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     September 30, 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 November 3, 2006:

Common Stock, par value $.01 per share                            6,677,087
--------------------------------------                            ---------
        (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 and Nine months
           Ended September 30, 2006 and 2005 (Unaudited)......................................    3

           Consolidated Statement of Condition as of September 30, 2006
           (Unaudited) and December 31, 2005..................................................    4

           Consolidated Statement of Cash Flows for the Nine months Ended
           September 30, 2006 and 2005 (Unaudited)............................................    5

           Notes to the Consolidated Financial Statements for the Three and Nine
           Months Ended September 30, 2006 and 2005 (Unaudited)...............................    7

Item 2.  Management's Discussion and Analysis of Financial Condition
         -----------------------------------------------------------
           and Results of Operations..........................................................   16
           -------------------------

Item 3.  Quantitative and Qualitative Disclosures About Market Risk...........................   27
         ----------------------------------------------------------

Item 4.  Controls and Procedures .............................................................   27
         -----------------------


                           PART II. Other Information


Item 1.  Legal Proceedings....................................................................   28
         -----------------

Item 1A. Risk Factors.........................................................................   28
         ------------

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds .........................   28
         -----------------------------------------------------------

Item 3.  Defaults upon Senior Securities......................................................   28
         -------------------------------

Item 4.  Submission of Matters to a Vote of Security Holders..................................   28
         ---------------------------------------------------

Item 5.  Other Information ...................................................................   28
         -----------------

Item 6.  Exhibits ............................................................................   28
         --------

Signatures ....................................................................................  29

Exhibit 31 Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 ...........  30

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



                                       2



                           WSFS FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENT OF OPERATIONS



                                                           Three months ended September 30,         Nine months ended September 30,
                                                           --------------------------------         -------------------------------
                                                                 2006               2005                2006                2005
                                                              ---------          ---------           ---------           ---------
                                                                                          (Unaudited)
                                                                              (In Thousands, Except Per Share Data)
                                                                                                            
Interest income:
   Interest and fees on loans .........................      $  37,577           $  27,419           $ 105,005           $  76,023
   Interest on mortgage-backed securities .............          7,186               6,445              21,989              18,763
   Interest and dividends on investment securities.....            616                 921               1,639               2,315
   Other interest income ..............................            752                 351               1,843               1,086
                                                             ---------           ---------           ---------           ---------
                                                                46,131              35,136             130,476              98,187
                                                             ---------           ---------           ---------           ---------

Interest expense:
   Interest on deposits ...............................         11,392               5,674              29,682              14,423
   Interest on Federal Home Loan Bank advances ........         12,384               7,955              35,131              21,405
   Interest on trust preferred borrowings .............          1,736                 954               3,859               3,633
   Interest on other borrowings .......................          1,499               1,338               3,995               3,620
                                                             ---------           ---------           ---------           ---------
                                                                27,011              15,921              72,667              43,081
                                                             ---------           ---------           ---------           ---------
Net interest income ...................................         19,120              19,215              57,809              55,106
Provision for loan losses .............................            319                 225               1,702               1,576
                                                             ---------           ---------           ---------           ---------
Net interest income after provision for loan losses....         18,801              18,990              56,107              53,530
                                                             ---------           ---------           ---------           ---------

Noninterest income:
   Credit/debit card and ATM income ...................          4,982               3,907              14,000              10,775
   Deposit service charges ............................          2,979               2,676               8,382               7,341
   Bank owned life insurance income ...................          2,401                 499               3,411               1,522
   Investment advisory income .........................            573                 651               1,821               1,878
   Loan fee income ....................................            458                 516               1,292               1,511
   Mortgage banking activities, net ...................            136                 106                 219                 287
   Securities losses ..................................         (1,940)               (609)             (1,981)               (609)
   Other income .......................................            720                 838               2,083               2,449
                                                             ---------           ---------           ---------           ---------
                                                                10,309               8,584              29,227              25,154
                                                             ---------           ---------           ---------           ---------

Noninterest expense:
   Salaries, benefits and other compensation ..........         10,189               9,061              28,802              26,377
   Occupancy expense ..................................          1,387               1,290               4,034               3,829
   Equipment expense ..................................          1,162                 950               3,219               2,887
   Data processing and operations expenses ............            886                 761               2,632               2,670
   Marketing expense ..................................            676                 689               2,017               2,042
   Professional fees ..................................            587                 610               1,349               1,661
   Other operating expense ............................          2,700               2,789               8,708               7,257
                                                             ---------           ---------           ---------           ---------
                                                                17,587              16,150              50,761              46,723
                                                             ---------           ---------           ---------           ---------

Income before minority interest and taxes .............         11,523              11,424              34,573              31,961
Less minority interest ................................              9                  48                  40                 122
                                                             ---------           ---------           ---------           ---------
Income before taxes ...................................         11,514              11,376              34,533              31,839
Income tax provision ..................................          3,511               3,969              11,691              11,076
                                                             ---------           ---------           ---------           ---------
Net Income ............................................      $   8,003           $   7,407           $  22,842           $  20,763
                                                             =========           =========           =========           =========

Earnings per share:
   Basic ..............................................      $    1.20           $    1.12           $    3.45           $    3.02
   Diluted ............................................      $    1.16           $    1.06           $    3.31           $    2.85


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

                                       3


                           WSFS FINANCIAL CORPORATION
                       CONSOLIDATED STATEMENT OF CONDITION


                                                                                 September 30,   December 31,
                                                                                     2006           2005
                                                                                  -----------    -----------
                                                                                          (Unaudited)
                                                                            (In Thousands, Except Per Share Data)
                                                                                         
