin  (currently  2.75%) over the weekly  average
yield on U.S. Treasury securities adjusted to a constant maturity,  as published
by the Federal Reserve Board.

                                      -9-


<PAGE>

         Generally,  the maximum rate on these loans is up to six percent  above
the initial interest rate. We underwrite  adjustable-rate  loans under standards
consistent with private mortgage insurance and secondary market criteria.  We do
not originate  adjustable-rate  mortgages  with payment  limitations  that could
produce negative  amortization.  Consistent with industry practice in our market
area, we typically  originate  adjustable-rate  mortgage  loans with  discounted
initial interest rates.

         The retention of  adjustable-rate  mortgage loans in our loan portfolio
helps  mitigate  our risk to  changes  in  interest  rates.  However,  there are
unquantifiable  credit risks  resulting  from potential  increased  costs to the
borrower as a result of repricing adjustable-rate mortgage loans. It is possible
that  during  periods  of  rising  interest  rates,   the  risk  of  default  on
adjustable-rate  mortgage  loans may  increase due to the upward  adjustment  of
interest costs to the borrower. Further, although adjustable-rate mortgage loans
allow us to increase  the  sensitivity  of our asset base to changes in interest
rates,  the extent of this interest  sensitivity  is limited by the periodic and
lifetime  interest rate  adjustment  limitations.  Accordingly,  there can be no
assurance that yields on our adjustable-rate  mortgages will adjust sufficiently
to  compensate  for  increases  to our cost of funds  during  periods of extreme
interest rate increases.

         The original  contractual loan payment period for residential  loans is
normally 10 to 30 years.  Because  borrowers may refinance or prepay their loans
without  penalty,  these loans tend to remain  outstanding  for a  substantially
shorter period of time. First mortgage loans customarily  include  "due-on-sale"
clauses on adjustable- and fixed-rate  loans.  This provision gives us the right
to declare a loan immediately due and payable in the event the borrower sells or
otherwise  disposes of the real property  subject to the  mortgage.  Due-on-sale
clauses are an  important  means of  adjusting  the rate on existing  fixed-rate
mortgage loans to current market rates. We enforce  due-on-sale  clauses through
foreclosure and other legal proceedings to the extent available under applicable
laws.

         In general,  loans are sold without  recourse except for the repurchase
arising from standard contract  provisions covering violation of representations
and warranties or, under certain investor  contracts,  a default by the borrower
on the first  payment.  We also have limited  recourse  exposure  under  certain
investor  contracts  in the event a  borrower  prepays a loan in total  within a
specified  period after sale,  typically one year.  The recourse is limited to a
pro rata portion of the premium  paid by the  investor  for that loan,  less any
prepayment penalty collectible from the borrower.


Commercial Real Estate, Construction and Commercial Lending.

         Federal  savings banks are generally  permitted to invest up to 400% of
their total regulatory capital in nonresidential real estate loans and up to 20%
of its assets in commercial  loans.  As a federal savings bank that was formerly
chartered  as a  Delaware  savings  bank,  we have  certain  additional  lending
authority.

         We  offer   commercial  real  estate  mortgage  loans  on  multi-family
properties and other commercial real estate. Generally, loan-to-value ratios for
these loans do not exceed 80% of appraised value at origination.

         We offer  commercial  construction  loans to developers.  In some cases
these  loans are made as  "construction/permanent"  loans,  which  provides  for
disbursement  of loan funds during  construction  and  automatic  conversion  to
mini-permanent  loans  (1-5  years)  upon  completion  of  construction.   These
construction  loans are made on a short-term  basis,  usually not  exceeding two
years, with interest rates indexed to our prime rate or London InterBank Offered
Rate ("LIBOR"),  in most cases, and adjusted periodically as these rates change.
The loan appraisal process includes the same evaluation criteria as required for
permanent  mortgage loans, but also takes into  consideration:  completed plans,
specifications, comparables and cost estimates. Prior to approval of the credit,
these items are used as a basis to determine the appraised  value of the subject
property when  completed.  Our policy  requires that all  appraisals be reviewed
independently  from our commercial lending staff.  Generally,  the loan-to-value
ratios for  construction  loans do not exceed 75%. The 

                                      -10-


<PAGE>

initial interest rate on the permanent portion of the financing is determined by
the prevailing  market rate at the time of conversion to the permanent  loan. At
December 31, 2006, $369.8 million was committed for construction loans, of which
$241.9 million had been disbursed.

         The remainder of our commercial  lending includes loans for the purpose
of working capital,  financing  equipment  acquisitions,  business expansion and
other  business  purposes.  These  loans  generally  range in  amounts up to $10
million, and their terms range from less than one year to seven years. The loans
generally  carry variable  interest rates indexed to our prime rate or LIBOR, at
the time of closing.  We have no loans to any one industry with a  concentration
greater then 12.0%.

         Commercial,  commercial mortgage and construction lending have a higher
level of risk than residential  mortgage lending.  These loans typically involve
larger loan  balances  concentrated  with single  borrowers or groups of related
borrowers.   In  addition,   the  payment   experience   on  loans   secured  by
income-producing  properties is typically dependent on the successful  operation
of the related real estate project and may be more subject to adverse conditions
in the commercial real estate market or in the economy  generally.  The majority
of our commercial and commercial real estate loans are  concentrated in Delaware
and surrounding areas.

         Construction  loans  involve  additional  risk  because  loan funds are
advanced as  construction  projects  progress.  The valuation of the  underlying
collateral  can  be  difficult  to  quantify  prior  to  the  completion  of the
construction.  This is due to  uncertainties  inherent in  construction  such as
changing construction costs, delays arising from labor or material shortages and
other unpredictable contingencies.  We attempt to mitigate these risks and plans
for these  contingencies  through  additional  analysis  and  monitoring  of its
construction projects.  Construction loans receive independent inspections prior
to disbursement of funds.

         Federal law limits the  extensions of credit to any one borrower to 15%
of unimpaired capital, or 25% if the difference is secured by readily marketable
collateral  having a  market  value  that  can be  determined  by  reliable  and
continually available pricing. Extensions of credit include outstanding loans as
well as contractual  commitments to advance  funds,  such as standby  letters of
credit,  but do not include unfunded loan commitments.  At December 31, 2006, no
borrower had collective outstandings exceeding these limits.


Consumer Lending.

         Our primary  consumer  credit products are  equity-secured  installment
loans  and  home  equity  lines  of  credit.   At  December  31,  2006,  we  had
equity-secured  installment  loans totaling $141.7 million which represented 54%
of total  consumer  loans. A home equity line of credit grants a borrower a line
of credit of up to 100% of the appraised value (net of any senior  mortgages) of
their residence.  This line of credit is secured by a mortgage on the borrower's
property  and can be drawn upon at any time during the period of  agreement.  At
December  31,  2006,  we had  extended  $193.4  million in home equity  lines of
credit,  of which $101.0 million had been drawn at that date.  Home equity lines
of credit offer  potential  Federal income tax  advantages,  the  convenience of
checkbook  access and  revolving  credit  features.  Home equity lines of credit
expose us to the risk that falling  collateral  values may leave us inadequately
secured,  while the risk on products like home equity loans is mitigated as they
amortize over time. We have not yet had any  significant  adverse  experience on
home equity lines of credit.

                                      -11-


<PAGE>

The following shows our consumer loans at year-end, for the last five years.


<TABLE>
<CAPTION>
                                                                          December 31,
                               -----------------------------------------------------------------------------------------------------
                                       2006                2005                2004                2003                 2002
                               ------------------   ------------------ --------------------- ------------------- -------------------
                                  Amount  Percent     Amount  Percent     Amount   Percent     Amount  Percent     Amount  Percent
                                  ------  -------     ------  -------     ------   -------     ------  -------     ------  -------
                                                                     (Dollars in Thousands)
<S>                           <C>          <C>     <C>         <C>    <C>           <C>     <C>         <C>     <C>          <C>  
Equity secured installment 
  loans ...................    $ 141,708    53.8%   $ 136,721   55.8%  $ 131,935     62.6%   $ 124,411   66.9%   $ 123,655    68.1%
Home equity lines of credit      100,981    38.3       87,503   35.7      56,755     26.9       39,858   21.4       31,512    17.3
Automobile ................        1,702     0.7        2,616    1.1       5,126      2.4        9,137    4.9       11,728     6.4
Unsecured lines of credit .        8,947     3.4        8,780    3.6       9,338      4.4       10,506    5.6       12,402     6.8
Other .....................       10,140     3.8        9,200    3.8       7,805      3.7        2,221    1.2        2,554     1.4
                               ---------     ---    --------- -----    ---------    -----    ---------  -----    ---------   ----- 

Total consumer loans ......    $ 263,478     100%   $ 244,820 100.0%   $ 210,959    100.0%   $ 186,133  100.0%   $ 181,851   100.0%
                               =========     ===    ========= =====    =========    =====    =========  =====    =========   ===== 
</TABLE>


                                      -12-


<PAGE>

Loan Originations, Purchase and Sales.

         We have engaged in traditional lending activities primarily in Delaware
and contiguous areas of neighboring  states. As a federal savings bank, however,
we may originate,  purchase and sell loans throughout the United States. We have
purchased  limited  amounts of loans from  outside our normal  lending area when
such   purchases   are  deemed   appropriate.   We  originate   fixed-rate   and
adjustable-rate  residential real estate loans through our banking  offices.  In
addition,  we  have  established  relationships  with  correspondent  banks  and
mortgage brokers to originate loans.

         During 2006,  we  originated  $459 million of  residential  real estate
loans. This compares to originations of $499 million in 2005. From time to time,
we have purchased  whole loans and loan  participations  in accordance  with our
ongoing asset and liability management objectives. Purchases of residential real
estate  loans from  correspondents  and brokers  primarily  in the  mid-Atlantic
region  totaled  $81.6  million for the year ended  December  31, 2006 and $77.5
million for 2005.  Residential  real  estate  loan sales  totaled $33 million in
2006, $39.0 million in 2005 and $51.1 million in 2004. While we generally intend
to hold our loans for the foreseeable  future,  we sell certain newly originated
mortgage  loans in the secondary  market  primarily to control the interest rate
sensitivity  of our balance  sheet and to manage  overall  balance sheet mix. We
hold  certain  fixed-rate  mortgage  loans for  investment  consistent  with our
current asset/liability management strategies.

         We do not originate sub-prime mortgage loans. In the past, we purchased
a portfolio of sub-prime loans from a former  subsidiary,  of which $6.4 million
is  outstanding  at December 31, 2006. Of these loans $235,000 are in nonaccrual
status.

         At  December  31,  2006,  we  serviced  approximately  $266  million of
residential  mortgage loans for others  compared to $256 million at December 31,
2005. We also service residential  mortgage loans for our own portfolio totaling
$453 million and $431 million at December 31, 2006 and 2005, respectively.

         We originate  commercial  real estate and commercial  loans through our
commercial  lending  division.  Commercial  loans  are made for the  purpose  of
working capital, financing equipment acquisitions,  business expansion and other
business  purposes.  During 2006, we originated  $711 million of commercial  and
commercial  real estate loans  compared with $597 million in 2005. To reduce our
exposure on certain types of these loans,  or to maintain  relationships  within
internal  lending limits at times we will sell a portion of our commercial  real
estate loan  portfolio.  Commercial real estate loan sales totaled $16.0 million
and $36.6 million in 2006 and 2005, respectively.  These amounts represent gross
contract amounts and do not reflect amounts outstanding on those loans.

         Our consumer lending  activity is conducted  through our branch offices
and through  correspondent banks and mortgage brokers. We originate a variety of
consumer credit products  including home improvement loans, home equity lines of
credit,  automobile  loans,  credit cards,  unsecured  lines of credit and other
secured and unsecured  personal  installment loans.  During 2006,  consumer loan
originations amounted to $18.5 million compared to $20.0 million in 2005.

         During 2006,  we formed a new reverse  mortgage  initiative.  While the
Bank's  activity  during the year has been limited to acting as a  correspondent
for these loans,  our intention is to originate and  underwrite  our own reverse
mortgages  in the future.  We expect to sell most of these loans and not to hold
them in our portfolio.  These reverse mortgages are government approved, insured
and are endorsed by the AARP.

         All loans to one  borrowing  relationship  exceeding $3 million must be
approved  by  the  Senior  Management  Loan  Committee  ("SLC").  The  Executive
Committee  of the Board of  Directors  ("EC")  approves  the  minutes of the SLC
meetings.  They also approve individual loans exceeding $5 million for customers
with less than one year of  significant  loan history with the Bank and loans in
excess of $7.5 million for customers with established  borrowing  relationships.
Depending upon their experience and management position,  individual officers of
the Bank have the authority to approve  smaller loan amounts.  Our credit policy
includes  a "House  Limit" to one  borrowing  relationship  of $18  million.  In
extraordinary  circumstances,  we will approve  exceptions to the "House Limit".
The largest is a borrowing relationship 

                                      -13-


<PAGE>

of $34.7  million,  which the EC  approved.  This  borrowing  is secured by U.S.
Treasury  securities  which have a value at maturity  equal to or exceeding  the
aggregate loan payments.


Fee Income from Lending Activities.

         We  earn  fee  income  from  lending  activities,  including  fees  for
originating  loans,  servicing  loans and selling loan  participations.  We also
receive fee income for making commitments to originate construction, residential
and  commercial  real estate  loans.  Additionally,  we collect  fees related to
existing  loans which include  prepayment  charges,  late charges and assumption
fees.

         We charge  fees for making loan  commitments.  Also as part of the loan
application  process,  the borrower may pay us for out-of-pocket costs to review
the application, whether or not the loan is closed.

         Most loan fees are not  recognized  in the  Consolidated  Statement  of
 Operations immediately,  but are deferred as adjustments of yield in accordance
 with  U.S.  generally  accepted  accounting  principles  and are  reflected  in
 interest income. Those fees represented an immaterial amount of interest income
 during the three  years ended  December  31,  2006.  Loan fees other than those
 considered adjustments of yield (such as late charges) are reported as loan fee
 income, a component of noninterest income.


LOAN LOSS EXPERIENCE, PROBLEM ASSETS AND DELINQUENCIES

         Our results of operations can be negatively  impacted by  nonperforming
assets,  which include nonaccruing loans,  nonperforming real estate investments
and assets acquired through  foreclosure.  Nonaccruing  loans are those on which
the  accrual of  interest  has  ceased.  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 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 collectibility of principal
and interest.

         We  endeavor  to manage our  portfolio  to  identify  problem  loans as
promptly  as  possible  and  take  immediate  actions  to  minimize  losses.  To
accomplish  this, our Risk Management  Department  monitors the asset quality of
our loan and investment in real estate  portfolios and reports such  information
to the Credit Policy  Committee,  the Audit  Committee of the Board of Directors
and the Bank's Controller's Department.


SOURCES OF FUNDS

                  We manage our  liquidity  risk and funding  needs  through our
treasury function and our Asset/Liability Committee.  Historically,  we have had
success  in  growing  our loan  portfolio.  For  example,  during the year ended
December  31,  2006,  net loan growth  resulted in the use of $246.4  million in
cash.  The loan  growth was  primarily  the result of our  continued  success in
increasing  corporate and small business lending.  Management expects this trend
to continue.  While our loan-to-deposit  ratio has been well above 100% for many
years,  management has significant experience managing its funding needs through
borrowings and deposit growth.

         As a financial institution,  we have ready access to several sources of
funding. Among these are:

          o    Deposit growth,
          o    The brokered deposit market,

                                      -14-


<PAGE>

          o    Borrowing from the Federal Home Loan Bank,
          o    Other borrowings such as repurchase agreements,
          o    Cash flow from securities and loan sales and repayments,
          o    And our net income.

         Our  current  branch  expansion  and  renovation  program is focused on
expanding  our retail  footprint in Delaware  and  attracting  new  customers to
provide additional deposit growth.  Customer deposit growth was strong, equaling
$149.8 million, or 13%, between December 31, 2005 and December 31, 2006.

         Deposits. We offer various deposit programs to our customers, including
savings  accounts,  demand deposits,  interest-bearing  demand  deposits,  money
market deposit  accounts and  certificates of deposits.  In addition,  we accept
"jumbo"  certificates  of  deposit  with  balances  in excess of  $100,000  from
individuals, businesses and municipalities in Delaware.

         WSFS is the second largest independent full service banking institution
headquartered  and operating in Delaware.  The Bank primarily  attracts deposits
through  its system of 27 retail  banking  offices (as of  December  31,  2006).
Nineteen banking offices were located in northern  Delaware's New Castle County,
WSFS' primary market. These banking offices maintain approximately 186,000 total
account  relationships with approximately 76,000 total households.  Four banking
offices are located in central  Delaware's Kent County,  two of which are in the
state  capital,  Dover.  Two banking  offices are located in  Delaware's  Sussex
County and two other banking offices are located in southeastern Pennsylvania.

         The following  table shows the maturity of  certificates  of deposit of
$100,000 or more as of December 31, 2006:


                                                  December 31,
Maturity Period                                       2006
---------------                                       ----
                                                 (In Thousands)

Less than 3 months......................            $103,751
Over 3 months to 6 months...............              67,282
Over 6 months to 12 months..............              38,567
Over 12 months..........................              22,930
                                                    --------
                                                    $232,530
                                                    ========


         Borrowings.   We  utilize  the  following  borrowing  sources  to  fund
operations:

         Federal Home Loan Bank Advances

         As a member of the Federal Home Loan Bank of Pittsburgh, we are able to
obtain  Federal  Home Loan Bank  ("FHLB")  advances.  Advances  from the FHLB of
Pittsburgh had rates ranging from 2.47% to 5.65% at December 31, 2006.  Pursuant
to collateral  agreements  with the FHLB, the advances are secured by qualifying
first mortgage  loans,  qualifying  fixed-income  securities,  FHLB stock and an
interest-bearing  demand  deposit  account  with the FHLB.  We are  required  to
acquire and hold shares of capital  stock in the FHLB of Pittsburgh in an amount
at least equal to 4.65% of its  borrowings  from them,  plus 0.65% of our unused
borrowing  capacity.  As of December 31, 2006, our FHLB stock investment totaled
$39.9 million.

         Three  advances are  outstanding  at December 31, 2006 totaling  $115.0
million,  with a weighted average rate of 5.15% maturing in 2008 and beyond.  At
the discretion of the FHLB,  they are  convertible  quarterly to a variable rate
advance based upon a three-month LIBOR rate, after an initial fixed term. If any
of these  advances  convert,  we have the  option to prepay  these  advances  at
predetermined times or rates.

                                      -15-


<PAGE>

          Trust Preferred Borrowings

         On April 6,  2005,  we  completed  the  issuance  of $67.0  million  of
aggregate  principal  amount of Pooled  Floating  Rate  Securities at a variable
interest rate of 177 basis points over the three-month  LIBOR rate. The proceeds
from this issuance were used to fund the redemption of $51.5 million of Floating
Rate Capital Trust I Preferred  Securities which had a variable interest rate of
250 basis points over the three-month LIBOR rate.


     Federal Funds Purchased and Securities Sold Under Agreements to Repurchase

         During 2006, we purchased federal funds as a short-term funding source.
At December 31, 2006, we had purchased  $50.0 million in federal funds at a rate
of 5.38%.  At  December  31,  2005,  we also had  $50.0  million  federal  funds
purchased.

         During 2006,  we sold  securities  under  agreements to repurchase as a
short-term  funding  source.  At  December  31,  2006,   securities  sold  under
agreements to repurchase had a fixed rate of 5.32%.  The  underlying  securities
are U.S.  Government  agency  securities  with a book value of $25.0  million at
December 31, 2006.

PERSONNEL

         As of December  31,  2006 we had 573  full-time  equivalent  Associates
(employees). The Associates are not represented by a collective bargaining unit.
Management believes its relationship with its Associates is very good.


REGULATION

Regulation of the Corporation

         General.  We are a registered  savings and loan holding company and are
subject to the regulation,  examination,  supervision and reporting requirements
of the Office of Thrift  Supervision  ("OTS").  It is also a  registered  public
company subject to the reporting  requirements  of the United States  Securities
and  Exchange  Commission.  The  filings we make with  Securities  and  Exchange
Commission,  including  Annual Reports on Form 10-K,  Quarterly  Reports on Form
10-Q,  Current  Reports on Form 8-K, and all  amendments to those  reports,  are
available on the investor relations page of our website at www.wsfsbank.com.

         Sarbanes-Oxley Act of 2002. Sarbanes-Oxley Act of 2002 (the "Act"). The
Securities and Exchange  Commission  (the "SEC") has promulgated new regulations
pursuant  to  the  Sarbanes-Oxley  Act of  2002  and  may  continue  to  propose
additional implementing or clarifying regulations as necessary in furtherance of
the Act.  The  passage  of the Act and the  regulations  implemented  by the SEC
subject  publicly-traded  companies to additional and more cumbersome  reporting
regulations   and  disclosure.   Compliance  with  the  Act  and   corresponding
regulations has increased our expenses.

         Restrictions on  Acquisitions.  A savings and loan holding company must
obtain the prior approval of the Director of OTS before  acquiring,  (i) control
of any  other  savings  association  or  savings  and loan  holding  company  or
substantially all the assets thereof,  or (ii) more than 5% of the voting shares
of a savings  association or holding  company thereof which is not a subsidiary.
Except with the prior approval of the Director of OTS, no director or officer of
a savings and loan holding  company or person owning or  controlling by proxy or
otherwise more than 25% of such company's stock, may also acquire control of any
savings  association,  other than a subsidiary  savings  association,  or of any
other savings and loan holding company.

         The OTS may only approve  acquisitions  resulting in the formation of a
multiple savings and loan holding company which controls savings associations in
more than one state if: (i) the company involved controls a savings  

                                      -16-


<PAGE>

institution  which  operated  a  home  or  branch  office  in the  state  of the
association to be acquired as of March 5, 1987;  (ii) the acquirer is authorized
to  acquire  control  of the  savings  association  pursuant  to  the  emergency
acquisition  provisions  of the  Federal  Deposit  Insurance  Act;  or (iii) the
statutes  of the  state in which  the  association  to be  acquired  is  located
specifically permit institutions to be acquired by state-chartered  associations
or savings and loan holding  companies  located in the state where the acquiring
entity is located (or by a holding  company that controls  such  state-chartered
savings  institutions).  The  laws of  Delaware  do not  specifically  authorize
out-of-state   savings  associations  or  their  holding  companies  to  acquire
Delaware-chartered savings associations.

         The statutory  restrictions  on the  formation of  interstate  multiple
holding  companies  would not  prevent us from  entering  into  other  states by
mergers or branching.  OTS regulations permit federal  associations to branch in
any  state or  states  of the  United  States  and its  territories.  Except  in
supervisory cases or when interstate  branching is otherwise  permitted by state
law or other  statutory  provision,  a federal  association may not establish an
out-of-state  branch  unless the federal  association  qualifies  as a "domestic
building and loan association" under Section 7701(a)(19) of the Internal Revenue
Code or as a "qualified  thrift  lender" under the Home Owners' Loan Act and the
total assets  attributable to all branches of the association in the state would
qualify such branches taken as a whole for treatment as a domestic  building and
loan association or qualified thrift lender.  Federal associations generally may
not  establish  new branches  unless the  association  meets or exceeds  minimum
regulatory  capital  requirements.  The OTS will also consider the association's
record of compliance with the Community  Reinvestment  Act of 1977 in connection
with any branch application.

Regulation of WSFS Bank

         General.  As a federally  chartered  savings  institution,  the Bank is
subject to extensive regulation by the Office of Thrift Supervision. The lending
activities and other  investments  of the Bank must comply with various  federal
regulatory  requirements.  The OTS periodically examines the Bank for compliance
with regulatory requirements. The FDIC also has the authority to conduct special
examinations  of the  Bank.  The Bank must file  reports  with  Office of Thrift
Supervision describing its activities and financial condition.  The Bank is also
subject to certain  reserve  requirements  promulgated  by the  Federal  Reserve
Board.

         Transactions with Affiliates;  Tying Arrangements.  The Bank is subject
to certain restrictions in its dealings with us and our affiliates. Transactions
between savings  associations and any affiliate are governed by Sections 23A and
23B  of  the  Federal  Reserve  Act.  An  affiliate  of a  savings  association,
generally,  is any company or entity which  controls or is under common  control
with the savings  association or any subsidiary of the savings  association that
is a bank or  savings  association.  In a holding  company  context,  the parent
holding company of a savings association (such as "WSFS Financial  Corporation")
and any  companies  which are  controlled  by such  parent  holding  company are
affiliates of the savings association. Generally, Sections 23A and 23B (i) limit
the extent to which the savings  institution or its  subsidiaries  may engage in
"covered  transactions" with any one affiliate to an amount equal to 10% of such
institution's  capital  stock and surplus,  and limit the  aggregate of all such
transactions with all affiliates to an amount equal to 20% of such capital stock
and  surplus  and  (ii)  require  that  all  such   transactions   be  on  terms
substantially  the  same,  or at  least  as  favorable,  to the  institution  or
subsidiary as those provided to a non-affiliate.  The term "covered transaction"
includes the making of loans,  purchase of assets,  issuance of a guarantee  and
similar  types of  transactions.  In  addition  to the  restrictions  imposed by
Sections 23A and 23B, no savings  association  may (i) lend or otherwise  extend
credit to an  affiliate  that  engages in any  activity  impermissible  for bank
holding companies, or (ii) purchase or invest in any stocks, bonds,  debentures,
notes or similar  obligations of any affiliate,  except for affiliates which are
subsidiaries  of  the  savings   association.   Savings  associations  are  also
prohibited from extending credit,  offering  services,  or fixing or varying the
consideration  for any extension of credit or service on the condition  that the
customer obtain some  additional  service from the institution or certain of its
affiliates  or that the customer not obtain  services  from a competitor  of the
institution, subject to certain limited exceptions.

                                      -17-


<PAGE>

         Regulatory Capital Requirements. Under OTS capital regulations, savings
institutions  must maintain  "tangible"  capital equal to 1.5% of adjusted total
assets,  "Tier 1" or "core"  capital equal to 4% of adjusted total assets (or 3%
if the  institution is rated  composite 1 under the OTS examiner rating system),
and "total" capital (a combination of core and "supplementary" capital) equal to
8%  of  risk-weighted  assets.  In  addition,  OTS  regulations  impose  certain
restrictions on savings  associations that have a total risk-based capital ratio
that is less than  8.0%,  a ratio of Tier 1 capital to  risk-weighted  assets of
less than 4.0% or a ratio of Tier 1 capital  to  adjusted  total  assets of less
than  4.0%  (or  3.0% if the  institution  is rated  Composite  1 under  the OTS
examination rating system).  For purposes of these  regulations,  Tier 1 capital
has the same definition as core capital.

         The  OTS  capital  rule  defines  Tier  1 or  core  capital  as  common
stockholders'  equity (including  retained  earnings),  noncumulative  perpetual
preferred stock and related surplus,  minority  interests in the equity accounts
of fully consolidated subsidiaries, certain nonwithdrawable accounts and pledged
deposits of mutual  institutions  and  "qualifying  supervisory  goodwill," less
intangible  assets  other than  certain  supervisory  goodwill  and,  subject to
certain  limitations,  mortgage and  non-mortgage  servicing  rights,  purchased
credit card relationships and  credit-enhancing  interest only strips.  Tangible
capital  is given  the same  definition  as core  capital  but does not  include
qualifying  supervisory goodwill and is reduced by the amount of all the savings
institution's intangible assets except for limited amounts of mortgage servicing
assets.  The OTS capital rule requires that core and tangible capital be reduced
by an amount equal to a savings  institution's  debt and equity  investments  in
"non-includable"  subsidiaries engaged in activities not permissible to national
banks,  other than  subsidiaries  engaged in activities  undertaken as agent for
customers  or  in  mortgage   banking   activities  and  subsidiary   depository
institutions or their holding  companies.  At December 31, 2006, the Bank was in
compliance with both the core and tangible capital requirements.

         The risk  weights  assigned by the OTS  risk-based  capital  regulation
range from 0% for cash and U.S.  government  securities to 100% for consumer and
commercial  loans,  non-qualifying  mortgage loans,  property  acquired  through
foreclosure,  assets more than 90 days past due and other assets. In determining
compliance with the risk-based capital  requirement,  a savings  institution may
include  both core  capital  and  supplementary  capital  in its total  capital,
provided  the  amount of  supplementary  capital  included  does not  exceed the
savings institution's core capital.  Supplementary capital is defined to include
certain preferred stock issues,  non-withdrawable  accounts and pledged deposits
that do not qualify as core capital, certain approved subordinated debt, certain
other  capital  instruments,  general  loan  loss  allowances  up  to  1.25%  of
risk-weighted  assets and up to 45% of  unrealized  gains on  available-for-sale
equity  securities  with  readily  determinable  fair values.  Total  capital is
reduced by the amount of the  institution's  reciprocal  holdings of  depository
institution  capital  instruments  and all equity  investments.  At December 31,
2006, WSFS Bank was in compliance with the OTS risk-based capital requirements.

         Dividend Restrictions.  As the subsidiary of a savings and loan holding
company,  WSFS bank must  submit  notice to the OTS prior to making any  capital
distribution  (which  includes cash  dividends and payments to  shareholders  of
another institution in a cash merger).  In addition,  a savings association must
make application to the OTS to pay a capital distribution if (x) the association
would  not  be  adequately  capitalized  following  the  distribution,  (y)  the
association's   total   distributions   for  the   calendar   year  exceeds  the
association's net income for the calendar year to date plus its net income (less
distributions)  for the  preceding  two  years,  or (z) the  distribution  would
otherwise violate applicable law or regulation or an agreement with or condition
imposed by the OTS.

         Insurance  of Deposit  Accounts.  The Bank's  deposits  are  insured to
applicable  limits  by the  FDIC.  Although  the FDIC is  authorized  to  assess
premiums  under a  risk-based  system for such deposit  insurance,  most insured
depository  institutions have not been required to pay premiums for the last ten
years.  The Federal  Deposit  Insurance  Reform Act of 2005 (the "Reform  Act"),
which was signed into law on February 15, 2006,  resulted in significant changes
to the federal deposit insurance program: (i) effective March 31, 2006, the Bank
Insurance Fund and the Savings Association Insurance Fund were merged into a new
combined fund,  called the Deposit  Insurance  Fund;  (ii) the current  $100,000
deposit insurance coverage will be indexed for inflation (with adjustments every
five years,  commencing  January 1, 2011); and (iii) deposit insurance  coverage
for  retirement  accounts was increased to $250,000 per  participant  subject to
adjustment  for  inflation.  In  addition,  the Reform 

                                      -18-


<PAGE>

Act gave the FDIC greater  latitude in setting the assessment  rates for insured
depository institutions, which could be used to impose minimum assessments.

         The  FDIC  is  authorized  to set the  reserve  ratio  for the  Deposit
Insurance Fund annually at between 1.15% and 1.5% of estimated insured deposits.
If the Deposit  Insurance  Fund's reserves exceed the designated  reserve ratio,
the FDIC is required to pay out all or, if the reserve  ratio is less than 1.5%,
a portion of the excess as a dividend to insured  depository  institutions based
on the  percentage  of insured  deposits  held on December 31, 1996 adjusted for
subsequently  paid  premiums.  Insured  depository  institutions  that  were  in
existence on December 31, 1996 and paid assessments prior to that date (or their
successors) are entitled to a one-time credit against future  assessments  based
on the amount of their  assessable  deposits on that date. We anticipate that we
will be able to offset most of our deposit  insurance  premium for 2007 with the
special assessment credit.

         Pursuant  to the Reform Act,  the FDIC has  maintained  the  designated
reserve  ratio at  1.25%.  The FDIC has also  adopted a new  risk-based  premium
system that provides for quarterly assessments based on an insured institution's
ranking in one of four risk categories  based on their  examination  ratings and
capital ratios. Beginning in 2007,  well-capitalized  institutions with a CAMELS
("Capital,  Assets,  Management,  Earnings,  Liquidity and Sensitivity to market
risk")  rating of 1 or 2 will be grouped in Risk Category I and will be assessed
for deposit  insurance at an annual rate of between five and seven basis points,
with  the  assessment  rate  for  an  individual  institution  to be  determined
according  to a  formula  based  on a  weighted  average  of  the  institution's
individual  CAMEL component  ratings,  plus either five financial  ratios or the
average ratings of its long-term  debt.  Institutions in Risk Categories II, III
and IV  will  be  assessed  at  annual  rates  of 10,  28 and 43  basis  points,
respectively.

         In  addition,  all  FDIC-insured   institutions  are  required  to  pay
assessments  to the  FDIC to fund  interest  payments  on  bonds  issued  by the
Financing Corporation ("FICO"), an agency of the Federal government  established
to recapitalize  the predecessor to the SAIF. The FICO assessment  rates,  which
are determined  quarterly,  averaged 0.013% of insured  deposits in fiscal 2006.
These assessments will continue until the FICO bonds mature in 2017.

         Federal Reserve System.  Pursuant to regulations of the Federal Reserve
Board, a savings institution must maintain average daily reserves equal to 3% on
the first $42.1 million of transaction accounts, plus 10% on the remainder. This
percentage  is subject to  adjustment  by the  Federal  Reserve  Board.  Because
required  reserves  must  be  maintained  in the  form  of  vault  cash  or in a
non-interest  bearing  account  at a Federal  Reserve  Bank,  the  effect of the
reserve  requirement may reduce the amount of an institution's  interest-earning
assets. As of December 31, 2005 we met our reserve requirements.


I
TEM 1A.  RISK FACTORS
----------------------

         The following are certain risks that  management  believes are specific
to our  business.  This  should not be viewed as an all  inclusive  list and the
order is not intended as an indicator of the level of importance.


Future loan losses may negatively impact the Company

         We are subject to credit risk, which is the risk of losing principal or
interest  due to  borrowers'  failure to repay  loans in  accordance  with their
terms.  A downturn in the economy or the real estate  market in our market areas
or a rapid change in interest  rates could have a negative  effect on collateral
values  and  borrowers'   ability  to  repay.  This  deterioration  in  economic
conditions could result in losses to us. To the extent loans are not paid timely
by borrowers,  the loans are placed on non-accrual,  thereby  reducing  interest
income.

