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

                                    FORM 10-Q
(Mark One)

(X)      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the quarterly period ended            March 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
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Delaware                                   22-2866913
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


  838 Market Street, Wilmington, Delaware               19801
  ---------------------------------------               -----
  (Address of principal executive offices)            (Zip Code)


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

         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  12 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 whether the  registrant  is a large  accelerated
filer,  an accelerated  filer,  or a  non-accelerated  filer.  See definition of
"accelerated  filer and large  accelerated  filer" in Rule 12b-2 of the Exchange
Act (Check one): Large  accelerated  filer  Accelerated  filer X Non-accelerated
filer


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

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of May 5, 2006:

Common Stock, par value $.01 per share                     6,609,151
--------------------------------------            ------------------------------
         (Title of Class)                            (Shares Outstanding)



                           WSFS FINANCIAL CORPORATION

                                    FORM 10-Q

                                      INDEX



                          PART I. Financial Information

                                                                                              Page
                                                                                              ----
                                                                                        
Item 1.  Financial Statements
         --------------------

           Consolidated Statement of Operations for the Three Months
           Ended March 31, 2006 and 2005 (Unaudited)......................................     3

           Consolidated Statement of Condition as of March 31, 2006
           (Unaudited) and December 31, 2005..............................................     4

           Consolidated Statement of Cash Flows for the Three Months Ended
           March 31, 2006 and 2005 (Unaudited)............................................     5

           Notes to the Consolidated Financial Statements for the Three
           Months Ended March 31, 2006 and 2005 (Unaudited)...............................     7

Item 2.  Management's Discussion and Analysis of Financial Condition
         -----------------------------------------------------------
           and Results of Operations......................................................    15
           -------------------------

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.......................    23
         ----------------------------------------------------------

Item 4.  Controls and Procedures .........................................................    23
         -----------------------


                           PART II. Other Information


Item 1.  Legal Proceedings................................................................    23
         -----------------

Item 1A. Risk Factors.....................................................................    23
         ------------

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds .....................    24
         -----------------------------------------------------------

Item 3.  Defaults upon Senior Securities..................................................    24
         -------------------------------

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

Item 5.  Other Information ...............................................................    24
         -----------------

Item 6.  Exhibits ........................................................................    24
         --------

Signatures ...............................................................................    25

Exhibit 31 Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 ......    26

Exhibit 32 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 .......    28



                                       2



                           WSFS FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENT OF OPERATIONS




                                                          Three months ended March 31,
                                                          ----------------------------
                                                               2006       2005
                                                               ----       ----
                                                                 (Unaudited)
                                                               (In Thousands)
                                                                 
Interest income:
     Interest and fees on loans ..........................    $32,096    $23,157
     Interest on mortgage-backed securities ..............      7,332      5,874
     Interest and dividends on investment securities .....        635        755
     Other interest income ...............................        414        379
                                                              -------    -------
                                                               40,477     30,165
                                                              -------    -------
Interest expense:
     Interest on deposits ................................      8,177      4,087
     Interest on Federal Home Loan Bank advances .........     10,743      6,187
     Interest on trust preferred borrowings ..............      1,017        712
     Interest on other borrowings ........................      1,237      1,066
                                                              -------    -------
                                                               21,174     12,052
                                                              -------    -------
Net interest income ......................................     19,303     18,113
Provision for loan losses ................................        688        579
                                                              -------    -------
Net interest income after provision for loan losses ......     18,615     17,534
                                                              -------    -------

Noninterest income:
     Credit/debit card and ATM income ....................      4,160      3,203
     Deposit service charges .............................      2,577      2,178
     Investment advisory income ..........................        630        608
     Bank owned life insurance income ....................        488        496
     Loan fee income .....................................        421        426
     Mortgage banking activities, net ....................         22        144
     Other income ........................................        740        801
                                                              -------    -------
                                                                9,038      7,856
                                                              -------    -------
Noninterest expenses:
     Salaries, benefits and other compensation ...........      9,192      8,822
     Occupancy expense ...................................      1,300      1,276
     Equipment expense ...................................        982        983
     Data processing and operations expenses .............        857        911
     Marketing expense ...................................        613        525
     Professional fees ...................................        257        553
     Other operating expense .............................      3,041      1,900
                                                              -------    -------
                                                               16,242     14,970
                                                              -------    -------
Income before minority interest and taxes ................     11,411     10,420
Less minority interest ...................................         16         37
                                                              -------    -------
Income before taxes ......................................     11,395     10,383
Income tax provision .....................................      4,054      3,593
                                                              -------    -------
Net income ...............................................    $ 7,341    $ 6,790
                                                              =======    =======

Earnings per share:
   Basic .................................................    $  1.11    $  0.96
   Diluted ...............................................    $  1.06    $  0.90


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

                                       3



                                           WSFS FINANCIAL CORPORATION
                                       CONSOLIDATED STATEMENT OF CONDITION



                                                                              March 31,     December 31,
                                                                                 2006           2005
                                                                             -----------    -----------
                                                                                     (Unaudited)
                                                                                   (In Thousands)
                                                                                    
Assets
Cash and due from banks ..................................................   $    58,589    $    59,251
Cash in non-owned ATMs ...................................................       159,042        174,527
Interest-bearing deposits in other banks .................................           145            173
                                                                             -----------    -----------
    Total cash and cash equivalents ......................................       217,776        233,951
Investment securities held-to-maturity ...................................         4,632          4,806
Investment securities available-for-sale including reverse mortgages .....        54,062         52,683
Mortgage-backed securities available-for-sale ............................       618,082        608,372
Mortgage-backed securities trading .......................................        12,105         11,951
Loans held-for-sale ......................................................         1,503            436
Loans, net of allowance for loan losses of $26,143 at March 31, 2006
  and $25,381 at December 31, 2005 .......................................     1,877,770      1,774,858
Bank owned life insurance ................................................        54,681         54,193
Stock in Federal Home Loan Bank of Pittsburgh, at cost ...................        46,548         46,293
Assets acquired through foreclosure ......................................            44             59
Premises and equipment ...................................................        25,087         22,904
Accrued interest receivable and other assets .............................        40,571         36,246
                                                                             -----------    -----------

Total assets .............................................................   $ 2,952,861    $ 2,846,752
                                                                             ===========    ===========

Liabilities and Stockholders' Equity

Liabilities:
Deposits:
    Noninterest-bearing demand ...........................................   $   274,983    $   279,415
    Interest-bearing demand ..............................................       141,972        141,378
    Money market .........................................................       238,003        209,398
    Savings ..............................................................       245,011        251,675
    Time .................................................................       245,943        224,853
    Jumbo certificates of deposit - retail ...............................        97,819         87,212
                                                                             -----------    -----------
      Total retail deposits ..............................................     1,243,731      1,193,931
    Jumbo certificates of deposit - non-retail ...........................        79,122         40,567
    Brokered certificates of deposit .....................................       244,301        211,738
                                                                             -----------    -----------
        Total deposits ...................................................     1,567,154      1,446,236

Federal funds purchased and securities sold under agreements
  to repurchase...........................................................        73,400         83,150
Federal Home Loan Bank advances ..........................................       998,533      1,008,721
Trust preferred borrowings ...............................................        67,011         67,011
Other borrowed funds .....................................................        35,968         36,126
Accrued interest payable and other liabilities ...........................        26,374         23,327
                                                                             -----------    -----------
Total liabilities ........................................................     2,768,440      2,664,571
                                                                             -----------    -----------