Assets:
Cash and due from banks .......................................................   $    67,616    $    59,251
Cash in non-owned ATMs ........................................................       155,257        174,527
Federal funds sold and securities purchased under agreements to resell ........        15,000              -
Interest-bearing deposits in other banks.......................................           628            173
                                                                                  -----------    -----------
   Total cash and cash equivalents ............................................       238,501        233,951
Investment securities held-to-maturity.........................................         4,383          4,806
Investment securities available-for-sale including reverse mortgages ..........        50,216         52,683
Mortgage-backed securities available-for-sale .................................       525,633        608,372
Mortgage-backed securities trading ............................................        12,279         11,951
Loans held-for-sale............................................................           621            436
Loans, net of allowance for loan losses of $26,747 at September 30, 2006
   and $25,381 at December 31, 2005 ...........................................     1,986,982      1,774,858
Bank owned life insurance .....................................................        57,604         54,193
Stock in Federal Home Loan Bank of Pittsburgh, at cost ........................        48,156         46,293
Assets acquired through foreclosure............................................            17             59
Premises and equipment ........................................................        28,075         22,904
Accrued interest receivable and other assets ..................................        47,235         36,246
                                                                                  -----------    -----------

Total assets ..................................................................   $ 2,999,702    $ 2,846,752
                                                                                  ===========    ===========
Liabilities and Stockholders' Equity

Liabilities:
Deposits:
   Noninterest-bearing demand .................................................   $   263,363    $   279,415
   Interest-bearing demand ....................................................       127,861        141,378
   Money market ...............................................................       235,210        209,398
   Savings ....................................................................       238,978        251,675
   Time .......................................................................       308,686        224,853
   Jumbo certificates of deposit - customer ...................................       118,339         87,212
                                                                                  -----------    -----------
      Total customer deposits .................................................     1,292,437      1,193,931
   Other jumbo certificates of deposit ........................................        84,352         40,567
   Brokered certificates of deposit ...........................................       239,361        211,738
                                                                                  -----------    -----------
      Total deposits ..........................................................     1,616,150      1,446,236

Federal funds purchased and securities sold under agreements to repurchase ....        63,400         83,150
Federal Home Loan Bank advances ...............................................       956,755      1,008,721
Trust preferred borrowings ....................................................        67,011         67,011
Other borrowed funds ..........................................................        58,549         36,126
Accrued interest payable and other liabilities ................................        29,407         23,327
                                                                                  -----------    -----------
Total liabilities .............................................................     2,791,272      2,664,571
                                                                                  -----------    -----------

Minority Interest..............................................................            47            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
   15,546,556 at September 30, 2006 and 15,435,630 at December 31, 2005 .......           155            154
Capital in excess of par value ................................................        79,477         74,673
Accumulated other comprehensive loss...........................................        (7,749)        (9,968)
Retained earnings .............................................................       340,386        319,065
Treasury stock at cost, 8,871,469 shares at September 30, 2006 and 8,839,569
   shares at December 31, 2005.................................................      (203,886)      (201,949)
                                                                                  -----------    -----------
Total stockholders' equity ....................................................       208,383        181,975
                                                                                  -----------    -----------
Total liabilities, minority interest and stockholders' equity .................   $ 2,999,702    $ 2,846,752
                                                                                  ===========    ===========

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

                                       4



                           WSFS FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENT OF CASH FLOWS



                                                                                      Nine months ended September 30,
                                                                                      ------------------------------
                                                                                           2006           2005
                                                                                        -----------    -----------
                                                                                                (Unaudited)
                                                                                               (In Thousands)
                                                                                                
Operating activities:
Net income ..........................................................................   $    22,842    $    20,763
Adjustments to reconcile net income to net cash provided by operating activities:
   Provision for loan losses ........................................................         1,702          1,576
   Depreciation, accretion and amortization .........................................         3,622          4,598
   (Increase) decrease in accrued interest receivable and other assets ..............       (11,773)           805
   Origination of loans held-for-sale................................................       (17,134)       (32,971)
   Proceeds from sales of loans held-for-sale .......................................        15,216         32,691
   Gain on mortgage banking activity.................................................          (219)          (287)
   Loss on sale of investments ......................................................         1,981            609
   Stock-based compensation expense (net of tax benefit recognized) .................           847              -
   Excess tax benefits from share-based payment arrangements.........................        (1,529)             -
   Minority interest net income .....................................................            40            122
   Increase in accrued interest payable and other liabilities .......................         7,609          8,607
   Loss (gain) on sale of assets acquired through foreclosure........................            44           (119)
   Increase in value of bank-owned life insurance....................................        (3,411)        (1,523)
   Increase in capitalized interest, net.............................................          (562)          (201)
                                                                                        -----------    -----------
Net cash provided by operating activities ...........................................        19,275         34,670
                                                                                        -----------    -----------
Investing activities:
Maturities of investment securities .................................................           440          2,045
Sale of investment securities available-for-sale ....................................        23,950         60,451
Purchase of investments available-for-sale ..........................................       (20,718)       (22,767)
Repayments of mortgage-backed securities held-to-maturity............................             -              4
Repayments of mortgage-backed securities available-for-sale .........................        81,590         85,153
Sales of mortgage-backed securities available-for-sale ..............................        49,412              -
Purchases of mortgage-backed securities available-for-sale ..........................       (47,721)      (163,279)
Repayments of reverse mortgages .....................................................           586            177
Disbursements for reverse mortgages..................................................          (393)          (298)
Purchase of Cypress Capital Management LLC...........................................          (466)          (452)
Sale of loans .......................................................................        10,253            637
Purchase of loans....................................................................        (9,124)        (8,983)
Net increase in loans ...............................................................      (213,036)      (158,515)
Net increase in stock of Federal Home Loan Bank of Pittsburgh........................        (1,863)        (1,717)
Sales of assets acquired through foreclosure, net ...................................            60            619
Purchase of land.....................................................................             -           (925)
Sale of real estate held-for-investment .............................................             -          5,296
Investment in partnership............................................................            23         (1,196)
Investment in premises and equipment, net............................................        (7,687)        (2,589)
                                                                                        -----------    -----------
Net cash used for investing activities ..............................................      (134,694)      (206,339)
                                                                                        -----------    -----------
Financing activities:
Net increase in demand and savings deposits .........................................         5,969        108,243
Net increase in time deposits .......................................................       185,560         66,561
Net decrease in securities sold under agreement to repurchase........................        (9,750)       (48,955)
Net decrease in federal funds purchased..............................................       (10,000)             -
Receipts from FHLB advances .........................................................     6,173,923      5,410,301
Repayments of FHLB advances .........................................................    (6,225,889)    (5,329,482)
Redemption of WSFS Capital Trust I Preferred Securities..............................             -        (51,547)
Issuance of Pooled Floating Rate Capital Securities .................................             -         67,011
Dividends paid on common stock.......................................................        (1,521)        (1,392)
Issuance of common stock and exercise of employee stock options .....................         2,284          2,757
Excess tax benefit from share-based payment arrangements ............................         1,529              -
Purchase of treasury stock, net of reissuance........................................        (1,937)       (40,104)
Decrease in minority interest........................................................          (199)          (161)
                                                                                        -----------    -----------
Net cash provided by financing activities ...........................................       119,969        183,232
                                                                                        -----------    -----------