                                      -19-


<PAGE>

Rapidly changing interest rate environments could reduce our profitability

          Interest  and fees on loans and  securities,  net of interest  paid on
deposits and borrowings,  are a large part of our net income. Interest rates are
key drivers of our net interest  margin and subject to many  factors  beyond the
control  of  management.  As  interest  rates  change,  net  interest  income is
affected.  Rapid  increases or  decreases in interest  rates in the future could
negatively impact our net interest margin.

Liquidity risk

          Due to our continued success in our lending  operations,  particularly
in  corporate  and small  business  lending,  our loans have  exceeded  customer
deposit   funding.   Changes  in  interest  rates  or   alternative   investment
opportunities  and other  factors may make  deposit  gathering  more  difficult.
Additionally,  interest rate changes or  disruptions  in the capital  market may
make the terms of the  borrowings  and brokered  deposits less  favorable.  As a
result, there is a risk that we will not have funds to meet our obligations when
they  come  due.   Interest   rate  and   liquidity   risk  is  managed  by  our
Asset/Liability  Committee ("ALCO").  While our  loan-to-deposit  ratio has been
well above 100% for many years,  management has significant  experience managing
its funding needs through borrowings and deposit growth. A liquidity crisis plan
has been developed and is an important part of our liquidity management.

The financial services industry is very competitive

          We face  competition  in  attracting  and retaining  deposits,  making
loans,  and providing other financial  services  throughout our market area. Our
competitors  include other community banks, larger banking  institutions,  and a
wide   range  of  other   financial   institutions   such  as   credit   unions,
government-sponsored enterprises, mutual fund companies, insurance companies and
other non-bank businesses.  Many of these competitors have substantially greater
resources than us. If we are unable to compete effectively,  we will lose market
share and will have less income from deposits and loans,  which will  negatively
impact our net interest  margin.  Profitability of other products may be reduced
as well.

Adverse  changes in the economic  growth and vitality in our banking markets may
negatively impact us

       Our  business  is  closely  tied to the  economies  of  Delaware  and the
contiguous  counties outside of Delaware.  A sustained  economic  downturn could
adversely affect our net income.

We are subject to extensive regulation

       Our  operations  are subject to extensive  regulation by federal  banking
authorities  which impose  requirements and restrictions on our operations.  The
impact  of  changes  to laws and  regulations  or other  actions  by  regulatory
agencies could make regulatory compliance more difficult or expensive for us and
could adversely affect our net income.
We may not be able to achieve our growth plans or effectively manage its growth

          There can be no assurance that growth  opportunities will be available
or that growth will be successfully managed.  This includes,  but is not limited
to, growth in generating loans and gathering deposits.  Due to our investment in
future growth,  failure to obtain  sufficient growth would negatively effect our
net income.

Inability  to hire or retain  certain key  professionals,  management  and staff
could adversely affect our revenues and net income

          We rely on key personnel to manage and operate our business, including
major revenue generating functions such as our loan and deposit portfolios.  The
loss of key staff may adversely  affect our ability to maintain and manage these
portfolios effectively, which could negatively effect our revenues. In addition,
loss of key personnel could result in increased  recruiting and hiring expenses,
which could cause a decrease in our net income.

                                      -20-


<PAGE>

We continually encounter technological change

          The  financial  services  industry  is  continually  undergoing  rapid
technological  change  with  frequent  introductions  of  new  technology-driven
products and services.  The effective use of technology increases efficiency and
enables  financial  institutions to better serve customers and reduce costs. Our
future success  depends,  in part,  upon our ability to address the needs of our
customers by using technology to provide products and services that will satisfy
customer  demands,  as  well  as  to  create  additional   efficiencies  in  our
operations.  Our largest  competitors have  substantially  greater  resources to
invest  in  technological  improvements.  We may  not  be  able  to  effectively
implement  new  technology-driven  products  and  services or be  successful  in
marketing these products and services to our customers.  Failure to successfully
keep pace with  technological  change affecting the financial  services industry
could have a material adverse impact on our business and, in turn, our financial
condition and our net income.


ITEM 1B.  UNRESOLVED STAFF COMMENTS
-----------------------------------

      None.


ITEM 2. PROPERTIES
------------------

         The following table shows  information  regarding  offices and material
properties held by us, and our subsidiaries, at December 31, 2006.


<TABLE>
<CAPTION>
                                                                                 Net Book Value
                                                                                   Of Property
                                                      Owned/     Date Lease       or Leasehold
Location                                              Leased       Expires      Improvements (1)      Deposits
--------                                              ------       -------      ----------------      --------
                                                                                           (In Thousands)
                                                                               -----------------------------------
WSFS:
-----
<S>                                               <C>            <C>                   <C>           <C>     
Main Office (2)                                       Owned                              $1,330        $769,286
  9th & Market Streets
  Wilmington, DE  19899

Union Street Branch                                   Leased        2008                     67          45,078
  3rd & Union Streets
  Wilmington, DE  19805

Trolley Square Branch                                 Leased        2011                     11          32,356
  1711 Delaware Avenue
  Wilmington, DE  19806

Fairfax Shopping Center Branch (12)                   Leased        2008                    785          69,286
  2005 Concord Pike
  Wilmington, DE  19803

Branmar Plaza Shopping Center Branch                  Leased        2008                     80          82,705
  1812 Marsh Road
  Wilmington, DE  19810

Prices Corner Shopping Center Branch                  Leased        2008                     18         100,457
  3202 Kirkwood Highway
  Wilmington, DE  19808

Pike Creek Shopping Center Branch                     Leased        2015                    830          83,129
  New Linden Hill & Limestone Roads
  Wilmington, DE  19808

University Plaza Shopping Center Branch               Leased        2026                  1,267          44,872
  I-95 & Route 273
  Newark, DE  19712

College Square Shopping Center Branch (3)             Leased        2012                    140          79,058
  Route 273 & Liberty Avenue
  Newark, DE  19711

Airport Plaza Shopping Center Branch                  Leased        2013                    705          68,882
  144 N. DuPont Hwy.
  New Castle, DE  19720
</TABLE>


                                      -21-


<PAGE>

<TABLE>
<CAPTION>
                                                                                 Net Book Value
                                                                                   Of Property
                                                      Owned/     Date Lease       or Leasehold
Location                                              Leased       Expires      Improvements (1)      Deposits
--------                                              ------       -------      ----------------      --------
                                                                                           (In Thousands)
                                                                               -----------------------------------

WSFS (continued...):
--------------------
<S>                                               <C>            <C>                   <C>           <C>     
Stanton Branch                                        Leased        2011                      5          17,268
  Inside ShopRite at First State Plaza
  1600 W. Newport Pike
  Wilmington, DE  19804

Glasgow Branch                                        Leased        2008                     40          23,139
  Inside Genuardi's at Peoples Plaza
  Routes 40 & 896
  Newark, DE  19804

Middletown Crossing Shopping Center                   Leased        2017                  1,151          32,806
  Route 299 and Silver Lake Road
  Middletown, DE 19709

Dover Branch                                          Leased        2010                     17          17,323
  Inside Metro Food Market
  Rt 134 & White Oak Road
  Dover, DE  19901

West Dover Loan Office                                Leased        2009                      6             108
  Greentree Office Center
  160 Greentree Drive
  Suite 105
  Dover, DE  19904

Blue Bell Loan Office                                 Leased        2008                      -          11,770
  550 Township Line Road
  Suite 400
  Blue Bell, PA  19422

Glen Eagle Branch                                     Leased        2008                     77           9,161
  Inside Genaurdi's Family Market
  475 Glen Eagle Square
  Glen Mills, PA  19342

University of Delaware-Trabant University Center      Leased        2008                    105          10,354
  17 West Main Street
  Newark, DE  19716

Brandywine Branch                                     Leased        2009                     72          21,962
  Inside Genaurdi's Family Market
  2522 Foulk Road
  Wilmington, DE  19810

Wal-Mart Branch                                       Leased        2009                    225           7,213
  Route 40 & Wilton Boulevard
  New Castle, DE  19720

Operations Center                                     Owned                                 777             N/A
  2400 Philadelphia Pike
  Wilmington, DE  19703

Longwood Branch                                       Leased       2010                      90           7,634
  830 E. Baltimore Pike
  E. Marlborough, PA 19348

Holly Oak Branch                                      Leased       2010                      75          17,372
  Inside Superfresh
  2105 Philadelphia Pike
  Claymont, DE  19703

Hockessin Branch                                      Leased       2015                     618          54,143
  7450 Lancaster Pike
  Hockessin, DE  19707

Lewes Loan Center                                     Leased       2008                      94          24,835
  Southpointe Professional Center
  1515 Savannah Road, Suite 103
  Lewes Beach, DE  19958
</TABLE>


                                      -22-

<PAGE>


<TABLE>
<CAPTION>
                                                                                 Net Book Value
                                                                                  of Property
                                                      Owned/    Date Lease        or Leasehold
    Location                                          Leased      Expires       Improvements (1)       Deposits
    --------                                          ------      -------       ----------------       --------
                                                                                          (In Thousands)
                                                                               --------------------------------------
    WSFS (continued...):
    --------------------
<S>                                            <C>               <C>                  <C>              <C>   
    Fox Run Shopping Center                           Leased       2015                 1,040            27,359
      Bear, DE

    Camden Town Center                                Leased       2024                 1,109            23,860
      4566 S. Dupont Highway
      Camden, DE  19934

    Rehoboth                                          Leased       2028                   980            41,038
      Lighthouse Plaza
      Route #1
      Rehoboth, DE  19971

    Loan Operations                                   Leased       2007                    50               N/A
      30 Blue Hen Drive, Suite 200
      Newark, DE 19713

    West Dover                                        Owned                             2,281            13,723
      1486 Forest Avenue
      Dover, DE  19904

    Longneck                                          Leased       2026                 1,388            15,398
      24985 John J. Williams Highway
      Millsboro, DE  19966

    Smyrna (4)                                        Leased       2007                    15             4,547
      231 S. DuPont Parkway
      Smyrna, DE  19977

    Smyrna (5)                                        Leased       2026                   112               N/A
      Simon's Corner Shopping Center
      1300 South DuPont Highway
      Smyrna, DE  19977

    Oxford, LPO                                       Leased       2011                     3               226
      59 South Third Street
      Oxford, PA  19363

    Greenville, LPO (6)                               Leased       2017                     5               N/A
      3908 Kennet Pike
      Greenville, DE  19807

    WSFS Bank Center Branch (7)                       Leased       2011                   544               N/A
      500 Delaware Avenue
      Wilmington, DE  19801

    Market Street Branch (8)                          Leased       2008                     -               N/A
      833 Market Street
      Wilmington, DE  19801

    Montchanin Capital Management, Inc.               Leased       2010                    18               N/A
    -----------------------------------    
      1220 Market Street
      Suite 705
      Wilmington, DE  19801

    Cypress Capital Management, LLC                   Leased       2010                     5               N/A
    -------------------------------      
      1220 Market Street
      Suite 704
      Wilmington, DE  19801

    WSFS Reit, Inc.                                   Leased       2007                     -               N/A
    ---------------    
      227 East Main Street
      Elkton, MD  21921

    Friess Building (9) (10)                          Owned                             1,816               N/A
      3908 Kennett Pike
      Greenville, DE Property
</TABLE>


                                      -23-

<PAGE>


<TABLE>
<CAPTION>
                                                                                 Net Book Value
                                                                                  of Property
                                                      Owned/    Date Lease        or Leasehold
    Location                                          Leased      Expires       Improvements (1)       Deposits
    --------                                          ------      -------       ----------------       --------
                                                                                        (In Thousands)
                                                                               --------------------------------------
    WSFS Reit, Inc. (continued...):
    -------------------------------
<S>                                         <C>                <C>                      <C>          <C>
    Fairfax Building                                  Owned                             6,085               N/A
      2005 Concord Pike                                                                                     
      Wilmington, DE  19801

    WSFS Bank Center (11)                             Leased       2019                   640               N/A
    500 Delaware Avenue                                                                             -----------
    Wilmington, DE  19801                                                                       
                                                                                                    $ 1,756,348
                                                                                                    ===========

</TABLE>


(1)  The net book value of our investment in premise and equipment totaled $30.2
     million at December 31, 2006.
(2) Includes  location of executive  offices.  
(3)  Includes  our  education  and  development  center  and the  operations  of
     CashConnect.
(4)  Temporary  location for branch until  permanent  branch is  completed.  The
     permanent branch is expected to be completed in October 2007.
(5)  Permanent location under construction as of December 31, 2006. Construction
     is expected to be completed in October 2007.
(6)  WSFS Bank leases this location from WSFS Reit, Inc. Under  renovation as of
     December 31, 2006. Expected to be completed in March 2007.
(7)  Branch under  construction  as of December 31, 2006.  The branch opened for
     business on January 4, 2007.
(8)  Temporary  location for branch until permanent  location is completed.  The
     permanent branch is expected to be completed in 2008.
(9)  Property  transferred to WSFS Reit, Inc. in 2002. 
(10) Transferred to real estate held for Investment in October 2005.
(11) New  headquarters  building under  construction at December 31, 2006. Lease
     begins in January  2007.  Occupancy is scheduled  for March 2007. We have a
     minority ownership in this property.
(12) Owned by WSFS Reit, Inc.


ITEM 3. LEGAL PROCEEDINGS
-------------------------

         There are no material  legal  proceedings  to be  disclosed  under this
item.


ITEM 4.  SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
-------  ----------------------------------------------------

         No matter was submitted to a vote of the stockholders during the fourth
quarter of the fiscal year ended December 31, 2006 through the  solicitation  of
proxies or otherwise.



                                     PART II


ITEM 5. MARKET FOR REGISTRANT'S  COMMON EQUITY,  RELATED STOCKHOLDER MATTERS AND
--------------------------------------------------------------------------------
        ISSUER PURCHASES OF EQUITY SECURITIES
        -------------------------------------

      The information  under "Market for Registrant's  Common Equity and Related
Stockholder  Matters" in the WSFS  Financial  Corporation  2006 Annual Report to
Stockholders  (filed as Exhibit 13 to this Form 10-K) is incorporated  into this
item by reference.

                                      -24-


<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA
--------------------------------


<TABLE>
<CAPTION>
                                              2006            2005            2004          2003           2002
                                          -----------    -----------    -----------     -----------    -----------
                                                      (Dollars in Thousands, Except Per Share Data)
<S>                                     <C>            <C>            <C>             <C>            <C>        
At December 31,
---------------
  Total assets ........................   $ 2,997,396    $ 2,846,752    $ 2,502,956     $ 2,207,077    $ 1,705,000
  Net loans (1) .......................     2,019,741      1,775,294      1,535,467       1,304,877      1,197,032
  Investment securities (2) ...........        53,893         56,704         97,485         116,292         21,777
  Investment in reverse mortgages, net            598            785           (109)            193          1,131
  Other investments ...................        41,615         46,466         44,477          44,771         93,500
  Mortgage-backed securities (2) ......       516,711        620,323        524,144         530,552        148,238
  Deposits ............................     1,756,348      1,446,236      1,234,962         923,333        898,396
  Borrowings (3) ......................       935,668      1,127,997      1,002,609       1,031,058        466,006
  Trust preferred borrowings ..........        67,011         67,011         51,547          50,000         50,000
  Stockholders' equity ................       212,059        181,975        196,303         187,992        182,672
  Number of full-service branches (4) .            27             24             24              23             21

For the Year Ended December 31,
-------------------------------
  Interest income .....................   $   177,177    $   136,022    $   104,110     $    89,299    $    94,703
  Interest expense ....................        99,278         62,380         37,246          31,301         33,434
  Noninterest income ..................        40,305         34,653         31,950          26,166        124,060
  Noninterest expenses ................        69,314         62,877         55,699          49,417         51,617
  Income from continuing operations ...        30,441         27,856         25,757          21,233         88,018
  Net income ..........................        30,441         27,856         25,900          63,022        101,141
  Earnings per share:
    Basic:
      Income from continuing operations   $      4.59    $      4.10    $      3.60     $      2.73    $      9.69
      Net income ......................          4.59           4.10           3.62            8.11          11.13
    Diluted:
      Income from continuing operations          4.41           3.89           3.39            2.58           9.34
      Net income ......................          4.41           3.89           3.41            7.65          10.73

Interest rate spread ..................          2.70%          2.91%          3.07%           3.02%          4.97%
Net interest margin ...................          2.98           3.13           3.24            3.29           4.93
Return on average equity (5) ..........         15.42          14.78          13.54           10.60          70.69
Return on average assets (5) ..........          1.03           1.05           1.10            1.09           6.22
Average equity to average assets (5) ..          6.68           7.10           8.13           10.28           8.79
</TABLE>


(1)  Includes loans held-for-sale.
(2)  Includes securities available-for-sale.
(3)  Borrowings  consist of FHLB advances,  securities  sold under  agreement to
     repurchase and other borrowed funds.
(4)  WSFS opened three branches in 2006,  opened one branch in 2004,  opened two
     branches  in  2003,  and   transferred  six  branches  to  other  financial
     institutions in 2002.

(5)  Based on continuing operations.



ITEM 7 MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULTS
--------------------------------------------------------------------------------
       OF OPERATIONS
       -------------

        The information under "Management's Discussion and Analysis of Financial
Condition and Results of  Operations"  in the WSFS  Financial  Corporation  2006
Annual Report (filed as Exhibit 13 to this Form 10-K) is incorporated  into this
item by reference.

                                      -25-


<PAGE>


I
TEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------------------------------------------------------------------

        The  information  under "Market Risk" in the WSFS Financial  Corporation
2006 Annual Report (filed as Exhibit 13 to this Form 10-K) is incorporated  into
this item by reference.



 ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DISCLOSURES
------------------------------------------------------------

        Our  financial  statements  listed  under  Item 15 of this Form 10-K and
contained in the WSFS Financial Corporation 2006 Annual Report (filed as Exhibit
13 to this Form 10-K) are incorporated into this item by reference.



ITEM 9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
--------------------------------------------------------------------------------
         FINANCIAL DISCLOSURE
         --------------------

           There are no matters required to be disclosed under this item.


ITEM 9A. CONTROLS AND PROCEDURES
--------------------------------

         Disclosure Controls and Procedures

         Our management evaluated, with the participation of our Chief Executive
Officer  and  Chief  Financial  Officer,  the  effectiveness  of our  disclosure
controls  and  procedures  as of the end of the period  covered by this  report.
Based on that  evaluation,  the Chief  Executive  Officer  and  Chief  Financial
Officer concluded that our disclosure controls and procedures are effective.

         Internal Control Over Financial Reporting

         Management's  report on our internal  control over financial  reporting
appears in the WSFS Financial  Corporation  2006 Annual Report (filed as Exhibit
13 to this Form 10-K) and is incorporated into this item by reference.

         The  attestation  report  of KPMG  LLP on  management's  assessment  of
internal  control  over  financial  reporting  appears  in  the  WSFS  Financial
Corporation  2006 Annual  Report  (filed as Exhibit 13 to this Form 10-K) and is
incorporated into this item by reference.

         During the quarter  ended  December  31,  2006,  there was no change in
internal control over financial  reporting that has materially  affected,  or is
reasonably  likely to materially  affect,  our internal  control over  financial
reporting.



ITEM 9B. OTHER INFORMATION
--------------------------

         There are no matters required to be disclosed under this item.

                                      -26-


<PAGE>


                                    PART III



ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------------------------------

     The  Information   under  "Section  16a  Beneficial   Ownership   Reporting
Compliance"  and  "Proposal  1 -  Election  of  Directors"  in the  Registrant's
definitive proxy statement for the  registrant's  Annual Meeting of Stockholders
to be held on April 26, 2007 (the "Proxy  Statement") is incorporated  into this
item by reference.

     We have  adopted a Code of Ethics that applies to our  principal  executive
officer, principal financial officer,  principal accounting officer,  controller
or persons performing similar functions.  A copy of the Code of Ethics is posted
on our website at www.wsfsbank.com.



ITEM 11.  EXECUTIVE COMPENSATION
--------------------------------

     The  information  under  "Proposal I - Election of  Directors" in the Proxy
Statement is incorporated into this item by reference.



ITEM 12.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
--------------------------------------------------------------------------------
          RELATED SHAREHOLDER MATTERS
          ---------------------------

(a)       Security Ownership of Certain Beneficial Owners

          Information  required by this item is incorporated herein by reference
          to the section  captioned  "Voting  Securities  and Principal  Holders
          Thereof" of the Proxy Statement

(b)       Security Ownership of Management

          Information  required by this item is incorporated herein by reference
          to the section  captioned  "Proposal  1 Election of  Directors - Stock
          Ownership of Management" of the Proxy Statement

(c)       We know of no  arrangements,  including  any  pledge  by any person of
          our securities, the operation of which may at a subsequent date result
          in a change in control of the registrant.

(d)       Securities Authorized for Issuance Under Equity Compensation Plans

                                      -27-


<PAGE>

Shown below is information as of December 31, 2006 with respect to  compensation
plans under  which  equity  securities  of the  Registrant  are  authorized  for
issuance.


<TABLE>
<CAPTION>
                                                 Equity Compensation Plan Information

                                                  (a)                      (b)                         (c)
                                                                                                Number of securities
                                       Number of Securities         Weighted-Average           remaining available for
                                         to be issued upon           exercise price of          future issuance under
                                      exercise of outstanding          outstanding            equity compensation plans
                                            Options and                Options and             (excluding securities
                                       Phantom Stock Awards        Phantom Stock Awards        reflected in column (a)
                                       --------------------        --------------------        -----------------------
<S>                                       <C>                         <C>                             <C>   
Equity compensation plans
  approved by stockholders (1)               700,427                     $ 39.50                         70,212

Equity compensation plans
 not approved by stockholders                   n/a                          n/a                            n/a       
                                             -------                     -------                         ------

    TOTAL                                    700,427                     $ 39.50                         70,212
                                             =======                     =======                         ======

</TABLE>


(1)  Plans  approved by  stockholders  include the 1997 Stock  Option  Plan,  as
     amended and the 2005 Incentive Plan.



ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------

     The information under "Business  Relationships and Related Transactions" in
the Proxy Statement is incorporated into this item by reference.



ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES
------------------------------------------------

         The information  under  "Independent  Public  Accountants" in the Proxy
Statement is incorporated into this item by reference.



ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
----------------------------------------------------

    (a) Listed below are all financial  statements and exhibits filed as part of
this report, and are incorporated by reference.

         1.  The   consolidated   statements  of  Condition  of  WSFS  Financial
             Corporation  and  subsidiary as of December 31, 2006 and 2005,  and
             the  related   consolidated   statements  of  income,   changes  in
             stockholders'  equity  and cash  flows for each of the years in the
             three year  period  ended  December  31,  2006,  together  with the
             related  notes and the  independent  auditors'  report of KPMG LLP,
             independent registered public accounting firm.

         2. Schedules omitted as they are not applicable.

                                      -28-


<PAGE>

The following  exhibits are  incorporated by reference herein or annexed to this
Annual Report:

Exhibit
Number                            Description of Document

3.1                Registrant's  Certificate  of  Incorporation,  as  amended is
                   incorporated  herein  by  reference  to  Exhibit  3.1  of the
                   Registrant's  Annual  Report on Form 10-K for the year  ended
                   December 31, 1994.

3.2                Amended and Restated  Bylaws  of  WSFS Financial Corporation,
                   incorporated  herein  by  reference  to  Exhibit  3.2 of  the
                   Registrant's  Annual  Report on Form 10-K for the year  ended
                   December 31, 2003.

10.1               WSFS  Financial  Corporation,   1994  Short  Term  Management
                   Incentive  Plan  Summary  Plan  Description  is  incorporated
                   herein  by  reference  to  Exhibit  10.7 of the  Registrant's
                   Annual  Report on Form 10-K for the year ended  December  31,
                   1994.

10.2               Amended and Restated Wilmington Savings Fund Society, Federal
                   Savings Bank 1997 Stock Option Plan is incorporated herein by
                   reference to the Registrant's  Registration Statement on Form
                   S-8 (File No.  333-26099)  filed with the Commission on April
                   29, 1997.

10.3               2000  Stock Option and Temporary  Severance  Agreement  among
                   Wilmington  Savings Fund Society,  Federal Savings Bank, WSFS
                   Financial  Corporation  and  Marvin N. Schoenhals on February
                   24, 2000 is incorporated herein  by reference to Exhibit 10.4
                   of the Registrant's  Annual Report  on Form 10-K for the year
                   ended December 31, 2000.

10.4               Severance  Policy  among  Wilmington  Savings  Fund  Society,
                   Federal Savings Bank and certain  Executives  dated March 13,
                   2001,  as  amended is  incorporated  herein by  reference  to
                   Exhibit 10.5 of the  Registrant's  Annual Report on Form 10-K
                   for the year ended December 31, 2000.

10.5               WSFS   Financial   Corporation's   2005   Incentive  Plan  is
                   incorporated  herein  by  reference  to  appendix  A  of  the
                   Registrant's  Definitive Proxy Statement on Schedule 14-A for
                   the 2005 Annual Meeting of Stockholders.

13                 Portions   of   the   Corporation's  2004  Annual  Report  to
                   Shareholders

21                 Subsidiaries of Registrant.

23                 Consent of KPMG LLP

                                      -29-


<PAGE>

31                 Certification pursuant to Rule 13a-14 of the Exchange Act

32                 Certification pursuant to 18 U.S.C.  Section 1350, as adopted
                   pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002

Exhibits 10.1 through 10.4.1 represent management contracts or compensatory plan
arrangements.

                                      -30-


<PAGE>


SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                         WSFS FINANCIAL CORPORATION


Date:  March 7, 2007                     BY:   /s/ Marvin N. Schoenhals      
                                               ---------------------------------
                                                Marvin N. Schoenhals
                                                Chairman and President

 Pursuant to the  requirements  of the  Securities  Exchange  Act of 1934,  this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.


<TABLE>
<CAPTION>
<S>                             <C>
Date:   March 7, 2007                    BY:    /s/ Marvin N. Schoenhals                               
                                                ------------------------------------
                                                Marvin N. Schoenhals
                                                Chairman and President


Date:   March 7, 2007                    BY:    /s/ Charles G. Cheleden                                
                                                ------------------------------------
                                                Charles G. Cheleden
                                                Vice Chairman and Director


Date:   March 7, 2007                    BY:    /s/ John F. Downey                                     
                                                ------------------------------------
                                                John F. Downey
                                                Director


Date:   March 7, 2007                    BY:    /s/ Linda C. Drake                                     
                                                ------------------------------------
                                                Linda C. Drake
                                                Director


Date:   March 7, 2007                    BY:    /s/ David E. Hollowell                                 
                                                ------------------------------------
                                                David E. Hollowell
                                                Director


Date:   March 7, 2007                    BY:    /s/ Joseph R. Julian                                   
                                                ------------------------------------
                                                Joseph R. Julian
                                                Director
</TABLE>


                                      -31-


<PAGE>

<TABLE>
<CAPTION>
<S>                             <C>

Date:   March 7, 2007                    BY:    /s/ Dennis E. Klima                                    
                                                ------------------------------------
                                                Dennis E. Klima
                                                Director


Date:   March 7, 2007                    BY:    /s/ Calvert A. Morgan, Jr.                             
                                                ------------------------------------
                                                Calvert A. Morgan, Jr.
                                                Director


Date:   March 7, 2007                    BY:    /s/ Thomas P. Preston                                  
                                                ------------------------------------
                                                Thomas P. Preston
                                                Director


Date:   March 7, 2007                    BY:    /s/ Scott E. Reed                                      
                                                ------------------------------------
                                                Scott E. Reed
                                                Director


Date:   March 7, 2007                    BY:    /s/ Claibourne D. Smith                                
                                                ------------------------------------
                                                Claibourne D. Smith
                                                Director


Date:   March 7, 2007                    BY:    /s/ R. Ted Weschler                                    
                                                ------------------------------------
                                                R. Ted Weschler
                                                Director


Date:   March 7, 2007                    BY:    /s/ Stephen A. Fowle                                   
                                                ------------------------------------
                                                Stephen A. Fowle
                                                Executive Vice President and
                                                Chief Financial Officer


Date:   March 7, 2007                    BY:    /s/ Robert F. Mack                                     
                                                ------------------------------------
                                                Robert F. Mack
                                                Senior Vice President and Controller
</TABLE>


                                      -32-




                                   Exhibit 13


         Management's Discussion and Analysis of Financial Condition and
                             Results of Operations

OVERVIEW

         WSFS Financial Corporation (Company or Corporation) is a thrift holding
company  headquartered  in  Wilmington,   Delaware.  Substantially  all  of  the
Corporation's  assets  are  held  by its  subsidiary,  Wilmington  Savings  Fund
Society,  FSB (Bank or WSFS).  Founded  in 1832,  WSFS is one of the ten  oldest
continuously-operating  banks in the United  States.  As a federal  savings bank
that was formerly  chartered as a state mutual savings bank, WSFS enjoys broader
investment  powers than most other financial  institutions.  WSFS has served the
residents  of the  Delaware  Valley for 175 years.  WSFS is the  largest  thrift
institution   headquartered  in  Delaware  and  the  fourth  largest   financial
institution in the state on the basis of total deposits  traditionally  garnered
in-market.  The Corporation's  primary market area is the mid-Atlantic region of
the United  States that is  characterized  by a  diversified  manufacturing  and
service  economy.  The long-term  strategy of the  Corporation is to improve its
status as a high-performing  financial  services company by focusing on its core
community banking business.

         WSFS
 provides  residential and commercial  real estate,  commercial and
consumer  lending  services,  as well as  retail  deposit  and  cash  management
services.  In addition,  WSFS  provides  wealth  management  and personal  trust
services through its new division,  Wilmington Advisors, which was formed during
2006.   Lending  activities  are  funded  primarily  with  retail  deposits  and
borrowings. The Federal Deposit Insurance Corporation (FDIC) insures deposits to
their legal maximum. WSFS serves customers primarily from its main office and 27
retail banking offices located in Delaware and southeastern Pennsylvania.

         The Corporation has two consolidated subsidiaries,  WSFS and Montchanin
Capital   Management,   Inc.   (Montchanin).   The  Corporation   also  has  one
unconsolidated  affiliate,  WSFS Capital Trust III.  Fully-owned  and continuing
consolidated  subsidiaries of WSFS include WSFS Investment  Group,  Inc.,  which
markets  various  third-party  insurance  products and securities  through WSFS'
retail banking system,  and WSFS Reit,  Inc., which holds qualifying real estate
assets and may be used in the future to raise capital.

         Montchanin has one consolidated  non-wholly owned  subsidiary,  Cypress
Capital  Management,  LLC  (Cypress).  Cypress,  a 90%  owned  subsidiary,  is a
Wilmington-based investment advisory firm serving high net-worth individuals and
institutions.  Cypress had approximately $455 million in assets under management
at December 31, 2006.

         WSFS Credit Corporation  (WCC), a consolidated  subsidiary of the Bank,
which was engaged  primarily in indirect  auto  financing  and vehicle  leasing,
discontinued   operations  in  2000.   More   information  is  provided  in  the
Discontinued Operations section of Management's Discussion and Analysis and Note
2 to the Financial Statements.


FORWARD-LOOKING STATEMENTS

         Within this annual  report and  financial  statements,  management  has
included certain  "forward-looking  statements" concerning the future operations
of the  Corporation.  Statements  contained in this annual  report which are not
historical facts, are forward-looking  statements as that term is defined in the
Private Securities  Litigation Reform Act of 1995. It is management's  desire to
take  advantage  of the  "safe  harbor"  provisions  of the  Private  Securities
Litigation  Reform Act of 1995.  This  statement  is for the express  purpose of
availing the  Corporation of the protections of such safe harbor with respect to
all   "forward-looking   statements."   Management  has  used   "forward-looking
statements"  to describe  future plans and strategies  and  expectations  of the
Corporation's future financial results.  Management's ability to predict results
or the effect or success of future plans and strategies is inherently uncertain.
Factors that could affect results include interest rate trends, competition, the
general economic climate in Delaware, the mid-Atlantic region and the country as
a whole, asset quality,  loan growth,  loan delinquency  rates,  operating risk,
uncertainty  of  estimates  in  general,   and  changes  in  federal  and  state
regulations, among other factors. These factors

                                        1


<PAGE>

should be considered in evaluating the  "forward-looking  statements," and undue
reliance  should not be placed on such  statements.  Actual  results  may differ
materially from management  expectations.  WSFS Financial  Corporation  does not
undertake,  and  specifically  disclaims any obligation to publicly  release the
result of any revisions  that may be made to any  forward-looking  statements to
reflect the occurrence of anticipated or  unanticipated  events or circumstances
after the date of such statements.

RESULTS OF OPERATIONS

         WSFS Financial Corporation recorded net income of $30.4 million for the
year ended  December 31, 2006,  compared to $27.9  million and $25.9  million in
2005 and  2004,  respectively.  Income  from  continuing  operations  was  $30.4
million,  $27.9 million and $25.8 million for the years ended December 31, 2006,
2005 and 2004, respectively.

         Net Interest Income. Net interest income increased $4.3 million, or 6%,
to $77.9  million in 2006  compared  to $73.6  million in 2005.  Total  interest
income earned on assets  increased  $41.2  million,  due to the  combination  of
higher amounts of earning assets and higher rates. During the year, the yield on
loans increased 101 basis points while the yield on  mortgage-backed  securities
increased 35 basis  points.  Interest  expense  increased  $36.9  million due to
higher amounts of interest-bearing  deposits and borrowings to fund the increase
in earning  assets as well as higher  rates.  The higher  rates on both  earning
assets and  interest-bearing  liabilities  were the result of higher  prevailing
rates during 2006.

         The net interest  margin ratio of 2.98% for 2006 declined from 3.13% in
2005. This ratio was negatively  impacted by a flattening yield curve, growth in
the Company's  CashConnect (ATM) division  (revenues related to cash outstanding
for this business is recorded as fee income rather than interest  income,  while
the  cost of  funding  these  balances  is  charged  to  interest  expense)  and
aggressive competition for deposits.

