SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
{X} ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2006
-----------------------------------------------------
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
For the transition period from ______________________ to _____________________
Commission file number 0-16668
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A. Full title of the plan and the address of the plan:
WSFS Financial Corporation
401(k) Savings and Retirement Plan
500 Delaware Avenue
Wilmington, DE 19801
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
WSFS Financial Corporation
500 Delaware Avenue
Wilmington, DE 19801
REQUIRED INFORMATION
The audited financial statements required are included herein.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
WSFS Financial Corporation
401(k) Savings and Retirement Plan
DATE: June 29, 2007 /s/ Stephen A. Fowle
----------------------------------
Stephen A. Fowle
Plan Administrator
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Financial Statements and Supplemental Schedules
December 31, 2006 and 2005
(With Report of Independent Registered Public Accounting Firm Thereon)
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Table of Contents
Page
Report of Independent Registered Public Accounting Firm 1
Statements of Net Assets Available for Benefits, December 31, 2006 and 2005 2
Statements of Changes in Net Assets Available for Benefits, Years ended December 31, 2006 and 2005 3
Notes to Financial Statements 4
Schedules:
1 Schedule H, line 4i - Schedule of Assets (Held at End of Year), December 31, 2006 11
2 Schedule H, line 4j - Schedule of Reportable Transactions, Year ended December 31, 2006 12
Report of Independent Registered Public Accounting Firm
The Plan Administrator
WSFS Financial Corporation 401(k) Savings and Retirement Plan:
We have audited the accompanying statements of net assets available for benefits
of the WSFS Financial Corporation 401(k) Savings and Retirement Plan (the
"Plan") as of December 31, 2006 and 2005, and the related statement of changes
in net assets available for benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these 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 audits 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 financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2006 and 2005, and the changes in net assets available for benefits
for the years then ended, in conformity with U.S. generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
(held at end of year) and reportable transactions are presented for the purpose
of additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. These supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/KPMG
Philadelphia, Pennsylvania
June 29, 2007
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Statements of Net Assets Available for Benefits
December 31, 2006 and 2005
2006 2005
----------- -----------
Assets:
Investments (note 3) $44,502,471 $39,520,374
Loans to participants 805,359 897,787
----------- -----------
Total Investments 45,307,830 40,418,161
Receivables:
Employer contribution 164,319 108,385
----------- -----------
Total receivables 164,319 108,385
----------- -----------
Net assets available for benefits $45,472,149 $40,526,546
=========== ===========
See accompanying notes to financial statements.
2
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Statements of Changes in Net Assets Available for Benefits
Years Ended December 31, 2006 and 2005
2006 2005
----------- -----------
Additions:
Investment income:
Interest and dividends $ 310,487 $ 503,005
Net change in realized and unrealized appreciation in
fair value of investments 4,134,218 1,093,066
----------- -----------
4,444,705 1,596,071
----------- -----------
Contributions:
Employer 1,437,606 1,326,137
Participants 1,625,160 1,468,314
----------- -----------
3,062,766 2,794,451
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Total additions 7,507,471 4,390,522
Deductions:
Benefits paid 2,561,868 1,750,166
----------- -----------
Net increase 4,945,603 2,640,356
Net assets available for benefits:
Beginning of year 40,526,546 37,886,190
----------- -----------
End of year $45,472,149 $40,526,546
=========== ===========
See accompanying notes to financial statements.
3
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements
December 31, 2006 and 2005
(1) Description of Plan
The purpose of the WSFS Financial Corporation 401(k) Savings and
Retirement Plan (the Plan) is to encourage and assist employees
(Associates) in following a systematic savings program suited to their
individual long-term financial objectives. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA). The following description of the Plan provides only general
information. Participants should refer to the plan agreement or the
summary plan description for a more complete description of the Plan's
provisions.
(a) Eligibility
All full- and part-time Associates of WSFS Financial Corporation
or its subsidiaries (the Employers) who have completed six months
of service as of July 1, 2004 or who will complete six months of
service on or after July 1, 2004 are eligible to participate
following the completion of six months of continuous employment.
(b) Contributions
Participants may authorize the Employers to make payroll
deductions under the Plan from 0% to 70% of their total
compensation, not to exceed $15,000 in 2006. In addition, those
participants, who are over age 50 or turning age 50 on or before
December 31, 2006, are eligible for an additional catch-up
contribution of $5,000 in 2006. The percentage contribution may be
increased, decreased, revoked, or resumed at any time during the
year. Such changes are effective as of the next pay period.