Increase in cash and cash equivalents ...............................................         4,550         11,563
Cash and cash equivalents at beginning of period ....................................       233,951        193,009
                                                                                        -----------    -----------
Cash and cash equivalents at end of period ..........................................   $   238,501    $   204,572
                                                                                        ===========    ===========
                                                                                           (Continued on next page)

                                       5




                           WSFS FINANCIAL CORPORATION
                CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)



                                                                                        Nine months ended September 30,
                                                                                        ------------------------------
                                                                                             2006            2005
                                                                                        -----------    -----------
                                                                                                 (Unaudited)
                                                                                               (In Thousands)
                                                                                                
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest during the year...............................................   $    66,213    $    36,106
Cash paid for income taxes, net .....................................................        10,332          6,727
Loans transferred to assets acquired through foreclosure ............................            62            372
Net change in other comprehensive income ............................................        (2,219)        (4,956)
Transfer of loans held-for-sale to loans ............................................         1,837          1,369


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

                                       6



                           WSFS FINANCIAL CORPORATION
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           FOR THREE AND NINE MONTHS ENDED SEPTEMBER 30, 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 deposit and cash management  services.  Lending activities
are funded primarily with deposits and borrowings. Deposits are insured to their
legal maximum by the Federal Deposit Insurance  Corporation  (FDIC). WSFS serves
customers  from its main office,  26 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  a 80%  interest  in Cypress  and in January  2006,  it  increased  its
ownership  to 90%.  Cypress  is a  Wilmington  based  investment  advisory  firm
servicing high net-worth  individuals and institutions.  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
in conjunction with WSFS. 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.  Per Rule  10-01 of  Regulation  S-X,  the  Corporation  is not
required to include all information and notes for complete financial  statements
and prevailing practices within the banking industry.  Operating results for the
three and nine  month  periods  ended  September  30,  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 on Form 10-K for the year ended December 31, 2005 as
filed with the Securities and Exchange Commission.

Accounting for Stock-Based Compensation

         In December  2004,  the  Financial  Accounting  Standards  Board (FASB)
issued  Statement  of  Financial  Accounting  Standards  (SFAS) No. 123 (revised
2004),  Share-Base  Payment  (SFAS 123R).  SFAS 123R  requires  all  share-based
payments  to  employees,  including  grants of  employee  stock  options,  to be
recognized as  compensation  expense in the  consolidated  financial  statements
based on their fair  values.  That expense  will be  recognized  over the period
during which an  Associate  is required to provide  services in exchange for the
award,  known as the requisite service period (usually the vesting period).  The
Corporation  adopted  SFAS 123R  beginning  January 1, 2006  using the  Modified
Prospective  Application  Method.  This  method  relates to  current  and future
periods and does not require the  restatement  of prior  periods.  The impact of
adopting SFAS 123R for the three months ended  September 30, 2006,  was $301,000
or $0.04 per share, to salaries, benefits and other compensation.  The impact of
adopting SFAS 123R for the nine months ended September 30, 2006, was $992,000 or
$0.12 per share, to salaries, benefits and other compensation.

         The  Corporation  has  stock  options   outstanding   under  two  plans
(collectively,  "Stock Incentive Plans") for officers,  directors and Associates
of the Corporation and its subsidiaries. After shareholder approval in 2005, the
1997 Stock Option Plan ("1997  Plan"),  was replaced by the 2005  Incentive Plan
("2005  Plan").  No future awards may be granted  under the 1997 Plan.  The 2005
Plan will terminate on the tenth  anniversary of its effective date, after which
no awards may be granted.  The number of shares  reserved for issuance under the
2005 Plan is 400,000. At September 30, 2006, there were 168,997 shares available
for future grants under the 2005 Plan.

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

                                       7



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



                                                         At or for the three months                    At or for the three months
                                                  ------------------------------------------       ---------------------------------
                                                          ended September 30, 2006                      ended September 30, 2005
                                                  ------------------------------------------       ---------------------------------
                                                                               Weighted-                                  Weighted-
                                                                                Average                                    Average
                                                                               Exercise                                   Exercise
                                                            Shares              Price                  Shares               Price
                                                            ------              -----                  ------               -----
                                                                                                      
   Outstanding at beginning of period                      692,523          $    33.02                787,488          $    24.65
   Granted - stock options                                   1,200               61.32                  7,677               55.44
   Granted - restricted shares                              15,228                   -                      7                   -
   Exercised - stock options                               (44,080)              16.31                 (9,590)              15.14
   Forfeited - stock options                                  (410)              61.59                 (2,820)              47.73
                                                           -------                                    -------
   Outstanding at end of period                            664,461               33.41                782,762               24.98

   Exercisable at end of period                            354,635               22.02                451,627               17.21

   Weighted-average fair value
   of stock options granted                             $    20.81                                $     13.26

   Weighted-average fair value
   of restricted shares granted                         $    63.60                                $     56.61



      As of June 30,  2006,  394,930  stock  options  were  exercisable  with an
intrinsic  value of $16.3  million.  During  the third  quarter  of 2006,  4,195
options vested with an intrinsic value of $110,000,  and a grant date fair value
of $9.52 per option. Also during the quarter, 44,080 options were exercised with
an  intrinsic  value of $2.0  million.  In  addition,  410 vested  options  were
forfeited  with an  intrinsic  value of $433.  There  were  354,635  exercisable
options  remaining at  September  30,  2006,  with an  intrinsic  value of $14.4
million and a remaining  contractual  term of 4.9 years.  At September  30, 2006
there were 664,461 stock options  outstanding  with an intrinsic  value of $19.5
million and a remaining  contractual term of 5.4 years. During the third quarter
of 2005,  9,590 options were exercised  with an intrinsic  value of $408,000 and
2,880 options vested with a grant date fair value of $7.77 per option.