         Net interest  income was  negatively  impacted in 2005 when the Company
refinanced $51.5 million of Floating Rate Capital Trust I Preferred  Securities,
which carried an interest rate of 250 basis points over the  three-month  London
InterBank  Offered  Rate (LIBOR) and issued $67.0  million  aggregate  principal
amount of Pooled  Floating  Rate  Capital  Securities,  at LIBOR  plus 177 basis
points. In conjunction with the refinancing, the Company incurred a $1.1 million
(pretax) non-cash charge from the write down of unamortized debt issuance costs.

         Net interest income increased $6.8 million, or 10%, to $73.6 million in
2005 compared to $66.9 million in 2004.  Total interest  income  increased $31.9
million  between  2004 and  2005,  primarily  due to  growth  in  loans  and the
increased yield on loans and mortgage-backed securities. Total interest expense,
excluding the expense to fund discontinued  operations,  increased $25.1 million
from 2004 to 2005 primarily due to an increase in deposits and  borrowings  used
to fund the loan growth.  The average rate paid on Federal Home Loan Bank (FHLB)
advances increased 71 basis points, as lower costing advances matured during the
year and were replaced at higher rates.

         The following table sets forth 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.

                                       2


<PAGE>


<TABLE>
<CAPTION>
                                                                          Year Ended December 31,
                                                   -------------------------------------------------------------------
                                                            2006 vs. 2005                       2005 vs. 2004  
                                                   -------------------------------     -------------------------------
                                                    Volume      Rate         Net        Volume       Rate         Net
                                                   -------     -------     -------     -------     -------     -------
                                                                          (Dollars in Thousands)
<S>                                              <C>         <C>         <C>         <C>         <C>         <C>    
Interest income:
    Commercial real estate loans ..............    $ 4,549     $ 7,985     $12,534     $ 8,307     $ 6,493     $14,800
    Residential real estate loans .............      2,367       1,546       3,913        (564)       (454)     (1,018)
    Commercial loans (1) ......................     10,832       6,780      17,612       5,813       6,078      11,891
    Consumer loans ............................      2,590       1,411       4,001       1,234         652       1,886
    Loans held-for-sale .......................        (55)        (15)        (70)        (10)        (11)        (21)
    Mortgage-backed securities ................        703       2,054       2,757       2,744       2,617       5,361
    Investment securities .....................     (1,413)        723        (690)       (914)       (774)     (1,688)
    Other .....................................         97       1,001       1,098          17         684         701
                                                   -------     -------     -------     -------     -------     -------

Favorable (unfavorable) .......................     19,670      21,485      41,155      16,627      15,285      31,912
                                                   -------     -------     -------     -------     -------     -------
Interest expense:
    Deposits:
      Interest-bearing demand .................         35         453         488          69          35         104
      Money market ............................      1,420       2,833       4,253       2,117       1,055       3,172
      Savings .................................       (224)        723         499        (180)        661         481
      Retail time deposits ....................      3,302       3,909       7,211       1,141       1,955       3,096
      Jumbo certificates of deposit - nonretail      1,586       1,140       2,726         (69)        675         606
      Brokered certificates of deposit ........      2,118       3,722       5,840       2,852       1,984       4,836
    FHLB of Pittsburgh advances ...............      3,286      11,919      15,205         782       6,300       7,082
    Trust preferred borrowings ................        319        (558)       (239)        596       2,512       3,108
    Other borrowed funds ......................     (1,404)      2,305         901        (213)      2,715       2,502
    Cost of funding discontinued operations ...          7           7          14          74          73         147
                                                   -------     -------     -------     -------     -------     -------
Unfavorable (favorable) .......................     10,445      26,453      36,898       7,169      17,965      25,134
                                                   -------     -------     -------     -------     -------     -------
Net change as reported ........................   $  9,225     $(4,968)    $ 4,257     $ 9,458     $(2,680)   $  6,778
                                                  ========     =======     =======     =======     =======    ========
</TABLE>


(1)  The tax-equivalent income adjustment is related to commercial loans.

                                       3


<PAGE>

The following table provides information  regarding the average balances of, and
yields/rates on interest-earning assets and interest-bearing  liabilities during
the periods indicated:


<TABLE>
<CAPTION>
                                                                            Year Ended December 31,        
                                      ----------------------------------------------------------------------------------------------
                                                     2006                            2005                           2004 
                                      -------------------------------   ----------------------------   -----------------------------
                                        Average               Yield/     Average             Yield/      Average            Yield/
                                        Balance    Interest  Rate (1)    Balance   Interest  Rate(1)     Balance  Interest  Rate(1)
                                        -------    --------  --------    -------   --------  -------     -------  --------  -------
                                                     (Dollars in Thousands)
<S>                                 <C>           <C>         <C>    <C>          <C>         <C>    <C>         <C>        <C>  
Assets
Interest-earning assets:
  Loans (2) (3):
    Commercial real estate loans ... $   635,133   $ 52,095    8.20%  $  573,566   $ 39,561    6.90%  $  438,395  $ 24,761   5.56%
    Residential real estate loans...     480,307     26,458    5.51      436,373     22,545    5.17      446,910    23,563   5.27
Commercial loans ...................     582,546     45,973    7.97      439,375     28,361    6.62      340,611    16,470   5.08
    Consumer loans..................     258,946     19,052    7.36      222,679     15,051    6.76      204,122    13,165   6.45
                                      ----------   --------           ----------   --------           ----------  --------
       Total loans..................   1,956,932    143,578    7.39    1,671,993    105,518    6.38    1,430,038    77,959   5.53
  Mortgage-backed securities (4)....     591,021     28,444    4.81      575,580     25,687    4.46      510,965    20,326   3.98
  Loans held-for-sale (3)...........       1,001         51    5.09        2,032        121    5.95        2,188       142   6.49
  Investment securities (4).........      55,004      2,568    4.67       88,094      3,258    3.70      110,567     4,946   4.47
  Other interest-earning assets.....      51,144      2,536    4.96       48,077      1,438    2.99       47,010       737   1.57
                                      ----------   --------           ----------   --------          -----------  --------
       Total interest-earning
         assets.....................   2,655,102    177,177    6.72    2,385,776    136,022    5.75    2,100,768   104,110   5.01
                                                   --------                        --------                       --------
Allowance for loan losses...........     (26,491)                        (24,909)                        (23,357)
Cash and due from banks.............      57,771                          53,434                          52,332
Cash in non-owned ATMs..............     153,060                         133,235                         116,953
Bank-owned life insurance...........      53,137                          53,137                          48,400
Loans, operating leases and 
  other assets of discontinued 
  operations .......................           -                             531                           4,660
Other noninterest-earning assets ...      63,793                          55,000                          45,338
                                      ----------                      ----------                      ----------
       Total assets.................  $2,956,372                      $2,656,204                      $2,345,094
                                      ==========                      ==========                      ==========

Liabilities and Stockholders' Equity
Interest-bearing liabilities:
  Interest-bearing deposits:
    Interest-bearing demand.........  $  123,599        785    0.64%  $  111,585        297    0.27%  $   83,566       193   0.23%
    Money market....................     232,418      8,090    3.48      177,911      3,837    2.16       60,615       665   1.10
    Savings.........................     240,426      2,237    0.93      272,673      1,738    0.64      312,981     1,257   0.40
    Retail time deposits............     384,654     15,309    3.98      286,371      8,098    2.83      238,024     5,002   2.10
                                      ----------   --------           ----------   --------           ----------   -------
       Total interest-bearing 
         retail deposits............     981,097     26,421    2.69      848,540     13,970    1.65      695,186     7,117   1.02
    Jumbo certificates of deposit - 
      nonretail.....................      80,691      4,100    5.08       43,554      1,374    3.15       47,555       768   1.61
    Brokered certificates of 
      deposit.......................     243,070     12,186    5.01      189,593      6,346    3.35       84,194     1,510   1.79
                                      ----------   --------           ----------   --------           ----------   ------- 
       Total interest-bearing 
         deposits...................   1,304,858     42,707    3.27    1,081,687     21,690    2.01      826,935     9,395   1.14
  FHLB of Pittsburgh advances.......     976,101     45,878    4.64      887,822     30,673    3.41      859,742    23,591   2.70
  Trust preferred borrowings........      67,011      5,053    7.44       62,986      5,292    8.29       51,162     2,184   4.20
  Other borrowed funds..............     123,800      5,640    4.56      165,406      4,739    2.87      181,334     2,237   1.23
  Cost of funding discontinued 
    operations......................           -          -                    -        (14)                   -      (161)
                                      ----------   --------           ----------   --------           ----------

       Total interest-bearing
         liabilities................   2,471,770     99,278    4.02    2,197,901     62,380    2.84    1,919,173    37,246   1.94
                                                   --------                        --------                        -------
Noninterest-bearing 
  demand deposits...................     262,838                         250,321                         220,446
Other noninterest-bearing 
  liabilities.......................      24,330                          19,274                          15,040
Minority interest...................          84                             209                             200
Stockholders' equity................     197,350                         188,499                         190,235
                                      ----------                      ----------                      ----------
       Total liabilities and 
         stockholders' equity.......  $2,956,372                      $2,656,204                      $2,345,094
                                      ==========                      ==========                      ==========
Excess (deficit) of interest-
  earning assets over 
  interest-bearing liabilities......  $  183,332                      $  187,875                      $  181,595
                                      ==========                      ==========                      ==========
Net interest and dividend income....               $ 77,899                        $ 73,642                        $66,864
                                                   ========                        ========                        =======
Interest rate spread................                           2.70%                           2.91%                         3.07%
                                                               ====                            ====                          ====
Interest rate margin................                           2.98%                           3.13%                         3.24%
                                                               ====                            ====                          ====
</TABLE>


(1)  Weighted average yields have been computed on a tax-equivalent basis.
(2)  Nonperforming loans are included in average balance computations.
(3)  Balances are reflected net of unearned income.
(4)  Includes securities available-for-sale. 

                                       4


<PAGE>

         Provision for Loan Losses.  The Corporation  maintains an allowance for
loan losses at an  appropriate  level based on  management's  assessment  of the
"estimable" and "probable" losses in the loan portfolio,  pursuant to accounting
literature  which is discussed  further in the  Nonperforming  Assets section of
Management's  Discussion and Analysis.  Management's  evaluation is based upon a
review of the portfolio and requires significant  judgement.  For the year ended
December 31, 2006,  the  Corporation  recorded a provision  for loan losses from
continuing  operations of $2.7 million compared to $2.6 million in 2005 and $3.2
million in 2004.  In 2006,  the increase is the result of continued  loan growth
despite continued positive trends in asset quality.

         Noninterest Income.  Noninterest income increased $5.7 million to $40.3
million in 2006, or 16%, from $34.7  million in 2005.  The largest  increase was
attributable to the $3.8 million in card and ATM income as a result of increased
volumes of cash in non-owned ATMs and higher bailment rates earned on this cash.
During 2006, the number of ATMs serviced by the CashConnect  segment,  WSFS' ATM
unit,  remained  essentially  flat,  while the number of WSFS owned and operated
ATMs increased to 313.  Deposit service charges also increased $2.2 million as a
result of growth in deposit  accounts as well as additional  fee based  services
provided  by WSFS.  During  the third  quarter of 2006,  noninterest  income was
impacted by  unanticipated  income of $1.8 million in the Bank's  investment  in
Bank-Owned Life Insurance (BOLI).  Also, during 2006, the Bank recognized a loss
of $2.0 million on the sale of below-market  yielding securities.  This sale was
part of the  Bank's  efforts  to  improve  its  earning  asset mix and return on
assets.

         Noninterest  income increased $2.7 million to $34.7 million in 2005, or
8%,  from  $32.0  million  in 2004.  The  increase  was  mainly the result of an
increase of $2.9 million in card and ATM income as a result of underlying growth
in volumes combined with increased  prime-based  bailment fees. During 2005, the
CashConnect  segment  increased the number of ATMs it serviced by 33%. Of these,
WSFS owned and operated 271 ATMs in 2005. Additionally,  deposit service charges
increased  $702,000 due primarily to an increase in total retail deposits driven
by the  promotion  of a new free  checking  product  line.  The  increases  were
partially offset by $605,000 of losses  recognized on the sale of lower yielding
agency investments.

         Noninterest  Expenses.  Noninterest  expenses increased $6.4 million to
$69.3 million in 2006, or 10%,  from $62.9 million in 2005.  Salaries,  benefits
and other  compensation  increased  $4.2  million  as a result of the  Company's
continued  growth  including the opening of three branch  offices and two branch
renovations  / relocations  in 2006 and the  formation of the Wealth  Management
Division.  The number of full-time  Associates increased from 515 in 2005 to 573
in 2006.  The growth is also reflected in higher  equipment and other  operating
expenses  with an increase of $514,000 in equipment  expense and $1.7 million in
other  operating  expenses.  Additionally,  $1.5  million  of  the  increase  in
salaries,  benefits and other  compensation is the result of the  implementation
during 2006 of the Statement of Financial  Accounting  Standards (SFAS) No. 123R
(revised  2004),  Share-Based  Payment,  which  requires  that  all  share-based
payments to Associates,  including  grants of stock options,  be recognized over
the related service period as compensation expense in the income statement based
on their fair values. As a result of the continued growth, and the establishment
of the  Wealth  Management  Services  division,  the  Company  anticipates  that
expenses will continue to grow.

      Noninterest  expenses  for the year ended 2005 were $62.9  million  for an
increase  of $7.2  million  over the $55.7  million in 2004.  This  increase  is
primarily a result of the Company's  growth in the commercial and retail banking
areas and is mainly in  salaries,  benefits  and other  compensation,  occupancy
expense,  marketing  expenses  and other  operating  expenses.  The  increase in
marketing  expenses also stems from  expenses  related to the promotion of a new
free  checking  product  line,  and a  campaign  to  increase  market  share for
commercial banking.

         Income Taxes.  The  Corporation  recorded a $15.7 million tax provision
for the year ended December 31, 2006 compared to $14.8 million and $14.1 million
for the years ended December 31, 2005 and 2004, respectively.  The effective tax
rates for continuing  operations for the years ended December 31, 2006, 2005 and
2004 were 34.0%, 34.8% and 35.1%,  respectively.  The provision for income taxes
includes  federal,  state and local income taxes that are  currently  payable or
deferred because of temporary  differences between the financial reporting bases
and the tax reporting bases of the assets and liabilities.

         At December 31, 2006,  approximately $2.9 million in gross deferred tax
assets of the  Corporation  are related to net operating  losses and tax credits
attributable  to a  former  subsidiary.  Management  has  assessed  a  valuation
allowance  of $2.0  million on these  deferred  tax  assets  due to  limitations
imposed by the Internal Revenue Code.  Approximately  $693,000 in gross deferred
tax assets of the  Corporation at December 31, 2006 are related to state tax net
operating losses.

                                       5


<PAGE>

Management  has  established a valuation  allowance on all of these deferred tax
assets due to such net operating losses expiring before being utilized.

         The  Corporation has an ongoing program that analyzes its projection of
taxable  income  and  makes  adjustments  to  its  provision  for  income  taxes
accordingly.   For  additional   information  regarding  the  Corporation's  tax
provision and net operating loss carryforwards,  see Note 13 to the Consolidated
Financial Statements.

FINANCIAL CONDITION

         Total  assets  increased  $150.6  million,  or 5%,  during 2006 to $3.0
billion.  This increase was predominantly due to growth in net loans, which grew
$244.4 million,  or 14%,  during 2006.  This increase was partially  offset by a
decrease of $103.6  million in  mortgage-backed  securities.  Total  liabilities
increased  $120.7  million during the year to $2.8 billion at December 31, 2006.
This  increase  was  primarily  the result of an  increase in deposits of $310.1
million,  or 21%,  during 2006. This increase was offset by a decrease of $192.3
million in total borrowings.

         During 2006,  the  Corporation  took steps to realign its balance sheet
and improve its net interest margin ratio.  These steps  included,  but were not
limited to,  selling  $51.4  million of  below-market  yielding  mortgage-backed
securities.

         Cash in  non-owned  ATMs.  Between  December  31, 2005 and December 31,
2006,  the  CashConnect  segments',  WSFS'  ATM  unit,  cash in  non-owned  ATMs
decreased $8.4 million, or 5%. This decrease was the result of a decrease in the
number of ATMs serviced by CashConnect  from 7,696 at December 31, 2005 to 7,458
at December 31,  2006.  Of these,  313 ATMs were WSFS owned and operated  during
2006.

         Mortgage-backed  Securities.  Investments in mortgage-backed securities
decreased $103.6 million during 2006 to $516.7 million. This decrease was mainly
the result of the run-off of lower yielding  securities  during the year and the
sale of $51.4  million  of  mortgage-backed  securities.  The  weighted  average
duration of the mortgage-backed securities was 2.9 years at December 31, 2006.

         Loans,  net. Net loans increased  $244.4 million,  or 14%, during 2006.
This included  increases of $136.0 million,  or 27%, in commercial loans,  $77.0
million,  or 13%, in commercial  real estate  loans,  $17.8  million,  or 7%, in
consumer loans and $14.3 million, or 3%, in residential mortgage loans.

         Customer Deposits.  Customer deposits increased $149.8 million, or 13%,
during 2006 to $1.3  billion.  Customer  time deposits  (CDs)  increased  $135.1
million,  or 43%, in 2006.  In  addition,  core  deposit  relationships  (demand
deposits,  money market and savings  accounts)  increased $14.7 million,  or 1%,
during the year.  The table below depicts the changes in customer  deposits over
the last three years:

                                                Year Ended December 31,     
                                       ----------------------------------------
                                        2006             2005           2004 
                                        ----             ----           ---- 
                                                     (In Millions)

Beginning balance...................  $1,193.9         $1,052.2       $  883.1
Interest credited...................      33.8             11.4            6.6
Deposit inflows, net................     116.0            130.3          162.5 
                                      --------         --------       -------- 
Ending balance......................  $1,343.7         $1,193.9       $1,052.2
                                      ========         ========       ========


         Borrowings  and  Brokered  Certificates  of Deposit.  Total  borrowings
decreased by $192.3 million,  or 16%, between December 31, 2005 and December 31,
2006.  This  decrease was primarily the result of a decrease in FHLB advances of
$224.7 million,  or 22%,  during 2006. In addition,  Federal funds purchased and
securities sold under agreements to repurchase  decreased $9.8 million,  or 12%,
in 2006.  This  decrease was partially  offset by an increase in other  borrowed
funds of $42.1 million,  or 117%, in 2006.  Brokered  deposits  increased  $89.5
million, or 42%, during the year.

                                       6


<PAGE>

         Stockholders'  Equity.  Stockholders' equity increased $30.1 million to
$212.1 million at December 31, 2006. This increase included $30.4 million in net
income and $1.4  million  in other  comprehensive  income.  There were also $4.1
million in proceeds  from the exercise of common stock  options.  These  amounts
were partially offset by the acquisition of 103,400 shares of treasury stock for
a total of $6.1 million.  At December 31, 2006, the Corporation held 8.9 million
shares of its  common  stock as  treasury  shares.  The  Corporation  intends to
continue repurchasing shares in amounts depending on stock price and alternative
uses of capital.  Finally, the Corporation declared cash dividends totaling $2.1
million.

ASSET/LIABILITY MANAGEMENT

         The  primary  asset/liability  management  goal of the  Corporation  is
maximizing  its net interest  income  opportunities  within the  constraints  of
managing interest rate risk, while ensuring  adequate  liquidity and funding and
maintaining a strong capital base.

         In general,  while interest rate risk is mitigated by closely  matching
the maturities or repricing periods of interest-sensitive assets and liabilities
to ensure a favorable  interest rate spread.  Management  regularly  reviews the
Corporation's  interest-rate  sensitivity,  and uses a variety of  strategies as
needed to adjust that sensitivity within acceptable tolerance ranges established
by management and the Board of Directors.  Changing the relative  proportions of
fixed-rate  and  adjustable-rate  assets and  liabilities  is one of the primary
strategies utilized by the Corporation to accomplish this objective.

         The matching of assets and liabilities may be analyzed by examining the
extent to which such assets and liabilities are "interest-rate sensitive" and by
monitoring an institution's  interest-sensitivity  gap. An  interest-sensitivity
gap is considered  positive when the amount of  interest-rate  sensitive  assets
exceeds the amount of  interest-rate  sensitive  liabilities  repricing within a
defined  period,  and is considered  negative  when the amount of  interest-rate
sensitive  liabilities  exceeds  the amount of  interest-rate  sensitive  assets
repricing within a defined period.

                                       7


<PAGE>

         The  repricing  and  maturities  of  the  Corporation's   interest-rate
sensitive assets and  interest-rate  sensitive  liabilities at December 31, 2006
are set forth in the following table:


<TABLE>
<CAPTION>
                                                        Less than        One to         Over
                                                         One Year      Five Years    Five Years      Total   
                                                       -----------    -----------   -----------    -----------
                                                                       (Dollars in Thousands)
<S>                                                  <C>            <C>           <C>            <C>        
Interest-rate sensitive assets :
   Real estate loans (1) ...........................   $   717,191    $   331,910   $    88,869    $ 1,137,970
   Commercial loans ................................       507,625        102,298        33,995        643,918
   Consumer loans ..................................       127,242         55,747        80,488        263,477
   Mortgage-backed securities ......................       209,217         51,464       256,030        516,711
   Loans held-for-sale .............................           925              -             -            925
   Investment securities ...........................        77,035          1,585        15,743         94,363
   Other investments ...............................         1,743              -             -          1,743
                                                       -----------    -----------   -----------    -----------
                                                         1,640,978        543,004       475,125      2,659,107
                                                       -----------    -----------   -----------    -----------
Interest-rate sensitive liabilities:
   Money market and interest-bearing demand deposits       105,400              -       287,965        393,365
   Savings deposits ................................        58,588              -       168,265        226,853
   Retail time deposits ............................       397,176         35,600        14,370        447,146
   Jumbo certificates of deposit ...................       110,966            424             -        111,390
   Brokered certificates of deposit ................       216,362         21,223        63,669        301,254
   FHLB advances ...................................       614,000        160,962         9,067        784,029
   Trust preferred borrowings ......................        67,011              -             -         67,011
   Other borrowed funds ............................       100,784              -        50,856        151,640
                                                       -----------    -----------   -----------    -----------
                                                         1,670,287        218,209       594,192      2,482,688
                                                       -----------    -----------   -----------    -----------
   (Deficiency) excess  of interest-rate sensitive
   assets over interest-rate sensitive liabilities
   ("interest-rate sensitive gap") .................   $   (29,309)   $   324,795   $  (119,067)   $   176,419
                                                       ===========    ===========   ===========    ===========

One-year interest-rate sensitive assets/interest-rate sensitive liabilities     98.25% 
One-year interest-rate sensitive gap as a percent of total assets               (0.98)%
</TABLE>


-----------------
(1)  Includes commercial mortgage, construction, and residential mortgage loans.


         Generally,  during a period of rising  interest  rates,  a positive gap
would  result in an increase in net  interest  income while a negative gap would
adversely  affect net interest  income.  Conversely,  during a period of falling
rates, a positive gap would result in a decrease in net interest  income while a
negative   gap   would    augment   net   interest    income.    However,    the
interest-sensitivity  table does not provide a comprehensive  representation  of
the impact of interest  rate changes on net interest  income.  Each  category of
assets or liabilities will not be affected equally or  simultaneously by changes
in the  general  level of interest  rates.  Even  assets and  liabilities  which
contractually  reprice  within the rate period may not, in fact,  reprice at the
same price or the same time or with the same frequency.  It is also important to
consider  that the table  represents a specific  point in time.  Variations  can
occur as the Company adjusts its  interest-sensitivity  position  throughout the
year.

         To provide a more  accurate  one-year gap position of the  Corporation,
certain  deposit  classifications  are  based  on  the  interest-rate  sensitive
attributes  and  not on  the  contractual  repricing  characteristics  of  these
deposits. Management estimates, based on historical trends of the Bank's deposit
accounts,  that 35% of money market and 13% of interest-bearing  demand deposits
are sensitive to interest  rate changes and that 22% to 36% of savings  deposits
are sensitive to interest rate changes.  Accordingly,  these  interest-sensitive
portions are classified in the less than one-year category with the remainder in
the over five-year category.

         Deposit rates other than time deposit  rates are variable,  and changes
in  deposit  rates  are  generally   subject  to  local  market  conditions  and
management's discretion and are not indexed to any particular rate.

         In 1998,  the  Corporation  purchased a ten-year  interest  rate cap in
order to limit  its  exposure  on $51.5  million  of  variable  Trust  Preferred
Securities  issued in 1998.  On April 6, 2005,  the  Corporation  completed  the
issuance of $67.0 million of aggregate  principal amount of Pooled Floating Rate
Securities.  The proceeds from this issuance were used to fund the redemption of
$51.5  million of  Floating  Rate  Capital  Trust I Preferred  Securities.  This
derivative instrument  economically caps the three-month LIBOR, the base rate of
the trust preferred  borrowings,  at 6.00%.  The Trust Preferred  borrowings are
classified in the less than one-year  category  reflecting the ability to adjust
upward for the balance of the term of the interest rate

                                       8


<PAGE>

cap. If the three-month  LIBOR rate equals or exceeds 6.00%, the Trust Preferred
borrowing takes on a fixed  characteristic  and therefore would be classified in
the period corresponding to the cap's maturity.


REVERSE MORTGAGES

         The Corporation holds an investment in reverse mortgages of $598,000 at
December 31, 2006 representing a participation in reverse mortgages with a third
party.

         Reverse  mortgage  loans are contracts  that require the lender to make
monthly advances throughout the borrower's life or until the borrower relocates,
prepays or the home is sold,  at which time the loan  becomes  due and  payable.
Reverse  mortgages  are  nonrecourse  obligations,  which  means  that  the loan
repayments  are  generally  limited to the net sale  proceeds of the  borrower's
residence.

         The  Corporation  accounts for its  investment in reverse  mortgages by
estimating the value of the future cash flows on the reverse mortgages at a rate
deemed  appropriate  for these  mortgages,  based on the market rate for similar
collateral.  Actual  cash flows from the  maturity of these  mortgage  loans can
result in  significant  volatility  in the  recorded  value of reverse  mortgage
assets.  As a result,  income  varies  significantly  from  reporting  period to
reporting period.  For the year ended December 31, 2006, the Corporation  earned
$684,000 in interest income on reverse mortgages as compared to $678,000 in 2005
and $1.8 million in 2004.

         The projected cash flows depend on assumptions about life expectancy of
the  mortgagee  and the future  changes in  collateral  values.  Projecting  the
changes  in  collateral  values is the most  significant  factor  impacting  the
volatility  of  reverse  mortgage  values.  The  current  assumptions  include a
short-term annual  appreciation rate of -8.0% in the first year, and a long-term
annual appreciation rate of 0.5% in future years. If the long-term  appreciation
rate was  increased  to 1.5%,  the  resulting  impact on income  would have been
$101,000. Conversely, if the long-term appreciation rate was decreased to -0.5%,
the resulting impact on income would have been $(85,000).

         The Corporation also holds $12.4 million in BBB+ rated  mortgage-backed
securities classified as trading and options to acquire up to 49.9% of Class "O"
Certificates  issued in connection with securities  consisting of a portfolio of
reverse  mortgages  previously  held  by the  Corporation.  At the  time  of the
securitization, the securitizer retained 100% of the Class "O" Certificates from
the  securitization.  These Class "O"  Certificates  have no priority over other
classes of Certificates under the Trust and no distributions will be made on the
Class "O" Certificates  until,  among other conditions,  the principal amount of
each other class of notes has been reduced to zero. The underlying  assets,  the
reverse  mortgages,  are very long-term assets.  Hence, any cash flow that might
inure to the holder of the Class "O" Certificates is not expected to occur until
many years in the future.  Additionally,  the Company can exercise its option on
49.9% of the Class "O"  Certificates  in up to five separate  increments  for an
aggregate  purchase  price of $1.0 million any time between  January 1, 2004 and
the termination of the  Securitization  Trust.  The option to purchase the Class
"O"  Certificates  does not meet the  definition of a derivative  under SFAS No.
133, Accounting for Derivative and Hedging Activities.

         During 2006, the Corporation formed a new reverse mortgage  initiative.
While the  Company's  activity  during the year has been  limited to acting as a
correspondent  for these loans, the intention of the Company is to originate and
underwrite its own reverse mortgages in the future.  The Company expects to sell
most of these  loans and does not  intend to hold them in its  portfolio.  These
reverse mortgages are government approved, insured and are endorsed by the AARP.

DISCONTINUED OPERATIONS

         In December 2000,  the  Corporation  approved plans to discontinue  the
operations of WCC. At December 31, 2000, WCC had 7,300 lease contracts and 2,700
loan  contracts,  compared to zero lease  contracts  and zero loan  contracts at
December 31, 2006.

         An  extensive  analysis  as of  December  31,  2006  indicated  that no
additional  reserves were needed for the expected  losses in the business during
the remaining wind-down period.

                                       9


<PAGE>

         At December  31,  2006,  there were zero in indirect  loans and zero in
indirect  leases.  At December 31, 2006,  WSFS had exposure to no remaining used
car residuals.

MARKET RISK

         Market risk is the risk of loss from adverse  changes in market  prices
and rates.  The Company's  market risk arises  primarily from interest rate risk
inherent  in its  lending,  investing  and  funding  activities.  To  that  end,
management  actively  monitors and manages its interest rate risk exposure.  One
measure   required  to  be  performed  by  the  Office  of  Thrift   Supervision
(OTS)-regulated  institutions  is the test specified by OTS Thrift  Bulletin No.
13A,  "Management of Interest Rate Risk,  Investment  Securities and Derivatives
Activities."  This test  measures  the impact on the net  portfolio  value of an
immediate change in interest rates in 100 basis point increments.  Net portfolio
value is  defined  as the net  present  value of the  estimated  cash flows from
assets and  liabilities as a percentage of the net present value of assets.  The
following table is the estimated  impact of immediate  changes in interest rates
on the  Company's net interest  margin and net portfolio  value at the specified
levels at  December  31, 2006 and 2005,  calculated  in  compliance  with Thrift
Bulletin No. 13A:

                                             December 31,              
                     -----------------------------------------------------------
                                2006                            2005       
                     -----------------------------   ---------------------------
Change in Interest   % Change in                     % Change in
       Rate          Net Interest    Net Portfolio   Net Interest  Net Portfolio
  (Basis Points)      Margin (1)        Value (2)     Margin (1)       Value (2)
  --------------     -----------    --------------  -------------  -------------
       +300              -1%            7.89%           0%             7.33%
       +200              -1%            8.46%           0%             7.86%
       +100               0%            8.99%           0%             8.31%
          0               0%            9.66%           0%             8.72%
       -100              +2%            9.03%          -2%             8.83%
       -200 (3)          +1%            9.04%          -7%             8.62%
       -300 (3)          -1%            8.91%         -11%             8.32%


(1)  The percentage  difference between net interest margin in a stable interest
     rate  environment  and net interest  margin as projected  under the various
     rate environment changes.

(2)  The  net  portfolio  value  of  the  Company  in  a  stable  interest  rate
     environment and the net portfolio value as projected under the various rate
     environment changes.

(3)  Sensitivity  indicated by a decrease of 200 and 300 basis points may not be
     particularly   meaningful   at  December   31,  2006  and  2005  given  the
     historically low absolute level of interest rates at these dates.

         The Company's  primary  objective in managing  interest rate risk is to
minimize the adverse  impact of changes in interest  rates on the  Company's net
interest  income and capital,  while  maximizing  the  yield/cost  spread on the
Company's  asset/liability  structure.  The  Company  relies  primarily  on  its
asset/liability structure to control interest rate risk.

         The  Company  also  engages  in  other  business  activities  that  are
sensitive to changes in interest rates.  For example,  mortgage banking revenues
and expenses can fluctuate with changing interest rates.  These fluctuations are
difficult to model and estimate.

NONPERFORMING ASSETS

         Nonperforming  assets,  which include nonaccruing loans,  nonperforming
real estate investments and assets acquired through foreclosure,  can negatively
affect the Corporation's  results of operations.  Nonaccruing loans are those on
which the accrual of interest has ceased.  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

                                       10


<PAGE>

management's   assessment  of  the  ultimate  collectibility  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 sets forth the Corporation's  nonperforming  assets
and past due loans at the dates indicated:


<TABLE>
<CAPTION>
                                                                 December 31,              
                                                ----------------------------------------------
                                                 2006      2005      2004      2003      2002
                                                ------    ------    ------    ------    ------
                                                            (Dollars in Thousands)
<S>                                            <C>       <C>       <C>       <C>       <C>   
Nonaccruing loans:
     Commercial .............................   $1,282    $  925    $1,595    $1,549    $2,242
     Consumer ...............................      557       155       291       240       516
     Commercial mortgages ...................      500       727       909       941       326
     Residential mortgages ..................    1,493     1,567     1,601     2,513     3,246
     Construction ...........................        -        36         -         -       199
                                                ------    ------    ------    ------    ------
Total nonaccruing loans .....................    3,832     3,410     4,396     5,243     6,529
Assets acquired through foreclosure .........      388        59       217       301       904
                                                ------    ------    ------    ------    ------
Total nonperforming assets ..................   $4,220    $3,469    $4,613    $5,544    $7,433
                                                ======    ======    ======    ======    ======

Past due loans:
     Residential mortgages ..................   $  219    $  327    $  703    $  915    $  346
     Commercial and commercial mortgages ....        3         -         -       129        95
     Consumer ...............................       29        59       104       148        88
                                                ------    ------    ------    ------    ------
Total past due loans ........................   $  251    $  386    $  807    $1,192    $  529
                                                ======    ======    ======    ======    ======

Ratio of nonaccruing loans to total
     loans (1) ..............................     0.19%     0.19%     0.28%     0.40%     0.60%
Ratio of allowance for loan losses to gross
     loans (1) ..............................     1.34%     1.41%     1.56%     1.69%     1.95%
Ratio of nonperforming assets to total assets     0.14%     0.12%     0.18%     0.25%     0.44%
Ratio of loan loss allowance to nonaccruing
     loans (2) ..............................   705.32%   709.47%   524.05%   421.91%   324.49%
</TABLE>


(1)  Total loans exclude loans held-for-sale.
(2)  The applicable allowance represents general valuation allowances only.