Minority Interest ........................................................            72            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
    15,458,220 at March 31, 2006 and 15,435,630 at December 31, 2005 .....           155            154
Capital in excess of par value ...........................................        76,001         74,673
Accumulated other comprehensive loss .....................................       (15,037)        (9,968)
Retained earnings ........................................................       325,944        319,065
Treasury stock at cost, 8,852,069 shares at March 31, 2006 and 8,839,569
    shares at December 31, 2005 ..........................................      (202,714)      (201,949)
                                                                             -----------    -----------
Total stockholders' equity ...............................................       184,349        181,975
                                                                             -----------    -----------
Total liabilities, minority interest and stockholders' equity ............   $ 2,952,861    $ 2,846,752
                                                                             ===========    ===========


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

                                       4



                           WSFS FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENT OF CASH FLOWS



                                                                                   Three months ended March 31,
                                                                                   ----------------------------
                                                                                        2006           2005
                                                                                    -----------    -----------
                                                                                            (Unaudited)
                                                                                          (In Thousands)
                                                                                           
Operating activities:
Net income ......................................................................   $     7,341    $     6,790
Adjustments to reconcile net income to net cash provided by operating activities:
    Provision for loan losses ...................................................           688            579
    Depreciation, accretion and amortization ....................................           781          1,208
    Increase in accrued interest receivable and other assets ....................          (707)          (485)
    Origination of loans held-for-sale ..........................................        (4,019)       (12,036)
    Proceeds from sales of loans held-for-sale ..................................         2,682         12,565
    Gain on mortgage banking activity ...........................................           (22)          (144)
    Stock-based compensation expense (net of tax benefit recognized) ............           286              -
    Excess tax benefits from share-based payment arrangements ...................          (215)             -
    Minority interest net income ................................................            16             37
    Increase in accrued interest payable and other liabilities ..................         3,047          1,912
    Loss (gain) on sale of assets acquired through foreclosure ..................             1             (3)
    Increase in value of bank-owned life insurance ..............................          (488)          (496)
    Increase in capitalized interest, net .......................................          (311)           (67)
                                                                                    -----------    -----------
Net cash provided by operating activities .......................................         9,080          9,860
                                                                                    -----------    -----------

Investing activities:
Maturities of investment securities .............................................           180             30
Sale of investment securities available-for-sale ................................        11,000              -
Purchase of investments available-for-sale ......................................       (11,991)             -
Repayments of mortgage-backed securities held-to-maturity .......................             -              1
Repayments of mortgage-backed securities available-for-sale .....................        26,773         25,843
Purchases of mortgage-backed securities available-for-sale ......................       (44,793)       (87,022)
Repayments of reverse mortgages .................................................           125            110
Disbursements for reverse mortgages .............................................          (207)          (100)
Purchase of Cypress Capital Management LLC ......................................          (466)          (452)
Sale of loans ...................................................................           183              -
Purchase of loans ...............................................................        (3,305)        (1,742)
Net increase in loans ...........................................................      (100,002)       (71,824)
Net (decrease) increase in stock of Federal Home Loan Bank of Pittsburgh ........          (255)            83
Sales of assets acquired through foreclosure, net ...............................            14             98
Investment in partnership .......................................................            23              -
Investment in premise and equipment, net ........................................        (2,938)          (545)
                                                                                    -----------    -----------
Net cash used for investing activities ..........................................      (125,659)      (135,520)
                                                                                    -----------    -----------

Financing activities:
Net increase in demand and savings deposits .....................................        17,945         42,060
Net increase in time deposits ...................................................       102,563         19,558
Net increase in federal funds purchased .........................................             -         30,000
Net decrease in securities sold under agreement to repurchase ...................        (9,750)          (190)
Receipts from FHLB advances .....................................................     2,224,375      1,762,900
Repayments of FHLB advances .....................................................    (2,234,563)    (1,731,959)
Dividends paid on common stock ..................................................          (462)          (424)
Issuance of common stock and exercise of employee stock options .................           996          1,740
Excess tax benefits from share-based payment arrangements .......................           215              -
Purchase of treasury stock, net of reissuance ...................................          (765)        (8,409)
Decrease in minority interest ...................................................          (150)           (63)
                                                                                    -----------    -----------
Net cash provided by financing activities .......................................       100,404        115,213
                                                                                    -----------    -----------

Decrease in cash and cash equivalents ...........................................       (16,175)       (10,447)
Cash and cash equivalents at beginning of period ................................       233,951        193,009
                                                                                    -----------    -----------
Cash and cash equivalents at end of period ......................................   $   217,776    $   182,562
                                                                                    ===========    ===========


                            (Continued on next page)

                                       5


                           WSFS FINANCIAL CORPORATION
                CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)




                                                                                   Three months ended March 31,
                                                                                   ----------------------------
                                                                                         2006          2005
                                                                                    -----------    -----------
                                                                                           (Unaudited)
                                                                                          (In Thousands)
                                                                                            
Supplemental Disclosure of Cash Flow Information:
-------------------------------------------------
Cash paid in interest during the period..........................................   $    18,946    $     9,952
Cash paid for income taxes, net..................................................         1,200          1,088
Loans transferred to assets acquired through foreclosure ........................             -            303
Net change in other comprehensive income ........................................        (5,069)        (4,983)
Transfer of loans held-for-sale to loans.........................................           281            333


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

                                       6



                           WSFS FINANCIAL CORPORATION
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THREE MONTHS ENDED MARCH 31, 2006 AND 2005
                                   (UNAUDITED)


1.  BASIS OF PRESENTATION

         The  consolidated  Financial  Statements  include  the  accounts of the
parent company (WSFS Financial  Corporation),  Wilmington  Savings Fund Society,
FSB (Bank or WSFS) and Montchanin Capital Management,  Inc. (Montchanin) and its
non-wholly owned subsidiary,  Cypress Capital  Management,  LLC (Cypress).  WSFS
Financial  Corporation  (Company  or  Corporation)  also has one  unconsolidated
affiliate,  WSFS Capital Trust III (the Trust).  WSFS was founded in 1832 and is
one  of  the  oldest  financial  institutions  in  the  country.  WSFS  provides
residential  and  commercial  real  estate,   commercial  and  consumer  lending
services,  as well as  retail  deposit  and cash  management  services.  Lending
activities are funded  primarily with retail deposits and  borrowings.  Deposits
are insured to their legal maximum by the Federal Deposit Insurance  Corporation
(FDIC).  WSFS serves customers from its main office,  25 retail banking offices,
loan  production   offices  and  operations  centers  located  in  Delaware  and
southeastern  Pennsylvania.  Montchanin  was  formed  in 2003 to  provide  asset
management  products and services in the Bank's  primary market area. In January
2005,  Montchanin  acquired an 80% interest in Cypress.  Cypress is a Wilmington
based  investment  advisory  firm  servicing  high  net-worth   individuals  and
institutions.  In January 2006, Montchanin increased its ownership in Cypress to
90%.  The  Trust  was  formed  in 2005 to issue  Pooled  Floating  Rate  Capital
Securities.  The Trust  invested  all of the  proceeds  from the issuance of the
Pooled Floating Rate Capital Securities in Junior Subordinated Debentures of the
Corporation.

         Fully-owned and  consolidated  subsidiaries of WSFS include WSFS Credit
Corporation  (WCC),  WSFS  Investment  Group,  Inc.  and WSFS  Reit,  Inc.  WSFS
Investment  Group,  Inc.  markets various  third-party  investment and insurance
products, such as single-premium  annuities,  whole life policies and securities
primarily  through  WSFS' retail  banking  system.  The  investment  activity is
processed  through the Bank while the insurance  products are processed  through
WSFS Investment  Group,  Inc. WSFS Reit, Inc. is a real estate  investment trust
formed to hold qualifying real estate assets and may be used to raise capital in
the future.