         A summary of the status of the Corporation's  Stock Incentive Plans and
changes during the nine months then ended is presented below:



                                                          At or for the nine months                    At or for the nine months
                                                  ------------------------------------------       ---------------------------------
                                                            ended September 2006                          ended September 2005
                                                  ------------------------------------------       ---------------------------------
                                                                               Weighted-                                  Weighted-
                                                                                Average                                    Average
                                                                               Exercise                                   Exercise
                                                            Shares              Price                  Shares               Price
                                                            ------              -----                  ------               -----
                                                                                                      
   Outstanding at beginning of period                       745,949          $    31.60                873,360          $    23.48
   Granted - stock options                                    8,220               62.29                 14,057               56.20
   Granted - restricted shares                               15,244                   -                     22                   -
   Exercised - stock options                               (103,426)              17.58                (98,927)              15.57
   Forfeited - stock options                                 (1,526)              43.99                 (5,750)              34.89
                                                            -------                                    -------
   Outstanding at end of period                             664,461               33.41                782,762               24.98

   Exercisable at end of period                             354,635               22.02                451,627               17.21

   Weighted-average fair value
   of stock options granted                            $      16.84                               $      13.42

   Weighted-average fair value
   of restricted shares granted                        $      63.59                               $      56.43


                                       8


      Beginning January 1, 2006, 434,144 stock options were exercisable.  During
the nine  months  ended  September  30,  2006,  24,327  options  vested  with an
intrinsic  value of  $778,000,  and a grant date fair value of $7.99 per option.
Also during the first nine months of 2006,  103,426  options were exercised with
an  intrinsic  value of $4.6  million.  In  addition,  410 vested  options  were
forfeited with an intrinsic value of $433. During the first nine months of 2005,
98,927 options were exercised with an intrinsic value of $4.0 million and 51,770
options vested with a grant date fair value of $5.36 per option.

      The total amount of  compensation  cost related to nonvested stock options
as of September  30, 2006 was $1.5  million.  The  weighted-average  period over
which it is expected to be recognized is 1.2 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 between 4.6% and 5.2% in
2006;  an expected  option life of between three and  three-quarter  and six and
one-half years for all awards; and an expected stock price volatility of between
21.7%  and 22.3% in 2006.  For the  purposes  of this  option-pricing  model,  a
dividend yield of between 0.4% and 0.5% was used as the expected dividend yield.
Prior to adoption of SFAS 123R the Corporation used a graded-vesting schedule to
calculate the expense related to stock options.  Since the adoption of SFAS 123R
the  Corporation  now uses a  straight-line  schedule to  calculate  the expense
related to new stock options issued.

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

      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.  The Company, as permitted in 2005, had
elected not to adopt the fair value  accounting  provisions of SFAS 123, and had
instead  continued  to apply  Accounting  Principles  Board  (APB)  Opinion  25,
Accounting  for Stock  Issued  to  Employees,  and  related  interpretations  in
accounting for the Stock  Incentive  Plans and to provide the required pro forma
disclosures  of SFAS 123. Had the grant-date  fair-value  provisions of SFAS 123
been adopted,  the Corporation would have recognized pretax compensation expense
of $238,000 and $732,000 for the three and nine months ended September 30, 2005,
respectively, related to its Stock Incentive Plans.

      During the third quarter of 2005 and 2006 the Company  issued 7 and 15,228
shares, respectively,  of restricted stock. During the first nine months of 2005
and 2006 the Company  issued 22 and 15,244 shares,  respectively,  of restricted
stock. Restricted stock vests over five years: 0% in the first two years, 25% in
the third and fourth years and 50% in the fifth year.

      For comparative  purposes,  the following table  illustrates the effect on
net income and earnings per share, for the three and nine months ended September
30, 2005, had the Company  applied the fair value  recognition  provision of the
SFAS No. 123 to stock-based employee compensation.



                                                                         For the three months      For the nine months
                                                                         ended September 30,       ended September 30,
                                                                         -------------------       -------------------
                                                                                2005                       2005
                                                                                ----                       ----
                                                                             (In Thousands, Except Per Share Data)

                                                                                                 
Net income, as reported ................................................       $ 7,407                   $ 20,763
   Less:  Total stock-based employee compensation expense
             determined under fair value based methods for all awards,
             net of related tax effects ................................           201                        620
                                                                               -------                   --------
Pro forma net income....................................................       $ 7,206                   $ 20,143

Earnings per share:
Basic:
------
Net income .............................................................       $  1.12                     $ 3.02
   Less:  Total stock-based employee compensation expense
             determined under fair value based methods for all awards,
             net of related tax effects ................................          0.03                       0.09
                                                                               -------                   --------
Pro forma net income....................................................       $  1.09                     $ 2.93

Diluted:
Net income, as reported ................................................       $  1.06                     $ 2.85
   Less:  Total stock-based employee compensation expense
             determined under fair value based methods for all awards,
             net of related tax effects ................................          0.03                       0.08
                                                                               -------                   --------
Pro forma net income....................................................       $  1.03                     $ 2.77


                                       9



2.  EARNINGS PER SHARE

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




                                                                              For the three months       For the nine months
                                                                               ended September 30,       ended September 30,
                                                                               -------------------       -------------------
                                                                               2006        2005          2006          2005
                                                                               ----        ----          ----          ----
                                                                                   (In Thousands, Except Per Share Data)
                                                                                                         