         The ratio of  nonaccruing  loans to total loans  remained flat at 0.19%
between 2006 and 2005. In addition,  the ratio of nonperforming  assets to total
assets  increased  slightly from 0.12% in 2005 to 0.14% in 2006. The consistency
of these results illustrate continued strong levels of asset quality.

         The following  table  provides an analysis of the change in the balance
of nonperforming assets during the last three years:

                                             Year Ended December 31,       
                                      -------------------------------------
                                        2006           2005           2004   
                                      -------        -------        -------
                                                                 
(In Thousands)                                                   
                                                                 
Beginning balance .................   $ 3,469        $ 4,613        $ 5,544
      Additions ...................     5,697          5,062          6,554
      Collections .................    (3,916)        (4,467)        (4,668)
      Transfers to accrual ........      (453)          (398)        (1,717)
      Charge-offs/write-downs......      (577)        (1,341)        (1,100)
                                      -------        -------        -------
 Ending balance ...................   $ 4,220        $ 3,469        $ 4,613
                                      =======        =======        =======
                                                           
                                       11


<PAGE>
                                                       
          Allowance for Loan Losses.  The Corporation  maintains  allowances for
credit  losses  and  charges  losses to these  allowances  when such  losses are
realized.   The   determination  of  the  allowance  for  loan  losses  requires
significant  judgement  reflecting  management's  best estimate of probable loan
losses related to specifically  identified loans as well as probable loan losses
in the  remaining  loan  portfolio.  Management's  evaluation  is  based  upon a
continuing review of these portfolios.

          Management  establishes  the loan loss  allowance in  accordance  with
guidance provided in the Securities and Exchange  Commission's  Staff Accounting
Bulletin 102 (SAB 102). Its methodology for assessing the appropriateness of the
allowance  consists of several key elements which include:  specific  allowances
for identified  problem loans;  formula allowances for commercial and commercial
real estate loans; and allowances for pooled homogenous loans.

          Specific  reserves are  established  for certain  loans in cases where
management has identified  significant  conditions or circumstances related to a
specific credit that management  believes  indicate the probability  that a loss
has been incurred.

          The formula allowances for commercial and commercial real estate loans
are calculated by applying loss factors to outstanding  loans in each case based
on the  internal  risk  grade  of  loans  derived  from  analysis  of  both  the
probability of default and the  probability  of loss should default occur.  As a
result, changes in risk grades of both performing and nonperforming loans affect
the amount of the formula allowance.  Loss factors by risk grade have a basis in
WSFS'  historical  default  experience  for such  loans  and  assessment  of the
probability of default.  Loss  adjustment  factors are applied based on criteria
discussed below.

         Pooled     loans    are    loans    that    are    usually     smaller,
not-individually-graded  and homogenous in nature, such as consumer  installment
loans and residential mortgages. Loan loss allowances for pooled loans are based
on a ten-year net charge-off history.  The average loss allowance per homogenous
pool is based on the  product of  average  annual  historical  loss rate and the
average  estimated  duration of the pool multiplied by the pool balances.  These
separate risk pools are assigned a reserve for losses based upon this historical
loss information and loss adjustment factors.

         Historical  loss  adjustment   factors  are  based  upon   management's
evaluation of various current conditions including those listed below:

o    General economic and business conditions affecting WSFS' key lending areas,
o    Credit quality trends,
o    Recent loss experience in particular segments of the portfolio,
o    Collateral values and loan-to-value ratios,
o    Loan volumes and concentrations, including changes in mix,
o    Seasoning of the loan portfolio,
o    Specific industry conditions within portfolio segments,
o    Bank regulatory examination results, and
o    Other  factors,  including  changes  in  quality  of the loan  origination,
     servicing and risk management processes.

         WSFS'  loan  officers  and risk  managers  meet at least  quarterly  to
discuss and review these conditions and risks associated with individual problem
loans. In addition,  various regulatory  agencies,  as an integral part of their
examination  process,  periodically review the Corporation's  allowance for such
losses. The Company also gives  consideration to the results of these regulatory
agency examinations.

         During  2006,  the  provision  for loan  losses was also  affected by a
change  in  estimates  used in the  calculation.  The  change  is the  result of
continued  analysis of the Corporation's loss experience on commercial loans and
the Corporation's consideration of proposed regulatory guidance and professional
studies on the classification of commercial

                                       12


<PAGE>
credits to change  its  estimates.  This  change  combines  an  estimate  of the
probability of default for each of the Corporation's classified loan grades with
an  estimate  of loss  should an event of default  occur.  The  estimate of loss
further  segments  classified  loan grades into  sub-grades with unique factors.
Management  believes this analysis better estimates losses currently in its loan
portfolio.  These  changes  resulted in a reduction  to the  provision  for loan
losses of $1.8 million or $0.17 per share.

        The table below  represents  a summary of changes in the  allowance  for
loan losses during the periods indicated:


<TABLE>
<CAPTION>
                                                                        Year Ended December 31,   
                                                        --------------------------------------------------------
                                                          2006        2005        2004        2003    2002
                                                        --------    --------    --------    --------    --------
                                                                         (Dollars in Thousands)
<S>                                                    <C>         <C>         <C>         <C>         <C>     
Beginning balance ...................................   $ 25,381    $ 24,222    $ 22,386    $ 21,452    $ 21,597
Provision for loan losses - continuing operations ...      2,738       2,582       3,217       2,550       2,243
Provision for loan losses - businesses held-for-sale.          -           -           -           -         211
Sale of businesses held-for-sale ....................          -           -           -           -        (269)

Charge-offs:
    Residential real estate .........................         75          90         222         329         725
    Commercial real estate (1) ......................          -         104         148           -         333
    Commercial ......................................        470       1,048         656         827         895
    Overdrafts ......................................        390           -           -           -           -
    Consumer (2) ....................................        483         631         817         860       1,551
                                                        --------    --------    --------    --------    --------
Total charge-offs ...................................      1,418       1,873       1,843       2,016       3,504
                                                        --------    --------    --------    --------    --------
Recoveries:
    Residential real estate .........................         14          59          32           -          76
    Commercial real estate (1) ......................        170          42           -         202         181
    Commercial ......................................        343         209         335          79         483
    Consumer (2) ....................................        156         140          95         119         434
                                                        --------    --------    --------    --------    --------
Total recoveries ....................................        683         450         462         400       1,174
                                                        --------    --------    --------    --------    --------
Net charge-offs .....................................        735       1,423       1,381       1,616       2,330
                                                        --------    --------    --------    --------    --------
Ending balance ......................................   $ 27,384    $ 25,381    $ 24,222    $ 22,386    $ 21,452
                                                        ========    ========    ========    ========    ========
Net charge-offs to average gross loans outstanding,
    net of unearned income ..........................       0.04%       0.09%       0.10%       0.13%       0.22%
                                                        ========    ========    ========    ========    ========
</TABLE>

(1)  Includes commercial mortgage and construction loans.
(2)  2002 includes amounts for businesses held-for-sale.

         For the year ended  December 31, 2006,  the  Corporation  provided $2.7
million for loan losses. The increase in 2006 over 2005 is a result of continued
loan growth despite continued positive trends in asset quality.

         The allowance for losses is allocated by major portfolio type. As these
portfolios  have  developed,  they have  become a source of  historical  data in
projecting  delinquencies and loss exposure;  however,  such allocations are not
indicative  of where  future  losses may  occur.  Management  believes  that the
allowance  for loan losses of $27.4  million at December 31, 2006 is adequate to
provide for probable  losses on existing  loans based on  information  currently
available.  The  allocation  of the  allowance  for loan  and  lease  losses  by
portfolio  type at the  end of  each of the  last  five  fiscal  years,  and the
percentage of outstanding in each category to total gross loans outstanding,  at
such dates follow:


<TABLE>
<CAPTION>
                                                                   December 31,  
                                      -------------------------------------------------------------------------------------
                                            2006            2005                2004            2003            2002
                                      --------------   --------------    -------------    --------------    ---------------
                                       Amount Percent   Amount  Percent   Amount Percent   Amount Percent    Amount Percent
                                      ------- -------   ------  -------  ------- -------  ------- -------   ------- -------
                                                                       (Dollars in Thousands)
<S>                                 <C>        <C>   <C>        <C>    <C>       <C>   <C>         <C>     <C>       <C>  
Residential real estate..........    $  1,645   23.1% $  1,632   25.4%  $  1,468  28.1% $   2,736   34.6%   $ 3,620   38.2%
Commercial real estate...........      11,343   32.5    10,978   32.7      9,211  34.6      8,338   29.3      7,208   26.2
Commercial.......................      11,019   31.5     9,471   28.3     10,456  23.7      8,368   22.0      7,375   19.1
Consumer.........................       3,377   12.9     3,300   13.6      3,087  13.6      2,944   14.1      3,249   16.5
                                      -------  -----   -------  -----    ------- -----    -------  -----    -------  ----- 
Total............................     $27,384  100.0%  $25,381  100.0%   $24,222 100.0%   $22,386  100.0    $21,452  100.0%
                                      =======  =====   =======  =====    ======= =====    =======  =====    =======  ===== 
</TABLE>

                                       13

<PAGE>

LIQUIDITY

         The Company  manages its  liquidity  risk and funding needs through its
treasury function and its Asset/Liability Committee.  Historically,  the Company
has had  success in growing its loan  portfolio.  For  example,  during the year
ended December 31, 2006,  net loan growth  resulted in the use of $246.4 million
in cash.  The loan  growth was  primarily  the result of the  continued  success
increasing  corporate and small business lending.  Management expects this trend
to continue. While the Company's  loan-to-deposit ratio has been well above 100%
for many years, management has significant experience managing its funding needs
through borrowings and deposit growth.

         As a financial  institution,  the  Company has ready  access to several
sources of funding. Among these are:

               o    Deposit growth,
               o    The brokered deposit market,
               o    Borrowing from the FHLB,
               o    Other borrowings such as repurchase agreements,
               o    Cash flow from securities and loan sales and repayments, and
               o    Net income of the Company.

         The  Company's  current  branch  expansion  and  renovation  program is
focused on expanding the Company's  retail  footprint in Delaware and attracting
new customers to provide additional deposit growth.  Customer deposit growth was
strong,  equaling $149.8 million, or 13%, between December 31, 2005 and December
31, 2006.

         The  Corporation's  portfolio  of  high-quality,   liquid  investments,
primarily short-duration AAA-rated,  mortgage-backed securities and Agency notes
also  provide a source of cash  flow to meet  current  cash  needs.  If  needed,
portions of this portfolio, as well as portions of the loan portfolio,  could be
sold to provide cash to fund new loans. During the year ended December 31, 2006,
$32.4 million in cash was also provided by operating activities.

         The Company  has a policy  that  separately  addresses  liquidity,  and
management  monitors the Company's  adherence to policy  limits.  As part of the
liquidity  management process, the Company also monitors its available wholesale
funding capacity.  At December 31, 2006, the Company had $471 million in funding
capacity  at the  Federal  Home  Loan Bank of  Pittsburgh  and $451  million  in
estimated funding capacity in brokered deposits. Also, liquidity risk management
is a primary area of examination by the OTS.

         The  Corporation  has  not  used  and has no  intention  of  using  any
significant  off balance sheet financing  arrangement  for liquidity  management
purposes.  The Corporation's  financial  instruments with off balance sheet risk
are  limited to  obligations  to fund loans to  customers  pursuant  to existing
commitments,  obligations  of letters of credit and an  interest  rate cap which
limits the interest rate exposure on $50.0 million of trust  preferred  floating
rate  debt.  In  addition,  WSFS  has not had and has no  intention  to have any
significant   transactions,   arrangements  or  other   relationships  with  any
unconsolidated,  limited  purpose  entities  that  could  materially  affect its
liquidity or capital resources.

CAPITAL RESOURCES

         Federal laws, among other things,  require the OTS to mandate uniformly
applicable  capital  standards  for all savings  institutions.  These  standards
currently  require  institutions  such as WSFS to maintain a "tangible"  capital
ratio equal to 1.5% of adjusted  total assets,  "core" (or  "leverage")  capital
equal  to 4.0% of  adjusted  total  assets,  "Tier 1"  capital  equal to 4.0% of
"risk-weighted" assets and total "risk-based" capital (a combination of core and
"supplementary" capital) equal to 8.0% of "risk-weighted" assets.

         The Federal Deposit Insurance Corporation  Improvement Act (FDICIA), as
well as other  requirements,  established five capital tiers:  well-capitalized,
adequately-capitalized,  under-capitalized,  significantly under-capitalized and
critically under- capitalized.  A depository  institution's capital tier depends
upon 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 

                                       14


<PAGE>

well-capitalized   are  subject  to  various   restrictions   regarding  capital
distributions,  payment of management fees,  acceptance of brokered deposits and
other operating activities.

         At December 31,  2006,  WSFS is  classified  as  well-capitalized,  the
highest  regulatory  defined  level,  and is in compliance  with all  regulatory
capital requirements. Additional information concerning WSFS' regulatory capital
compliance is included in Note 12 to the Financial Statements.

         Since  1996,  the  Board  of  Directors  has  approved   several  stock
repurchase  programs  to  acquire  common  stock  outstanding.  As part of these
programs,  the  Corporation  acquired  approximately  103,400 shares in 2006 and
719,500 shares in 2005. At December 31, 2006, the  Corporation  held 8.9 million
shares of its  common  stock as  treasury  shares.  The  Corporation  intends to
continue repurchasing shares in amounts depending on stock price and alternative
uses of capital.  At December  31,  2006,  the  Corporation  had 546,600  shares
remaining under its current share repurchase authorization.

OFF BALANCE SHEET ARRANGEMENTS

         The  Corporation has no off balance sheet  arrangements  that currently
have,  or  are  reasonably  likely  to  have a  material  future  effect  on the
Corporation's financial condition,  changes in financial condition,  revenues or
expenses,  results of operations,  liquidity,  capital  expenditures  or capital
resources. Additional information concerning the Corporation's off balance sheet
arrangements is included in Note 15 to the Financial Statements.

CONTRACTUAL OBLIGATIONS

         At December 31,  2006,  the  Corporation  had  contractual  obligations
relating  to  operating  leases,  long-term  debt,  data  processing  and credit
obligations.  These  obligations are summarized  below.  Additional  information
concerning the Corporation's contractual obligations is included in Notes 8, 10,
and 15 to the Financial Statements.


<TABLE>
<CAPTION>
                                             Less than                            More than
                                 Total        1 Year     1-3 Years    3-5 Years    5 Years
                                 -----        ------     ---------    ---------    -------
                                                      (In Thousands)
<S>                          <C>          <C>          <C>          <C>          <C>       
Operating lease obligations   $   44,891   $    3,029   $    7,923   $    7,227   $   26,712
Long-term debt obligations       851,039      449,000      262,462       30,000      109,577
Data processing contracts          9,223        3,417        5,151          655         --
Credit obligations               532,335      532,335         --
                              ----------   ----------   ----------   ----------   ----------
Total                         $1,437,488   $  987,781   $  275,536   $   37,882   $  136,289
                              ==========   ==========   ==========   ==========   ==========
</TABLE>


IMPACT OF INFLATION AND CHANGING PRICES

         The Corporation's  Consolidated Financial Statements have been prepared
in accordance with U.S. generally accepted accounting principles,  which require
the  measurement  of  financial  position  and  operating  results  in  terms of
historical  dollars  without  consideration  of  the  changes  in  the  relative
purchasing power of money over time due to inflation. The impact of inflation is
reflected in the increased costs of the  Corporation's  operations.  Unlike most
industrial  companies,  nearly all the assets and liabilities of the Corporation
are  monetary.  As a  result,  interest  rates  have  a  greater  impact  on the
Corporation's  performance  than do the effects of general  levels of inflation.
Interest rates do not necessarily  move in the same direction or the same extent
as the price of goods and services.

RECENT LEGISLATION

          On July 30, 2002,  President  Bush signed into law the  Sarbanes-Oxley
Act of 2002 (the "Act"). The SEC promulgated certain regulations pursuant to the
Act  and  will  continue  to  propose  additional   implementing  or  clarifying
regulations as necessary in furtherance of the Act.

                                       15


<PAGE>

         The  passage  of the  Act and the  regulations  implemented  by the SEC
subjected   publicly-traded  companies  to  additional  and  more  comprehensive
reporting regulations and disclosure. These new regulations,  which are intended
to curtail  corporate  fraud,  require  the chief  executive  officer  and chief
financial  officer of the Company to personally  certify  certain SEC filings as
well  as the  Company's  Financial  Statements  and  to  certify  as to (i)  the
existence of disclosure  controls and procedures within the Company are designed
to ensure that  information  required to be  disclosed by the Company in its SEC
filings  is  processed,   summarized  and  reported   accurately  and  (ii)  the
effectiveness of the Company's internal control over financial reporting.

         The Act and regulations  promulgated  thereunder by the SEC also impose
additional measures to be taken by the Company's officers, directors and outside
auditors and impose accelerated reporting requirements by officers and directors
of the Company in connection  with certain  changes in their equity  holdings of
the Company.

         In February 2006,  Congress passed the Federal Deposit Insurance Reform
Act of 2005 (FDIRA). This legislation will merge the Bank Insurance Fund and the
Savings  Association  Insurance Fund into one fund,  increase insurance coverage
for retirement  accounts to $250,000,  adjust the maximum deposit  insurance for
inflation after March 31, 2010 and give the FDIC greater  flexibility in setting
insurance  assessments.  As part of the FDIRA-2005,  the  Corporation's  primary
operating  subsidiary,   the  Bank,  has  been  granted  a  one-time  credit  of
approximately  $1.0  million  for  utilization  against  future  FDIC  insurance
premiums.  The FDIC announced that 2007 assessments will range from 5 to 7 basis
points for  well-capitalized  institutions with composite  regulatory ratings of
one or two. The Corporation anticipates that the $1.0 million credit will offset
substantially the entire 2007 premium.

CRITICAL ACCOUNTING POLICIES

         The discussion  and analysis of the financial  condition and results of
operations  are  based  on the  Consolidated  Financial  Statements,  which  are
prepared in conformity with U.S. generally accepted accounting  principles.  The
preparation of these Financial  Statements requires management to make estimates
and assumptions affecting the reported amounts of assets,  liabilities,  revenue
and expenses. Management evaluates these estimates and assumptions on an ongoing
basis,  including those related to the allowance for loan losses,  contingencies
(including indemnifications), and deferred taxes. Management bases its estimates
on historical  experience  and various other  factors and  assumptions  that are
believed  to be  reasonable  under the  circumstances.  These form the basis for
making  judgements on the carrying value of assets and liabilities  that are not
readily  apparent  from other  sources.  Actual  results  may differ  from these
estimates under different assumptions or conditions.

         The  following  are  critical  accounting  policies  that  involve more
significant judgments and estimates:

Allowance for Loan Losses

         The  Corporation  maintains  allowances  for credit  losses and charges
losses to these allowances when realized. The determination of the allowance for
loan losses requires significant judgment reflecting  management's best estimate
of probable  loan losses  related to  specifically  identified  loans as well as
those in the remaining loan portfolio.  Management's  evaluation is based upon a
continuing review of these portfolios,  with consideration  given to evaluations
resulting from examinations performed by regulatory authorities.

Contingencies (Including Indemnifications)

         In the ordinary course of business,  the Corporation,  the Bank and its
subsidiaries  are subject to legal  actions,  which involve  claims for monetary
relief.  Based upon information  presently  available to the Corporation and its
counsel, it is management's opinion that any legal and financial  responsibility
arising  from  such  claims  will  not have a  material  adverse  effect  on the
Corporation's results of operations.

         The  Corporation  maintains a loss  contingency  for standby letters of
credit and charges  losses to this  reserve when such losses are  realized.  The
determination  of the loss  contingency  for standby  letters of credit requires
significant judgement reflecting  management's best estimate of probable losses.
The balance in this reserve at December 31, 2006 was $715,000.

                                       16


<PAGE>

         The Bank,  as successor to  originators  of reverse  mortgages is, from
time to time,  involved  in  arbitration  or  litigation  with  various  parties
including  borrowers or the heirs of borrowers.  Because reverse mortgages are a
relatively new and uncommon  product,  there can be no assurances  about how the
courts or arbitrators may apply existing legal principles to the  interpretation
and  enforcement  of the terms and  conditions  of the Bank's  reverse  mortgage
obligations.

Deferred Taxes

         The Corporation  accounts for income taxes in accordance with Statement
of Financial  Accounting  Standards (SFAS) No. 109,  Accounting for Income Taxes
(SFAS 109),  which requires the recording of deferred  income taxes that reflect
the net tax effects of temporary  differences  between the  carrying  amounts of
assets and liabilities for financial reporting purposes and the amounts used for
income tax purposes.  Management has assessed the Company's valuation allowances
on deferred income taxes resulting from, among other things, limitations imposed
by Internal Revenue Code and  uncertainties,  including the timing of settlement
and realization of these differences.

RECENT ACCOUNTING PRONOUNCEMENTS

         In July 2006, the Financial  Accounting  Standards  Board (FASB) issued
FASB  Interpretation  No. 48,  Accounting for  Uncertainty  in Income Taxes,  an
interpretation  of FASB  Statement 109 (FIN 48). FIN 48 prescribes a recognition
threshold and a measurement  attribute for the financial  statement  recognition
and measurement of a tax position taken or expected to be taken in a tax return.
Benefits  from tax positions  should be  recognized in the financial  statements
only when it is  more-likely-than-not  that the tax  position  will be sustained
upon  examination  by the  appropriate  taxing  authority  that  would have full
knowledge  of  all  relevant   information.   A  tax  position  that  meets  the
more-likely-than-not  recognition threshold is measured at the largest amount of
benefit  that is  greater  than  fifty  percent  likely of being  realized  upon
ultimate   settlement.   Tax  positions  that  previously  failed  to  meet  the
more-likely-than-not  recognition  threshold  should be  recognized in the first
subsequent financial reporting period in which that threshold is met. Previously
recognized   tax  positions   that  no  longer  meet  the   more-likely-than-not
recognition  threshold should be derecognized in the first subsequent  financial
reporting  period in which that threshold is no longer met. FIN 48 also provides
guidance on the  accounting  for and  disclosure of  unrecognized  tax benefits,
interest and penalties.  FIN 48 becomes effective for the Corporation on January
1, 2007 and is expected to have an immaterial  favorable impact to the equity of
the Corporation.

         In February  2007,  the FASB issued SFAS No. 159, The Fair Value Option
for Financial Assets and Financial  Liabilities--Including  an amendment of FASB
Statement  No. 115 (SFAS 159).  SFAS 159  permits  entities to choose to measure
many  financial  instruments  and certain other items at fair value.  Unrealized
gains and losses on items for which the fair value  option has been elected will
be  recognized  in  earnings  at  each   subsequent   reporting  date.  For  the
Corporation,  this will become  effective on January 1, 2008. The Corporation is
currently  evaluating  the impact that the adoption of SFAS 159 will have on our
Consolidated Financial Statements.

                                       17


<PAGE>

Market for Registrant's Common Equity and Related Stockholder Matters

         WSFS Financial Corporation's Common Stock is traded on The Nasdaq Stock
MarketSM under the symbol WSFS. At December 31, 2006, the  Corporation had 1,320
registered  common  stockholders  of record.  The following table sets forth the
range of high and low sales prices for the Common Stock for each full  quarterly
period  within  the two  most  recent  fiscal  years  as  well as the  quarterly
dividends paid.

         The closing  market  price of the common stock at December 31, 2006 was
$66.93.


                                       Stock Price Range                
                                       -----------------                
                                       Low          High       Dividends
                                       ---          ----       ---------
 
           2006          4th          $60.00       $68.27       $ 0.08
                         3rd           57.22        64.62         0.08
                         2nd           57.34        64.65         0.08
                         1st           59.80        64.75         0.07
                                                                ------
                                                                $ 0.31

           2005          4th          $57.12       $65.00       $ 0.07
                         3rd           54.00        59.26         0.07
                         2nd           49.50        56.70         0.07
                         1st           51.90        60.38         0.06
                                                                ------
                                                                $ 0.27
                                                                ======
                                       18


<PAGE>

COMPARATIVE STOCK PERFORMANCE GRAPH

         The graph and table which  follow show the  cumulative  total return on
the  Common  Stock of the  Company  over the last five years  compared  with the
cumulative  total return of the Dow Jones Total Market Index and the Nasdaq Bank
Index over the same period as obtained  from  Bloomberg  L.P.  Cumulative  total
return on the Common Stock or the index equals the total increase in value since
December 31, 2001,  assuming  reinvestment of all dividends paid into the Common
Stock or the index,  respectively.  The graph and table were  prepared  assuming
$100 was invested on December 31, 2001 in the Common Stock of the Company and in
each of the indexes.  There can be no assurance that the Company's  future stock
performance  will be the same or similar  to the  historical  stock  performance
shown in the graph below. The Company neither makes nor endorses any predictions
as to stock performance.


                       CUMULATIVE TOTAL SHAREHOLDER RETURN
                  COMPARED WITH PERFORMANCE OF SELECTED INDEXES
                   December 31, 2001 through December 31, 2006
                                [GRAPHIC OMITTED]


<TABLE>
<CAPTION>
                                                  Cumulative Total Return
                                 -----------------------------------------------------------
                                  2001      2002      2003      2004      2005     2006
                                 -----------------------------------------------------------
<S>                              <C>       <C>     <C>        <C>       <C>       <C> 
WSFS Financial Corporation        $100      $191    $ 261      $351      $360      $395
Dow Jones Total Market Index       100        77       98       109       113       129
Nasdaq Bank Index                  100       107      142       161       158       179
</TABLE>


                                       19


<PAGE>

Management's Report on Internal Control Over Financial Reporting

To Our Stockholders:

         Management of the  Corporation  is  responsible  for  establishing  and
maintaining  adequate  internal  control over financial  reporting as defined in
Rules  13a-15(f)  under the Securities  Exchange Act of 1934. The  Corporation's
internal  control over  financial  reporting  is designed to provide  reasonable
assurance to the Corporation's  management and board of directors  regarding the
preparation and fair presentation of published financial statements.

         Management  assessed the  effectiveness of the  Corporation's  internal
control  over  financial  reporting  as of  December  31,  2006.  In making this
assessment,  management  used  the  criteria  set  forth  by  the  Committee  of
Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control -
Integrated Framework.  Based on this assessment,  management has concluded that,
as of December 31,  2006,  the  Corporation's  internal  control over  financial
reporting is effective based on those criteria.

         Management's  assessment of the  effectiveness of internal control over
financial  reporting as of December 31, 2006,  has been audited by KPMG LLP, the
independent registered public accounting firm who also audited the Corporation's
consolidated  financial  statements.  KPMG's  attestation report on management's
assessment  of the  Corporation's  internal  control  over  financial  reporting
appears elsewhere in this annual report.



/s/ Marvin N. Schoenhals                    /s/ Stephen A. Fowle         
------------------------------------        ------------------------------------
Marvin N. Schoenhals                        Stephen A. Fowle
Chairman and President                      Executive Vice President and
                                            Chief Financial Officer

                                       20


<PAGE>


             Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
WSFS Financial Corporation:

We  have  audited   management's   assessment,   included  in  the  accompanying
Management's  Report on Internal  Control Over  Financial  Reporting,  that WSFS
Financial  Corporation (the Corporation)  maintained  effective internal control
over financial reporting as of December 31, 2006, based on criteria  established
in Internal Control--Integrated  Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). The Corporation's management is
responsible for maintaining  effective internal control over financial reporting
and for its assessment of the  effectiveness  of internal control over financial
reporting.   Our  responsibility  is  to  express  an  opinion  on  management's
assessment and an opinion on the  effectiveness  of the  Corporation's  internal
control over financial reporting based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain  reasonable  assurance  about whether  effective
internal  control  over  financial  reporting  was  maintained  in all  material
respects. Our audit included obtaining an understanding of internal control over
financial reporting,  evaluating management's assessment, testing and evaluating
the design and operating  effectiveness of internal control, and performing such
other  procedures as we considered  necessary in the  circumstances.  We believe
that our audit provides a reasonable basis for our opinion.

A company's  internal control over financial  reporting is a process designed to
provide reasonable  assurance  regarding the reliability of financial  reporting
and the preparation of financial  statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial  reporting  includes those policies and procedures that (1) pertain to
the  maintenance  of records that, in reasonable  detail,  accurately and fairly
reflect the  transactions  and  dispositions  of the assets of the company;  (2)
provide  reasonable  assurance  that  transactions  are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting  principles,  and that receipts and  expenditures  of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of  unauthorized  acquisition,  use, or  disposition  of the company's
assets that could have a material effect on the financial statements.

Because of its inherent  limitations,  internal control over financial reporting
may not prevent or detect misstatements.  Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate  because of changes in  conditions,  or that the degree of compliance
with the policies or procedures may deteriorate.

In  our  opinion,   management's  assessment  that  the  Corporation  maintained
effective internal control over financial  reporting as of December 31, 2006, is
fairly stated, in all material respects,  based on criteria established in COSO.
Also, in our opinion,  the  Corporation  maintained,  in all material  respects,
effective  internal  control over  financial  reporting as of December 31, 2006,
based on criteria established in COSO.

We also have  audited,  in accordance  with the standards of the Public  Company
Accounting  Oversight  Board  (United  States),  the  consolidated  statement of
condition of WSFS Financial Corporation and subsidiaries as of December 31, 2006
and 2005,  and the related  consolidated  statements of  operations,  changes in
stockholders'  equity,  and cash  flows for each of the years in the  three-year
period ended  December 31, 2006, and our report dated March 9, 2007 expressed an
unqualified opinion on those consolidated financial statements.


/s/ KPMG LLP
-----------------          
Philadelphia, Pennsylvania
March 9, 2007


                                       21



<PAGE>


             Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
WSFS Financial Corporation:

We have  audited the  accompanying  consolidated  statement of condition of WSFS
Financial Corporation and subsidiaries (the Corporation) as of December 31, 2006
and 2005,  and the related  consolidated  statements of  operations,  changes in
stockholders'  equity,  and cash  flows for each of the years in the  three-year
period ended December 31, 2006. These consolidated  financial statements are the
responsibility of the Corporation's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the  financial  position of WSFS  Financial
Corporation  and  subsidiaries as of December 31, 2006 and 2005, and the results
of their operations and their cash flows for each of the years in the three-year
period ended  December 31, 2006,  in  conformity  with U.S.  generally  accepted
accounting principles.

We also have  audited,  in accordance  with the standards of the Public  Company
Accounting   Oversight  Board  (United   States),   the   effectiveness  of  the
Corporation's internal control over financial reporting as of December 31, 2006,
based on criteria established in Internal Control-Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and
our report dated March 9, 2007 expressed an unqualified  opinion on management's
assessment of, and the effective  operation of, internal  control over financial
reporting.

As discussed in Note 1 to the consolidated financial statements, the Corporation
adopted  Statement  of Financial  Accounting  Standards  No.  123R,  Share-Based
Payment,  a revision of FASB  Statement  No.  123,  Accounting  for  Stock-Based
Compensation, effective January 1, 2006.


/s/ KPMG LLP
------------
Philadelphia, Pennsylvania
March 9, 2007



                                       22

<PAGE>



CONSOLIDATED STATEMENT OF OPERATIONS


<TABLE>
<CAPTION>
                                                                              Year Ended December 31,                 
                                                                        ----------------------------------
                                                                         2006         2005         2004 
                                                                       ---------    ---------    ---------
                                                                   (Dollars in Thousands, Except Per Share Data)
<S>                                                                  <C>          <C>          <C>      
Interest income:
Interest and fees on loans .........................................   $ 143,629    $ 105,639    $  78,101
Interest on mortgage-backed securities .............................      28,444       25,687       20,326
Interest and dividends on investment securities ....................       1,884        2,580        3,099
Interest on investments in reverse mortgages .......................         684          678        1,847
Other interest income ..............................................       2,536        1,438          737
                                                                       ---------    ---------    ---------
                                                                         177,177      136,022      104,110
                                                                       ---------    ---------    ---------
Interest expense:
Interest on deposits ...............................................      42,707       21,690        9,395
Interest on Federal Home Loan Bank advances ........................      45,878       30,659       23,430
Interest on federal funds purchased and securities sold under
  agreements to repurchase .........................................       3,790        4,089        2,064
Interest on trust preferred borrowings .............................       5,053        5,292        2,184
Interest on other borrowings .......................................       1,850          650          173
                                                                       ---------    ---------    ---------
                                                                          99,278       62,380       37,246
                                                                       ---------    ---------    ---------
Net interest income ................................................      77,899       73,642       66,864
Provision for loan losses ..........................................       2,738        2,582        3,217
                                                                       ---------    ---------    ---------
Net interest income after provision for loan losses ................      75,161       71,060       63,647
                                                                       ---------    ---------    ---------

Noninterest income:
Credit/debit card and ATM income ...................................      18,835       15,049       12,137
Deposit service charges ............................................      12,250       10,091        9,389
Investment advisory income .........................................       2,399        2,519        2,262
Bank-owned life insurance income ...................................       3,976        2,003        2,190
Loan fee income ....................................................       1,824        1,999        2,182
Mortgage banking activities, net ...................................         225          391          439
Securities (losses) gains ..........................................      (1,981)        (605)         249
Other income .......................................................       2,777        3,206        3,102
                                                                       ---------    ---------    ---------
                                                                          40,305       34,653       31,950
                                                                       ---------    ---------    ---------
Noninterest expenses:
Salaries, benefits and other compensation ..........................      39,369       35,172       30,723
Occupancy expense ..................................................       5,508        5,168        4,666
Equipment expense ..................................................       4,393        3,879        3,696
Data processing and operations expense .............................       3,511        3,465        3,246
Marketing expense ..................................................       2,713        2,745        2,329
Professional fees ..................................................       2,070        2,416        2,496
Other operating expenses ...........................................      11,750       10,032        8,543
                                                                       ---------    ---------    ---------
                                                                          69,314       62,877       55,699
                                                                       ---------    ---------    ---------
Income from continuing operations before minority interest and taxes      46,152       42,836       39,898
Less minority interest .............................................          51          133          190
                                                                       ---------    ---------    ---------
Income from continuing operations before taxes .....................      46,101       42,703       39,708
Income tax provision ...............................................      15,660       14,847       13,951
                                                                       ---------    ---------    ---------
Income from continuing operations ..................................      30,441       27,856       25,757
Income on wind-down of discontinued operations, net of taxes .......           -            -          143
                                                                       ---------    ---------    ---------
Net income .........................................................   $  30,441    $  27,856    $  25,900
                                                                       =========    =========    =========
</TABLE>


                                       23


<PAGE>

CONSOLIDATED STATEMENT OF OPERATIONS (continued)


<TABLE>
<CAPTION>
                                                                            Year Ended December 31,               
                                                                          ------------------------------
                                                                            2006       2005       2004   
                                                                          --------   --------   --------
                                                                    (Dollars in Thousands, Except Per Share Data) 
<S>                                                                     <C>        <C>        <C>    
Earnings per share:                                                      
  Basic:                                                                 
     Income from continuing operations ...............................    $  4.59    $  4.10    $  3.60
     Income on wind-down of discontinued operations, net of taxes.....          -          -       0.02
                                                                          -------    -------    -------
         Net income ..................................................    $  4.59    $  4.10    $  3.62
                                                                          =======    =======    =======
                                                                         
  Diluted:                                                               
     Income from continuing operations ...............................    $  4.41    $  3.89    $  3.39
     Income on wind-down of discontinued operations, net of taxes.....          -          -       0.02
                                                                          -------    -------    -------
         Net income ..................................................    $  4.41    $  3.89    $  3.41
                                                                          =======    =======    =======
</TABLE>
                                                           

The accompanying notes are an integral part of these Financial Statements.