         The accounting and reporting  policies of the Corporation  conform with
U.S. generally accepted  accounting  principles and prevailing  practices within
the  banking  industry  for  interim  financial  information  and Rule  10-01 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
notes required for complete financial statements and prevailing practices within
the banking  industry.  Operating results for the three month period ended March
31, 2006 are not necessarily  indicative of the results that may be expected for
any future  quarters  or for the year  ending  December  31,  2006.  For further
information,  refer to the consolidated  financial  statements and notes thereto
included  in the  Corporation's  Annual  Report of Form 10-K for the year  ended
December 31, 2005 as filed with the Securities and Exchange Commission.

Accounting for Stock Option Grants

         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  effective  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 the three months ended March 31, 2006, was an increase
of $333,000 (pre-tax) or $0.04 (after-tax) per share, to salaries,  benefits and
other compensation.

         The  Corporation has stock options  outstanding  under two stock option
plans (collectively,  "Option 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 March 31, 2006, there were 232,941 shares available for
future grants under the 2005 Plan.

         The Option 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 between 20% and 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 Option Plans.

                                       7



         A summary of the status of the  Corporation's  Option Plans and changes
during the quarter then ended is presented below:



                                           March 2006                         March 2005
                                    ---------------------------       -------------------------
                                                  Weighted-                          Weighted-
                                                   Average                           Average
                                      Shares   Exercise Price             Shares   Exercise Price
                                      ------   --------------             ------   --------------
                                                                      
Stock Options:
Outstanding at beginning of period   745,949      $  31.60               873,360     $  23.48
Granted                                5,228         62.89                 4,597        58.58
Exercised                            (17,890)        24.05               (61,720)       16.02
Forfeited                               (776)        39.83                     -            -
                                     -------                             -------
Outstanding at end of period         732,511         32.00               816,237        24.24

Exercisable at end of period         423,054         20.43               474,150        16.89

Weighted-average fair value
 of awards granted                  $  15.33                            $  14.08



     Beginning January 1, 2006,  434,144 stock options were exercisable.  During
the first  quarter of 2006,  6,800  options  vested with an  intrinsic  value of
$261,000,  a fair value of $6.31 per  option.  Also during the  quarter,  17,890
options were exercised with an intrinsic  value of $694,000.  There were 423,054
exercisable  options  remaining  at March 31, 2006,  with an intrinsic  value of
$17.8 million and a remaining  contractual  term of 5.2 years. At March 31, 2006
there were 732,511 stock options  outstanding  with an intrinsic  value of $22.5
million and a remaining  contractual term of 5.7 years. During the first quarter
of 2005,  61,720 options were exercised with an intrinsic  value of $2.5 million
and 36,374 options vested with a fair value of $4.77 per option.

     The total amount of compensation cost related to nonvested stock options as
of March 31, 2006 is $2.3 million. The weighted-average  period over which it is
expected to be recognized is 1.3 years.  The Corporation  issues new shares upon
the exercise of options.

     The Black-Scholes option-pricing model was used to determine the grant-date
fair-value  of options.  Significant  assumptions  used in the model  included a
weighted-average  risk-free rate of return of 4.7% in 2006; expected option life
of between three and  three-quarter  and six and one-half  years for all awards;
and expected  stock price  volatility of 21.9% in 2006. For the purposes of this
option-pricing  model 0.4% 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.  Upon adoption of SFAS 123R the
Corporation  has switched to a  straight-line  schedule to calculate the expense
related to stock options.

     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.

     Prior to adoption of SFAS 123R,  SFAS No. 123,  Accounting for  Stock-Based
Compensation,  encouraged,  but did not  require,  the  adoption  of  fair-value
accounting for stock-based compensation to Associates. The Company, as permitted
in 2005, had elected not to adopt the fair value  accounting  provisions of SFAS
123,  and has  instead  continued  to apply  Accounting  Principles  Board (APB)
Opinion   25,   Accounting   for  Stock   Issued  to   Employees,   and  Related
Interpretations,  and related  interpretations in accounting for the Stock Plans
and to  provide  the  required  pro  forma  disclosures  of  SFAS  123.  Had the
grant-date fair-value provisions of SFAS 123 been adopted, the Corporation would
have  recognized  pretax  compensation  expense of $250,000 for the three months
ended March 31, 2005 related to its Option Plans.

                                       8



         For comparative purposes, the following table illustrates the effect on
net income and earnings per share, for the three months ended March 31 2005, had
the Company  applied the fair value  recognition  provision of the SFAS No. 123,
Accounting for Stock-Based Compensation, to stock-based employee compensation.



                                                                                   
Net income, as reported......................................................                $ 6,790
   Less : Total stock-based employee compensation expense determined
          under fair value based methods for all awards, net of related tax
          effects............................................................                    212
                                                                                             -------
Pro forma net income.........................................................                $ 6,578
                                                                                             =======

Earnings per share:
Basic:
-----
Net income ..................................................................                $  0.96
   Less : Total stock-based employee compensation expense determined
          under fair value based methods for all awards, net of related tax
          effects............................................................                   0.03
                                                                                             -------
Pro forma net income  .......................................................                $  0.93
                                                                                             =======

Diluted:
-------
Net income, as reported......................................................                $  0.90
   Less : Total stock-based employee compensation expense determined
          under fair value based methods for all awards, net of related tax
          effects............................................................                   0.02
                                                                                             -------
Pro forma net income ........................................................                $  0.88
                                                                                             =======




2.  EARNINGS PER SHARE

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



                                                                                        For the three months ended March 31,
                                                                                        ------------------------------------
                                                                                             2006                 2005
                                                                                             ----                 ----
                                                                                      (In Thousands, Except Per Share Data)
                                                                                                         
Numerator:
---------
    Net income ..............................................................               $7,341               $6,790
                                                                                            ======               ======

Denominator:
-----------
    Denominator for basic earnings per share - weighted average shares.......                6,601                7,090
    Effect of dilutive employee stock options ...............................                  304                  419
                                                                                             -----                -----
    Denominator for diluted earnings per share - adjusted weighted average
      shares and assumed exercise ...........................................                6,905                7,509
                                                                                             =====                =====

Basic earnings per share ....................................................               $ 1.11               $ 0.96
                                                                                            ======               ======

Diluted earnings per share ..................................................               $ 1.06               $ 0.90
                                                                                            ======               ======

Outstanding common stock equivalents having no dilutive effect...............                  100                   75


                                       9



3.       ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING

         The  Corporation  has an  interest-rate  cap with a notional  amount of
$50.0 million, which limits three-month London InterBank Offered Rate (LIBOR) to
6.00% for the ten years ending  December 1, 2008.  Until  December 31, 2003, the
cap qualified as a hedge of the cash flows on $50.0  million in trust  preferred
floating  rate debt.  The change in the fair value of the cap during the hedging
relationship,  was  captured in  accumulated  other  comprehensive  income.  The
remaining  amount  recorded  in  accumulated  other  comprehensive  income  from
December 31, 2003 will be  reclassified  into interest  expense when each of the
quarterly  interest  payments is made on the trust  preferred  debt.  During the
first  quarter of 2006,  the Company  recognized  a non-cash  pre-tax  charge of
$26,000 in interest  expense for the  amortization  of the remaining  balance in
accumulated other comprehensive income.

         The fair value of the cap is estimated  using a standard  option model.
The fair value of the interest rate cap at March 31, 2006 was $162,000.  The cap
is  considered a free standing  derivative  and all changes in the fair value of
the cap are recorded in the Statement of Operations.