Numerator:
Net income ..........................................................         $8,003       $7,407       $22,842       $20,763
                                                                              ======       ======       =======       =======
Denominator:
Denominator for basic earnings per share - weighted average shares...          6,657        6,630         6,626         6,886
Effect of dilutive employee stock options ...........................            258          376           278           390
                                                                              ------       ------       -------       -------
Denominator for diluted earnings per share - adjusted weighted
   average shares and assumed exercise ..............................          6,915        7,006         6,904         7,276
                                                                              ======       ======       =======       =======

Basic earnings per share ............................................         $ 1.20       $ 1.12        $ 3.45        $ 3.02
                                                                              ======       ======       =======       =======

Diluted earnings per share ..........................................         $ 1.16       $ 1.06        $ 3.31        $ 2.85
                                                                              ======       ======       =======       =======

Outstanding common stock equivalents having no dilutive effect ......            101           77           101            76


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 ten years  ending  December  1,  2008.  The fair  value of the cap is
estimated using a standard option model. The fair value of the interest rate cap
at  September  30,  2006 was  $35,000.  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.  During the first nine  months of 2006,  the  Company
recognized $555,000 of interest expense, of which $411,000 was the result of the
reclassification  of the  residual  amounts  related  to the hedge that were not
reclassified  at  the  time  the  Corporation  refinanced  its  Trust  Preferred
Securities in 2005.

         The following  depicts the change in fair market value of the Company's
derivative for the three and nine months ended:



                                                            For the three months ended September 30
                               --------------------------------------------------------------------------------------------------
                                                    2006                                                2005
                               -----------------------------------------------      ---------------------------------------------
                                      At                             At                   At                            At
                                   July 1,          Change     September 30,            July 1,        Change     September 30,
                                   -------          ------     -------------            -------        ------     -------------
                                                                          (In Thousands)

                                                                                                   
Interest Rate Cap .........         $ 188          $ (153)          $ 35                 $ 97           $ 48          $ 145




                                                            For the nine months ended September 30
                               --------------------------------------------------------------------------------------------------
                                                    2006                                                2005
                               -----------------------------------------------      ---------------------------------------------
                                      At                             At                   At                            At
                                  January 1,        Change     September 30,          January 1,       Change     September 30,
                                                                          (In Thousands)

                                                                                                   
Interest Rate Cap .........         $ 125           $ (90)          $ 35                 $ 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    For the nine months
                                                                    ended September 30,     ended September 30,
                                                                    -------------------     -------------------
                                                                                   (In Thousands)
                                                                      2006        2005        2006        2005
                                                                      ----        ----        ----        ----
                                                                                         
Net income ....................................................   $  8,003    $  7,407    $ 22,842    $ 20,763

Other Comprehensive Income:

Unrealized holding gains (losses) on securities
     available-for-sale arising during the period .............     16,057      (6,145)      5,073      (7,403)
Tax (expense) benefit .........................................     (6,101)      2,335      (1,927)      2,813
                                                                  --------    --------    --------    --------
Net of tax amount .............................................      9,956      (3,810)      3,146      (4,590)

Unrealized holding gains arising during the
    period on derivative used for cash flow hedge, including
    amounts reclassified into earnings ........................        411         113         465          18
Tax expense ...................................................       (144)        (39)       (164)         (6)
                                                                  --------    --------    --------    --------
Net of tax amount .............................................        267          74         301          12

Reclassification adjustment for losses included in net income .     (1,940)       (609)     (1,981)       (609)
Tax benefit ...................................................        737         231         753         231
                                                                  --------    --------    --------    --------
Net of tax amount .............................................     (1,203)       (378)     (1,228)       (378)
                                                                  --------    --------    --------    --------

Total comprehensive income ....................................   $ 17,023    $  3,293    $ 25,061    $ 15,807
                                                                  ========    ========    ========    ========


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 September 30, 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
and nine months ended September 30, 2006 and 2005 follows:

                                       11




                                                             For the three months ended September 30,
                                              ---------------------------------------------------------------------------
                                                              2006                                   2005
                                              ------------------------------------   ------------------------------------
                                                                            (In Thousands)
                                                   WSFS    CashConnect      Total        WSFS     CashConnect      Total
                                                   ----    -----------      -----        ----     -----------      -----
                                                                                            
External customer revenues:
     Interest income                          $   46,131   $        -   $   46,131   $   35,136   $        -   $   35,136
     Non-interest income                           6,145        4,164       10,309        5,290        3,294        8,584
                                              ----------   ----------   ----------   ----------   ----------   ----------
Total external customer revenues                  52,276        4,164       56,440       40,426        3,294       43,720
                                              ----------   ----------   ----------   ----------   ----------   ----------
Intersegment revenues:
     Interest income                               2,174            -        2,174        1,208            -        1,208
     Non-interest income                             172          179          351          218          164          382
                                              ----------   ----------   ----------   ----------   ----------   ----------
Total intersegment revenues                        2,346          179        2,525        1,426          164        1,590
                                              ----------   ----------   ----------   ----------   ----------   ----------

Total revenue                                     54,622        4,343       58,965       41,852        3,458       45,310
                                              ----------   ----------   ----------   ----------   ----------   ----------
External customer expenses:
     Interest expense                             27,011            -       27,011       15,921            -       15,921
     Non-interest expenses                        16,465        1,122       17,587       15,066        1,084       16,150
     Provision for loan loss                         319            -          319          225            -          225
                                              ----------   ----------   ----------   ----------   ----------   ----------
Total external customer expenses                  43,795        1,122       44,917       31,212        1,084       32,296
                                              ----------   ----------   ----------   ----------   ----------   ----------
Intersegment expenses:
     Interest expense                                  -        2,174        2,174            -        1,208        1,208
     Non-interest expenses                           179          172          351          164          218          382
                                              ----------   ----------   ----------   ----------   ----------   ----------
Total intersegment expenses                          179        2,346        2,525          164        1,426        1,590
                                              ----------   ----------   ----------   ----------   ----------   ----------

Total expenses                                    43,974        3,468       47,442       31,376        2,510       33,886
                                              ----------   ----------   ----------   ----------   ----------   ----------