                                       24


<PAGE>

CONSOLIDATED STATEMENT OF CONDITION


<TABLE>
<CAPTION>
                                                                                                     December 31,                
                                                                                             ------------------------------
                                                                                               2006                 2005  
                                                                                             ----------         ----------
                                                                                                     (In Thousands)
<S>                                                                                        <C>                <C>       
  Assets

  Cash and due from banks.......................................................             $   73,989         $   59,251
  Cash in non-owned ATMs........................................................                166,092            174,527
  Federal funds sold............................................................                  1,500                  -
  Interest-bearing deposits in other banks......................................                    243                173
                                                                                             ----------         ----------
            Total cash and cash equivalents.....................................                241,824            233,951
  Investment securities held-to-maturity  (fair value: 2006-$4,252; 2005-$5,005)                  4,219              4,806
  Investment securities available-for-sale including reverse mortgages..........                 50,272             52,683
  Mortgage-backed securities available-for-sale.................................                504,347            608,372
  Mortgage-backed securities trading............................................                 12,364             11,951
  Loans held-for-sale...........................................................                    919                436
  Loans, net of allowance for loan losses of $27,384 at December 31, 2006 and
    $25,381 at December 31, 2005................................................              2,018,822          1,774,858
  Bank-owned life insurance.....................................................                 55,282             54,193
  Stock in Federal Home Loan Bank of Pittsburgh, at cost.........................                39,872             46,293
  Assets acquired through foreclosure...........................................                    388                 59
  Premises and equipment........................................................                 30,218             22,904
  Accrued interest receivable and other assets..................................                 38,869             36,246
                                                                                             ----------         ----------
  Total assets..................................................................             $2,997,396         $2,846,752
                                                                                             ==========         ==========

  Liabilities and Stockholders' Equity

  Liabilities:

  Deposits:
Noninterest-bearing demand......................................................             $  276,338        $   279,415
Interest-bearing demand ........................................................                146,719            141,378
Money market ...................................................................                246,645            209,398
Savings.........................................................................                226,853            251,675
Time............................................................................                326,009            224,853
Jumbo certificates of deposit - customer........................................                121,142             87,212
                                                                                             ----------         ----------
            Total customer deposits ............................................              1,343,706          1,193,931
Other jumbo certificates of deposit.............................................                111,388             40,567
Brokered deposits...............................................................                301,254            211,738
                                                                                             ----------         ----------
             Total deposits.....................................................              1,756,348          1,446,236

  Federal funds purchased and securities sold under agreements to repurchase ...                 73,400             83,150
  Federal Home Loan Bank advances...............................................                784,028          1,008,721
  Trust preferred borrowings....................................................                 67,011             67,011
  Other borrowed funds..........................................................                 78,240             36,126
  Accrued interest payable and other liabilities................................                 26,256             23,327
                                                                                             ----------         ----------
  Total liabilities.............................................................              2,785,283          2,664,571
                                                                                             ----------         ----------


  Minority Interest.............................................................                     54                206

  Stockholders' Equity:

  Serial preferred stock $.01 par value, 7,500,000 shares authorized; 
    none issued and outstanding.................................................                      -                  -
  Common stock $.01 par value, 20,000,000 shares authorized; issued 15,584,580
    at December 31, 2006 and 15,435,630 at December 31, 2005....................                    156                154
  Capital in excess of par value ...............................................                 81,580             74,673
  Accumulated other comprehensive loss..........................................                 (8,573)           (9,968)
  Retained earnings............................................................                 347,448            319,065
  Treasury stock at cost, 8,942,969 shares at December 31, 2006 and 8,839,569
    shares at December 31, 2005.................................................               (208,552)          (201,949)
                                                                                             ----------         ----------
  Total stockholders' equity....................................................                212,059            181,975
                                                                                             ----------         ----------
  Total liabilities, minority interest and stockholders' equity.................             $2,997,396         $2,846,752
                                                                                             ==========         ==========

</TABLE>

  The accompanying notes are an integral part of these Financial Statements.

                                       25


<PAGE>

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                                                 Acumulated
                                                                    Capital in     Other                          Total
                                                           Common   Excess of  Comprehensive  Retained    Treasury  Stockholders'
                                                           Stock    Par Value      Loss       Earnings      Stock       Equity      
                                                           -----    ---------      ----       --------      -----       ------      
                                                                                      (In Thousands)
<S>                                                    <C>         <C>         <C>          <C>          <C>         <C>      
Balance, December 31, 2003 ..........................   $     151   $  64,738   $  (1,748)   $ 268,797    $(143,946)  $ 187,992
Comprehensive income:                                
     Net income .....................................           -           -           -       25,900            -      25,900
     Other comprehensive loss (1) ...................           -           -      (1,637)           -            -      (1,637)
                                                                                                                      ---------
Total comprehensive income ..........................                                                                    24,263
                                                                                                                      ---------
Cash dividend, $0.23 per share ......................           -           -           -       (1,643)           -      (1,643)
Issuance of common stock, including proceeds from 
exercise of common stock options ....................           1       2,044           -            -            -       2,045
Treasury stock at cost, 368,400 shares (2) ..........           -         173           -            -      (17,899)    (17,726)
Tax benefit from exercises of common stock options...           -       1,372           -            -            -       1,372
                                                        ---------   ---------   ---------    ---------    ---------   ---------
Balance, December 31, 2004 ..........................   $     152   $  68,327   $  (3,385)   $ 293,054    $(161,845)  $196,303
                                                        =========   =========   =========    =========    =========  ========

Comprehensive income:
     Net income .....................................           -           -           -       27,856            -      27,856
     Other comprehensive loss (1) ...................           -           -      (6,583)           -            -      (6,583)
                                                                                                                      ---------
Total comprehensive income ..........................                                                                    21,273
                                                                                                                      ---------
Cash dividend, $0.27 per share ......................           -           -           -       (1,845)           -      (1,845)
Issuance of common stock, including proceeds from 
exercise of common stock options ....................           2       3,120           -            -            -       3,122
Treasury stock at cost, 712,300 shares (3) ..........           -         276           -            -      (40,104)    (39,828)
Tax benefit from exercises of common stock options...           -       2,950           -            -            -       2,950
                                                        ---------   ---------   ---------    ---------    ---------   ---------
Balance, December 31, 2005 ..........................   $     154   $  74,673   $  (9,968)   $ 319,065    $(201,949)  $ 181,975
                                                        =========   =========   =========    =========    =========   =========

Comprehensive income:
     Net income .....................................           -           -           -       30,441            -      30,441
     Other comprehensive income (1) .................           -           -       1,956            -            -       1,956
                                                                                                                      ---------
Total comprehensive income ..........................                                                                    32,397
                                                                                                                      ---------
Adjustment to initially apply FASB Statement No......
    158, net of tax  $(344) .........................           -           -        (561)           -            -        (561)
Cash dividend, $0.31 per share ......................           -           -           -       (2,058)           -      (2,058)
Issuance of common stock, including proceeds from 
exercise of common stock options ....................           2       4,610           -            -            -       4,612
Treasury stock at cost, 103,400 shares ..............           -           -           -            -       (6,603)     (6,603)
Issuance of restricted stock ........................           -         286           -            -            -         286
Tax benefit from exercises of common stock options...           -       2,011           -            -            -       2,011
                                                        ---------   ---------   ---------    ---------    ---------   --------- 
Balance, December 31, 2006 ..........................   $     156   $  81,580   $  (8,573)   $ 347,448    $(208,552)  $ 212,059
                                                        =========   =========   =========    =========    =========   ========= 


(1)  Other Comprehensive Income:                           2006         2005        2004
                                                          -----         ----       -----
     Net unrealized holding losses on securities
         available-for-sale arising during the period
         net of taxes (2006 - $261, 2005 - $(4,540),
        2004 - $(661))...............................   $     426    $  (7,407)   $  (1,078)

     Net unrealized holding gains (losses) 
         arising during the period on 
         derivatives net of taxes (2006 - $163, 
         2005 - $241, 2004 - $(218)).................         302          449         (405)

     Reclassification for losses (gains) included
         in income,  net of taxes (2006 - $753, 
         2005 - $230, 2004 - $(94))..................       1,228          375         (154)
                                                        ---------    ---------    --------- 

     Total other comprehensive income (loss).........   $   1,956    $  (6,583)   $  (1,637)
                                                        =========    =========    ========= 
</TABLE>


(2)  Net of reissuance of 5,500 shares.
(3)  Net of reissuance of 7,200 shares.  The accompanying  notes are an integral
     part of these Financial Statements.

                                       26


<PAGE>

CONSOLIDATED STATEMENT OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                                      Year Ended December 31,    
                                                                                                -----------------------------------
                                                                                                   2006         2005         2004
                                                                                                ---------    ---------    ---------
                                                                                                           (In Thousands)
<S>                                                                                            <C>          <C>          <C>      
Operating activities:

Net income ..................................................................................   $  30,441    $  27,856    $  25,900
Adjustments to reconcile net income to net cash provided by (used for)  operating activities:
     Provision for loan losses ..............................................................       2,738        2,582        3,217
     Depreciation, accretion and amortization ...............................................       4,507        5,440        6,022
     (Increase) decrease in accrued interest receivable and other assets ....................      (3,066)      (1,952)      (2,831)
     Origination of loans held-for-sale .....................................................     (23,914)     (37,222)     (42,647)
     Proceeds from sales of loans held-for-sale .............................................      21,406       38,721       38,223
     Gain on mortgage banking activity ......................................................        (224)         (84)        (205)
     Loss (gain) on sale of loans ...........................................................           -            1         (234)
     Loss (gain) on sale of investments .....................................................       1,981          605         (249)
     Stock-based compensation expense (net of tax benefit recognized) .......................       1,153            -            -
     Excess tax benefits from share-based payment arrangements ..............................      (2,011)           -            -
     Minority interest in net income ........................................................          51          133          190
     Increase in accrued interest payable and other liabilities .............................       4,380        6,031        2,648
     Loss (gain) on sale of assets acquired through foreclosure .............................          41         (137)         (60)
     Increase in value of bank-owned life insurance .........................................      (3,976)      (2,003)      (2,190)
     Increase in capitalized interest, net ..................................................      (1,097)        (678)      (2,271)
                                                                                                ---------    ---------    ---------
Net cash provided by operating activities ...................................................      32,410       39,293       25,513
                                                                                                ---------    ---------    ---------
Investing activities:

     Maturities of investment securities ....................................................         610        6,990        2,675
     Sales of investment securities available-for-sale ......................................      23,950       60,454       25,057
     Purchases of investment securities available-for-sale ..................................     (20,718)     (26,744)      (9,930)
     Sales of mortgage-backed securities available-for-sale .................................      49,412            -       51,634
     Repayments of mortgage-backed securities held-to-maturity ..............................           -            4        1,813
     Repayments of mortgage-backed securities available-for-sale ............................     102,255      112,395      150,988
     Purchases of mortgage-backed securities available-for-sale .............................     (47,721)    (220,816)    (200,696)
     Repayments on reverse mortgages ........................................................       1,347          177        2,619
     Disbursements for reverse mortgages ....................................................        (476)        (393)        (470)
     Purchase of Cypress Capital Management, LLC ............................................        (466)        (452)      (1,122)
     Sale of loans ..........................................................................      11,379          688       13,435
     Purchase of loans ......................................................................      (9,600)     (15,831)     (14,767)
     Purchase of bank-owned life insurance ..................................................           -            -      (50,000)
     Payment of bank-owned life insurance ...................................................       2,887            -            -
     Net increase in loans ..................................................................    (246,432)    (228,758)    (228,001)
     Net increase in stock of Federal Home Loan Bank of Pittsburgh ..........................       6,421       (2,347)        (270)
     Sales of assets acquired through foreclosure, net ......................................          80          683          532
     Purchase of land .......................................................................           -         (925)      (2,860)
     Purchase of office building ............................................................           -            -       (3,507)
     Sale of real estate held-for-investment ................................................           -        5,296            -
     Investment in real estate partnership ..................................................          24       (1,196)           -
     Premises and equipment, net ............................................................     (10,750)      (4,202)      (6,378)
                                                                                                ---------    ---------    ---------

Net cash used for investing activities ......................................................    (137,798)    (314,977)    (269,248)
                                                                                                ---------    ---------    ---------
           
                                                                                                (Continued on next page)
</TABLE>


                                       27


<PAGE>

CONSOLIDATED STATEMENT OF CASH FLOWS (continued)


<TABLE>
<CAPTION>
                                                                                                  Year Ended December 31,    
                                                                                         -----------------------------------------
                                                                                             2006           2005           2004 
                                                                                         -----------    -----------    -----------
                                                                                                      (In Thousands)
<S>                                                                                     <C>            <C>            <C>        
  Financing activities:

    Net increase in demand and savings deposits ......................................   $    56,803    $   125,297    $   102,368
    Net increase in time deposits ....................................................       294,365         87,875        202,933
    Net decrease in securities sold under agreements to repurchase ...................        (9,750)       (48,955)       (16,276)
    Receipts of FHLB advances ........................................................     8,796,661      7,789,201      6,193,801
    Repayments of FHLB advances ......................................................    (9,021,354)    (7,617,543)    (6,200,034)
    Redemption of Trust I Preferred Securities .......................................             -        (51,547)             -
    Issuance of Pooled Floating Rate Capital Securities ..............................             -         67,011              -
    Dividends paid on common stock ...................................................        (2,058)        (1,845)        (1,643)
    Issuance of common stock and exercise of common stock options ....................         3,355          6,348          3,590
    Excess tax benefit from share-based payment arrangements .........................         2,011              -              -
    Purchase of treasury stock, net of reissuance ....................................        (6,603)       (40,104)       (17,899)
    (Decrease) increase in minority interest .........................................          (203)          (166)             3
                                                                                         -----------    -----------    -----------
    Net cash provided by financing activities ........................................       113,227        315,572        266,843
                                                                                         -----------    -----------    -----------
    Increase in cash and cash equivalents from continuing operations .................         7,839         39,888         23,108
    Net cash provided by operating activities of discontinued operations .............            14          1,141          7,746
    Net cash provided by (used for) investing activities of discontinued operations...            20            (87)           640
    Cash and cash equivalents at beginning of period .................................       233,951        193,009        161,515
                                                                                         -----------    -----------    -----------
    Cash and cash equivalents at end of period .......................................   $   241,824    $   233,951    $   193,009
                                                                                         ===========    ===========    ===========
                                                                                   
  Supplemental Disclosure of Cash Flow Information:

    Cash paid for interest for the year ..............................................   $    98,142    $    58,080    $    36,355
    Cash paid for income taxes, net ..................................................        13,597         10,151          9,803
    Cash (refunded) paid for taxes of discontinued operations, net ...................             -            (45)           396
    Loans transferred to assets acquired through foreclosure .........................           450            388            388
    Net change in accumulated other comprehensive loss ...............................         1,395         (6,583)        (1,637)
    Transfer of loans held-for-sale to loans .........................................         2,129          1,378          2,858
    Deconsolidation of WSFS Capital Trust I ..........................................             -              -          1,547
    Transfer of building to real estate held-for-investment ..........................             -          1,878              -
                                                                                   
</TABLE>


  The accompanying notes are an integral part of these Financial Statements.

                                       28


<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         WSFS Financial Corporation (Company or Corporation) is a thrift holding
company  organized  under the laws of the State of Delaware.  The  Corporation's
principal  wholly-owned  subsidiary,  Wilmington Savings Fund Society,  FSB (the
Bank or WSFS),  is a federal savings bank organized under the laws of the United
States which, at December 31, 2006,  serves  customers from its main office,  27
retail banking offices,  loan production  offices and operations centers located
in Delaware and southeastern Pennsylvania.

         In preparing the Financial  Statements,  management is required to make
estimates  and  assumptions   that  affect  the  reported   amounts  of  assets,
liabilities, revenues and expenses. The material estimates that are particularly
susceptible to significant  changes in the near term relate to the allowance for
loan  losses,   investment  in  reverse  mortgages,   contingencies   (including
indemnifications) and income taxes.

         Basis of Presentation

         The  consolidated  Financial  Statements  include  the  accounts of the
parent  company,  Montchanin  Capital  Management,  Inc.  (Montchanin)  and  its
non-wholly owned subsidiary, Cypress Capital Management, LLC (Cypress), WSFS and
its wholly-owned subsidiaries,  WSFS Investment Group, Inc., WSFS Reit, Inc. and
WSFS  Credit  Corporation  (WCC).  As  discussed  in  Note  2 of  the  Financial
Statements,  the results of WCC, the  Corporation's  wholly-owned  indirect auto
financing and leasing subsidiary, are presented as discontinued operations.

         WSFS Capital  Trust III is an  unconsolidated  affiliate of the Company
and was formed in 2005 to issue  $67.0  million  aggregate  principle  amount of
Pooled Floating Rate Capital Securities.  The proceeds from this issue were used
to fund the  redemption  of $51.5  million of Floating Rate WSFS Capital Trust I
Preferred  Securities (formerly WSFS Capital Trust I). The Trust invested all of
the proceeds  from the sale of the Pooled  Floating  Rate Capital  Securities in
Junior Subordinated  Debentures of the Corporation.  WSFS Investment Group, Inc.
markets various third-party  insurance and securities products to Bank customers
through WSFS' retail banking system. WSFS Reit, Inc. is a real estate investment
trust that was formed to hold  qualifying  real estate assets and may be used in
the future as a vehicle to raise capital. Montchanin was formed to provide asset
management products and services. In 2004, Montchanin acquired a 60% interest in
Cypress,  a Wilmington based  investment  advisory firm servicing high net-worth
individuals  and  institutions.  In January  2005 and January  2006,  Montchanin
increased its ownership in Cypress to 80%, and 90%, respectively.

         During 2005, the Corporation announced that it would move its corporate
headquarters in early 2007. As part of the transaction, the Corporation acquired
a passive  ownership  interest in a limited  partnership  created to develop the
office building in which the Corporation will be a tenant. Related to this move,
the Company sold the land on which the WSFS Bank Center is to be built.  As part
of this agreement,  the property  developer has agreed to purchase the Company's
current  headquarters,  which is  expected  to  result in  approximately  a $3.0
million gain at the time of the move.

         Certain  reclassifications have been made to the prior years' Financial
Statements to conform them to the current year's  presentation.  All significant
intercompany transactions are eliminated in consolidation.

         Cash and Cash Equivalents

         For purposes of reporting cash flows, cash and cash equivalents include
cash,  due from  banks,  federal  funds  sold  and  securities  purchased  under
agreements  to  resell.  Generally,  federal  funds are  purchased  and sold for
periods ranging up to 90 days.

         Debt and Equity Securities

         Investments in equity securities that have a readily  determinable fair
value and investments in debt  securities are classified  into three  categories
and accounted for as follows:

    o    Debt  securities  with the  positive  intention to hold to maturity are
         classified as "held-to-maturity" and reported at amortized cost.
    o    Debt and equity securities purchased with the intention of selling them
         in the near  future are  classified  as  "trading  securities"  and are
         reported at fair value,  with  unrealized  gains and losses included in
         earnings.

                                       29


<PAGE>

    o    Debt and equity  securities  not  classified in either of the above are
         classified  as  "available-for-sale  securities"  and  reported at fair
         value,  with  unrealized  gains and losses  excluded  from earnings and
         reported, net of tax, as a separate component of stockholders' equity.

         Debt  and  equity  securities   include   mortgage-backed   securities,
corporate and municipal bonds, U.S. Government and agency securities and certain
equity  securities.  Premiums  and  discounts  on  debt  and  equity  securities
held-to-maturity and  available-for-sale are recognized in interest income using
a level yield  method over the period to  expected  maturity.  The fair value of
debt and equity  securities  is  primarily  obtained  from  third-party  pricing
services.   Implicit  in  the  valuation  are  estimated  prepayments  based  on
historical and current market conditions.

         Declines  in  the  fair  value  of  individual   held-to-maturity   and
available-for-sale  securities  below their cost that are other than  temporary,
result in  write-downs  of the  individual  securities to their fair value.  The
related write-downs are included in earnings as realized losses.  Management has
the discretion to determine  impairment in certain  circumstances.  The specific
identification method is used to determine realized gains and losses on sales of
investment and mortgage-backed securities. All sales are made without recourse.

         Investment in Reverse Mortgages

         The  Corporation  accounts for its  investment in reverse  mortgages in
accordance  with the  instructions  provided by the staff of the  Securities and
Exchange  Commission  entitled  "Accounting  for Pools of Uninsured  Residential
Reverse  Mortgage  Contracts"  which requires  grouping the  individual  reverse
mortgages into "pools" and recognizing  income based on the estimated  effective
yield of the pool.  In computing  the  effective  yield,  the  Corporation  must
project  the  cash  inflows  and  outflows  of  the  pool  including   actuarial
projections of the life expectancy of the individual contract holder and changes
in the collateral value of the residence. At each reporting date, a new economic
forecast  is made of the cash  inflows  and  outflows  of each  pool of  reverse
mortgages;  the  effective  yield of each  pool is  recomputed,  and  income  is
adjusted  retroactively and prospectively to reflect the revised rate of return.
Because of this  quasi-market-value  based  accounting,  the  recorded  value of
reverse  mortgage  assets can result in significant  volatility  associated with
estimations.  As a  result,  income  recognition  can  vary  significantly  from
reporting period to reporting period.

         Loans

         Loans are stated net of deferred fees and costs and unearned discounts.
Loan  interest  income is accrued  using  various  methods  that  approximate  a
constant yield. Loan origination and commitment fees and direct loan origination
costs are deferred  and  recognized  over the life of the related  loans using a
level yield method over the period to maturity.

         A loan is impaired when, based on current information and events, it is
probable  that a creditor will be unable to collect all amounts due according to
the contractual  terms of the loan agreement.  Impaired loans are measured based
on the present value of expected future  discounted cash flows, the market price
of the  loan or the  fair  value  of the  underlying  collateral  if the loan is
collateral  dependent.  Impaired  loans include  loans within the  Corporation's
commercial, commercial mortgage, commercial construction,  residential mortgages
and consumer  portfolios.  The Corporation's  policy for recognition of interest
income on impaired loans is the same as for nonaccrual loans discussed below.

         Nonaccrual Loans

         Nonaccrual loans are those on which the accrual of interest has ceased.
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  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 or recorded as interest income,  depending on management's
assessment  of ultimate  collectibility  of principal  and  interest.  Loans are
returned  to an accrual  status  when the  borrower's  ability to make  periodic
principal and interest  payments has returned to normal (i.e. - brought  current
with respect to principal or interest or  restructured)  and the paying capacity
of the  borrower or the  underlying  collateral  is deemed  sufficient  to cover
principal  and  interest  in  accordance  with  the   Corporation's   previously
established loan-to-value policies.

                                       30


<PAGE>

         Allowances for Loan Losses

         The  Corporation  maintains  allowances  for credit  losses and charges
losses to these allowances when such losses are realized.  The  determination of
the  allowance  for  loan  losses  requires  significant   judgement  reflecting
management's best estimate of probable losses related to specifically identified
loans as well as probable losses in the remaining loan  portfolio.  Management's
evaluation is based upon a review of these portfolios.

         Management  establishes  the loan loss  allowance  in  accordance  with
guidance provided by the Securities and Exchange  Commission's  Staff Accounting
Bulletin 102 (SAB 102). Its methodology for assessing the appropriateness of the
allowance  consists of several key elements which include:  specific  allowances
for identified  problem loans,  formula allowances for commercial and commercial
real estate loans, and allowances for pooled homogenous loans.

         Specific  reserves  are  established  for certain  loans in cases where
management has identified  significant  conditions or circumstances related to a
specific credit that management believes indicate that a loss has been incurred.

         The formula  allowances for commercial and commercial real estate loans
are calculated by applying loss factors to outstanding  loans in each case based
on the  internal  risk  grade  of  loans  derived  from  analysis  of  both  the
probability of default and the  probability  of loss should default occur.  As a
result, changes in risk grades of both performing and nonperforming loans affect
the amount of the formula allowance.  Loss factors by risk grade have a basis in
WSFS'  historical  default  experience  for such loans and an  assessment of the
probability of default.  Loss  adjustment  factors are applied based on criteria
discussed below.

         Pooled  loans are loans  that are  usually  smaller,  not-individually-
graded  and  homogeneous  in  nature,  such as  consumer  installment  loans and
residential  mortgages.  Loan loss  allowances  for pooled  loans are based on a
ten-year net  charge-offs  history.  The average loss allowance per  homogeneous
pool is based on the  product's  average  annual  historical  loss  rate and the
average  estimated  duration of the pool multiplied by the pool balances.  These
separate  risk pools are assigned a reserve for loss based upon this  historical
loss information and loss adjustment factors.

         Historical  loss  adjustment   factors  are  based  upon   management's
evaluation of various current conditions, including those listed below.

o    General economic and business conditions affecting WSFS' key lending areas,
o    Credit quality trends,
o    Recent loss experience in particular segments of the portfolio,
o    Collateral values and loan-to-value ratios,
o    Loan volumes and concentrations, including changes in mix,
o    Seasoning of the loan portfolio,
o    Specific industry conditions within portfolio segments,
o    Bank regulatory examination results, and
o    Other  factors,  including  changes  in  quality  of the loan  origination,
     servicing and risk management processes.

         WSFS'  loan  officers  and risk  managers  meet at least  quarterly  to
discuss and review these  conditions,  and also risks associated with individual
problem loans. In addition,  various regulatory agencies, as an integral part of
their examination process,  periodically review the Corporation's  allowance for
loan  losses.  The  Company  also gives  consideration  to the  results of these
regulatory agency examinations.

         During  2006,  the  provision  for loan  losses was also  affected by a
change  in  estimates  used in the  calculation.  The  change  is the  result of
continued  analysis of the Corporation's loss experience on commercial loans and
the Corporation's consideration of proposed regulatory guidance and professional
studies on the  classification  of commercial  credits to change its  estimates.
This change  combines an estimate of the  probability of default for each of the
Corporation's classified loan grades with an estimate of loss should an event of
default occur. The estimate of loss further segments classified loan grades into
sub-grades  with  unique  factors.  Management  believes  this  analysis  better
estimates  losses  currently in its loan portfolio.  These changes resulted in a
reduction to the provision for loan losses of $1.8 million or $0.17 per share.

         Allowances  for  estimated  losses on  investments  in real  estate and
assets acquired  through  foreclosure are provided if the carrying value exceeds
the fair value less estimated disposal costs.

                                       31


<PAGE>

         Assets Held-for-Sale

         Assets held-for-sale include loans held-for-sale and are carried at the
lower of cost or market of the aggregate or, in some cases, individual assets.

         Assets Acquired Through Foreclosure

         Assets  acquired  through  foreclosure are recorded at the lower of the
recorded  investment in the loans or fair value less estimated  disposal  costs.
Costs  subsequently  incurred to improve the assets are included in the carrying
value provided that the resultant carrying value does not exceed fair value less
estimated  disposal  costs.  Costs relating to holding the assets are charged to
expense in the current  period.  An allowance for  estimated  losses is provided
when declines in fair value below the carrying value are  identified.  Net costs
of assets acquired  through  foreclosure  include costs of holding and operating
the assets, net gains or losses on sales of the assets and provisions for losses
to reduce such assets to fair value less estimated disposal costs.

         Premises and Equipment

         Premises and equipment are stated at cost less accumulated depreciation
and amortization.  Costs of major  replacements,  improvements and additions are
capitalized.  Depreciation expense is computed on a straight-line basis over the
estimated  useful lives of the assets or, for leasehold  improvements,  over the
life of the related  lease if less than the  estimated  useful life. In general,
computer  equipment,  furniture  and  equipment  and  building  renovations  are
depreciated over three, five and ten years,  respectively.  Accelerated  methods
are used in depreciating certain assets for income tax purposes.

         Federal  Funds  Purchased  and  Securities  Sold  Under  Agreements  to
Repurchase

         The  Corporation  enters into sales of securities  under  agreements to
repurchase.  Reverse repurchase  agreements are treated as financings,  with the
obligation  to  repurchase  securities  sold  reflected  as a  liability  in the
Consolidated  Statement of Condition.  The securities  underlying the agreements
remain in the asset accounts.

         Loss Contingency for Standby Letters of Credit

         The  Corporation  maintains a loss  contingency  for standby letters of
credit and charges  losses to this  reserve when such losses are  realized.  The
determination  of the loss  contingency  for standby  letters of credit requires
significant  judgement reflecting  management's best estimate of probable losses
related to standby letters of credit.

         Income Taxes

         The provision for income taxes includes federal, state and local income
taxes  currently  payable and those  deferred  because of temporary  differences
between the financial statement basis and tax basis of assets and liabilities.

                                       32


<PAGE>

         Earnings Per Share

         The  following  table sets forth the  computation  of basic and diluted
earnings per share:


<TABLE>
<CAPTION>
                                                                                       2006      2005       2004
                                                                                     -------   -------   --------
                                                                                (In Thousands, Except Per Share Data)
<S>                                                                                <C>       <C>       <C>    
Numerator:
   Income from continuing operations ...................................             $30,441   $27,856   $25,757
   Income on wind-down of discontinued operations, net of taxes ........                   -         -       143
                                                                                     -------   -------   -------
   Net income ..........................................................             $30,441   $27,856   $25,900
                                                                                     =======   =======   ======= 
Denominator:
  Denominator for basic earnings per share - weighted average shares ...               6,634     6,795     7,158
  Effect of dilutive employee stock options ............................                 270       373       435
                                                                                     -------   -------   -------
  Denominator for diluted earnings per share -.adjusted weighted average
    shares and assumed exercise ........................................               6,904     7,168     7,593
                                                                                     =======   =======   ======= 
Earnings per share:
  Basic:
   Income from continuing operations ...................................             $  4.59   $  4.10   $  3.60
   Income on wind-down of discontinued operations, net of taxes ........                   -         -      0.02
                                                                                     -------   -------   -------
   Net income ..........................................................             $  4.59   $  4.10   $  3.62
                                                                                     =======   =======   ======= 
   Diluted:
   Income from continuing operations ...................................             $  4.41   $  3.89   $  3.39
   Income on wind-down of discontinued operations, net of taxes ........                   -         -      0.02
                                                                                     -------   -------   -------
   Net income ..........................................................             $  4.41   $  3.89   $  3.41
                                                                                     =======   =======   ======= 

   Outstanding common stock equivalents having no dilutive effect ......                 197       173         4
</TABLE>


                                       33


<PAGE>

Stock-Based Compensation

         In December  2004,  the  Financial  Accounting  Standards  Board (FASB)
issued  Statement  of  Financial  Accounting  Standards  (SFAS) No. 123 (revised
2004),  Share-Based  Payment  (SFAS 123R).  SFAS 123R  requires all  share-based
payments  to  employees,  including  grants of  employee  stock  options,  to be
recognized as  compensation  expense in the  consolidated  financial  statements
based on their fair  values.  That expense  will be  recognized  over the period
during which an  Associate  is required to provide  services in exchange for the
award,  known as the requisite service period (usually the vesting period).  The
Corporation  adopted  SFAS 123R  beginning  January 1, 2006  using the  Modified
Prospective  Application  Method.  This  method  relates to  current  and future
periods and does not require the  restatement  of prior  periods.  The impact of
adopting SFAS 123R for 2006 was $1.5 million,  or $0.19 per share,  to salaries,
benefits and other compensation.


         For comparative purposes, the following table illustrates the effect on
net  income  and  earnings  per share had the  Company  applied  the fair  value
recognition provision of the SFAS No. 123 to stock-based employee compensation.