         The following  depicts the change in fair market value of the Company's
derivatives for the periods indicated:




                                      2006                                 2005
                        --------------------------------    ---------------------------------
                            At                    At           At                      At
                        January 1,   Change    March 31,    January 1,    Change    March 31,
                        ----------   ------    ---------    ----------    ------    ---------
                                                  (In Thousands)

                                                                  
Interest Rate Cap.......  $125        $ 37       $162         $ 322       $ (177)     $ 145



                                       10



4.       COMPREHENSIVE INCOME

         The following  schedule  reconciles  net income to total  comprehensive
income as required by SFAS No. 130, Reporting Comprehensive Income:



                                                            For the three months
                                                               ended March 31,
                                                               ---------------
                                                               (In Thousands)
                                                             2006           2005
                                                             ----           ----
                                                                   
Net income .........................................       $ 7,341        $ 6,790

Other Comprehensive Income:

Unrealized holding losses on securities
     available-for-sale arising during the period...        (8,203)        (8,153)
Tax benefit ........................................         3,117          3,098
                                                           -------        -------
Net of tax amount ..................................        (5,086)        (5,055)

Unrealized holding gains arising during the
     period on derivatives .........................            26            111
Tax expense ........................................            (9)           (39)
                                                           -------        -------
Net of tax amount ..................................            17             72

Total comprehensive income .........................       $ 2,272        $ 1,807
                                                           =======        =======


5.       TAXES ON INCOME

         The  Corporation  accounts for income taxes in accordance with SFAS No.
109,  Accounting  for Income  Taxes,  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 valuation
allowances on the deferred income taxes due to, among other things,  limitations
imposed by Internal  Revenue  Code and  uncertainties,  including  the timing of
settlement and realization of these differences.

         In November  2005,  the FASB issued FASB Staff  Position  (FSP) No. FAS
123R-3,  Transition  Election for the Tax Effects of Share-Based Payment Awards.
This FSP provides a simplified  method to calculate the  Company's  hypothetical
additional  paid-in  capital  (APIC)  pool for the  beginning  balance of excess
benefits and the method of determining the subsequent pool of option awards that
are outstanding  and fully or partially  vested upon adoption of SFAS 123R. This
FSP allows  companies up to one year from the later of the adoption date of SFAS
123R or November 10, 2006 to evaluate the available transition  alternatives and
make a one-time  election.  The  Corporation  has elected to use the  simplified
method of accounting for the tax effect of share-based payment awards.

6.       SEGMENT INFORMATION

         Under the definition of SFAS No. 131,  Disclosures About Segments of an
Enterprise and Related  Information,  the Corporation has two operating segments
at March 31, 2006: WSFS and CashConnect, the ATM division of WSFS.

         The WSFS  segment  provides  financial  products  through  its  banking
offices to commercial and retail  customers.  The CashConnect  segment  provides
turnkey ATM services through strategic  partnerships with several of the largest
networks,  manufacturers, and service providers in the ATM industry. The balance
sheet  category  "Cash in non-owned  ATMs"  includes cash in which fee income is
earned through  bailment  arrangements  with customers of CashConnect.  Bailment
arrangements are typically renewed annually.

         Reportable  segments are business units that are managed separately and
offer different  services to distinct customer bases. The Corporation  evaluates
performance  based on pre-tax  ordinary  income  relative to resources used, and
allocates  resources based on these results.  Segment  information for the three
months ended March 31, 2006 and 2005 follows:

                                       11





                                                                For the Three Months Ended March 31,
                                            ---------------------------------------------------------------------------
                                                            2006                                  2005
                                            ------------------------------------   ------------------------------------
                                                                          (In Thousands)
                                                Bank    CashConnect      Total         Bank    CashConnect      Total
                                                ----    -----------      -----         ----    -----------      -----
                                                                                         
External customer revenues:
     Interest income                        $   40,477   $        -   $   40,477   $   30,165   $        -   $   30,165
     Noninterest income                          5,580        3,458        9,038        5,180        2,676        7,856
                                            ----------   ----------   ----------   ----------   ----------   ----------
Total external customer revenues                46,057        3,458       49,515       35,345        2,676       38,021
                                            ----------   ----------   ----------   ----------   ----------   ----------

Inter-segment revenues:
     Interest income                             1,708            -        1,708          808            -          808
     Noninterest income                            230          179          409          180          155          335
                                            ----------   ----------   ----------   ----------   ----------   ----------
Total inter-segment revenues                     1,938          179        2,117          988          155        1,143
                                            ----------   ----------   ----------   ----------   ----------   ----------

Total revenue                                   47,995        3,637       51,632       36,333        2,831       39,164
                                            ----------   ----------   ----------   ----------   ----------   ----------

External customer expenses:
     Interest expense                           21,174            -       21,174       12,052            -       12,052
     Noninterest expenses                       15,329          913       16,242       14,390          580       14,970
     Provision for loan loss                       688            -          688          579            -          579
                                            ----------   ----------   ----------   ----------   ----------   ----------
Total external customer expenses                37,191          913       38,104       27,021          580       27,601
                                            ----------   ----------   ----------   ----------   ----------   ----------

Inter-segment expenses:
     Interest expense                                -        1,708        1,708            -          808          808
     Noninterest expenses                          179          230          409          155          180          335
                                            ----------   ----------   ----------   ----------   ----------   ----------
Total inter-segment expenses                       179        1,938        2,117          155          988        1,143
                                            ----------   ----------   ----------   ----------   ----------   ----------

Total expenses                                  37,370        2,851       40,221       27,176        1,568       28,744
                                            ----------   ----------   ----------   ----------   ----------   ----------

Income before minority interest and taxes   $   10,625   $      786   $   11,411   $    9,157   $    1,263       10,420

Less minority interest                                                        16                                     37
Income tax provision                                                       4,054                                  3,593
                                                                      ----------                             ----------
Consolidated net income                                               $    7,341                             $    6,790
                                                                      ==========                             ==========

Cash and cash equivalents                   $   58,734   $  159,042   $  217,776   $   52,874   $  129,688   $  182,562
Other segment assets                         2,723,554       11,531    2,735,085    2,435,084        4,431    2,439,515
                                            ----------   ----------   ----------   ==========   ==========   ==========

Total  segment assets                       $2,782,288   $  170,573   $2,952,861   $2,487,958   $  134,119   $2,622,077
                                            ==========   ==========   ==========   ==========   ==========   ==========

Capital expenditures                        $   18,614   $       60   $   18,674   $      273   $      266   $      539


                                       12



7.   INDEMNIFICATIONS AND GUARANTEES

         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 the  Federal  Home Loan  Mortgage  Corporation  as part of its  ongoing
asset/liability management program. Loans held-for-sale are carried at the lower
of cost or market. 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 the first  quarter of 2006,  the
Company made no repurchases of any loans sold in the secondary market.

         Swap  Guarantees.  The Company  entered into  agreements with unrelated
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 agreement,  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  March  31,  2006  and  December  31,  2005,   there  were  eighteen
variable-rate to fixed-rate swap transactions  between the third party financial
institutions and customers of WSFS with an initial  notional amount  aggregating
approximately $57.9 million,  and with maturities ranging from approximately one
to ten years.  The aggregate market value of these swaps to the customers was an
asset of $771,100 at March 31, 2006 and $98,600 at December 31, 2005. The amount
of liability  recorded by the Company for these guarantees that were in a paying
position  at March  31,  2006 and  December  31,  2005 was  $5,000  and  $8,000,
respectively. This amount represented the fair value of the guarantee to perform
under the terms of the swap agreements.

                                       13



8.   ASSOCIATE (EMPLOYEE) BENEFIT PLANS

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 requires that the costs of these benefits be recognized over
an Associate's  active working  career.  Disclosures are in accordance with SFAS
No. 132 (Revised), Employer's Disclosure About Pensions and Other Postretirement
Benefits (SFAS 132R) that standardized the applicable disclosure requirements.

         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 beginning in 2006. The Corporation  determined that its prescription  drug
benefits  under its  postretirement  benefit plan is  actuarially  equivalent to
Medicare Part D and thereby qualifies for subsidy under the Act.