Income before taxes and extraordinary items   $   10,648   $      875       11,523   $   10,476   $      948       11,424

Less minority interest                                                           9                                     48
Income tax provision                                                         3,511                                  3,969
                                                                        ----------                             ----------
Consolidated net income                                                 $    8,003                             $    7,407
                                                                        ==========                             ==========

Cash and cash equivalents                     $   83,244   $  155,257   $  238,501   $   61,283   $  143,289   $  204,572
Other segment assets                           2,748,279       12,922    2,761,201    2,500,099        6,610    2,506,709
                                              ----------   ----------   ----------   ----------   ----------   ----------

Total segment assets                          $2,831,523   $  168,179   $2,999,702   $2,561,382   $  149,899   $2,711,281
                                              ==========   ==========   ==========   ==========   ==========   ==========

Capital expenditures                          $    2,389   $      174   $    2,563   $    1,827   $      125   $    1,952



                                       12





                                                              For the nine months ended September 30,
                                              ---------------------------------------------------------------------------
                                                              2006                                   2005
                                              ------------------------------------   ------------------------------------
                                                                            (In Thousands)
                                                   WSFS    CashConnect      Total        WSFS     CashConnect      Total
                                                   ----    -----------      -----        ----     -----------      -----
                                                                                            
External customer revenues:
     Interest income                          $  130,476   $        -   $  130,476   $   98,187   $        -   $   98,187
     Non-interest income                          17,598       11,629       29,227       16,203        8,951       25,154
                                              ----------   ----------   ----------   ----------   ----------   ----------
Total external customer revenues                 148,074       11,629      159,703      114,390        8,951      123,341
                                              ----------   ----------   ----------   ----------   ----------   ----------
Intersegment revenues:
     Interest income                               5,976            -        5,976        3,001            -        3,001
     Non-interest income                             508          519        1,027          592          498        1,090
                                              ----------   ----------   ----------   ----------   ----------   ----------
Total intersegment revenues                        6,484          519        7,003        3,593          498        4,091
                                              ----------   ----------   ----------   ----------   ----------   ----------

Total revenue                                    154,558       12,148      166,706      117,983        9,449      127,432
                                              ----------   ----------   ----------   ----------   ----------   ----------
External customer expenses:
     Interest expense                             72,667            -       72,667       43,081            -       43,081
     Non-interest expenses                        47,750        3,011       50,761       43,943        2,780       46,723
     Provision for loan loss                       1,702            -        1,702        1,576            -        1,576
                                              ----------   ----------   ----------   ----------   ----------   ----------
Total external customer expenses                 122,119        3,011      125,130       88,600        2,780       91,380
                                              ----------   ----------   ----------   ----------   ----------   ----------
Intersegment expenses:
     Interest expense                                  -        5,976        5,976            -        3,001        3,001
     Non-interest expenses                           519          508        1,027          498          592        1,090
                                              ----------   ----------   ----------   ----------   ----------   ----------
Total intersegment expenses                          519        6,484        7,003          498        3,593        4,091
                                              ----------   ----------   ----------   ----------   ----------   ----------

Total expenses                                   122,638        9,495      132,133       89,098        6,373       95,471
                                              ----------   ----------   ----------   ----------   ----------   ----------

Income before taxes and extraordinary items   $   31,920   $    2,653       34,573   $   28,885   $    3,076   $   31,961

Less minority interest                                                          40                                    122
Income tax provision                                                        11,691                                 11,076
                                                                        ----------                             ----------
Consolidated net income                                                 $   22,842                             $   20,763
                                                                        ==========                             ==========

Cash and cash equivalents                     $   83,244   $  155,257   $  238,501   $   61,283   $  143,289   $  204,572
Other segment assets                           2,748,279       12,922    2,761,201    2,500,099        6,610    2,506,709
                                              ----------   ----------   ----------   ----------   ----------   ----------

Total segment assets                          $2,831,523   $  168,179   $2,999,702   $2,561,382   $  149,899   $2,711,281
                                              ==========   ==========   ==========   ==========   ==========   ==========

Capital expenditures                          $    7,312   $      369   $    7,681   $    2,926   $      465   $    3,391



                                       13



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 sells certain 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 third  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 agreements, those
financial  institutions  have  recourse to the Company for any exposure  created
under  each swap  transaction  in the event the  customer  defaults  on the swap
agreement and the agreement is in a paying position to the third-party financial
institution.  This is a  customary  arrangement  that allows  smaller  financial
institutions, such as WSFS, to provide access to interest rate swap transactions
for its customers without WSFS creating the swap itself.

         At September 30, 2006, there were nineteen  variable-rate to fixed-rate
swap transactions between the third party financial institution and customers of
WSFS,  compared to eighteen at December 31, 2005.  The initial  notional  amount
aggregated approximately $65.2 million at September 30, 2006 compared with $57.9
million at December 31, 2005, with maturities  ranging from approximately one to
ten years.  The  aggregate  market value of these swaps to the  customers was an
asset of $225,000 at September  30, 2006 and $98,600 at December  31, 2005.  The
amount of liability  recorded by the Company for these guarantees that were in a
liability  position at  September  30, 2006 and December 31, 2005 was $6,000 and
$8,000,  respectively.  This amount  represented  the fair  market  value of the
guarantee to perform under the terms of the swap agreements.


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).  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.