<TABLE>
<CAPTION>
                                                                                                  2005       2004
                                                                                                --------   ---------
                                                                                       (In Thousands, Except Per Share Data)
<S>                                                                                             <C>         <C>    
Income from continuing operations, as reported.........................................          $27,856     $25,757
Less:  Total stock-based employee compensation expense determined
           under fair value based methods for all awards, net of related tax effects....            (972)       (590)
                                                                                                --------   ---------
Pro forma income from continuing operations.............................................         $26,884     $25,167
                                                                                                 =======     =======

      Earnings per share:
        Basic:
          Income from continuing operations............................................         $   4.10   $    3.60
          Less: Total stock-based employee compensation expense determined
             under fair value based methods for all awards, net of related tax effects..           (0.14)      (0.08)
                                                                                                --------   ---------
          Pro forma income from continuing operations...................................        $   3.96   $    3.52
                                                                                                ========   =========

        Diluted:
          Income from continuing operations............................................         $   3.89   $    3.39
          Less: Total stock-based employee compensation expense determined
             under fair value based methods for all awards, net of related tax effects..           (0.14)      (0.08)
                                                                                                --------   ---------
          Pro forma income from continuing operations...................................        $   3.75   $    3.31
                                                                                                ========   =========
</TABLE>


2.   DISCONTINUED OPERATIONS OF A BUSINESS SEGMENT

         In December 2000, the Corporation  discontinued  the operations of WCC,
its indirect auto  financing  and vehicle  leasing  subsidiary.  At December 31,
2000, WCC had 7,300 lease contracts and 2,700 loan  contracts,  compared to zero
lease contracts and zero loan contracts at December 31, 2006.

         At December  31,  2006,  loans,  operating  leases and other  assets of
discontinued operations, net were zero compared to $34,000 at December 31, 2005.
This was mainly due to scheduled  maturities in the remaining  indirect loan and
lease portfolios.  At December 31, 2004, the Corporation  reviewed the remaining
used car residual  values and  determined  that its  exposure was  significantly
reduced.  As a result, at December 31, 2004, the Corporation reduced its reserve
for  discontinued  operations  by  $143,000,  net of taxes.  There  were no such
adjustments  recorded  during 2005 or 2006. As of December 31, 2006,  all assets
and liabilities relating to the discontinued  operations of WCC were zero and as
a result  WSFS  expects no  additional  gains or losses  from this  discontinued
business segment.

                                       34


<PAGE>

3.   INVESTMENT SECURITIES

         The following  tables detail the amortized  cost and the estimated fair
value of the Corporation's investment securities:


<TABLE>
<CAPTION>
                                                             Gross      Gross
                                                 Amortized Unrealized Unrealized  Fair
                                                    Cost     Gains      Losses    Value 
                                                  -------   -------   -------   -------
                                                             (In Thousands)
<S>                                              <C>       <C>       <C>       <C>      
Available-for-sale securities:

    December 31, 2006:
       Reverse mortgages (1) ..............       $   598   $     -   $     -   $   598  
       U.S. Government and agencies .......        46,920        21        74    46,867
       State and political subdivisions....         2,785        23         1     2,807
                                                  -------   -------   -------   -------
                                                  $50,303   $    44   $    75   $50,272
                                                  =======   =======   =======   =======
    December 31, 2005:                            
       Reverse mortgages (1) ..............       $   785   $     -   $     -   $   785
       U.S. Government and agencies .......        51,702         -       785    50,917
       State and political subdivisions....           975         6         -       981
                                                  -------   -------   -------   -------
                                                  $53,462   $     6   $   785   $52,683
                                                  =======   =======   =======   =======
                                                  
Held-to-maturity:                                 
                                                  
    December 31, 2006:                            
       State and political subdivisions....       $ 4,219   $    75   $    42   $ 4,252
                                                  -------   -------   -------   -------
                                                  $ 4,219   $    75   $    42   $ 4,252
                                                  =======   =======   -------   -------
    December 31, 2005:                            
       State and political subdivisions....       $ 4,806   $   199   $     -   $ 5,005
                                                  -------   -------   -------   -------
                                                  $ 4,806   $   199   $     -   $ 5,005
                                                  =======   =======   =======   =======
</TABLE>

                                                  
(1)  See Note 6 of the Financial  Statements for a further discussion of Reverse
     Mortgages.


         Securities with book values  aggregating  $49.7 million at December 31,
2006 were  specifically  pledged as collateral  for WSFS'  Treasury Tax and Loan
account  with the Federal  Reserve  Bank,  securities  sold under  agreement  to
repurchase  and certain  letters of credit and municipal  deposits which require
collateral.  Accrued interest receivable  relating to investment  securities was
$560,000 and $434,000 at December 31, 2006 and 2005, respectively.

         The scheduled maturities of investment securities  held-to-maturity and
securities available-for-sale at December 31, 2006 were as follows:


<TABLE>
<CAPTION>
                                                        Held-to-Maturity          Available-for-Sale 
                                                 ----------------------------   -----------------------
                                                  Amortized   Fair Amortized      Fair
                                                    Cost           Value          Cost           Value 
                                                                    (In Thousands)
<S>                                              <C>            <C>            <C>            <C>       
Within one year (1)........................       $ 2,050        $  2,080       $ 39,677       $ 39,604  
After one year but within five years.......         1,085           1,130          8,576          8,595
After five but within ten years............             -               -          2,050          2,073
After ten years............................         1,084           1,042              -              - 
                                                  -------        --------       --------       --------
                                                  $ 4,219         $ 4,252       $ 50,303       $ 50,272 
                                                  =======         =======       ========       ========
</TABLE>

                                                                         
(1)  Reverse mortgages do not have contractual  maturities.  The Corporation has
     included reverse mortgages in maturities within one year.

                                       35


<PAGE>

         During 2006, proceeds from the sale of investment securities classified
as available-for-sale were $11.0 million, with a loss of $41,000 realized on the
sales.  Municipal bonds totaling  $610,000 were called by the issuers.  Proceeds
from the sale of investments  classified as  available-for-sale  during 2005 and
2004 were $60.7 million and $25.0 million, respectively. There was a net loss of
$609,000  realized on sales in 2005 and $1,000 net gain  realized  in 2004.  The
cost  basis  for  all  investment  security  sales  was  based  on the  specific
identification  method. There were no sales of investment  securities classified
as held-to-maturity in 2006, 2005 and 2004.

         At December 31, 2006, the Company owned investment  securities totaling
$40.9  million  where the  amortized  cost  basis  exceeded  fair  value.  Total
unrealized  losses on those  securities were $117,000 at December 31, 2006. This
temporary impairment is the result of changes in market interest rates since the
purchase of the  securities.  Securities  amounting  to $38.9  million have been
impaired for 12 months or longer.  The  Corporation  has  determined  that these
securities are not "other than temporarily"  impaired. The following table lists
the unrealized losses aggregated by category:


<TABLE>
<CAPTION>
                                                     Less than 12 months           12 months or longer                Total       
                                                   -----------------------       ------------------------      ---------------------
                                                   Fair        Unrealized        Fair          Unrealized      Fair       Unrealized
                                                   Value          Loss           Value           Loss          Value         Loss 
                                                   -----          ----           -----           ----          -----         ---- 
                                                                        (In Thousands)
<S>                                              <C>            <C>            <C>            <C>            <C>            <C> 
Held-to-maturity                                                                                                           
  State and political subdivisions ............   $   966        $    42        $     -        $     -        $   966        $    42
                                                                                                                           
Available-for-sale                                                                                                         
  State and political subdivisions ............       984              1              -              -            984              1
                                                                                                                             -------
  U.S. Government and agencies ................         -              -         38,906             74         38,906             74
                                                  -------        -------        -------        -------        -------        -------
                                                                                                                           
     Total temporarily impaired investments....   $ 1,950        $    43        $38,906        $    74        $40,856        $   117
                                                  =======        =======        =======        =======        =======        =======
</TABLE>

                                                                       
                                       36


<PAGE>

4.   MORTGAGE-BACKED SECURITIES

         The following  tables detail the amortized  cost and the estimated fair
value of the Corporation's mortgage-backed securities:


<TABLE>
<CAPTION>
                                                              Gross           Gross
                                                Amortized   Unrealized      Unrealized   Fair
                                                  Cost        Gains           Losses     Value     
                                                --------    --------         --------   --------
                                                                (In Thousands)
<S>                                            <C>         <C>             <C>         <C>     
Available-for-sale securities:

December 31, 2006:
Collateralized mortgage obligations .........   $424,748    $    119         $  9,023   $415,844  
 FNMA .......................................     42,254           -            2,036     40,218
 FHLMC ......................................     31,121          97            1,632     29,586
 GNMA .......................................     19,115           -              416     18,699
                                                --------    --------         --------   --------
                                                $517,238    $    216         $ 13,107   $504,347
                                                ========    ========         ========   ========
                                                                            
      Weighted average yield ................       4.77%                   
                                                                            
December 31, 2005:                                                          
Collateralized mortgage obligations .........   $526,546    $    205         $ 11,199   $515,552
 FNMA .......................................     49,785           -            2,010     47,775
 FHLMC ......................................     32,211           -            1,554     30,657
 GNMA .......................................     14,643           -              255     14,388
                                                --------    --------         --------   --------
                                                $623,185    $    205         $ 15,018   $608,372
                                                ========    ========         ========   ========
                                                                            
      Weighted average yield ................       4.63%                   
                                                                            
Trading securities:                                                         
                                                                            
December 31, 2006:                                                          
      Collateralized mortgage obligations....   $ 12,364    $      -                -   $ 12,364
                                                --------    --------         --------   --------
                                                $ 12,364    $      -         $      -   $ 12,364
                                                ========    ========         ========   ========
                                                                            
      Weighted average yield ................       8.35%                   
                                                                            
December 31, 2005:                                                          
      Collateralized mortgage obligations....   $ 11,951    $      -         $      -   $ 11,951
                                                --------    --------         --------   --------
                                                $ 11,951    $      -         $      -   $ 11,951
                                                ========    ========         ========   ========
                                                                            
      Weighted average yield ............           7.38%                   
</TABLE>
                                                              

         The portfolio of available-for-sale  mortgage-backed securities consist
of 100% AAA-rated,  currently cash flowing securities, backed by conventional 15
or 20-year  mortgages.  The  weighted  average  duration of the  mortgage-backed
securities was 2.9 years at December 31, 2006.

         At  December  31,  2006,  mortgage-backed  securities  with par  values
aggregating  $183.2  million  were  pledged as  collateral  for retail  customer
repurchase  agreements  and  municipal  deposits.  Accrued  interest  receivable
relating to  mortgage-backed  securities  was $2.0  million and $2.4  million at
December  31,  2006 and 2005,  respectively.  From time to time  mortgage-backed
securities  are  pledged  as  collateral  for  Federal  Home  Loan  Bank  (FHLB)
borrowings.  The fair  value  of these  pledged  mortgage-backed  securities  at
December 31, 2006 and 2005 were $0 and $272.2  million,  respectively.  Proceeds
from  the  sale of  mortgage-backed  securities  available-for-sale  were  $49.4
million in 2006,  resulting in a loss of $1.94  million.  There were no sales of
mortgage-backed  securities in 2005. The cost basis of all mortgage-backed sales
are based on specific identification method.

         The  Corporation  owns $12.4  million  of SASCO  RM-1 2002  securities,
including  accrued  interest,  which was paid in kind,  which are  classified as
"trading." $10.0 million was received as partial  consideration  for the sale of
the reverse mortgage  portfolio,  while an additional $1.0 million was purchased
at par at the time of the  securitization and $1.4 million from accrued interest
paid in kind. These floating rate notes represent the BBB+ traunche of a reverse
mortgage securitization  underwritten by Lehman Brothers and carry a coupon rate
of one-month London InterBank Offered Rate (LIBOR) plus 300 basis points.  For a
further discussion of reverse mortgages, see the Reverse Mortgages discussion in
M
anagement's Discussion and Analysis and Note 5 to the Financial Statements.

                                       37


<PAGE>
         Based on accounting  rules under SFAS No. 115,  Accounting  for Certain
Investments in Debt and Equity Securities (SFAS 115), when these securities were
acquired they were  classified  as "trading." It was the Company's  intention to
sell them in the near  term.  An active  market  for  these  securities  has not
developed  since  the  issuance,  but  it  continues  to be  the  intent  of the
Corporation  to sell these  securities  if and when an active  market  develops.
Since there is no active market for these  securities,  the Corporation has used
the guidance under SFAS 115 to provide a reasonable  estimate of fair value. The
Corporation  estimated  the value of these  securities  as of December  31, 2006
based on the pricing of similar securities that have an active market as well as
a fundamental  analysis of the actual cash flows of the  underlying  securities.
The  Corporation  also  obtained an  estimate,  from an  independent  securities
dealer,  of the  value  of these  securities,  which  was also  based in part on
similar actively-traded securities.

         At December  31, 2006,  the Company  owned  mortgage-backed  securities
totaling  $471.2  million  where the amortized  cost basis  exceeded fair value.
Total  unrealized  losses on those securities were $13.1 million at December 31,
2006.  This  temporary  impairment  is the result of changes in market  interest
rates since the purchase of the securities.  Some of these  securities have been
impaired for twelve months or longer.  The Corporation has determined that these
securities are not "other than temporarily"  impaired. The following table lists
the unrealized losses aggregated by category:


<TABLE>
<CAPTION>
                                            Less than 12 months            12 months or longer              Total  
                                         ------------------------      --------------------------    ------------------------
                                           Fair        Unrealized       Fair          Unrealized      Fair         Unrealized
                                           Value          Loss          Value           Loss          Value           Loss   
                                         --------       --------       --------       --------       --------       --------
                                                                           (In Thousands)
<S>                                     <C>            <C>            <C>            <C>            <C>            <C>       
Available-for-sale
   CMO ...............................   $ 46,654       $    173       $338,984       $  8,850       $385,638       $  9,023  
   FNMA ..............................          -              -         40,218          2,036         40,218          2,036
   FHLMC .............................          -              -         26,629          1,632         26,629          1,632
   GNMA ..............................      7,011            126         11,688            290         18,699            416
                                         --------       --------       --------       --------       --------       --------
                                                                                                                
     Total temporarily impaired MBS...   $ 53,665       $    299       $417,519       $ 12,808       $471,184       $ 13,107
                                         ========       ========       ========       ========       ========       ========
</TABLE>


5.   REVERSE MORTGAGES AND RELATED ASSETS

         The Corporation holds an investment in reverse mortgages of $598,000 at
December 31, 2006 representing a participation in reverse mortgages with a third
party.

         Reverse  mortgage  loans are contracts  that require the lender to make
monthly advances throughout the borrower's life or until the borrower relocates,
prepays or the home is sold,  at which time the loan  becomes  due and  payable.
Reverse  mortgages  are  nonrecourse  obligations,  which  means  that  the loan
repayments  are  generally  limited to the net sale  proceeds of the  borrower's
residence.

         The  Corporation  accounts for its  investment in reverse  mortgages by
estimating the value of the future cash flows on the reverse mortgages at a rate
deemed  appropriate  for these  mortgages,  based on the market rate for similar
collateral.   Actual  cash  flows  from  these  mortgage  loans  can  result  in
significant  volatility in the recorded value of reverse mortgage  assets.  As a
result,  income varies  significantly from reporting period to reporting period.
For the year ended  December  31,  2006,  the  Corporation  earned  $684,000  in
interest  income on reverse  mortgages  as compared to $678,000 in 2005 and $1.8
million in 2004.

         The projected cash flows depend on assumptions about life expectancy of
the  mortgagee  and the future  changes in  collateral  values.  Projecting  the
changes  in  collateral  values is the most  significant  factor  impacting  the
volatility  of  reverse  mortgage  values.  The  current  assumptions  include a
short-term annual  appreciation rate of -8.0% in the first year, and a long-term
annual appreciation rate of 0.5% in future years. If the long-term  appreciation
rate was  increased  to 1.5%,  the  resulting  impact on income  would have been
$101,000. Conversely, if the long-term appreciation rate was decreased to -0.5%,
the resulting impact on income would have been $(85,000).

         The Corporation also holds $12.4 million in BBB+ rated  mortgage-backed
securities classified as trading and options to acquire up to 49.9% of Class "O"
Certificates  issued in connection with securities  consisting of a portfolio of
reverse  mortgages  previously  held  by the  Corporation.  At the  time  of the
securitization, the securitizer retained 100% of the Class "O" Certificates from
the  securitization.  These Class "O"  Certificates  have no priority over other
classes of Certificates under the Trust and no distributions will be made on the
Class "O" Certificates  until,  among other conditions,  the principal amount of
each other class of notes has been reduced to zero. The underlying  assets,  the
reverse  mortgages,  are very long-term assets.  Hence, any cash flow that might
inure to the holder of the Class "O" Certificates is not expected to occur until
many years in 

                                       38

<PAGE>

the future.  Additionally,  the Company can  exercise its option on 49.9% of the
Class  "O"  Certificates  in up to five  separate  increments  for an  aggregate
purchase  price  of $1.0  million  any  time  between  January  1,  2004 and the
termination of the  Securitization  Trust.  The option to purchase the Class "O"
Certificates  does not meet the  definition of a derivative  under SFAS No. 133,
Accounting for Derivative and Hedging Activities.  This certificate is an equity
security with no readily  determinable  fair value, as such, it is excluded from
the accounting  treatment  promulgated under SFAS 115. As a result, the security
is carried at cost (which is zero).  The  amount,  by which the  certificate  is
considered in the money, is included in Note 16 to the Financial Statements,  as
required by SFAS No. 107, Disclosures about Fair Value of Financial Instruments.

6.   LOANS

The following tables detail the Corporation's loan portfolio:

                                                               December 31,   
                                                        ------------------------
                                                           2006           2005
                                                           ----           ----
                                                             (In Thousands)
Real estate mortgage loans:
     Residential (1-4 family) ......................   $  473,946    $  457,213
     Other .........................................      446,810       432,660
Real estate construction loans......................      260,733       194,002
Commercial loans....................................      649,832       511,798
Consumer loans......................................      263,478       244,820
                                                       ----------    ----------
                                                        2,094,799     1,840,493
Less:
     Loans in process ..............................       49,437        40,560
     Deferred fees..................................         (844)        (306)
     Allowance for loan losses .....................       27,384        25,381
                                                       ----------    ----------
        Net loans...................................   $2,018,822    $1,774,858
                                                       ==========    ==========


         The  Corporation  had impaired loans of  approximately  $3.8 million at
December  31, 2006  compared to $3.4  million at December  31,  2005.  A loan is
impaired when,  based on current  information and events,  it is probable that a
creditor will be unable to collect all amounts due according to the  contractual
terms of the loan agreement.  The average recorded balance of impaired loans was
$3.6 million and $3.9 million during 2006 and 2005, respectively.  The allowance
for losses on impaired  loans was $369,000 at December 31, 2006,  as compared to
$480,000 at  December  31,  2005.  There was no interest  income  recognized  on
impaired loans.

         The total  amount of loans  serviced  for others were  $265.5  million,
$255.8  million  and  $245.5  million  at  December  31,  2006,  2005 and  2004,
respectively.  The  Corporation  received  fees from the  servicing  of loans of
$724,000, $769,000 and $800,000 during 2006, 2005 and 2004, respectively.

         Beginning  in  2005,  the  Corporation  began  prospectively  recording
mortgage-servicing  rights on its mortgage loan  servicing  portfolio.  Mortgage
servicing  rights  represent the present value of the future net servicing  fees
from servicing  mortgage loans  acquired or originated by the  Corporation.  The
total of this  portfolio  was $64.9  million and $37.6  million for December 31,
2006 and 2005, respectively. Mortgage loans serviced for others are not included
in loans on the accompanying  Consolidated Statement of Condition. The valuation
of these  servicing  rights  resulted in $135,000  and  $308,000 of  noninterest
income during 2006 and 2005, respectively.  Revenues from originating, marketing
and  servicing  mortgage  loans  as well as  valuation  adjustments  related  to
capitalized   mortgage   servicing  rights  are  included  in  mortgage  banking
activities, net on the Consolidated Statement of Operations.

         Accrued interest  receivable on loans outstanding was $10.3 million and
$7.9 million at December 31, 2006 and 2005, respectively.

         Nonaccruing  loans  aggregated  $3.8  million,  $3.4  million  and $4.4
million at December 31, 2006,  2005 and 2004,  respectively.  If interest on all
such loans had been recorded in accordance with contractual  terms, net interest
income would have  increased by $159,000 in 2006,  $133,000 in 2005 and $150,000
in 2004.

                                       39


<PAGE>

         A summary of changes in the allowance for loan losses follows:

                                             Year Ended December 31,         
                                        --------------------------------
                                          2006        2005        2004  
                                        --------    --------    --------
                                        
(In Thousands)                          
                                        
Beginning balance ................      $ 25,381    $ 24,222    $ 22,386
     Provision for loan losses....         2,738       2,582       3,217
     Loans charged-off (1) .......        (1,418)     (1,873)     (1,843)
     Recoveries ..................           683         450         462
                                        --------    --------    --------
Ending balance ...................      $ 27,384    $ 25,381    $ 24,222
                                        ========    ========    ========
                                 
(1)  2006  includes  $390,000 of  overdraft  charge-offs.  Prior to 2006,  these
     expenses were recognized in other operating expense.


7.  ASSETS ACQUIRED THROUGH FORECLOSURE

     Assets acquired through foreclosure are summarized as follows:

                                                        December 31,      
                                                    --------------------
                                                      2006        2005
                                                    --------    --------
                                                       (In Thousands)

Real estate ......................                  $    388    $     59
Less allowance for losses.........                         -           -
                                                    --------    --------
Ending balance....................                  $    388    $     59
                                                    ========    ========


8.  PREMISES AND EQUIPMENT

         Land, office buildings, leasehold improvements, furniture and equipment
and renovations-in-process, at cost, are summarized by major classifications:


                                                        December 31,      
                                                    --------------------
                                                      2006        2005
                                                    --------    --------
                                                       (In Thousands)

Land .............................                   $ 4,440     $ 4,440
Buildings ........................                    12,125      11,052
Leasehold improvements ...........                    18,746      13,094
Furniture and equipment ..........                    25,349      21,917
                                                     -------     -------
                                                      60,660      50,503
Less:
Accumulated depreciation .........                    30,442      27,599
                                                    --------    --------
                                                     $30,218     $22,904
                                                     =======     =======


         The  Corporation   occupies   certain  premises  and  operates  certain
equipment  under  noncancelable  leases with terms  ranging  from 1 to 25 years.
These  leases are  accounted  for as  operating  leases.  Rent  expense was $2.4
million in 2006,  $2.2 million in 2005 and $2.3 million in 2004.  Future minimum
payments under these leases at December 31, 2006 are as follows:


(In Thousands)
2007     .......................................                 $ 3,029
2008     .......................................                   4,158
2009     .......................................                   3,765
2010     .......................................                   3,690
2011     .......................................                   3,537
Thereafter .....................................                  26,712
                                                                 -------
         Total future minimum lease payments ...                 $44,891
                                                                 =======

                                       40


<PAGE>

9.  DEPOSITS

The  following is a summary of deposits by category,  including a summary of the
remaining time to maturity for time deposits:

                                                             December 31,    
                                                       -----------------------
                                                           2006         2005
                                                       ----------   ----------
                                                           (In Thousands)
Money market and demand:
    Noninterest-bearing demand .....................   $  276,338   $  279,415
    Interest-bearing demand ........................      146,719      141,378
    Money market ...................................      246,645      209,398
                                                       ----------   ----------
       Total money market and demand ...............      669,702      630,191
                                                       ----------   ----------

Savings ............................................      226,853      251,675
                                                       ----------   ----------

Customer certificates of deposits, by maturity:
    Less than one year .............................      251,215      152,891
    One year to two years ..........................       54,079       59,269
    Two years to three years .......................       17,217        8,137
    Three years to four years ......................        1,567        2,346
    Over four years ................................        1,931        2,210
                                                       ----------   ----------
       Total customer time certificates ............      326,009      224,853
                                                       ----------   ----------

Jumbo certificates of deposit-customer, by maturity:
    Less than one year .............................       98,636       69,716
    One year to two years ..........................       16,087       15,950
    Two years to three years .......................        6,103        1,292
    Three years to four years ......................            -          100
    Over four years ................................          316          154
                                                       ----------   ----------
      Total jumbo certificates of deposit-customer .      121,142       87,212
                                                       ----------   ----------
Subtotal customer deposits .........................    1,343,706    1,193,931
                                                       ----------   ----------

Other jumbo certificates of deposit, by maturity:
    Less than one year .............................      110,964       36,935
    One year to two years ..........................          152        1,496
    Two years to three years .......................          272            -
    Three years to four years ......................            -          415
    Over four years ................................            -        1,721
                                                       ----------   ----------
       Total other jumbo time certificates .........      111,388       40,567
                                                       ----------   ----------

Brokered deposits less than one year ...............      301,254      211,738
                                                       ----------   ----------

Total deposits .....................................   $1,756,348   $1,446,236
                                                       ==========   ==========

Interest expense by category follows:

                                                     Year Ended December 31, 
                                                   ---------------------------
                                                    2006      2005      2004 
                                                   -------   -------   -------
                                                         (In Thousands)

Interest-bearing demand ......................   $   785   $   297   $   193
Money market .................................     8,090     3,837       665
Savings ......................................     2,237     1,738     1,257
Customer time deposits .......................    15,309     8,098     5,002
                                                 -------   -------   -------
      Total customer interest expense ........    26,421    13,970     7,117
                                                 -------   -------   -------
                                              
Other jumbo certificates of deposit ..........     4,100     1,374       768
Brokered deposits ............................    12,186     6,346     1,510
                                                 -------   -------   -------
                                              
      Total interest expense on deposits......   $42,707   $21,690   $ 9,395
                                                 =======   =======   =======

                                       41


<PAGE>

10.  BORROWED FUNDS

The following is a summary of borrowed funds by type:


<TABLE>
<CAPTION>
                                                                                       Maximum
                                                                                       Amount                     Weighted
                                                                                      Outstanding     Average      Average
                                                                          Weighted     at Month       Amount       Interest
                                                             Balance at    Average       End        Outstanding     Rate
                                                               End of      Interest   During the     During the   During the
                                                               Period       Rate        Period         Period       Period     
                                                               ------       ----        ------         ------       ------     
                                                                         (Dollars in Thousands)
          2006
          ----
<S>                                                       <C>              <C>       <C>             <C>            <C>  
FHLB advances............................................  $   784,028      4.93%     $1,051,458      $976,101       4.64%
Trust preferred borrowings...............................       67,011      7.14          67,011        67,011       7.44
Federal funds purchased and securities
  sold under agreements to repurchase ...................       73,400      5.36          83,150        74,412       5.02
Other borrowed funds ....................................       78,240      4.30          78,240        49,388       3.74

          2005
          ----

FHLB advances............................................   $1,008,721      4.12%     $1,008,721      $887,822       3.41%
Trust preferred borrowings...............................       67,011      6.18          67,011        62,986       8.29
Federal funds purchased and securities
  sold under agreements to repurchase ...................       83,150      4.24         172,135       128,062       1.67
Other borrowed funds ....................................       36,126      3.05          42,037        37,344       1.74
</TABLE>


Federal Home Loan Bank Advances

         Advances from the FHLB of  Pittsburgh  with rates ranging from 2.47% to
5.65% at December 31, 2006 are due as follows:

                                                                       Weighted
                                                                       Average
                                                    Amount              Rate  
                                                    ------            ---------
                                                      (Dollars in Thousands)

       2007...............................         $449,000             4.83%
       2008...............................          174,900             5.32
       2009...............................           87,562             4.80
       2010 - 2013........................           72,566             4.76
                                                   --------
                                                   $784,028
                                                   ========

         Pursuant to collateral  agreements with the FHLB,  advances are secured
by qualifying first mortgage loans,  qualifying  fixed-income  securities,  FHLB
stock and an interest-bearing demand deposit account with the FHLB.

         As a member of the FHLB of Pittsburgh,  WSFS is required to acquire and
hold  shares of capital  stock in the FHLB of  Pittsburgh  in an amount at least
equal to 4.65% of its advances  (borrowings)  from the FHLB of Pittsburgh,  plus
0.65% of the  unused  borrowing  capacity.  WSFS  was in  compliance  with  this
requirement  with a stock  investment  in FHLB of Pittsburgh of $39.9 million at
December 31, 2006.

         Three  advances are  outstanding  at December 31, 2006 totaling  $115.0
million, with a weighted average rate of 5.15% maturing in 2008 and beyond. They
are  convertible  on a  quarterly  basis  (at the  discretion  of the FHLB) to a
variable rate advance based upon the  three-month  LIBOR rate,  after an initial
fixed  term.  If any of these  advances  convert,  WSFS has the option to prepay
these advances at predetermined times or rates.

                                       42


<PAGE>

         Trust Preferred Borrowings

         On April 6, 2005,  the  Corporation  completed  the  issuance  of $67.0
million of aggregate  principal  amount of Pooled  Floating Rate Securities at a
variable  interest rate of 177 basis points over the three-month LIBOR rate. The
proceeds from this issuance were used to fund the redemption of $51.5 million of
Floating Rate Capital Trust I Preferred Securities which had a variable interest
rate of 250 basis points over the three-month LIBOR rate.

         Federal  Funds  Purchased  and  Securities  Sold  Under  Agreements  to
Repurchase

         During 2006,  WSFS  purchased  federal  funds as a  short-term  funding
source.  At December 31, 2006, WSFS had purchased $50.0 million in federal funds
at a rate of 5.38%.  At December 31, 2005,  WSFS had $50.0 million federal funds
purchased.

         During 2006, WSFS sold securities  under  agreements to repurchase as a
short-term  funding  source.  At  December  31,  2006,   securities  sold  under
agreements to repurchase had a fixed rate of 5.32%.  The  underlying  securities
are U.S.  Government  agency  securities  with a book value of $25.0  million at
December 31, 2006.  Securities  sold under  agreements  to  repurchase  with the
corresponding carrying and market values of the underlying securities are due as
follows:


<TABLE>
<CAPTION>
                                                                        Collateral          
                                                         -----------------------------------------------
                               Borrowing                  Carrying          Market            Accrued
                               Amount         Rate         Value             Value           Interest   
                             ----------    ----------    ----------        ----------       ------------
(Dollars in Thousands)
<S>                          <C>             <C>        <C>               <C>              <C>       
2006
----

Up to 30 days................ $  23,400       5.32%      $  24,993         $  24,969        $      215
                              =========                  =========         =========        ==========

2005
----

Up to 30 days................ $  33,150       4.31%      $  34,795         $  34,036        $      299
                              =========                  =========         =========        ==========
</TABLE>



         Other Borrowed Funds

         Included in other borrowed funds are collateralized borrowings of $78.2
 million  and  $36.1  million  at  December  31,  2006 and  2005,  respectively,
 consisting   of   outstanding   retail   repurchase   agreements,   contractual
 arrangements  under which portions of certain  securities are sold overnight to
 retail  customers  under   agreements  to  repurchase.   Such  borrowings  were
 collateralized  by  mortgage-backed  securities.  The  average  rates  on these
 borrowings were 4.30% and 3.05% at December 31, 2006 and 2005, respectively.

 11.  STOCKHOLDERS' EQUITY

         Under Office of Thrift Supervision (OTS) capital  regulations,  savings
 institutions  such as WSFS, must maintain  "tangible"  capital equal to 1.5% of
 adjusted  total assets,  "core" capital equal to 4.0% of adjusted total assets,
 "Tier  1"  capital  equal  to 4.0%  of  risk-weighted  assets  and  "total"  or
 "risk-based" capital (a combination of core and "supplementary"  capital) equal
 to 8.0% of risk-weighted  assets.  Failure to meet minimum capital requirements
 can  initiate  certain  mandatory - and  possibly  additional  discretionary  -
 actions by regulators that, if undertaken,  could have a direct material effect
 on WSFS'  Financial  Statements.  At December  31,  2006 and 2005,  WSFS was in
 compliance   with   regulatory   capital   requirements   and  was   deemed   a
 "well-capitalized" institution.

                                       43


<PAGE>

         The following table presents WSFS' consolidated  capital position as of
December 31, 2006 and 2005:


<TABLE>
<CAPTION>
                                                                                                      To Be Well-Capitalized
                                                         Consolidated            For Capital          Under Prompt Corrective
                                                         Bank Capital         Adequacy Purposes          Action Provisions  
                                                     Amount     Percent       Amount     Percent        Amount      Percent  
                                                     ------     -------       ------     -------        ------      -------
                                                                             (Dollars in Thousands)
<S>                                              <C>           <C>        <C>            <C>        <C>             <C>   
 As of December 31, 2006:
   Total Capital (to risk-weighted assets).....   $ 302,805     13.54%     $ 178,857      8.00%      $ 223,571       10.00%
   Core Capital (to adjusted tangible assets)..     277,593      9.25        120,084      4.00         150,105        5.00 
   Tangible Capital (to tangible assets).......     277,593      9.25         45,032      1.50             N/A         N/A
   Tier 1 Capital (to risk-weighted assets)....     277,593     12.42         89,429      4.00         134,143        6.00

 As of December 31, 2005:
   Total Capital (to risk-weighted assets).....   $ 265,269     13.38%     $ 158,620      8.00%      $ 198,274       10.00%
   Core Capital (to adjusted tangible assets)..     244,164      8.56        114,097      4.00         142,622        5.00
   Tangible Capital (to tangible assets).......     244,164      8.56         42,786      1.50             N/A         N/A
   Tier 1 Capital (to risk-weighted assets)....     244,164     12.31         79,310      4.00         118,965        6.00
</TABLE>



         The Corporation has a simple capital  structure with one class of $0.01
par common  stock  outstanding,  each  share  having  equal  voting  rights.  In
addition, the Corporation has authorized 7,500,000 shares of $0.01 par preferred
stock.  No preferred  stock was  outstanding at December 31, 2006 and 2005. When
infused into the Bank, the Trust Preferred  Securities issued in 2005 qualify as
Tier 1 capital.  WSFS is prohibited from paying any dividend or making any other
capital   distribution  if,  after  making  the  distribution,   WSFS  would  be
ndercapitalized   within  the  meaning  of  the  OTS  Prompt  Corrective  Action
regulations.  Since 1996,  the Board of  Directors  has approved  several  stock
repurchase  programs to reacquire common shares. As part of these programs,  the
Corporation acquired  approximately  103,400 shares in 2006 for $6.6 million and
719,500 shares in 2005 for $40.2 million.