Contributions made by participants are credited to their
individual accounts and are made on a pretax basis assuming
applicable regulations set forth in the Internal Revenue Code are
satisfied.
All contributions made by the Employers on participants' behalf
are also on a pretax basis. The Employers' contributions comprise
the following:
Company Matching Contribution - The Plan includes an employer
matching contribution program such that the Employers match 100%
of the Associate's contribution up to 5% of total compensation.
The matching contribution is made in cash and is invested in WSFS
Financial Corporation common stock. Participants can opt to
transfer the WSFS Financial Corporation common stock at any time.
Employer Base Profit Sharing Contribution - The Plan includes a
profit sharing program. The contribution for each eligible
participant is calculated as a fixed percentage of the
participant's total compensation. The profit sharing contribution
is in the form of WSFS Financial Corporation common stock.
Participants can opt to transfer the WSFS Financial Corporation
common stock at any time. The two types of profit sharing
contributions are as follows:
o Base Contribution - Participants shall be entitled to a base
contribution in each calendar quarter in which the Board
approves such contributions, based upon the Employers'
performance. It is calculated based on a fixed percentage
established at the beginning of the year.
4
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements
December 31, 2006 and 2005
o Supplemental Contribution - A Participant shall be entitled
to a supplemental contribution at the end of each Plan Year
in which the Board approves such contributions, based upon
the Employers' performance.
For the years ended December 31, 2006 and 2005, the Employers made no
Supplemental Contributions.
(c) Participants' Accounts
Participants' accounts are credited for their contributions and
the Employers' contribution made on their behalf. Participants'
accounts are also adjusted by an allocation of the earnings or
losses of the Plan fund in which each participant's account is
invested based upon the change in unit share price of all funds
and for the money market fund upon the ratio of the account
balance to the total of all participants' account balances in that
fund.
(d) Vesting
All Associate contributions are 100% vested and are not subject to
forfeiture for any reason. Employer contributions that are
forfeited by participants reduce future Employer contributions.
Forfeitures were $90,023 and $58,456 for the years ended December
31, 2006 and 2005, respectively. Forfeitures used to offset
Employer contributions amounted to $26,191 and $52,600 for the
years ended December 31, 2006 and 2005, respectively. The table
below shows the vesting schedule for the Plan:
Years of service Vested percentages as amended
---------------------- ----------------------------------
0-1 20%
2 40
3 60
4 80
5 100
(e) Withdrawals
Participants' accounts are segregated between pre-January 1, 1988
and post-January 1, 1988 contributions. Associate contributions
made subsequent to January 1, 1988 are made on a pretax basis.
Withdrawals are subject to tax and, in certain instances, penalty.
Effective January 1, 1993, the Plan is required to withhold
federal income taxes at a flat rate of 20% on the taxable portion
of withdrawals that are not directly rolled over into an
Individual Retirement Account (IRA) or another qualified
retirement plan. This withholding tax does not apply to minimum
distributions and annuity payments. Participant interest payments
on loans, which are recorded as earnings, are made on a post-tax
basis.
5
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements
December 31, 2006 and 2005
Under the Plan, participants may request hardship withdrawals of
vested contributions (but not income earned on contributions after
December 31, 1988), which must be approved by the Associate
Benefits Committee and can only be made for one of the following
reasons:
1. Purchase of primary residence of the participant
2. Preservation of primary residence
3. Certain medical expenses of a participant or the
participant's dependents
4. Tuition for the next semester or quarter of postsecondary
education of the participant, spouse, or dependents.
(f) Loan Provision
Under the Plan, participants may obtain loans up to 50% of their
vested account balance with a minimum loan of $1,000 and a maximum
loan of $50,000. The interest rate on loans is the prime rate plus
1%. Interest paid on the loan is added to the participant's
account balance. Loans are secured by the participant's interest
in the Plan. To be eligible for a loan, Associates must make
Associate Savings Contributions of at least 1% of total
compensation. They may only request one new loan or refinancing in
any 12-month period.
(g) Administrative Expenses
Expenses relating to the administration of the Plan are paid by
WSFS Financial Corporation. Costs incurred by the Plan relating to
voluntary removal of funds in the form of loan proceeds or
withdrawals are paid by the participants.
(h) Payment of Benefits
Any Participant who separates from service for any reason,
including Disability, but excluding death benefits, shall be
entitled to receive their vested interest in their account
balance. This distribution can be in a lump sum payment, rollover
to an IRA, or rollover to the qualified plan of a new employer.