                                       14



         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 September 30,           Nine months ended September 30,
                                                   --------------------------------           -------------------------------
                                                        2006               2005                  2006                2005
                                                        ----               ----                  ----                ----
                                                                                                       
Service cost...............................             $ 27               $ 26                 $  81               $  80
Interest cost..............................               23                 31                    70                  91
Amortization of transition obligation......               15                 15                    45                  45
Net loss recognition.......................                -                  4                     -                  12
                                                        ----               ----                 -----               -----
         Net periodic benefit cost.........             $ 65               $ 76                 $ 196               $ 228
                                                        ====               ====                 =====               =====



Supplemental Pension Plan

         The  Corporation  provided a nonqualified  plan that gave credit for 25
years of service based on the qualified  plan formula.  This plan is 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 September 30,           Nine months ended September 30,
                                                   --------------------------------           -------------------------------
                                                        2006               2005                  2006                2005
                                                        ----               ----                  ----                ----
                                                                                                        
Interest cost..............................             $ 11               $ 11                  $ 33                $ 33
Net loss recognition.......................               15                  6                    43                  18
                                                        ----               ----                  ----                ----
         Net periodic benefit cost.........             $ 26               $ 17                  $ 76                $ 51
                                                        ====               ====                  ====                ====


                                       15




ITEM 2.  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 deposits and
borrowings. The Federal Deposit Insurance Corporation (FDIC) insures deposits to
their legal  maximum.  WSFS serves  customers from its main office and 26 retail
banking  offices,  loan  production  offices and operations  centers  located in
Delaware and southeastern Pennsylvania. Wealth management services include: WSFS
Investment Group, Inc., Montchanin Capital Management,  Inc. (Montchanin) and an
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  consolidated  subsidiaries of WSFS include WSFS  Investment  Group,
Inc.  which markets  various  third-party  insurance  products and securities in
conjunction  with WSFS, 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 $429 million in assets under  management at
September 30, 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."  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

                                       16



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.
The balance in this reserve at September 30, 2006 was $715,000.

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

Deferred Taxes

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

FINANCIAL CONDITION, CAPITAL RESOURCES AND LIQUIDITY

Financial Condition

         Total  assets  increased  $153.0  million  during the nine months ended
September 30, 2006.  During the first nine months of 2006, net loans grew $212.1
million,  or 12%, to $2.0 billion,  reflecting  the  continued  strong growth in
commercial and commercial  real estate loans,  which amounted to $169.3 million.
Residential  and  consumer  loans  grew  by  $24.4  million  and  $19.7  million
respectively.   Cash   and  cash   equivalents   increased   by  $5.0   million.
Mortgage-backed  securities (MBS) decreased by $82.4 million.  This decrease was
due to a $51.4 million sale of mortgage-backed securities and repayments.

         During the third quarter of 2006 the Company  transferred  $3.0 million
of mortgage loans to a third party through a securitization transaction in order
to transform these mortgage loans into investment securities, receiving MBS with
an equivalent  notional amount in exchange.  Those MBS are collateralized by the
same mortgage loans that the Company transferred to the third party. The Federal
Home Loan Mortgage Corporation backs the MBS.

         Total  liabilities  increased  $126.7 million between December 31, 2005
and September 30, 2006, to $2.8 billion, mainly due to a $169.9 million, or 12%,
increase in  deposits.  This  included  increases  of $98.5  million in customer
deposits,  $43.8  million in other  jumbo  certificates  of  deposit  (primarily
municipal deposits), and $27.6 million in brokered certificates of deposits. The
incremental  increases  in other  jumbo  certificates  of deposit  and  brokered
certificates  of deposit  were used to fund the strong  loan  growth  during the
first nine  months of 2006.  Federal  Home Loan Bank (FHLB)  advances  decreased
$52.0  million.  This  decrease in FHLB  advances was mainly due to using excess
funds from the sale of mortgage-backed securities to repay advances.

                                       17



Capital Resources

         Stockholders'  equity increased $26.4 million between December 31, 2005
and  September  30,  2006.  This  increase was mainly due to net income of $22.8
million and an increase of $4.8  million  from the  issuance of common stock and
exercise of employee stock options.  Other  comprehensive loss decreased by $2.2
million  during the first nine  months of 2006 due in part to an increase in the
fair  value of  securities  available-for-sale.  In  addition,  the  Corporation
purchased  31,900 shares of its common stock for $1.9 million  ($60.72 per share
average). Finally, the Corporation declared cash dividends totaling $1.5 million
during the nine months ended September 30, 2006.

Below is a table  comparing  the Bank's  consolidated  capital  position  to the
minimum regulatory requirements as of September 30, 2006 (dollars in thousands):



                                                                                                         To be Well-Capitalized
                                                                                                         Under Prompt Corrective
                                                 Consolidated                   For Capital                 Action Provisions
                                                 Bank Capital                Adequacy Purposes
                                           --------------------------    ---------------------------    --------------------------
                                                            % of                           % of                          % of
                                              Amount       Assets           Amount        Assets          Amount        Assets
                                              ------       ------           ------        ------          ------        ------
                                                                                                     
Total Capital
   (to Risk-Weighted Assets) ........        $293,604        13.32%        $176,360        8.00%          $220,450      10.00%
Core Capital (to Adjusted
   Total Assets) ....................         269,194         8.96          120,145        4.00            150,182       5.00
Tangible Capital (to Tangible
   Assets) ..........................         269,194         8.96           45,054        1.50                N/A        N/A
Tier 1 Capital (to Risk-Weighted
   (Assets) .........................         269,194        12.21           88,180        4.00            132,270       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  September  30,  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 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 8.5% at September  30, 2006,  compared  with 6.4% at
June 30, 2006. Both of these ratios were 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  deposit  market.  The Bank's  branch  expansion 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
Company 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 nine  months  ended  September  30,  2006,  net loan  growth
resulted in the use of $211.9 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.

                                       18



         During the nine months ended September 30, 2006,  $19.3 million in cash
was  provided by operating  activities,  while $6.0 million in cash was provided
through the net increase in demand and savings  deposits  and $185.6  million in
cash through the net  increase in time  deposits.  During this period,  cash and
cash equivalents increased $4.6 million to $238.5 million.

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.