         The Holding Company

         In April 2005, WSFS Capital Trust III, an  unconsolidated  affiliate of
WSFS  Financial  Corporation,  issued $67.0  million of  aggregate  principle of
Pooled Floating Rate Securities at a variable  interest rate of 177 basis points
over the  three-month  LIBOR rate.  The proceeds were used to refinance the WSFS
Capital  Trust I November  1998  issuance  of $51.5  million of Trust  Preferred
Securities  which had a variable  rate of 250 basis points over the  three-month
LIBOR  rate.  At December  31,  2006,  the coupon rate of the Capital  Trust III
securities was 7.14% with a scheduled  maturity of June 1, 2035. The Corporation
purchased an interest rate cap that economically limits the three-month LIBOR to
6.00% on $50.0 million of the $67.0 million of securities  until  December 2008.
The effective rate of these securities,  including the cost of the cap was 7.44%
at December 31, 2006. The effective rate will vary, however, due to fluctuations
in interest  rates and changes in the fair value of the cap. The  proceeds  from
the  issue  were  invested  in  Junior  Subordinated  Debentures  issued by WSFS
Financial  Corporation.  These  securities  are treated as  borrowings  with the
interest  included  in  interest  expense  on  the  Consolidated   Statement  of
Operations. Additional information concerning the Trust Preferred Securities and
the  interest  rate  cap is  included  in  Notes  11  and  20 to  the  Financial
Statements.  The proceeds were used primarily to extinguish higher rate debt and
for general corporate purposes.

         Pursuant to federal laws and  regulations,  WSFS'  ability to engage in
transactions with affiliated corporations is limited, and WSFS generally may not
lend funds to nor guarantee indebtedness of the Corporation.

                                       44


<PAGE>

12.  ASSOCIATE (EMPLOYEE) BENEFIT PLANS

Associate 401(k) Savings Plan

         Certain  subsidiaries of the  Corporation  maintain a qualified plan in
which Associates may participate. Participants in the plan may elect to direct a
portion of their wages into  investment  accounts  that  include  professionally
managed  mutual  and money  market  funds and the  Corporation's  common  stock.
Generally,  the principal and earnings thereon are tax deferred until withdrawn.
The Company matches a portion of the Associates'  contributions and periodically
makes discretionary contributions based on Company performance into the plan for
the benefit of Associates.  The  Corporation's  total cash  contributions to the
plan on behalf of its Associates resulted in a cash expenditure of $1.6 million,
$1.4 million and $1.6 million for 2006, 2005 and 2004, respectively.

         All  Company  contributions  are made in the form of the  Corporation's
common stock that Associates may transfer to various other  investment  vehicles
without any  significant  restrictions.  The plan purchased  13,000,  36,000 and
46,000  shares of common stock of the  Corporation  during 2006,  2005 and 2004,
respectively.

         Postretirement Benefits

         The  Corporation  shares  certain  costs of  providing  health and life
insurance  benefits  to  retired  Associates  (and their  eligible  dependents).
Substantially  all  Associates  may become  eligible for these  benefits if they
reach normal retirement age while working for the Corporation.

         The Corporation  accounts for its  obligations  under the provisions of
SFAS No. 106,  Employers'  Accounting  for  Postretirement  Benefits  Other Than
Pensions  (SFAS  106).  SFAS 106  requires  that the costs of these  benefits be
recognized  over  an  Associate's   active  working   career.   Amortization  of
unrecognized net gains or losses  resulting from experience  different from that
assumed and from  changes in  assumptions  is  included  as a  component  of net
periodic  benefit cost over the remaining  service period of active employees to
the  extent  that  such  gains  and  losses   exceed  10%  of  the   accumulated
postretirement benefit obligation,  as of the beginning of the year. Disclosures
for 2006 are in accordance with SFAS No. 158, Employers'  Accounting for Defined
Benefit Pension and Other Postretirement Plans (SFAS 158), while disclosures for
previous  years  are in  accordance  with  SFAS No.  132  (Revised),  Employers'
Disclosure About Pensions and Other Postretirement Benefits.

         On December 31,  2006,  the  Corporation  adopted the  recognition  and
disclosure  provisions  of SFAS  158.  SFAS  158  requires  the  Corporation  to
recognize the funded status of its defined  benefit  postretirement  plan in its
statement of financial position, with a corresponding  adjustment to accumulated
other  comprehensive  income,  net of tax. The adjustment to  accumulated  other
comprehensive  income at  adoption  represents  the net  unrecognized  actuarial
losses  and  unrecognized  transition  obligation  remaining  from  the  initial
adoption of SFAS No. 87,  Employers'  Accounting  for Pensions (SFAS 87), all of
which  were   previously   netted  against  the  plan's  funded  status  in  the
Corporation's statement of financial position pursuant to the provisions of SFAS
87. These amounts will be subsequently  recognized as net periodic pension costs
pursuant to the Corporation's  historical  accounting policy for amortizing such
amounts.  Further,  actuarial gains and losses that arise in subsequent  periods
and are not recognized as net periodic  pension cost in the same periods will be
recognized as a component of other comprehensive  income.  Those amounts will be
subsequently  recognized as a component of net periodic pension cost on the same
basis as the amounts  recognized in accumulated  other  comprehensive  income at
adoption of SFAS 158.

         The  incremental  effect of adopting  the  recognition  and  disclosure
provisions of SFAS 158 on the Corporation's  Consolidated Statement of Condition
at December  31, 2006 was a $905,000  (pretax)  decrease in other  comprehensive
income.  This  included a net  actuarial  loss of $537,000 and a net  transition
obligation  of  $368,000.  Also related to the adoption of SFAS 158, the Company
recorded a deferred  tax asset of  $344,000  and a  corresponding  liability  of
$905,000.  During  2007,  the Company  expects to  recognize  $19,000 in expense
relating to the  amortization  of the net actuarial  loss and $61,000 in expense
relating to the amortization of the net transition obligation.

         In  December  2003,   President  Bush  signed  into  law  the  Medicare
Prescription  Drug,  Improvement and Modernization Act of 2003 (the "Act").  The
Act expanded Medicare to include,  for the first time, coverage for prescription
drugs.

         In May 2004, the FASB issued accounting  guidance applicable to the Act
in the form of FASB Staff Position (FSP) 106-2.  The guidance  states,  in part,
that it applies only to a health care plan for which the employer has  concluded
that  prescription  drug  benefits  available  under  the  plan  to  some or all
participants  for some or all  future  years  are  "actuarially  equivalent"  to
Medicare Part D and thus qualify for subsidy under the Act.

                                       45


<PAGE>

The following  disclosures relating to postretirement  benefits were measured at
December 31, 2006:


<TABLE>
<CAPTION>
                                                                                      2006        2005        2004
                                                                                    -------     -------     -------
                                                                                        (Dollars in Thousands)
<S>                                                                                <C>         <C>         <C>    
Change in benefit obligation:
Benefit obligation at beginning of year .........................................   $ 2,287     $ 2,086     $ 2,083
Service cost ....................................................................       108         106          97
Interest cost ...................................................................        93         122         122
Actuarial (gain)/loss ...........................................................      (110)        200         (81)
Benefits paid ...................................................................      (145)       (227)       (135)
                                                                                    -------     -------     -------
      Benefit obligation at end of year .........................................   $ 2,233     $ 2,287     $ 2,086
                                                                                    =======     =======     =======

Change in plan assets:
Fair value of plan assets at beginning of year ..................................   $     -     $     -     $     -
Employer contributions ..........................................................       145         227         135
Benefits paid ...................................................................      (145)       (227)       (135)
                                                                                    -------     -------     -------
      Fair value of plan assets at end of year ..................................   $     -     $     -     $     -   
                                                                                    =======     =======     =======

Funded status:
Funded status ...................................................................   $(2,233)    $(2,287)    $(2,086)
Unrecognized transition obligation ..............................................         -         429         491
Unrecognized net loss ...........................................................         -         647         461
Recognized net loss .............................................................       905           -           -
                                                                                    -------     -------     -------
      Net amount recognized .....................................................   $(1,328)    $(1,211)    $(1,134)
                                                                                    =======     =======     ======= 

Components of net periodic benefit cost:
Service cost ....................................................................   $   108     $   106     $    97
Interest cost ...................................................................        93         122         122
Amortization of transition obligation ...........................................        61          61          61
Net loss recognition ............................................................         -          15          21
                                                                                    -------     -------     -------
      Net periodic benefit cost .................................................   $   262     $   304     $   301
                                                                                    =======     =======     =======

Assumptions used to determine net periodic benefit cost:
       Discount rate ............................................................      5.50%       6.00%       6.00%
       Health care cost trend rate ..............................................      5.00%       5.50%       5.50%

Sensitivity analysis of health care cost trends:
Effect of +1% on service cost plus interest cost................................    $    (8)    $     3     $     3
Effect of -1% on service cost plus interest cost ................................         7          (1)         (1)
Effect of +1% on APBO ...........................................................       (76)         18          18
Effect of -1% on APBO ...........................................................        66          (9)        (10)

Assumptions used to value the Accumulated Postretirement Benefit
  Obligation (APBO):
       Discount rate ............................................................      5.75%       5.50%       6.00%
       Health care cost trend rate ..............................................      5.00%       5.50%       5.50%
       Ultimate trend rate ......................................................      5.00%       5.00%       5.00%
       Year of ultimate trend rate ..............................................      2005        2005        2005

Estimated future benefit payments:
The following table shows the expected future payments for the next ten years:
During 2007 .....................................................................   $   109
During 2008 .....................................................................       108
During 2009 .....................................................................       109
During 2010 .....................................................................       109
During 2011 .....................................................................       110
During 2012 through 2016 ........................................................       672
                                                                                    -------
                                                                                    $ 1,217
                                                                                    =======
</TABLE>


                                       46


<PAGE>

         The  Corporation  assumes that the average  annual rate of increase for
medical benefits will remain flat and stabilize at an average increase of 5% per
annum.  The costs  incurred for retirees'  health care are limited since certain
current and all future  retirees are restricted to an annual medical premium cap
indexed  (since  1995) by the  lesser of 4% or the  actual  increase  in medical
premiums paid by the Corporation.  For 2006, this annual premium cap amounted to
$2,219  per  retiree.   The  Corporation   estimates  that  it  will  contribute
approximately $109,000 to the plan during fiscal 2007.

     Supplemental Pension Plan

         The Corporation  provided a nonqualified  plan that gives credit for 25
years of service  based on the qualified  plan  formula.  This plan is currently
being  provided to two retired  executives  of the  Corporation.  The plan is no
longer being provided to Associates of the  Corporation.  Unrecognized net gains
or losses resulting from experience different from that assumed and from changes
in assumptions is recognized  immediately as a component of net periodic benefit
cost.

The  following  disclosures  relating  to the  supplemental  pension  plan  were
measured at December 31, 2006:


<TABLE>
<CAPTION>

                                                            2006      2005      2004
                                                            ----      ----      ----
                                                              (Dollars in Thousands)
<S>                                                       <C>       <C>       <C>  
Change in benefit obligation:
Benefit obligation at beginning of year ................   $ 777     $ 760     $ 784
Service cost ...........................................       -         -         -
Interest cost ..........................................      40        43        45
Actuarial loss .........................................       4        58        15
Benefits paid ..........................................     (84)      (84)      (84)
                                                           -----     -----     -----
      Benefit obligation at end of year ................   $ 737     $ 777     $ 760
                                                           =====     =====     =====

Change in plan assets:
Fair value of plan assets at beginning of year .........   $   -     $   -     $   -
Employer contributions .................................      84        84        84
Benefits paid ..........................................     (84)      (84)      (84)
                                                           -----     -----     -----
      Fair value of plan assets at end of year .........   $   -     $   -     $   -
                                                           =====     =====     =====

Funded status:
Funded status ..........................................   $(737)    $(777)    $(760)
Unrecognized net loss ..................................       -         -         -
                                                           -----     -----     -----
      Net amount recognized ............................   $(737)    $(777)    $(760)
                                                           =====     =====     =====

Components of net periodic benefit cost:
Service cost ...........................................   $   -     $   -     $   -
Interest cost ..........................................      40        43        45
Amortization of transition obligation ..................       -         -         -
Net loss recognition ...................................       4        58        15
                                                           -----     -----     -----
      Net periodic benefit cost ........................   $  44     $ 101     $  60
                                                           =====     =====     =====

Assumptions used to determine net periodic benefit cost:
       Discount rate ...................................    5.50%    6.00%     6.00%

Assumptions used to value the Supplemental Pension Plan
  Obligation:
       Discount rate ...................................    5.75%    5.50%     6.00%

</TABLE>


                                       47


<PAGE>

Estimated future supplemental pension plan payments:

The following table shows the expected future payments for the next ten years:

During 2007....................................................... $ 84
During 2008.......................................................   84
During 2009.......................................................   84
During 2010.......................................................   83
During 2011.......................................................   83
During 2012 through 2016..........................................  418
                                                                   ----
                                                                   $836
                                                                   ====

         The Corporation estimates that it will contribute approximately $84,000
to the plan during fiscal 2007.

         The  Corporation has two additional  plans.  They are a Director's Plan
with a corresponding  liability of $143,000 and an Early Retirement  Window Plan
with a corresponding liability of $569,000.

13.  TAXES ON INCOME

         The Corporation and its subsidiaries file a consolidated federal income
tax return and  separate  state  income tax  returns.  The income tax  provision
consists of the following:


<TABLE>
<CAPTION>
                                                                                Year Ended December 31,      
                                                                     ----------------------------------------
                                                                        2006           2005           2004
                                                                        ----           ----           ----
                                                                                 (In Thousands)
<S>                                                                <C>             <C>             <C>    
From continuing operations:
Current income taxes:
     Federal taxes ..............................................    $14,662         $11,118         $12,175
     State and local taxes.......................................      2,278           2,197           1,993
  Deferred income taxes:
     Federal taxes ..............................................    (1,336)           1,445             (22)
     State and local taxes ......................................         56              87            (195)
                                                                     -------        --------        --------
           Subtotal .............................................     15,660          14,847         13,951
                                                                     -------        --------        --------

From discontinued operations and businesses held-for-sale: 
Current income taxes:
     Federal taxes...............................................          -               -             112
     State and local taxes.......................................          -               -              65
                                                                     -------        --------        --------
           Subtotal .............................................          -               -             177
                                                                     -------        --------        --------

           Total ................................................    $15,660        $ 14,847        $ 14,128
                                                                     =======        ========        ========
</TABLE>


         Current  federal  income taxes  include  taxes on income that cannot be
offset by net operating loss carryforwards.

                                       48


<PAGE>

         Deferred  income  taxes  reflect  the  net  tax  effects  of  temporary
differences between the carrying amounts of assets and liabilities for financial
reporting  purposes and the amounts used for income tax purposes.  The following
is a summary of the  significant  components of the  Corporation's  deferred tax
assets and liabilities as of December 31, 2006 and 2005:

                                                            2006        2005 
                                                          --------    --------
                                                             (In Thousands)

Deferred tax liabilities:
     Accelerated depreciation .........................   $   (488)   $   (856)
     Other ............................................       (110)       (310)
     Prepaid expenses .................................     (1,490)     (1,109)
     Deferred loan costs ..............................     (2,005)     (1,866)
                                                          --------    --------
Total deferred tax liabilities ........................     (4,093)     (4,141)
                                                          --------    --------

Deferred tax assets:
     Bad debt deductions ..............................      9,585       8,849
     Tax credit carryforwards .........................        150         150
     Net operating loss carryforwards .................      3,406       3,911
     Capital loss carryforwards .......................        679           -
     Loan fees ........................................         14          28
     Reserves and other ...............................      2,033       1,748
     Unrealized losses on available-for-sale securities      5,255       6,088
                                                          --------    --------
Total deferred tax assets .............................     21,122      20,774
                                                          --------    --------

Valuation allowance ...................................     (2,651)     (2,702)
                                                          --------    --------
Net deferred tax asset ................................   $ 14,378    $ 13,931
                                                          ========    ========

         Included  in  the  table  above  is the  effect  of  certain  temporary
differences  for which no deferred tax expense or benefit was  recognized.  Such
items consisted  primarily of unrealized gains and losses on certain investments
in debt and equity securities accounted for under SFAS 115.

         Based  on  the   Corporation's   history  of  prior  earnings  and  its
expectations  of the future,  it is anticipated  that  operating  income and the
reversal  pattern of its temporary  differences  will,  more likely than not, be
sufficient  to realize a net deferred tax asset of $14.4 million at December 31,
2006.  Adjustments  to  decrease  gross  deferred  tax  assets  and the  related
valuation  allowance in the amount of $51,000 and $110,000 were made in 2006 and
2005, respectively, to reflect state tax net operating losses that have expired.
An adjustment to the  valuation  allowance was made in 2004 to reflect  benefits
previously recognized for state tax net operating losses that are not realizable
due to changes in state tax law enacted in 2004,  along with further  unrealized
benefits related to the discontinuance of the leasing company.

         At December 31, 2006,  approximately $2.9 million in gross deferred tax
assets of the Corporation  were related to net operating  losses and tax credits
attributable  to a former  subsidiary.  The Corporation has assessed a valuation
allowance  of $2.0  million  on a portion  of these  deferred  tax assets due to
limitations imposed by the Internal Revenue Code.

         Approximately  $693,000 in gross deferred tax assets of the Corporation
at December 31, 2006 are related to state tax net operating losses.  The Company
has assessed a valuation allowance of $693,000 on this entire deferred tax asset
due to an  expectation  of such  net  operating  losses  expiring  before  being
utilized.

         The  Corporation  has $1.9 million of capital loss  carryforwards  that
will expire on December 31, 2011.  Net operating  loss  carryforwards  (NOLs) of
$19.5 million remain at December 31, 2006.  The expiration  dates and amounts of
such NOL carryforwards are listed below:

                                               Federal            State  
                                               -------            -----  
                                                     (In Thousands)

2007....................................      $     -            $ 7,980
2008....................................          997                  -
2009....................................        6,755                  -
2018....................................            -              3,732
                                              -------            -------
                                              $ 7,752            $11,712
                                              =======            =======


                                       49


<PAGE>

         The  Corporation's  ability to use its  federal  NOLs to offset  future
income is subject to restrictions enacted in Section 382 of the Internal Revenue
Code.  These  restrictions  limit a  company's  future use of NOLs if there is a
significant  ownership change in a company's stock (an "Ownership Change").  The
utilization  of  approximately  $7.8  million  of  federal  net  operating  loss
carryforwards is limited to approximately  $1.3 million each year as a result of
such  Ownership  Change in a former  subsidiary's  stock.  The  Corporation  has
assessed a valuation  allowance of $2.0  million on a portion of these  deferred
tax assets due to limitations imposed by the Internal Revenue Code.

         A  reconciliation  setting forth the differences  between the effective
tax  rate of the  Corporation  and the  U.S.  Federal  statutory  tax rate is as
follows:


<TABLE>
<CAPTION>
                                                                   Year Ended December 31,       
                                                            -------------------------------------
                                                             2006             2005         2004
                                                             ----             ----         ----
<S>                                                         <C>              <C>          <C>  
Statutory federal income tax rate ......................     35.0%            35.0%        35.0%
State tax net of federal tax benefit....................      3.2              3.2          3.0
Interest income 50% excludable..........................     (1.6)            (1.7)        (1.9)
Bank-owned life insurance income........................     (3.0)            (1.6)        (1.9)
Utilization of loss carryforwards and
       valuation allowance adjustments..................        -                -          1.1
Incentive stock option compensation.....................      0.6                -            -
Other...................................................     (0.2)            (0.1)           - 
                                                          -------          -------     ---------
Effective tax rate .....................................     34.0%            34.8%       35.3 %
                                                           ======           ======      =======
</TABLE>


                                       50


<PAGE>

14.  STOCK-BASED COMPENSATION

         In December  2004,  the  Financial  Accounting  Standards  Board (FASB)
issued SFAS No. 123 (revised 2004),  Share-Based  Payment (SFAS 123R). SFAS 123R
requires all  share-based  payments to employees,  including  grants of employee
stock  options,  to be recognized as  compensation  expense in the  consolidated
financial statements based on their fair values. That expense will be recognized
over the period  during which an  Associate  is required to provide  services in
exchange  for the award,  known as the  requisite  service  period  (usually the
vesting  period).  The Corporation  adopted SFAS 123R beginning  January 1, 2006
using the  Modified  Prospective  Application  Method.  This  method  relates to
current  and  future  periods  and does not  require  the  restatement  of prior
periods.

         The  Corporation  has  stock  options   outstanding   under  two  plans
(collectively,  "Stock Incentive Plans") for officers,  directors and Associates
of the Corporation and its subsidiaries. After shareholder approval in 2005, the
1997 Stock  Option Plan ("1997  Plan") was replaced by the 2005  Incentive  Plan
("2005  Plan").  No future awards may be granted  under the 1997 Plan.  The 2005
Plan will terminate on the tenth  anniversary of its effective date, after which
no awards may be granted.  The number of shares  reserved for issuance under the
2005 Plan is 400,000.  At December 31, 2006,  there were 70,212 shares available
for future grants under the 2005 Plan.

         The Stock  Incentive  Plans provide for the granting of incentive stock
options  as  defined  in Section  422 of the  Internal  Revenue  Code as well as
nonincentive stock options (collectively,  "Stock Options").  Additionally,  the
2005 Plan provides for the granting of stock  appreciation  rights,  performance
awards, restricted stock and restricted stock unit awards, deferred stock units,
dividend  equivalents,  other  stock-based  awards  and cash  awards.  All Stock
Options are to be granted at not less than the market price of the Corporation's
common stock on the date of the grant.  All Stock  Options  granted  during 2006
vest in 20% or 25% per annum  increments,  start to become  exercisable one year
from the grant date and expire  between  five and ten years from the grant date.
Generally, all awards become immediately exercisable in the event of a change in
control, as defined within the Stock Incentive Plans.

         A  summary  of the  status  of the  Corporation's  Option  Plans  as of
December 31,  2006,  2005 and 2004,  and changes  during the years then ended is
presented below:



<TABLE>
<CAPTION>
                                              2006                         2005                          2004
                                    --------------------------    --------------------------   ----------------------------
                                                   Weighted-                    Weighted-                     Weighted-
                                                   Average                       Average                       Average
                                      Shares    Exercise Price       Shares   Exercise Price     Shares     Exercise Price
                                      ------    --------------       ------   --------------     ------     --------------
<S>                                 <C>           <C>              <C>          <C>             <C>          <C>    
Stock Options:
Outstanding at beginning of year     739,404       $  31.88         866,845      $ 23.66         938,264      $ 19.49
Granted                              106,905          64.93         109,817        62.71          80,980        59.50
Exercised                           (143,346)         19.01        (226,963)       15.05        (131,849)       15.51
Canceled                              (2,536)         46.19         (10,295)       38.98         (20,550)       26.92
                                   ---------                      ---------                    ---------
Outstanding at end of year           700,427          39.50         739,404        31.88         866,845        23.66

Exercisable at end of year           414,973          26.84         434,144        20.51         499,496        16.90

Weighted-average fair value
 of awards granted                 $   13.52                      $   13.67                    $   13.90
</TABLE>



         Beginning January 1, 2006,  434,144 stock options were exercisable with
an intrinsic value of $20.2 million. In addition,  at January 1, 2006 there were
305,260  nonvested  options  with a grant date fair value of $11.28.  During the
year ended December 31, 2006,  124,635 options vested with an intrinsic value of
$3.4 million, and a grant date fair value of $9.87 per option. Also during 2006,
143,346  options were  exercised  with an intrinsic  value of $6.2  million.  In
addition,  460 vested options were  forfeited with an intrinsic  value of $3,000
and a grant date fair value of $14.75,  while 2,536  options  were  forfeited in
total with a grant date fair value of  $11.17.  There were  414,973  exercisable
options remaining at December 31, 2006, with an intrinsic value of $16.6 million
and a remaining  contractual  term of 4.8 years. At December 31, 2006 there were
700,427 stock options outstanding with an intrinsic value of $19.2 million and a
remaining  contractual  term of 5.2 years and 285,454  nonvested  options with a
grant date fair value of $12.74.  During 2005,  226,963  options were  exercised
with an intrinsic value of $10.0 million and 162,323 options vested with a grant
date fair value of $7.05 per option.

                                       51


<PAGE>

         The total  amount of  compensation  cost  related  to  nonvested  stock
options as of December 31, 2006 was $2.2 million.  The  weighted-average  period
over which it is expected to be recognized is 1.5 years. The Corporation  issues
new shares upon the exercise of options.

         During 2006, the  Corporation  granted 103,885 options with a five-year
life and a four-year vesting period. The Black-Scholes  option-pricing model was
used to  determine  the grant  date  fair  value of these  options.  Significant
assumptions  used in the model  included a  weighted-average  risk-free  rate of
return of between  4.6% and 4.8% in 2006;  an expected  option life of three and
three-quarter years; and an expected stock price volatility of between 18.2% and
22.1% in 2006. For the purposes of this  option-pricing  model, a dividend yield
of between 0.4% and 0.5% was used as the expected dividend yield.

         Also during 2006, the Corporation granted 3,020 options with a ten-year
life and a five-year vesting period. The Black-Scholes  option-pricing model was
used to  determine  the grant  date  fair  value of these  options.  Significant
assumptions  used in the model  included a  weighted-average  risk-free  rate of
return of between  4.7% and 5.2% in 2006;  an  expected  option  life of six and
one-half  years;  and an expected  stock price  volatility  of between 21.8% and
22.3% in 2006. For the purposes of this  option-pricing  model, a dividend yield
of between 0.4% and 0.5% was used as the expected dividend yield.

         Prior to adoption of SFAS 123R, the Corporation  used a  graded-vesting
schedule to calculate the expense  related to stock options.  Since the adoption
of SFAS 123R, the Corporation now uses a straight-line schedule to calculate the
expense related to new stock options issued.

         The Black-Scholes and other  option-pricing  models assume that options
are freely tradable and immediately vested.  Since options are not transferable,
have vesting provisions,  and are subject to trading blackout periods imposed by
the Company,  the value calculated by the Black-Scholes  model may significantly
overstate the true economic value of the options.

         The impact of adopting  SFAS 123R for the year ended  December 31, 2006
was  $1.5  million,  or  $0.19  per  share,  to  salaries,  benefits  and  other
compensation.  This included  $233,000,  or $0.03 per share,  from the immediate
expensing of options granted to retirement-eligible Associates during the fourth
quarter of 2006,  as required by SFAS 123R.  Prior to the adoption of SFAS 123R,
the Company applied Accounting Principles Board (APB) Opinion 25, Accounting for
Stock Issued to Employees,  and related  interpretations  in accounting  for the
Stock Incentive Plans and to provide the required pro forma  disclosures of SFAS
No.123  Accounting for Stock-Based  Compensation  (SFAS 123). Had the grant date
fair value  provisions  of SFAS 123 been  adopted,  the  Corporation  would have
recognized pretax  compensation  expense of $1.2 million in 2005 and $907,000 in
2004, respectively, related to its Stock Incentive Plans.

         The  following  table  summarizes  all stock  options  outstanding  and
exercisable  for Option  Plans as of December  31,  2006,  segmented by range of
exercise prices:


<TABLE>
<CAPTION>
                                              Outstanding                         Exercisable     
                                --------------------------------------------- ----------------------
                                               Weighted-       Weighted-                  Weighted-
                                               Average          Average                    Average
                                               Exercise        Remaining                  Exercise
                                  Number       Price       Contractual Life     Number      Price             
                                  ------     -----------   ----------------     ------  ------------
  Stock Options:
<S>                            <C>         <C>                <C>            <C>      <C>    
$ 6.52-$13.04                      83,377      $ 10.92            3.8 years      83,377   $ 10.92
$13.05-$19.56                     177,633        16.46            4.2 years     172,633     16.44
$19.57-$26.08                           -            -              - years           -         -
$26.09-$32.60                       1,600        31.60            6.2 years           -         -
$32.61-$39.12                      75,400        33.40            5.8 years      56,295     33.40
$39.13-$45.64                      70,935        43.71            6.7 years      41,397     43.71
$45.65-$52.16                       4,670        48.54            7.5 years       1,868     48.54
$52.17-$58.68                      12,357        55.05            7.7 years       3,391     54.63
$58.69-$65.20                     274,455        62.89            5.6 years      56,012     61.10
                                  -------                                       -------

Total                             700,427       $39.50            5.2 years     414,973    $26.84
                                  =======                                       =======
</TABLE>


         During  2006,  2005 and 2004 the Company  issued  15,269,  30 and 6,515
shares, respectively, of restricted stock. These awards vest over five years: 0%
in the first two years, 25% in each of the third and fourth years and 50% in the
fifth year.

                                       52


<PAGE>

15.  COMMITMENTS AND CONTINGENCIES

         Lending Operations

         At December 31, 2006, the  Corporation had commitments to extend credit
of $532.8 million. Consumer lines of credit totaled $46.3 million of which $35.5
million was  secured by real  estate.  Outstanding  letters of credit were $40.6
million and outstanding commitments to make or acquire mortgage loans aggregated
$12.3 million.  Approximately  $8.4 million of these  mortgage loan  commitments
were at fixed rates ranging from 5.25% to 7.13%, and approximately  $3.9 million
were at  variable  rates  ranging  from  5.00% to  6.63%.  Mortgage  commitments
generally have closing dates within a six-month period.

         Data Processing Operations

         The  Company  has  entered   into   contracts  to  manage  its  network
operations, data processing and other related services. The projected amounts of
future minimum payments contractually due (in thousands) are as follows:

                  2007.........................................   $3,417
                  2008.........................................    2,730
                  2009.........................................    2,421
                  2010.........................................      655

         Legal Proceedings

         In the ordinary course of business,  the Corporation,  the Bank and its
subsidiaries  are subject to legal  actions  that  involve  claims for  monetary
relief.  Based upon information  presently  available to the Corporation and its
counsel,  it  is  the  Corporation's   opinion  that  any  legal  and  financial
responsibility  arising from such claims will not have a material adverse effect
on the Corporation's results of operations.

         The Bank, as successor to originators, is from time to time involved in
arbitration or litigation with reverse mortgage loan borrowers or with the heirs
of  borrowers.  Because  reverse  mortgages  are a  relatively  new and uncommon
product,  there can be no assurances regarding how the courts or arbitrators may
apply existing legal  principles to the  interpretation  and  enforcement of the
terms and conditions of the Bank's reverse mortgage rights and obligations.

         Financial Instruments With Off-Balance Sheet Risk

         The Corporation is a party to financial  instruments  with  off-balance
sheet risk in the normal  course of  business  primarily  to meet the  financing
needs of its customers.  To varying degrees, these financial instruments involve
elements of credit risk that are not recognized in the Consolidated Statement of
Condition.

         Exposure to loss for  commitments to extend credit and standby  letters
of credit written is represented by the contractual amount of those instruments.
The  Corporation   generally  requires  collateral  to  support  such  financial
instruments  in  excess  of the  contractual  amount  of those  instruments  and
essentially  uses the same credit policies in making  commitments as it does for
on-balance sheet instruments.

                                       53


<PAGE>

     The  following   represents  a  summary  of  off-balance   sheet  financial
instruments at year-end:


<TABLE>
<CAPTION>
                                                                          December 31,           
                                                                   --------------------------    
                                                                     2006             2005  
                                                                     ----             ------
                                                                        (In Thousands)
<S>                                                                <C>           <C>     
Financial  instruments  with contract  amounts which
  represent  potential credit risk:
       Construction loan commitments .............................   $127,858      $104,000
       Commercial mortgage loan commitments ......................     96,618        93,966
       Commercial loan commitments ...............................    209,125       176,344
       Commercial standby letters of credit ......................     40,594        26,720
       Residential mortgage loan commitments .....................     12,320        37,692
       Consumer loan commitments .................................     46,315        64,676
</TABLE>


         Commitments  to extend  credit are  agreements to lend to a customer as
long as there is no  violation of any  condition  established  in the  contract.
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.  Standby letters of credit are
conditional  commitments  issued to guarantee the performance of a customer to a
third party.  The  Corporation  evaluates each customer's  creditworthiness  and
obtains collateral based on management's credit evaluation of the counterparty.

         Indemnifications

         Secondary Market Loan Sales. The Company  generally does not sell loans
with  recourse  except to the extent  arising from  standard  loan sale contract
provisions  covering  violations of  representations  and warranties  and, under
certain circumstances first payment default by the borrower. These are customary
repurchase  provisions  in the  secondary  market for  conforming  mortgage loan
sales. The Company typically sells  fixed-rate,  conforming first mortgage loans
to Freddie Mac as part of its ongoing asset/liability  management program. Loans
held-for-sale  are carried at the lower of cost or market of the aggregate or in
some cases individual  loans.  Gains and losses on sales of loans are recognized
at the time of the sale.

          As is customary in such sales, WSFS provides  indemnifications  to the
 buyers under  certain  circumstances.  These  indemnifications  may include the
 repurchase of loans by WSFS.  Repurchases and losses are rare, and no provision
 is made for  losses  at the time of  sale.  During  2006,  the  Company  had no
 repurchases.

          Swap  Guarantees.   The  Company  entered  into  agreements  with  two
 unaffiliated   financial  institutions  whereby  those  financial  institutions
 entered  into  interest  rate   derivative   contracts   (interest   rate  swap
 transactions) with customers  referred to them by the Company.  By the terms of
 the agreements,  those financial  institutions have recourse to the Company for
 any  exposure  created  under each swap  transaction  in the event the customer
 defaults on the swap agreement and the agreement is in a paying position to the
 third-party financial institution.  This is a customary arrangement that allows
 smaller financial  institutions such as WSFS to provide access to interest rate
 swap transactions for its customers without WSFS creating the swap itself.

          At  December  31,  2006,   there  were  twenty-two   variable-rate  to
 fixed-rate swap transactions between the third-party  financial institution and
 customers of WSFS with an initial  notional  amount  aggregating  approximately
 $77.4 million, and with maturities ranging from six months to eleven years. The
 aggregate  market  value of these swaps to the  customers  was a  liability  of
 $291,000  as  of  December  31,  2006,   and  includes  $1.0  million  of  swap
 transactions in a paying position to third-party financial institutions.