         Based on an actuarial  analysis  performed  during the first quarter of
2006, the Corporation anticipates that its future benefit payments will be lower
due to the  subsidy.  The  reduction  to the  total  accumulated  postretirement
benefit  obligation (APBO) at January 1, 2006 was $559,000.  Recognition of this
subsidy  is  also  expected  to  reduce  2006  net  periodic  benefit  costs  by
approximately $74,000, or approximately $18,500 each quarter.

         The following  disclosures of the net periodic  benefit cost components
of  post-retirement  benefits are in accordance with SFAS 132R and were measured
at January 1, 2006:

                                                Three months ended March 31,
                                                ----------------------------
                                                  2006              2005
                                                  ----              ----

Service cost .............................         $27               $27
Interest cost ............................          23                30
Amortization of transition obligation ....          15                15
Net loss recognition .....................           -                 4
                                                   ---               ---
      Net periodic benefit cost...........         $65               $76
                                                   ===               ===

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 of the net periodic  benefit cost components
of a  supplemental  pension  plan  are in  accordance  with  SFAS  132R and were
measured at January 1, 2006:

                                               Three months ended March 31,
                                               ----------------------------
                                                  2006              2005
                                                  ----              ----

Interest  cost ...........................         $11               $11
Net loss recognition .....................          14                 6
                                                   ---               ---
      Net periodic benefit cost...........         $25               $17
                                                   ===               ===

                                       14



ITEM 2.  WSFS FINANCIAL CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF
------    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

         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  oldest
financial  institutions  in the country.  As a federal  savings bank,  which 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 174 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,  which 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, cash management and wealth
management  services.  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 from its main
office and 25 retail banking  offices,  loan  production  offices and operations
centers located in Delaware and  southeastern  Pennsylvania.  Wealth  Management
services includes WSFS Investment Group, Inc.,  Montchanin  Capital  Management,
Inc. (Montchanin) and a new investment management and trust services group.

         The Corporation has two consolidated subsidiaries, WSFS and 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 has more than $465 million in assets under  management at
March 31, 2006.

         WSFS Credit Corporation  (WCC), a consolidated  subsidiary of the Bank,
which was engaged  primarily in indirect  motor  vehicle  leasing,  discontinued
operations  in 2000.  WCC no longer  accepts new  applications  but continues to
service an immaterial amount of existing loans until their maturities.


FORWARD-LOOKING STATEMENTS

         Within this report and financial  statements,  management  has included
certain  "forward-looking  statements"  concerning the future  operations of the
Corporation. Statements contained in this 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"  contained  in  our  financial   statements.   Management  has  used
"forward-looking  statements"  to  describe  the  future  plans  and  strategies
including   expectations  of  the   Corporation's   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.  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.


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

                                       15



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  judgments 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  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  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.  The balance in this reserve at March 31,
2006 was $542,000.

         The Bank,  as successor to  originators  of reverse  mortgages is, from
time to time,  involved in  arbitration or litigation  with the 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 SFAS No.
109,  Accounting  for Income  Taxes,  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.

FINANCIAL CONDITION, CAPITAL RESOURCES AND LIQUIDITY

Financial Condition

         Total assets  increased  $106.1  million  during the three months ended
March 31,  2006.  During the first three  months of 2006,  net loans grew $102.9
million to $1.9 billion reflecting the continued strong growth in commercial and
commercial real estate loans,  which amounted to $76.0 million.  Residential and
consumer  loans  grew by $17.1  million  and  $10.6  million,  respectively.  In
addition,  mortgage-backed securities (MBS) increased by $9.9 million during the
first  three  months of 2006.  Other  assets  and  accrued  interest  receivable
increased $4.4 million.  These  increases were partially  offset by decreases of
$16.2 million in cash and cash equivalents.

         Total  liabilities  increased  $103.9 million between December 31, 2005
and March 31, 2006, to $2.8 billion,  mainly due to a $120.9 million increase in
deposits.  This included  increases of $49.8 million in retail  deposits,  $38.5
million in non-retail certificates of deposit (primarily municipal deposits) and
$32.6 million in brokered  certificates of deposit. The incremental increases in
non-retail  certificates  of deposit and brokered  certificates  of deposit were
used to fund the strong loan growth  during the quarter.  These  increases  were
partially  offset by a $10.2  million  decrease in Federal Home Loan Bank (FHLB)
advances  and a  decrease  of  $9.8  million  in  Federal  Funds  purchased  and
securities sold under agreement to repurchase.

                                       16



Capital Resources

         Stockholders'  equity  increased $2.4 million between December 31, 2005
and March 31, 2006.  This  increase was mainly due to net income of $7.3 million
and an  increase  of $5.2  million  from the  issuance  of common  stock and the
exercise of employee stock  options.  These  increases were partially  offset by
other  comprehensive  loss,  which increased $5.1 million during the first three
months  of 2006  due,  in part,  to a decline  in the fair  value of  securities
available-for-sale.  In addition, the Corporation purchased 12,500 shares of its
common stock for $765,000 ($61.22 per share average).  Finally,  the Corporation
declared cash dividends  totaling  $462,000  during the three months ended March
31, 2006.

         Below is a table comparing the Bank's consolidated  capital position to
the minimum regulatory requirements as of March 31, 2006 (dollars in thousands):



                                                                                                    To be Well-Capitalized
                                                   Consolidated                For Capital          Under Prompt Corrective
                                                   Bank Capital             Adequacy Purposes          Action Provisions
                                                   ------------             ------------------         -----------------
                                                                % of                       % of                      % of
                                               Amount         Assets         Amount      Assets        Amount      Assets
                                               ------         ------         ------      ------        ------      ------
                                                                                               
Total Capital
  (to Risk-Weighted Assets) ........         $272,608          13.18%      $165,461        8.00%     $206,826      10.00%
Core Capital (to Adjusted
  Total Assets).....................          251,964          12.18        118,499        4.00       148,124       5.00
Tangible Capital (to Tangible
  Assets) ..........................          251,964           8.51         44,437        1.50           N/A        N/A
Tier 1 Capital (to Risk-Weighted
  Assets)...........................          251,964           8.51         82,730        4.00       124,096       6.00


         Under Office of Thrift Supervision (OTS) capital  regulations,  savings
institutions such as the Bank 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  actions and possibly  additional  discretionary
actions by regulators  that, if undertaken,  could have a direct material effect
on the Bank's financial statements. At March 31, 2006 the Bank was in compliance
with  regulatory  capital  requirements  and is considered a  "well-capitalized"
institution.

Liquidity

         The Company  manages its  liquidity  risk and funding needs through its
treasury function and through its Asset/Liability  Committee.  The Company has a
policy  that  separately  addresses  liquidity,   and  management  monitors  the
Company's  adherence to policy limits. One measure of the Company's liquidity is
the  ratio  of cash  and  qualified  assets  to net  withdrawable  deposits  and
borrowings due within one year, which was 6.5% at March 31, 2006,  compared with
7.4% at  December  31,  2005.  Both of these  ratios  were well in excess of the
policy minimum. Also, liquidity risk management is a primary area of examination
by the OTS. The Company complies with guidance promulgated under Thrift Bulletin
77 that requires thrift  institutions to maintain  adequate  liquidity to assure
safe and sound operations.