Upon the death of a Participant prior to payment of all retirement
benefits, the Participant's vested account balance shall be paid
to the Participant's beneficiary in accordance with the Plan
Document.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying financial statements are prepared on the accrual
basis of accounting.
(b) Use of Estimates
The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets, liabilities, and changes therein, and disclosure of
contingent assets and liabilities. Actual results could differ
from those estimates.
6
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements
December 31, 2006 and 2005
(c) Investment Valuation and Income Recognition
The principal method of valuing the Plan's investments in
Collective Investment Funds is based on the value of quoted
year-end market values of securities held by such funds. WSFS
Financial Corporation common stock is valued at the year-end
market price. This valuation is also used as the principal source
of valuation of the WSFS Common Stock Fund. Investments in
short-term securities are valued at cost that approximates market.
Investments in mutual funds are valued at the net asset value of
the fund, which is based on the quoted year-end market value of
securities held by the fund.
Purchases and sales of investments are reflected on a trade-date
basis. Interest income is recorded on the accrual basis. Dividends
are recorded on the ex-dividend date.
(d) Revenue Recognition and Method of Accounting
The Plan records all transactions on an accrual basis. Investment
income is recorded as earned.
(e) Fund Accounting for Income
The mutual funds invest interest and dividend income within the
fund to purchase more fund assets rather than distribute the
income among investors in the fund.
(f) Payment of Benefits
Benefits are recorded when paid.
7
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements
December 31, 2006 and 2005
(3) Investments
The following represents the fair value of investments that are 5% or
more of the Plan's net assets:
December 31
---------------------------
2006 2005
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Smith Group Asset Management Fund $ 4,560,516 --
WSFS Common Stock Fund** 19,940,221* --
Eagle Global Advisors Fund 3,879,740 --
ABM-AMRO Income Plus Fund 2,938,147 --
NWQ Investment Management, LLC Fund 2,680,747 --
Brandywine Asset Management Fund 2,612,002 --
FMT/Vanguard GNMA Fund 2,532,853 --
Schwab Retirement Advantage Money Fund** -- $ 2,873,956
Strong Government Securities Fund -- 2,569,518
WSFS Financial Corporation common stock** -- 19,346,548*
Vanguard Index 500 Fund -- 2,495,600
Artisan International Fund -- 2,600,133
Royce Total Return Fund -- 2,161,279
*Nonparticipant directed.
**Party-in-interest.
During 2006 and 2005, the Plan's investments (including gains and losses
on investments bought and sold, as well as held during the year)
appreciated in value as follows:
2006 2005
---------- ----------
Collective Investment Funds $1,808,081 $ --
WSFS Common Stock Fund 1,661,156 --
Mutual funds 613,390 642,216
Common stock 51,591 450,850
---------- ----------
Total net appreciation $4,134,218 $1,093,066
========== ==========
8
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements
December 31, 2006 and 2005
(4) Nonparticipant-Directed Investments
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed investments
is as follows:
December 31
--------------------------
2006 2005
----------- -----------
Net assets:
WSFS Financial Corporation common stock and
employer contribution receivable $15,225,951 $14,841,270
Years ended December 31
--------------------------
2006 2005
----------- -----------
Changes in net assets:
Contributions $ 1,344,513 $ 1,327,738
Investment earnings 1,352,407 424,298
Benefits paid to participants (714,642) (555,361)
Transfers to participant-directed investments (1,597,597) (1,077,252)
----------- -----------
$ 384,681 $ 119,423
=========== ===========
(5) Income Tax Status
On December 15, 2005, the Plan was amended and restated effective March
28, 2005. The Plan received a favorable determination letter from the IRS
dated May 6, 2005. The Employers believe that the Plan currently is
designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code and that, therefore, the Plan
continues to qualify under Section 401(a) and the related trust continues
to be tax-exempt as of December 31, 2006. Therefore, no provision for
income taxes is included in the Plan's financial statements.
(6) Plan Termination
Although WSFS Financial Corporation has not expressed any intention to
terminate the Plan, it may do so at any time. Upon the complete
discontinuation of contributions to the Plan, or the complete or partial
termination of the Plan, the rights of all affected Associates under the
Plan shall become fully vested and nonforfeitable.