16.  FAIR VALUE OF FINANCIAL INSTRUMENTS

         The  reported  fair  values  of  financial  instruments  are based on a
variety of factors. In certain cases, fair values represent quoted market prices
for identical or comparable  instruments.  In other cases, fair values have been
estimated  based on  assumptions  regarding  the amount and timing of  estimated
future  cash  flows that are  discounted  to reflect  current  market  rates and
varying degrees of risk.  Accordingly,  the fair values may not represent actual
values of the financial instruments that could have been realized as of year-end
or that will be realized in the future.

                                       54


<PAGE>

         The following  methods and  assumptions  were used to estimate the fair
value of each class of  financial  instruments  for which it is  practicable  to
estimate that value:

         Cash and Short-Term  Investments:  For cash and short-term investments,
including  due from  banks,  federal  funds  sold,  securities  purchased  under
agreements  to resell  and  interest-bearing  deposits  with  other  banks,  the
carrying amount is a reasonable estimate of fair value.

         Investments and Mortgage-Backed  Securities:  Fair value for investment
and  mortgage-backed   securities  is  based  on  quoted  market  prices,  where
available.  If a quoted market price is not  available,  fair value is estimated
using quoted prices for similar securities.  The fair value of the Corporation's
investment  in reverse  mortgages is based on the net present value of estimated
cash flows, which have been updated to reflect recent external appraisals of the
underlying collateral.

         Loans:  Fair values are estimated for  portfolios of loans with similar
financial characteristics.  Loans are segregated by type: commercial, commercial
mortgages,  construction,  residential  mortgages and  consumer.  For loans that
reprice  frequently,  the book value approximates fair value. The fair values of
other types of loans are estimated by discounting  expected cash flows using the
current rates at which similar loans would be made to borrowers with  comparable
credit  ratings  and  for  similar  remaining  maturities.  The  fair  value  of
nonperforming  loans is based on recent  external  appraisals of the  underlying
collateral.  Estimated cash flows,  discounted  using a rate  commensurate  with
current  rates  and the risk  associated  with the  estimated  cash  flows,  are
utilized if appraisals are not available.

         Interest  Rate  Cap:  The fair  value  is  estimated  using a  standard
sophisticated option model.

         Class "O" Certificates:  The fair value of the option to purchase 49.9%
of the  Class "O"  Certificates  of SASCO  2002 RM1 is based on the net  present
value of the  forecasted  cash  flows.  The  forecasted  cash flows are based on
assumptions  about the life  expectancy  of the  mortgagee,  current  collateral
values,  the future change in collateral  values, and future interest rates. The
current  assumptions  include a short-term annual  appreciation rate of -8.0% in
the first year and a long-term annual appreciation rate of 0.5% in future years.
These  projected cash flows are discounted at an appropriate  discount rate. The
discount  rate is derived  using the  "Build-up  Model" taking into account as a
base the risk free rate of return  and  adding  individual  factors  unique  and
applicable  to the cash flows of the Class "O"  Certificates.  The discount rate
currently used is approximately  21%. Finally,  since the Class "O" Certificates
represent the equity  tranche of SASCO 2002 RM1, a 15%  illiquidity  discount is
applied to the resulting net present value.

         Deposit  Liabilities:  The  fair  value  of  deposits  with  no  stated
maturity,  such  as  noninterest-bearing   demand  deposits,  money  market  and
interest-bearing demand deposits and savings deposits, is assumed to be equal to
the amount payable on demand.  The carrying value of variable rate time deposits
and time deposits that reprice frequently also approximates fair value. The fair
value  of the  remaining  time  deposits  is based  on the  discounted  value of
contractual cash flows. The discount rate is estimated using the rates currently
offered for deposits with comparable remaining maturities.

         Borrowed Funds:  Rates currently  available to the Corporation for debt
with similar terms and remaining  maturities  are used to estimate fair value of
existing debt.

         Off-Balance  Sheet  Instruments:  The fair value of  off-balance  sheet
instruments,  including  commitments  to extend  credit and  standby  letters of
credit,  is  estimated  using the fees  currently  charged to enter into similar
agreements   with   comparable   remaining   terms  and   reflects  the  present
creditworthiness of the counterparties.

                                       55


<PAGE>

The  book  value  and  estimated  fair  value  of  the  Corporation's  financial
instruments are as follows:


<TABLE>
<CAPTION>
                                                                                       December 31,    
                                                                ---------------------------------------------------------
                                                                         2006                             2005
                                                                ------------------------          -----------------------
                                                                  Book          Fair                Book          Fair
                                                                  Value         Value               Value         Value  
                                                                ---------     ----------          ---------     ---------
                                                                                      (In Thousands)
Financial assets:
<S>                                                          <C>           <C>                 <C>          <C>       
     Cash and cash equivalents.......................          $  241,824    $  241,824          $  233,951   $  233,951
     Investment securities...........................              54,491        54,524              57,489       57,688
     Mortgage-backed securities......................             516,711       516,434             620,323      620,323
     Loans, net......................................           2,019,741     2,012,530           1,775,294    1,779,746
     Bank-owned life insurance.......................              55,282        55,282              54,193       54,193
     Stock in Federal Home Loan Bank of Pittsburgh...              39,872        39,720              46,293       46,293
     Accrued interest receivable.....................              13,037        13,037              11,070       11,070
     Interest rate cap...............................                  30            30                 125          125
     Option to purchase Class "O" Certificates.......                   -         3,503                   -            -

Financial liabilities:
     Deposits........................................           1,756,348     1,757,259           1,446,236    1,447,165
     Borrowed funds..................................           1,002,679       997,476           1,195,008    1,200,477
     Accrued interest payable........................               8,690         8,690               7,554        7,554

</TABLE>


         The  estimated  fair  value  of  the  Corporation's  off-balance  sheet
financial instruments is as follows:


<TABLE>
<CAPTION>
                                                                                                          December 31,   
                                                                                                   ------------------------
                                                                                                      2006            2005 
                                                                                                      ----           -----
                                                                                                       (In Thousands) 
<S>                                                                                               <C>             <C>   
Off-balance sheet instruments:
     Commitments to extend credit.......................................................            $4,454          $4,120
     Standby letters of credit..........................................................               406             267
</TABLE>


17.  RELATED PARTY TRANSACTIONS


         The Corporation  routinely enters into  transactions with its directors
and officers.  Such  transactions are made in the ordinary course of business on
substantially  the same  terms  and  conditions,  including  interest  rates and
collateral,  as those  prevailing at the same time for  comparable  transactions
with other  customers,  and do not, in the opinion of  management,  involve more
than the normal credit risk or present other unfavorable features. The aggregate
amount of loans to such  related  parties was $5.1  million and $6.9  million at
December 31, 2006 and 2005, respectively. During 2006, new loans and credit line
advances  to such  related  parties  amounted  to $9.4  million  and  repayments
amounted to $8.2 million.  In addition,  during 2006,  one director  retired and
$3.0 million in loans have been excluded from related party transactions.

         The  Corporation  engages a law firm that is affiliated with a director
of the  Corporation  for general  legal  services.  Total fees for such services
amounted to $31,000 during 2006.

         A director of the  Corporation is also a director of a loan customer of
the Bank. At December 31, 2006, the principal  balance  outstanding of that loan
was $7.0 million.

         The  Chairman of the  Corporation  is also the  Chairman of the FHLB of
Pittsburgh.  At December 31, 2006, the Bank had borrowed funds  outstanding from
the FHLB of  Pittsburgh  of $784.0  million and owned  $39.9  million of FHLB of
Pittsburgh stock.

                                       56


<PAGE>

18.  PARENT COMPANY FINANCIAL INFORMATION

Condensed Statement of Financial Condition


<TABLE>
<CAPTION>
                                                                  December 31,
                                                             ----------------------
                                                               2006         2005 
                                                             ---------    ---------
                                                                (In Thousands)
<S>                                                         <C>          <C>      
Assets:
     Cash ................................................   $   4,984    $  10,097
     Investment in subsidiaries ..........................     270,994      236,095
     Investment in interest rate cap .....................          30          125
     Investment in Capital Trust III .....................       2,011        2,011
     Other assets ........................................       1,499        1,056
                                                             ---------    ---------
Total assets .............................................   $ 279,518    $ 249,384
                                                             =========    =========

Liabilities:
     Borrowings ..........................................   $  67,011    $  67,011
     Interest payable ....................................         412          357
     Other liabilities ...................................          36           41
                                                             ---------    ---------
     Total liabilities ...................................      67,459       67,409
                                                             ---------    ---------

Stockholders' equity:
     Common stock ........................................         156          154
     Capital in excess of par value ......................      81,580       74,673
     Comprehensive loss ..................................      (8,573)      (9,968)
     Retained earnings ...................................     347,448      319,065
     Treasury stock ......................................    (208,552)    (201,949)
                                                             ---------    ---------
     Total stockholders' equity ..........................     212,059      181,975
                                                             ---------    ---------
Total liabilities and stockholders' equity ...............   $ 279,518    $ 249,384
                                                             =========    =========
</TABLE>


Condensed Statement of Operations


<TABLE>
<CAPTION>
                                                                        December 31,
                                                             -----------------------------------
                                                               2006         2005         2004
                                                             ---------    ---------    ---------
                                                                        (In Thousands)
<S>                                                         <C>          <C>         <C>   


Income:
     Interest income .....................................   $     594    $     533    $     101
     Noninterest income ..................................         354          139          139
                                                             ---------    ---------    ---------
                                                                   948          672          240
                                                             ---------    ---------    ---------
Expenses:
     Interest expense ....................................       5,053        5,292        2,246
     Other operating expenses ............................      (1,386)      (1,567)        (681)
                                                             ---------    ---------    ---------
                                                                 3,667        3,725        1,565
                                                             ---------    ---------    ---------

Loss before equity in undistributed income of subsidiaries      (2,719)      (3,053)      (1,325)
Equity in undistributed income of subsidiaries ...........      33,160       30,909       27,225
                                                             ---------    ---------    ---------
Net income ...............................................   $  30,441    $  27,856    $  25,900
                                                             =========    =========    =========
</TABLE>


                                       57


<PAGE>

Condensed Statement of Cash Flows


<TABLE>
<CAPTION>
                                                                                              Year Ended December 31,         
                                                                                         ---------------------------------
                                                                                           2006         2005        2004  
                                                                                         ---------    --------   ---------
                                                                                                   (In Thousands)
<S>                                                                                    <C>          <C>        <C>      
Operating activities:
Net income .....................................................................         $  30,441    $ 27,856   $  25,900
Adjustments to reconcile net income to net cash used for operating activities:
     Equity in undistributed income of subsidiaries ............................           (33,160)    (30,909)    (27,225)
     Amortization ..............................................................               560       1,398         175
     (Increase) decrease in other assets........................................              (606)        432        (600)
     Increase in other liabilities..............................................                51         126          37
                                                                                         ---------    --------   ---------
Net cash used for operating activities .........................................           (2,714)      (1,097)     (1,713)
                                                                                         ---------    --------   ---------

Investing activities:
     (Increase) decrease in investment in subsidiaries..........................              (646)     28,210      18,577
     Net issuance of Pooled Floating Rate Capital Securities....................                 -      17,011           -
                                                                                         ---------    --------   ---------
Net cash (used for) provided by investing activities............................              (646)     45,221      18,577
                                                                                         ---------    --------   ---------

Financing activities:
     Issuance of common stock ..................................................             6,907       6,348       3,590
     Dividends paid on common stock ............................................            (2,057)     (1,845)     (1,643)
     Treasury stock, net of reissuance .........................................            (6,603)    (40,104)    (17,899)
                                                                                         ---------    --------   ---------
Net cash used for financing activities .........................................            (1,753)    (35,601)    (15,952)
                                                                                         ---------    --------   ---------

(Decrease) increase in cash ....................................................            (5,113)      8,523         912
Cash at beginning of period ....................................................            10,097       1,574         662
                                                                                         ---------    --------   ---------
Cash at end of period ..........................................................        $    4,984   $  10,097   $   1,574
                                                                                        ==========   =========   =========
</TABLE>


19.  ACCOUNTING FOR INTEREST RATE CAP


           The  Corporation has an  interest-rate  cap with a notional amount of
$50.0 million,  which limits three-month LIBOR to 6.00% for the ten years ending
December 1, 2008. The fair value of the cap is estimated using a standard option
model. The fair value of the interest rate cap at December 31, 2006 was $30,000.
The cap is  considered a free  standing  derivative  and all changes in the fair
value of the cap are  recorded  in the  Consolidated  Statement  of  Operations.
During  2006,  the Company  recognized  $560,000  of  interest  expense of which
$411,000 was the result of the  reclassification of the residual amounts related
to the hedge that were not  reclassified at the time the Corporation  refinanced
its Trust Preferred Securities in 2005.

20. SEGMENT INFORMATION

         Under the definition of SFAS No. 131,  Disclosures About Segments of an
Enterprise and Related  Information,  the Corporation  discusses its business in
three segments.  There is one segment for WSFS and one for CashConnect,  the ATM
division of WSFS.  The third  segment,  "All  Others,"  represents  the combined
contributions  of  Montchanin  and the newly formed Wealth  Management  Services
Division.  Montchanin  and the Wealth  Management  Services  Division each offer
different products,  to a separate customer base, through distinct  distribution
methods than those of the Corporation.  Therefore,  the Corporation has combined
Montchanin  and the Wealth  Management  Services  Division to form the operating
segment "All Others." All prior years'  information  has been updated to reflect
this presentation.  WSFS provides financial products through its main office, 27
retail  banking  offices,  loan  production  offices and  operations  centers to
commercial and retail customers.  Retail and Commercial Banking, Commercial Real
Estate Lending,  Private Banking and other banking  business units are operating
departments of WSFS. These departments share the same regulator, market, many of
the same customers,  share common resources (corporate and department-level) and
provide similar products and services through the general  infrastructure of the
Company.  Because  of  these  and  other  reasons,  these  departments  are  not
considered  discrete segments and are  appropriately  aggregated within the WSFS
segment of the Company in  accordance  with SFAS No. 131.  CashConnect  provides
turnkey ATM services through strategic  partnerships with several of the largest
networks,  manufacturers and service  providers in the ATM industry.  Montchanin
provides  asset  management  products  and  services to  customers in the Bank's
primary  market  area.   Montchanin  has  one   consolidated   non-wholly  owned
subsidiary,  Cypress Capital  Management,  LLC (Cypress).  Cypress,  a 90% owned
subsidiary,  is  a  Wilmington-based   investment  advisory  firm  

                                       58


<PAGE>

serving high  net-worth  individuals  and  institutions.  The Wealth  Management
Services  Division  provides  wealth  management  and personal trust services to
customers in the Bank's primary market area.

         An operating  segment is a component of an  enterprise  that engages in
business  activities from which it may earn revenues and incur  expenses,  whose
operating  results are regularly  reviewed by the  enterprise's  chief operating
decision maker to make decisions  about resources to be allocated to the segment
and assess its  performance,  and for which  discrete  financial  information is
available. The Corporation evaluates performance based on pretax ordinary income
relative to resources  used,  and allocates  resources  based on these  results.
Segment  information  for the years ended  December 31,  2006,  2005 and 2004 is
shown below.

For the Year Ended December 31, 2006: (In Thousands)


<TABLE>
<CAPTION>
                                   ----------     -----------    -------------     ----------
                                      WSFS        CashConnect    All Others (1)      Total     
                                   ----------     -----------    -------------     ----------
<S>                               <C>            <C>            <C>               <C>       
External customer revenues:                                                        
         Interest income ......... $  177,177     $        -     $        -        $  177,177
         Noninterest income ......     22,253         15,644          2,408            40,305
                                   ----------     ----------     ----------        ----------
Total external customer revenues..    199,430         15,644          2,408           217,482
                                   ----------     ----------     ----------        ----------
                                                                                   
Intersegment revenues:                                                             
         Interest income .........      8,071              -              -             8,071
         Noninterest income ......      1,344            685              -             2,029
                                   ----------     ----------     ----------        ----------
Total intersegment revenues ......      9,415            685              -            10,100
                                   ----------     ----------     ----------        ----------
                                                                                   
Total revenue ....................    208,845         16,329          2,408           227,582
                                   ----------     ----------     ----------        ----------
                                                                                   
External customer expenses:                                                        
         Interest expense ........     99,278              -              -            99,278
         Noninterest expenses ....     62,439          4,222          2,653            69,314
         Provision for loan loss..      2,738              -              -             2,738
                                   ----------     ----------     ----------        ----------
Total external customer expenses..    164,455          4,222          2,653           171,330
                                   ----------     ----------     ----------        ----------
                                                                                   
Intersegment expenses:                                                             
         Interest expense ........          -          8,071              -             8,071
         Noninterest expenses ....        685            688            656             2,029
                                   ----------     ----------     ----------        ----------
Total intersegment expenses ......        685          8,759            656            10,100
                                   ----------     ----------     ----------        ----------
                                                                                   
Total expenses ...................    165,140         12,981          3,309           181,430
                                   ----------     ----------     ----------        ----------
                                                                                  
Income before taxes and                                                           
  extraordinary items ............ $   43,705     $    3,348     $     (901)           46,152
                                                                                  
Provision for income taxes .......                                                     15,660
Minority interest ................                                                         51
                                                                                   ----------
Consolidated net income ..........                                                 $   30,441
                                                                                   ==========
                                                                                  
Cash and cash equivalents ........ $   75,203     $  166,092     $      529        $  241,824
Other segment assets .............  2,738,576         15,228          1,768         2,755,572
                                   ----------     ----------     ----------        ----------
                                                                                  
Total segment assets ............. $2,813,779     $  181,320     $    2,297        $2,997,396
                                   ==========     ==========     ==========        ==========
                                                                                  
Capital expenditures ............. $    9,790     $      382     $       20        $   10,192
</TABLE>
                                                 
                                                                      
(1)  Includes  Montchanin  Capital  Management,  Inc. and the Wealth  Management
     Services Division.
                                                      
                                       59
                                                           

<PAGE>
                                                               
For the Year Ended December 31, 2005: (In Thousands)
                                                               

<TABLE>
<CAPTION>
                                   ----------     -----------    -------------     ----------
                                      WSFS        CashConnect    All Others (1)      Total     
                                   ----------     -----------    -------------     ----------
<S>                               <C>              <C>            <C>               <C>       
External customer revenues:                       
         Interest income ......... $  136,022     $        -     $        -        $  136,022
         Noninterest income ......     19,595         12,539          2,519            34,653
                                   ----------     ----------     ----------        ----------
Total external customer revenues..    155,617         12,539          2,519           170,675
                                   ----------     ----------     ----------        ----------
                                                                                   
Intersegment revenues:                                                             
         Interest income .........      4,729              -              -             4,729
         Noninterest income ......      1,361            682              -             2,043
                                   ----------     ----------     ----------        ----------
Total intersegment revenues ......      6,090            682              -             6,772
                                   ----------     ----------     ----------        ----------
                                                                                   
                                                                                   
Total revenue ....................    161,707         13,221          2,519           177,447
                                   ----------     ----------     ----------        ----------
                                                                                   
External customer expenses:                                                        
         Interest expense ........     62,380              -              -            62,380
         Noninterest expenses ....     56,562          3,956          2,359            62,877
         Provision for loan loss..      2,582              -              -             2,582
                                   ----------     ----------     ----------        ----------
Total external customer expenses..    121,524          3,956          2,359           127,839
                                   ----------     ----------     ----------        ----------
                                                                                   
Intersegment expenses:                                                             
         Interest expense ........          -          4,729              -             4,729
         Noninterest expenses ....        682            778            583             2,043
                                   ----------     ----------     ----------        ----------
Total intersegment expenses ......        682          5,507            583             6,772
                                   ----------     ----------     ----------        ----------
                                                                                   
Total expenses ...................    122,206          9,463          2,942           134,611
                                   ----------     ----------     ----------        ----------
                                                                                   
Income before taxes and                                                            
  extraordinary items ............ $   39,501     $    3,758     $     (423)           42,836
                                                                                   
Provision for income taxes .......                                                     14,847
Minority interest ................                                                        133
                                                                                   ----------
Consolidated net income ..........                                                 $   27,856
                                                                                   ==========
                                                                                   
Cash and cash equivalents ........ $   59,109     $  174,527     $      315        $  233,951
Other segment assets .............  2,604,038          7,153          1,610         2,612,801
                                   ----------     ----------     ----------        ----------
                                                                                   
Total segment assets ............. $2,663,147     $  181,680     $    1,925        $2,846,752
                                   ==========     ==========     ==========        ==========
                                                                                   
Capital expenditures ............. $   15,656     $      811     $       59        $   16,526
                                                                                   
</TABLE>
                                                   
                                                           
(1)  Includes  Montchanin  Capital  Management,  Inc. and the Wealth  Management
     Services Division.

                                       60


<PAGE>

For the Year Ended December 31, 2004: (In Thousands)


<TABLE>
<CAPTION>
                                       ----------   -----------   -------------     ----------
                                          WSFS      CashConnect   All Others (1)      Total     
                                       ----------   -----------   -------------     ----------
<S>                               <C>              <C>              <C>                   <C>       
External customer revenues:                                                        
         Interest income ..........   $  104,110   $        -     $        -        $  104,110
         Noninterest income .......       19,612       10,076          2,262            31,950
                                      ----------   ----------     ----------        ----------
Total external customer revenues ..      123,722       10,076          2,262           136,060
                                      ----------   ----------     ----------        ----------

Intersegment revenues:                                                             
         Interest income ..........        1,771            -              -             1,771
         Noninterest income .......        1,046          742              -             1,788
                                      ----------   ----------     ----------        ----------
Total intersegment revenues .......        2,817          742              -             3,559
                                      ----------   ----------     ----------        ----------
                                                                                   
Total revenue .....................      126,539       10,818          2,262           139,619
                                      ----------   ----------     ----------        ----------
                                                                                   
External customer expenses:                                                        
         Interest expense .........       37,246            -              -            37,246
         Noninterest expenses .....       50,134        3,516          2,049            55,699
         Provision for loan loss ..        3,217            -              -             3,217
                                      ----------   ----------     ----------        ----------
Total external customer expenses ..       90,597        3,516          2,049            96,162
                                      ----------   ----------     ----------        ----------
                                                                                   
Intersegment expenses:                                                             
         Interest expense .........            -        1,771              -             1,771
         Noninterest expenses .....          742          717            329             1,788
                                      ----------   ----------     ----------        ----------
Total intersegment expenses .......          742        2,488            329             3,559
                                      ----------   ----------     ----------        ----------
                                                                                   
Total expenses ....................       91,339        6,004          2,378            99,721
                                      ----------   ----------     ----------        ----------
                                                                                   
Income before taxes and                                                            
  extraordinary items .............   $   35,200   $    4,814     $     (116)           39,898
                                                                                   
Provision for income taxes ........                                                     13,951                                   
Minority interest .................                                                        190                                   
Income on wind-down of discontinued                                                
  operations, net of taxes ........                                                        143                                   
                                                                                    ----------
Consolidated net income ...........                                                 $   25,900                                   
                                                                                    ==========
                                                                                   
Cash and cash equivalents .........   $   61,021   $  131,150     $      307        $  192,478
Other segment assets ..............    2,301,726        7,583          1,169         2,310,478
                                      ----------   ----------     ----------        ----------
                                                                                   
Total segment assets ..............   $2,362,747   $  138,733     $    1,476        $2,502,956
                                      ==========   ==========     ==========        ==========
                                                                                   
Capital expenditures ..............   $    5,865   $      522     $       22        $    6,409
</TABLE>
                                        
                                                                     
(1)  Includes  Montchanin  Capital  Management,  Inc. and the Wealth  Management
     Services Division.

                                       61


<PAGE>

QUARTERLY FINANCIAL SUMMARY  (Unaudited)


<TABLE>
<CAPTION>
                                                                  Three Months Ended      
                                   ------------------------------------------------------------------------------
                                   12/31/06   9/30/06   6/30/06   3/31/06  12/31/05   9/30/05   6/30/05   3/31/05
                                   --------   -------   -------   -------  --------   -------   -------   -------
                                                       (In Thousands, Except Per Share Data)

<S>                                <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>    
Interest income .................   $46,701   $46,131   $43,868   $40,477   $37,835   $35,136   $32,886   $30,165
Interest expense ................    26,611    27,011    24,482    21,174    19,299    15,921    15,108    12,052
                                    -------   -------   -------   -------   -------   -------   -------   -------
Net interest income .............    20,090    19,120    19,386    19,303    18,536    19,215    17,778    18,113
Provision for loan losses .......     1,036       319       695       688     1,006       225       772       579
                                    -------   -------   -------   -------   -------   -------   -------   -------

Net interest income after
   provision for loan losses.....    19,054    18,801    18,691    18,615    17,530    18,990    17,006    17,534
Noninterest income ..............    11,078    10,309     9,880     9,038     9,499     8,584     8,714     7,856
Noninterest expenses ............    18,553    17,587    16,932    16,242    16,154    16,150    15,603    14,970
                                    -------   -------   -------   -------   -------   -------   -------   -------
Income before
  minority interest and taxes....    11,579    11,523    11,639    11,411    10,875    11,424    10,117    10,420
Less minority interest ..........        11         9        15        16        11        48        37        37
                                    -------   -------   -------   -------   -------   -------   -------   -------
                                                                                                     
Income before taxes .............    11,568    11,514    11,624    11,395    10,864    11,376    10,080    10,383
Income tax provision ............     3,969     3,511     4,126     4,054     3,771     3,969     3,514     3,593
                                    -------   -------   -------   -------   -------   -------   -------   -------

Net income ......................   $ 7,599   $ 8,003   $ 7,498   $ 7,341   $ 7,093   $ 7,407   $ 6,566   $ 6,790
                                    =======   =======   =======   =======   =======   =======   =======   =======

Earnings per share:
Basic ...........................   $  1.14   $  1.20   $  1.13   $  1.11   $  1.09   $  1.12   $  0.95   $  0.96
Diluted .........................   $  1.10   $  1.16   $  1.09   $  1.06   $  1.03   $  1.06   $  0.90   $  0.90

</TABLE>


                                       62

                         Subsidiaries of the Registrant



<TABLE>
<CAPTION>

                                                                                                   State or
                                                                              Percent          Other Jurisdiction
Parent Company                                   Subsidiary                    Owned            of Incorporation
--------------                                   ----------                    -----           ----------------
<S>                           <C>                                         <C>                <C>
WSFS Financial Corporation       Wilmington Savings Fund Society,               100%            United States
                                    Federal Savings Bank
                                 WSFS Capital Trust, III                        100%            Delaware
                                 Montchanin Capital Management, Inc.            100%            Delaware
                                 
Wilmington Savings Fund          WSFS Reit, Inc                                 100%            Delaware
 Society, Federal                WSFS Investment Group, Inc.                    100%            Delaware
 Savings Bank                    
                                 
                                 
Montchanin Capital               Cypress Capital Management, LLC                 90%(1)         Delaware
Management, Inc.                 
</TABLE>

                            
(1)  During 2007 this ownership percentage increased to 100%.



                              CONSENT OF KPMG LLP

            Consent of Independent Registered Public Accounting Firm
            --------------------------------------------------------




    The Board of Directors
    WSFS Financial Corporation:


    We consent to the incorporation by reference in the registration  statements
    (No.  333-106561,  No.  333-26099,  No. 333-33713,  No.  333-40032,  and No.
    333-127225)  on Form S-8 of WSFS  Financial  Corporation of our report dated
    March 9, 2007,  with respect to the  consolidated  statement of condition of
    WSFS  Financial  Corporation  and  subsidiaries  as of December 31, 2006 and
    2005,  and the related  consolidated  statements of  operations,  changes in
    stockholders' equity, and cash flows for each of the years in the three-year
    period ended December 31, 2006, management's assessment of the effectiveness
    of internal  control over  financial  reporting as of December 31, 2006, and
    the  effectiveness  of  internal  control  over  financial  reporting  as of
    December  31,  2006,  which  reports  appear in the December 31, 2006 annual
    report on Form 10-K of WSFS Financial Corporation.

    Our report dated March 9, 2007 on the consolidated statement of condition of
    WSFS  Financial  Corporation  and  subsidiaries  as of December 31, 2006 and
    2005,  and the related  consolidated  statements of  operations,  changes in
    stockholders' equity,
 and cash flows for each of the years in the three-year
    period  ended  December 31, 2006,  refers to the  Corporation's  adoption of
    Statement of Financial Standards No. 123R,  "Share-Based Payment," effective
    January 1, 2006.



     /s/ KPMG LLP

     Philadelphia, Pennsylvania
     March 14, 2007


                            CERTIFICATION PURSUANT TO
                                   RULE 13a-14
                               OF THE EXCHANGE ACT

                            SECTION 302 CERTIFICATION

   I, Marvin N. Schoenhals, President and Chief Executive Officer, certify that:

1.  I  have  reviewed  this  annual  report  on  Form  10-K  of  WSFS  Financial
Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact  necessary to make the statements
made, in light of the  circumstances  under which such statements were made, not
misleading with respect to the period covered by this report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;

4.  The  registrant's   other  certifying  officer  and  I  am  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rule 13a-15(e) and  15d-15(e)) and internal  control over financial
reporting  (as defined in Exchange Act Rule  13a-15(f)  and  15d(15(f))  for the
registrant and have:

         (a) Designed such disclosure  controls and  procedures,  or caused such
disclosure  controls
 and  procedures to be designed  under our  supervision,  to
ensure that  material  information  relating to the  registrant,  including  its
consolidated subsidiaries,  is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

         (b) Designed such internal control over financial reporting,  or caused
such  internal  control  over  financial  reporting  to be  designed  under  our
supervision,  to provide  reasonable  assurance  regarding  the  reliability  of
financial  reporting and the  preparation  of financial  statements for external
purposes in accordance with generally accepted accounting principles;

         (c) Evaluated the effectiveness of the registrant's disclosure controls
and  procedures  and  presented  in  this  report  our  conclusions   about  the
effectiveness  of the disclosure  controls and procedures,  as of the end of the
period covered by this report based on such evaluation; and

         (d)  Disclosed in this report any change in the  registrant's  internal
control over financial  reporting  that occurred  during the  registrant's  most
recent fiscal quarter that has materially  affected,  or is reasonably likely to
materially affect, the registrant's  internal control over financial  reporting;
and

5. The registrant's other certifying officer and I have disclosed,  based on our
most recent  evaluation of internal  control over  financial  reporting,  to the
registrant's  auditors  and the audit  committee  of the  registrant's  board of
directors:

         (a) All significant  deficiencies and material weaknesses in the design
or operation of internal  control over financial  reporting which are reasonably
likely to adversely  affect the issuer's ability to record,  process,  summarize
and report financial information; and

         (b) Any  fraud,  whether  or not  material,  that  involves  management
or other employees who have a significant role in the issuer's  internal control
over financial reporting.


Date: March 7, 2007                        /s/ Marvin N. Schoenhals  
                                           -------------------------------------
                                           Marvin N. Schoenhals
                                           President and Chief Executive Officer

<PAGE>

                            SECTION 302 CERTIFICATION

         I,  Stephen A. Fowle,  Executive  Vice  President  and Chief  Financial
Officer, certify that:

1.  I  have  reviewed  this  annual  report  on  Form  10-K  of  WSFS  Financial
Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact  necessary to make the statements
made, in light of the  circumstances  under which such statements were made, not
misleading with respect to the period covered by this report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;

4.  The  registrant's   other  certifying  officer  and  I  am  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rule 13a-15(e) and  15d-15(e)) and internal  control over financial
reporting  (as  defined in  Exchange  Act Rule  13a-15(f)  and  15d(f))  for the
registrant and have:

         (a) Designed such disclosure  controls and  procedures,  or caused such
disclosure  controls and  procedures to be designed  under our  supervision,  to
ensure that  material  information  relating to the  registrant,  including  its
consolidated subsidiaries,  is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

         (b) Designed such internal control over financial reporting,  or caused
such  internal  control  over  financial  reporting  to be  designed  under  our
supervision,  to provide  reasonable  assurance  regarding  the  reliability  of
financial  reporting and the  preparation  of financial  statements for external
purposes in accordance with generally accepted accounting principles;

         (c) Evaluated the effectiveness of the registrant's disclosure controls
and  procedures  and  presented  in  this  report  our  conclusions   about  the
effectiveness  of the disclosure  controls and procedures,  as of the end of the
period covered by this report based on such evaluation; and

         (d)  Disclosed in this report any change in the  registrant's  internal
control over financial  reporting  that occurred  during the  registrant's  most
recent fiscal quarter that has materially  affected,  or is reasonably likely to
materially affect, the registrant's  internal control over financial  reporting;
and

5. The registrant's other certifying officer and I have disclosed,  based on our
most recent  evaluation of internal  control over  financial  reporting,  to the
registrant's  auditors  and the audit  committee  of the  registrant's  board of
directors:

         (a) All significant  deficiencies and material weaknesses in the design
or operation of internal  control over financial  reporting which are reasonably
likely to adversely  affect the issuer's ability to record,  process,  summarize
and report financial information; and

         (b) Any fraud,  whether or not material,  that  involves  management or
other  employees who have a significant  role in the issuer's  internal  control
over financial reporting.


Date: March 7, 2007                               /s/ Stephen A. Fowle
                                                  ------------------------------
                                                  Stephen A. Fowle
                                                  Executive Vice President and
                                                  Chief Financial Officer





                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002






         We hereby  certify  pursuant  to ss. 906 of the  Sarbanes-Oxley  Act of
2002, that:


1)   This annual report fully complies with the requirements of Section 13(a) or
     15(d) of the Securities Exchange Act of 1934; and

2)   The  information  contained in this annual report fairly  presents,  in all
     material  respects,  the  financial  condition and results of operations of
     WSFS Financial Corporation.




/s/ Marvin N. Schoenhals                           /s/ Stephen A. Fowle

Marvin N. Schoenhals                               Stephen A. Fowle
Chairman and President                             Executive Vice President and
                                                   Chief Financial Officer


March 7, 2007                                      March 7, 2007