         As a  financial  institution,  the Bank has  ready  access  to  several
sources to fund  growth  and meet its  liquidity  needs.  Among  these are:  net
income, deposit programs,  loan repayments,  borrowing from the FHLB, repurchase
agreements  and the  brokered  CD market.  The branch  expansion  the Company is
currently undertaking is intended to enter the Company into new, but contiguous,
markets, attract new customers and provide funding for its business loan growth.
In addition,  the  Corporation  has a large  portfolio of  high-quality,  liquid
investments, primarily short-duration, AAA-rated, mortgage-backed securities and
Agency notes that are  positioned  to provide a  near-continuous  source of cash
flow to meet current cash needs,  or can be sold to meet larger  discrete  needs
for cash.  Management  believes  these  sources are  sufficient  to maintain the
required and prudent levels of liquidity.

         During the three months ended March 31, 2006, net loan growth  resulted
in the use of $103.1  million in cash.  The loan growth was primarily the result
of the successful  implementation  of specific  strategies  designed to increase
corporate and small business lending.  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,  primarily  through the Federal
Home Loan Bank of Pittsburgh.

         Additionally,  during  the three  months  ended  March 31,  2006,  $9.1
million in cash was provided by  operating  activities,  while $17.9  million in
cash was provided  through the net  increase in demand and savings  deposits and
$102.6  million in cash  through  the net  increase  in time  deposits.  For the
period, cash and cash equivalents decreased $16.2 million to $217.8 million.

                                       17


NONPERFORMING ASSETS

         The following table sets forth the Corporation's  nonperforming  assets
and  past  due  loans  at the  dates  indicated.  Nonperforming  assets  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 the value of the collateral is  insufficient  to
cover principal and interest.  Interest  accrued but not collected at the date a
loan is placed on  nonaccrual  status is reversed and charged  against  interest
income.  In addition,  the  amortization  of net deferred loan fees is suspended
when a loan is placed on nonaccrual status. Subsequent cash receipts are applied
either to the  outstanding  principal  balance or recorded  as interest  income,
depending on management's assessment of the ultimate collectibility of principal
and interest. Past due loans are loans contractually past due 90 days or more as
to principal or interest  payments  but which remain on accrual  status  because
they are considered well secured and in the process of collection.



                                                         March 31,         December 31,
                                                           2006                2005
                                                          ------              ------
                                                                (In Thousands)
                                                                      
Nonaccruing loans:
     Commercial .......................................   $  868              $  925
     Consumer .........................................      103                 155
     Commercial mortgage ..............................      419                 727
     Residential mortgage .............................    1,465               1,567
     Construction .....................................       36                  36
                                                          ------              ------

Total nonaccruing loans ...............................    2,891               3,410
Assets acquired through foreclosure ...................       44                  59
                                                          ------              ------
Total nonperforming assets ............................   $2,935              $3,469
                                                          ======              ======

Past due loans:
     Residential mortgages ............................   $  247              $  327
     Commercial and commercial mortgages ..............        -                   -
     Consumer .........................................       30                  59
                                                          ------              ------
Total past due loans ..................................   $  277              $  386
                                                          ======              ======

Ratios:
     Nonaccruing loans to total loans (1) .............     0.15%               0.19%
     Allowance for loan losses to gross loans (1)......     1.37%               1.41%
     Nonperforming assets to total assets .............     0.10%               0.12%
     Loan loss allowance to nonaccruing loans (2)......      863%                709%
     Loan and foreclosed asset allowance to total
       nonperforming assets (2) .......................      850%                697%


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

         Nonperforming  assets  decreased  $534,000  between  March 31, 2006 and
December  31,  2005.  The  decrease  in  commercial,  consumer,  commercial  and
residential  mortgage  resulted  from  collections,   charge-offs,  and  accrual
transfers  of  various  loans  exceeding  non-accrual  additions.   Construction
remained unchanged.  Assets acquired through foreclosure  decreased $15,000 as a
result of a write-down to a residential  property.  An analysis of the change in
the balance of non-performing assets is presented below.



                                                          For the Three
                                                           Months Ended        For the Year Ended
                                                          March 31, 2006        December 31, 2005
                                                          --------------        -----------------
                                                                    (In Thousands)
                                                                            
Beginning balance..................................           $3,469                $4,613
     Additions ....................................              566                 5,062
     Collections...................................             (884)               (4,467)
     Transfers to accrual/restructured status......             (113)                 (398)
     Charge-offs / write-downs, net................             (103)               (1,341)
                                                              ------                ------
Ending balance.....................................           $2,935                $3,469
                                                              ======                ======

                                       18


         The  timely  identification  of problem  loans is a key  element in the
Corporation's  strategy  to manage its loan  portfolios.  Timely  identification
enables the Corporation to take appropriate  action and,  accordingly,  minimize
losses.  An asset review system  established to monitor the asset quality of the
Corporation's  loans and investments in real estate  portfolios  facilitates the
identification  of problem assets. In general,  this system utilizes  guidelines
established by federal regulation;  however,  there can be no assurance that the
levels or the categories of problem loans and assets established by the Bank are
the same as those, which would result from a regulatory examination.

INTEREST SENSITIVITY

         The  matching  of   maturities   or   repricing   periods  of  interest
rate-sensitive assets and liabilities to ensure a favorable interest rate spread
and mitigate  exposure to  fluctuations  in interest rates is the  Corporation's
primary tool for achieving its asset/liability management strategies. Management
regularly reviews the  interest-rate  sensitivity of the Corporation and adjusts
the sensitivity within acceptable tolerance ranges established by management. At
March 31, 2006,  interest-earning assets exceeded  interest-bearing  liabilities
that mature or reprice within one year (interest-sensitive gap) by $1.3 million.
The    Corporation's    interest-sensitive    assets   as   a   percentage    of
interest-sensitive  liabilities  within the one-year window increased to 100% at
March 31, 2006  compared to 99% at December  31,  2005.  Likewise,  the one-year
interest-sensitive gap as a percentage of total assets changed to 0.04% at March
31, 2006 from -0.57% at  December  31,  2005.  The change in  sensitivity  since
December 31, 2005 is the result of the current interest rate environment and the
Corporation's  continuing  effort to  effectively  manage  interest  rate  risk.
Interest  rate-sensitive  assets  of the  Corporation  excluded  cash  flows  of
discontinued operations as well as the interest rate-sensitive funding for these
assets.

         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  OTS-regulated  institutions,  is the test
specified by OTS Thrift  Bulletin  No. 13a  "Management  of Interest  Rate Risk,
Investment Securities and Derivative  Activities." This test measures the impact
on the net portfolio value ratio of an immediate change in interest rates in 100
basis  point  increments.  The net  portfolio  value ratio is defined as the net
present  value of the  estimated  cash flows from  assets and  liabilities  as a
percentage  of net  present  value of cash flows  from total  assets (or the net
present value of equity).  The table below is the estimated  impact of immediate
changes in interest rates on the Company's net interest margin and net portfolio
value ratio at the  specified  levels at March 31, 2006 and 2005,  calculated in
compliance with Thrift Bulletin No. 13a:



                                                      At March 31,
                             --------------------------------------------------------------------
                                          2006                                2005
                             -------------------------------    ---------------------------------
              Change in       % Change in                        % Change in
            Interest Rate     Net Interest   Net Portfolio       Net Interest     Net Portfolio
           (Basis Points)      Margin (1)    Value Ratio (2)       Margin (1)     Value Ratio (2)
           --------------      ----------    ---------------       ----------     ---------------
                                                                   
                 +300              -1%             7.12%               1%             8.30%
                 +200               0%             7.77%               1%             8.70%
                 +100               0%             8.38%               1%             8.98%
                    0               0%             8.90%               0%             9.17%
                 -100              -1%             9.35%              -2%             9.17%
                 -200              -3%             9.40%              -7%             9.02%
                 -300              -7%             9.28%             -14%             9.04%


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

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



COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005

Results of Operations

         The  Corporation  recorded  net  income  of $7.3  million  or $1.06 per
diluted  share for the first  quarter of 2006.  This compares to $6.8 million or
$0.90 per diluted share for the same quarter last year.