9
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements
December 31, 2006 and 2005
(7) Related-Party Transactions
During 2006 and 2005, Certain Plan investments consisted of shares of
mutual funds sponsored by Charles Schwab Trust Company (the Custodian)
and WSFS Financial Corporation common stock. Investment transactions with
the Custodian and WSFS Financial Corporation qualify as party-in-interest
transactions. Fees incurred for investment management, custodial, and
record-keeping services were paid from the plan assets for the year ended
December 31, 2006 and by the Employers for the year ended December 31,
2005.
(8) Risks and Uncertainties
The Plan provides participants various investment options. Investment
securities are exposed to various risks such as interest rate, market,
and credit risks. Due to the level of risk associated with certain
investments securities, it is at least reasonably possible that changes
in the value of investment securities will occur in the near term and
that such changes could materially affect participants' account balances
and the amounts reported in the statement of net assets available for
benefits.
Schedule 1
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Schedule H, line 4i - Schedule of Assets (Held at End of Year)
December 31, 2006
Shares Fair value
--------- ------------
* WSFS Common Stock Fund 1,843,841 $19,940,221
Collective Investment Funds:
Smith Group Asset Management Fund 312,478 4,560,516
Eagle Global Advisors Fund 226,860 3,879,740
ABM-AMRO Income Plus Fund 254,389 2,938,147
NWQ Investment Management, LLC Fund 201,602 2,680,747
Brandywine Asset Management Fund 119,031 2,612,002
FMT/Vanguard GNMA Fund 231,575 2,532,853
Washington Capital Management Fund 158,886 2,196,494
FMT/iShares Russell Mid-Cap Growth Index ETF 138,239 1,388,021
Jamison Prince Asset Management Fund 58,314 621,772
FMT/Lifestyle Moderate Growth Strategy Fund 28,191 485,995
Delaware Investments Fund 30,349 330,060
FMT/Lifestyle Aggressive Growth Strategy Fund 14,229 273,985
FMT/Lifestyle Conservative Growth Strategy Fund 2,656 38,097
FMT/Lifestyle Total Return Strategy Fund 1,814 23,821
* Loans to participants (interest rate of prime plus 1%) 805,359
----------
Total investments $45,307,830
==========
* Party-in-interest.
See accompanying report of independent registered public accounting firm.
11
Schedule 2
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Schedule H, line 4j - Schedule of Reportable Transactions
Year Ended December 31, 2006
(single transaction or series of transactions in one issue aggregating 5% or
more of the market value of plan assets at January 1, 2006)
Sales Number of Number of
Name of party and ------------------------ purchases and sales and
descrition of assets Purchases Cost Proceeds Gain issuances redemptions
------------------------------------------------ ---------- ---------- ----------- ----------- --------- -----------
Series of transactions:
* WSFS Financial Corporation
common stock $ 1,117,091 $ 9,395,231 $20,516,804 $11,121,573 36 99
FMT/Vanguard GNMA Fund 4,916,541 2,499,865 2,505,956 6,091 38 45
Eagle Global Advisors Fund 6,977,159 3,574,132 3,592,215 18,083 55 45
Smith Group Asset Management Fund 8,685,253 4,424,762 4,433,904 9,142 45 50
ABN-AMRO Income Plus Fund 6,257,576 3,374,179 3,377,792 3,614 49 54
Brandywine Asset Management Fund 4,968,850 2,576,839 2,581,251 4,412 39 42
Washington Capital Management Fund 4,203,480 2,125,328 2,127,847 2,519 47 39
NWQ Investment Management, LLC Fund 5,058,248 2,646,949 2,655,510 8,560 44 39
FMT/iShares Russell Mid-Cap Growth Index ETF 2,740,710 1,453,793 1,458,399 4,607 39 39
* WSFS Common Stock Fund 27,081,198 20,018,201 20,805,588 787,387 58 75
Strong Government Securities Fund 186,230 2,856,721 2,676,397 (180,324) 53 54
Vanguard Index 500 Fund 295,289 2,593,130 2,832,679 239,549 54 45
Weitz Value Fund 116,422 2,048,676 2,146,200 97,524 40 37
Artisan International Fund 668,747 2,834,733 3,510,323 675,590 114 44
Royce Total Return Fund 285,098 2,313,684 2,547,297 233,613 84 51
Value Line Emerging Opportunities Fund 414,976 1,899,523 2,198,979 299,456 95 46
* Schwab Retirement Advantage Money Fund 895,456 3,758,528 3,758,528 -- 222 190
* Party-in-interest.
See accompanying report of independent registered public accounting firm.
12