                                       19



Net Interest Income

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



                                                                             Three Months Ended March 31,
                                                      ---------------------------------------------------------------------------
                                                                        2006                                  2005
                                                      -----------------------------------      ----------------------------------
                                                      Average                    Yield/        Average                   Yield/
                                                      Balance        Interest    Rate (1)      Balance      Interest     Rate (1)
                                                      -------        --------    --------      -------      --------     --------
                                                                                (Dollars in Thousands)
                                                                                                      
Assets:
Interest-earning assets:
Loans (2) (3):
     Commercial real estate loans .............   $   605,189       $  11,760      7.77%      $550,790      $  8,584      6.23%
     Residential real estate loans ............       466,329           6,279      5.39        437,109         5,580      5.11
     Commercial loans .........................       525,339           9,645      7.55        385,439         5,489      5.98
     Consumer loans ...........................       250,856           4,406      7.12        212,762         3,469      6.61
                                                  -----------        --------              -----------      --------
       Total loans ............................     1,847,713          32,090      7.01      1,586,100        23,122      5.90
Mortgage-backed securities (4) ................       623,551           7,332      4.70        542,965         5,874      4.33
Loans held-for-sale (3) .......................           594               6      4.04          2,510            35      5.58
Investment securities (4) .....................        58,060             635      4.37         97,194           755      3.11
Other interest-earning assets .................        48,690             414      3.45         45,950           379      3.30
                                                  -----------        --------              -----------      --------
     Total interest-earning assets ............     2,578,608          40,477      6.32      2,274,719        30,165      5.35
                                                                     --------                               --------
Allowance for loan losses .....................       (25,515)                                 (24,377)
Cash and due from banks .......................        51,364                                   54,011
Cash in non-owned ATMs ........................       144,436                                  123,306
Bank owned life insurance .....................        54,365                                   52,367
Other noninterest-earning assets ..............        59,986                                   54,310
                                                  -----------                              -----------
     Total assets .............................   $ 2,863,244                              $ 2,534,336
                                                  ===========                              ===========

Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
     Interest-bearing demand ..................   $   123,805             140      0.46%   $    99,596      $     59      0.24%
     Money market .............................       226,229           1,714      3.07        141,107           590      1.70
     Savings ..................................       247,152             511      0.84        285,462           271      0.39
     Retail time deposits .....................       322,184           2,688      3.38        286,722         1,851      2.62
                                                  -----------        --------              -----------      --------
       Total interest-bearing retail deposits .       919,370           5,053      2.23        812,887         2,771      1.38
Jumbo certificates of deposits ................        60,081             663      4.48         45,250           294      2.63
Brokered certificates of deposit ..............       226,022           2,461      4.42        156,471         1,022      2.65
                                                  -----------        --------              -----------      --------
       Total interest-bearing deposits.........     1,205,473           8,177      2.75      1,014,608         4,087      1.63
FHLB of Pittsburgh advances ...................     1,003,350          10,743      4.28        819,476         6,187      3.02
Trust preferred borrowings ....................        67,011           1,017      6.07         51,547           712      5.53
Other borrowed funds ..........................       121,822           1,237      4.06        194,210         1,066      2.20
                                                  -----------        --------              -----------      --------
     Total interest-bearing liabilities .......     2,397,656          21,174      3.53      2,079,841        12,052      2.32
                                                                     --------                               --------
Noninterest-bearing demand deposits ...........       257,963                                  239,590
Other noninterest-bearing liabilities .........        21,022                                   15,861
Minority interest .............................           154                                      224
Stockholders' equity ..........................       186,449                                  198,820
                                                  -----------                              -----------
Total liabilities and stockholders' equity ....   $ 2,863,244                              $ 2,534,336
                                                  ===========                              ===========
Excess of interest-earning assets
     over interest-bearing liabilities ........   $   180,952                              $   194,878
                                                  ===========                              ===========
Net interest and dividend income ..............                     $  19,303                               $ 18,113
                                                                    =========                               ========

Interest rate spread ..........................                                    2.79%                                  3.03%
                                                                                   ====                                   ====
Net interest margin ...........................                                    3.04%                                  3.23%
                                                                                   ====                                   ====


(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.

                                       20



         Net  interest  income for the first  quarter of 2006 was $19.3  million
compared to $18.1  million for the same quarter in 2005.  Higher loan and higher
mortgage backed securities (MBS) volumes drove much of this increase.  The yield
on earning  assets was also higher in the first  quarter of 2006 compared to the
first  quarter  of 2005.  The yield on loans  increased  1.11% from 5.90% in the
first quarter of 2005 to 7.01% in the first quarter of 2006;  while the yield on
mortgage backed securities increased 0.37% for the same period. The increases in
the yields were due to the higher overall level of market  interest rates as the
Federal  Reserve  continued  raising short term interest  rates through 2005 and
into 2006. The net interest margin for the first quarter of 2006 was 3.04%, down
..19% from March 31, 2005.  Rates on interest  bearing  liabilities rose 1.21% to
3.53% from 2.32% at March 31, 2005.

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   judgment  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. 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 loss experience for
such loans and may be adjusted for  significant  factors that,  in  management's
judgment,  affect the collectability of the portfolio as of the evaluation date.
See discussion of historical loss adjustment factors below.

         Pooled     loans    are    loans    that    are    usually     smaller,
not-individually-graded  and homogenous in nature, such as consumer  installment
loans  and  residential  mortgages.  Pooled  loan loss  allowances  are based on
historical  net  charge-offs  for ten years.  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 then assigned a reserve for losses based upon this
historical loss information and historical 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 (including trends in nonperforming  loans expected to
     result from existing conditions),
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.  The provision for loan losses increased from $579,000 for
the first three  months of 2005 to $688,000  for the first three months of 2006,
primarily  the result of more than $100  million in loan growth  during the most
recent quarter, despite continued positive trends in asset quality.

         The  Corporation  maintains  allowances  for credit  losses and charges
losses to these  allowances  when such losses are realized.  The  allowances for
losses are maintained at a level which management  considers adequate to provide
for  losses  based  upon an  evaluation  of  known  and  inherent  risks  in the
portfolios.  Management's  evaluation  is based upon a continuing  review of the
portfolios.

                                       21



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



                                                        Three months ended March 31,
                                                        ----------------------------
                                                           2006             2005
                                                           ----             ----
                                                          (Dollars in Thousands)
                                                                 
Beginning balance ...............................       $ 25,381         $ 24,222
Provision for loan losses .......................            688              579

Charge-offs:
     Residential real estate ....................             58               36
     Commercial real estate (1) .................              -                -
     Commercial .................................             30               66
     Consumer ...................................             81              158
                                                        --------         --------
        Total charge-offs .......................            169              260
                                                        --------         --------
Recoveries:
     Residential real estate ....................              3               56
     Commercial real estate (1) .................            147                -
     Commercial .................................             49                9
     Consumer ...................................             44               41
                                                        --------         --------
        Total recoveries ........................            243              106
                                                        --------         --------

Net charge-offs .................................            (74)             154
                                                        --------         --------
Ending balance ..................................       $ 26,143         $ 24,647
                                                        ========         ========
Net charge-offs to average gross loans
  outstanding, net of unearned income (2)........          (0.02)%           0.04%
                                                        ========         ========


(1)  Includes commercial mortgage and construction loans.
(2)  Ratios for the three months ended March 31, 2006 and 2005 are annualized.

Noninterest Income

         Noninterest  income  for the  quarter  ended  March  31,  2006 was $9.0
million  compared to $7.9 million for the first quarter of 2005, a 15% increase.
The increase over the first quarter of the prior year was mainly attributable to
increases of $957,000 in card and ATM income as a result of underlying growth in
volumes combined with $399,000 in increased deposit services  charges.  Mortgage
banking  activities  declined  $122,000  as fewer  loans  sold  during the first
quarter of 2006 resulted in lower mortgage  servicing rights being recognized by
the Corporation.

Noninterest Expense

         Noninterest  expense  for the  quarter  ended  March 31, 2006 was $16.2
million for an increase of $1.2 million over the $15.0 million  reported for the
same period of 2005.  The 8% increase  was  primarily a result of  increases  in
salaries,  benefits and other compensation,  and other operating  expenses.  The
salaries, benefits and other compensation increase was mainly due to $333,000 of
expenses  related to stock  options.  As of January  1,  2006,  the  Corporation
implemented  Statement of Financial Accounting Standards (SFAS) No. 123 (revised
2004),  Share-Based  Payment,  which requires that all  share-based  payments to
Associates,  including  grants of stock options,  be recognized as  compensation
expense in the income  statement  based on their fair  values.  The  increase in
other operating expenses stem from the reversal of a $503,000 reserve for losses
in the CashConnect (ATM) business recorded during the first quarter of 2005 that
was no longer necessary because losses were unlikely.  Additionally,  a $120,000
loss  contingency  for standby  letters of credit was recorded  during the first
quarter  of  2006.  The  increases  were  offset  by  a  $296,000   decrease  in
professional fees,  partially the result of the first quarter 2006 reversal of a
reserve related to reverse mortgages.  This reserve is analyzed quarterly and is
adjusted in accordance with a formulaic calculation.

Income Taxes

         The Corporation and its subsidiaries file a consolidated Federal income
tax return and separate state income tax returns. Income taxes are accounted for
in accordance  with SFAS 109,  which  requires the recording of deferred  income
taxes for tax consequences of "temporary  differences." The Corporation recorded
a provision  for income  taxes  during the three  months ended March 31, 2006 of
$4.1  million  compared to an income tax  provision of $3.6 million for the same
period in 2005.  The  effective  tax rates for each of the three  month  periods
ended March 31, 2006 and 2005 were 36% and 35%, respectively.

                                       22



         The effective tax rates reflect the recognition of certain tax benefits
in the financial  statements  including those benefits from tax-exempt  interest
income, BOLI income and fifty-percent  interest income exclusion on a loan to an
Employee Stock Ownership  Plan.  These tax benefits are offset by the tax effect
of stock based  compensation  expense  related to incentive  stock options and a
provision for state income tax expense.

         The  Corporation  analyzes  its  projections  of  taxable  income on an
ongoing  basis  and  makes   adjustments  to  its  provision  for  income  taxes
accordingly.

RECENT ACCOUNTING PRONOUNCEMENTS

         In February  2006,  the  Financial  Accounting  Standards  Board (FASB)
issued Statement of Financial  Accounting  Standards (SFAS) No. 155,  Accounting
for Certain  Hybrid  Financial  Instruments - An Amendment of Statements No. 133
and  140.  This  Statement  permits  fair  value  remeasurement  for any  hybrid
financial  instrument that contains an embedded  derivative that otherwise would
require  bifurcation.  It also  clarifies  which  interest-only  strips  are not
subject  to the  requirements  of  SFAS  133.  In  addition,  it  establishes  a
requirement to evaluate  interests in securitized  financial  assets to identify
interests  that  are  freestanding  derivatives  or that  are  hybrid  financial
instruments that contain an embedded derivative requiring bifurcation.  SFAS 155
becomes  effective in fiscal  years  beginning  after  September  15, 2006.  The
adoption of this  Statement  is not  expected  to have a material  impact on the
Corporation's Consolidated Financial Statements.

         In March 2006,  the FASB issued SFAS No. 156,  Accounting for Servicing
of Financial  Assets - An Amendment of Statement  No. 140. This  Statement  will
modify the accounting for servicing assets and liabilities, such as those common
with  mortgage  securitization   activities.  The  new  Standard  addresses  the
recognition  and  measurement  of  separately  recognized  servicing  assets and
liabilities and provides an approach to lessen the efforts to obtain  hedge-like
(offset) accounting.  SFAS 156 becomes effective in fiscal years beginning after
September  15, 2006.  The  adoption of this  Statement is not expected to have a
material impact on the Corporation's Consolidated Financial Statements.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk
         ----------------------------------------------------------
         Incorporated  herein by reference from Item 2, of this quarterly report
         on Form 10-Q.

Item 4.   Controls and Procedures
          -----------------------
          (a)  Evaluation of disclosure controls and procedures.  Based on their
               evaluation of the Company's  disclosure  controls and  procedures
               (as defined in Rules 13a-15(e) under the Securities  Exchange Act
               of 1934 (the "Exchange Act")), the Company's  principal executive
               officer and the principal  financial  officer have concluded that
               as of the end of the period covered by this  Quarterly  Report on
               Form 10-Q such  disclosure  controls and procedures are effective
               and is accumulated and communicated to the Company's  management,
               including the principal executive officer and principal financial
               officer,  as  appropriate  to allow  timely  decisions  regarding
               required disclosures.

          (b)  Changes in internal control over financial reporting.  During the
               quarter  under  report,  there  was no  change  in the  Company's
               internal  control over  financial  reporting  that has materially
               affected,  or is  reasonably  likely to  materially  affect,  the
               Company's internal control over financial reporting.

Part II.   OTHER INFORMATION

Item 1.    Legal Proceedings
           -----------------
           The  Company is not  engaged in any legal  proceedings  of a material
           nature at March 31, 2006.  From time to time, the Company is party to
           legal  proceedings  in the  ordinary  course of  business  wherein it
           enforces its security interest in loans.

Item 1A.   Risk Factors
           ------------
           Management  of the  Company  does not  believe  there  have  been any
           material changes to the risk factors previously  disclosed under Item
           1A. of the Company's  Form 10-K for the year ended December 31, 2005,
           previously filed with the Securities and Exchange Commission.

                                       23



Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
           -----------------------------------------------------------

         The  following  table lists  purchases  of the  Company's  common stock
during the first quarter of 2006.



                                                                                    Total Number of         Maximum Number
                                                     Total Number      Average     Shares Purchased       of Shares that May
                                                      of Shares      Price Paid   as Part of Publicly      Yet Be Purchased
                                                      Purchased       per Share     Announced Plans           Under Plans
                                                      ---------       ---------     ---------------           -----------
                                                                                               
           January 1, to January 31, 2006                      0         $0.00                  0               650,000

           February 1, to February 28, 2006                    0         $0.00                  0               650,000

           March 1, to March 31, 2006                     12,500        $61.22             12,500               637,500

           Total for the quarter ended March 31, 2006     12,500        $61.22


           There is no expiration date under either Plan.

Item 3.    Defaults upon Senior Securities
           -------------------------------
           Not applicable

Item 4.    Submission of Matters to a Vote of Security Holders
           ---------------------------------------------------
           Not applicable

Item 5.    Other Information
           -----------------
           Not applicable

Item 6.    Exhibits
           --------
          (a)  Exhibit  31 -  Certifications  pursuant  to  Section  302  of the
               Sarbanes-Oxley Act of 2002
          (b)  Exhibit  32 -  Certifications  pursuant  to  Section  906  of the
               Sarbanes-Oxley Act of 2002

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SIGNATURES

         Pursuant to the  requirements  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:  May 9, 2006                     /s/MARVIN N. SCHOENHALS
                                          -------------------------------------
                                          Marvin N. Schoenhals
                                          President and Chief Executive Officer






Date:  May 9, 2006                     /s/STEPHEN A. FOWLE
                                          -------------------------------------
                                          Stephen A. Fowle
                                          Executive Vice President and
                                          Chief Financial Officer


                                       25