                                                                                 September 30,         December 31,
                                                                                     2006                  2005
                                                                               ------------------    ------------------
                                                                                           (In Thousands)
                                                                                                   
Nonaccruing loans:
      Commercial ......................................................               $ 2,203              $   925
      Consumer ........................................................                   279                  155
      Commercial mortgage .............................................                   770                  727
      Residential mortgage ............................................                 2,244                1,567
      Construction ....................................................                     -                   36
                                                                                      -------              -------

Total nonaccruing loans ...............................................                 5,496                3,410
Assets acquired through foreclosure ...................................                    17                   59
                                                                                      -------              -------

Total nonperforming assets ............................................               $ 5,513              $ 3,469
                                                                                      =======              =======

Past due loans:
      Residential mortgages ...........................................               $   276              $   327
      Commercial and commercial mortgages .............................                     -                    -
      Consumer ........................................................                    13                   59
                                                                                      -------              -------

Total past due loans ..................................................               $   289              $   386
                                                                                      =======              =======

Ratios:
      Nonaccruing loans to total loans (1) ............................                  0.27%                0.19%
      Allowance for loan losses to gross loans (1) ....................                  1.33%                1.41%
      Nonperforming assets to total assets ............................                  0.18%                0.12%
      Loan loss allowance to nonaccruing loans (2) ....................                   477%                 709%
      Loan and foreclosed asset allowance to total
         nonperforming assets (2) .....................................                   476%                 697%


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

         Nonperforming  assets  increased $2.0 million between December 31, 2005
and September 30, 2006.  Nonaccruing  commercial loans increased  primarily from
the  third  quarter  transfer  of  a  $1.3  million  loan  into  this  category.
Nonaccruing  residential  mortgage loans increased  $677,000  primarily from the
third quarter addition of two large residential  mortgages,  partially offset by
charge-offs and accrual transfers. Assets acquired through foreclosure decreased
$42,000 as a result of a residential property sale. An analysis of the change in
the balance of nonperforming assets is presented on the following page.

                                       19





                                                          For the nine
                                                          months ended              For the year ended
                                                       September 30, 2006           December 31, 2005
                                                                      (In Thousands)
                                                                                
Beginning balance ..................................          $ 3,469                   $ 4,613
      Additions ....................................            4,388                     5,062
      Collections ..................................           (1,935)                   (4,467)
      Transfers to accrual/restructured status .....             (247)                     (398)
      Charge-offs / write-downs, net ...............             (162)                   (1,341)
                                                              -------                    -------

Ending balance .....................................          $ 5,513                    $ 3,469
                                                              =======                    =======


         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 promote 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 September 30, 2006,  interest-bearing  liabilities
exceeded  interest-earning  assets  that  mature  or  reprice  within  one  year
(interest-sensitive gap) by $35.3 million. The Corporation's  interest-sensitive
assets as a percentage  of  interest-sensitive  liabilities  within the one-year
window  increased to 98% at September 30, 2006 compared to 97% at June 30, 2006.
Likewise,  the one-year  interest-sensitive  gap as a percentage of total assets
changed to -1.18% at September 30, 2006 from -1.92% at June 30, 2006. The change
in  sensitivity  since June 30, 2006 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
of an immediate  change in interest  rates in 100 basis point  increments on the
net portfolio  value ratio.  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 September 30, 2006 and 2005,  calculated
in compliance with Thrift Bulletin No. 13a:



                                                At September 30,
                   ----------------------------------------------------------------------
                                   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                3%              8.55%              2%             7.77%
        +200                2%              9.15%              1%             8.21%
        +100                1%              9.82%              1%             8.56%
           0                0%              9.97%              0%             8.82%
        -100               -2%             10.24%             -2%             8.91%
        -200               -6%             10.66%             -6%             8.65%
        -300              -10%             10.72%            -11%             8.29%



(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.

                                       20



COMPARISON OF THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005

Results of Operations

         The  Corporation  recorded  net  income  of $8.0  million  or $1.16 per
diluted  share for the third  quarter of 2006.  This compares to $7.4 million or
$1.06 per  diluted  share for the same  quarter  last  year.  Significant  items
impacting  the  third  quarter  of  2006  were  $1.8  million  in  unanticipated
non-taxable income related to the Bank's investment in bank-owned life insurance
(BOLI),  or $0.26 per share and a $1.9 million loss on the sale of MBS, or $0.18
per share.

         Net income  for the nine  months  ended  September  30,  2006 was $22.8
million or $3.31 per diluted share.  This compares to $20.8 million or $2.85 per
diluted share for the comparable period last year.  Earnings for the nine months
ended  June 30,  2006 were also  impacted  by the  income  related to the Bank's
investment in BOLI and the loss on the sale of MBS, discussed above. Significant
items impacting the nine months ended September 30, 2005 include the refinancing
of $51.5 million of Trust Preferred Securities,  resulting in a non-cash charge,
of $1.1 million, or $0.10 per share.

                                       21



Net Interest Income

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



                                                                            Three months ended September 30,
                                                   ---------------------------------------------------------------------------------
                                                                       2006                                      2005
                                                   ----------------------------------------    -------------------------------------
                                                          Average    Interest &     Yield/           Average   Interest &    Yield/
                                                          Balance    Dividends     Rate (1)          Balance   Dividends    Rate (1)
                                                          -------    ---------     --------          -------   ---------    --------
                                                                                      (Dollars in Thousands)
                                                                                                            
Assets:
Interest-earning assets:
Loans (2) (3):
   Commercial real estate loans ..................     $  639,307      $13,537      8.47%        $  589,703      $10,450       7.09%
   Residential real estate loans .................        491,223        6,798      5.54            430,871        5,587       5.19
   Commercial loans ..............................        601,763       12,294      8.18            451,532        7,554       6.79
   Consumer loans ................................        262,600        4,938      7.46            221,706        3,787       6.78
                                                       ----------      -------                   ----------      -------
      Total loans ................................      1,994,893       37,567      7.59          1,693,812       27,378       6.53
Mortgage-backed securities (4) ...................        593,589        7,186      4.84            576,779        6,445       4.47
Loans held-for-sale (3) ..........................          1,185           10      3.38              2,462           41       6.66
Investment securities (4) (5) ....................         52,935          616      4.65            100,523          921       3.66
Other interest-earning assets ....................         55,668          752      5.36             48,155          351       2.89
                                                       ----------      -------                   ----------      -------
      Total interest-earning assets ..............      2,698,270       46,131      6.88          2,421,731       35,136       5.85
Allowance for loan losses ........................        (26,938)     -------                      (25,215)     -------
Cash and due from banks ..........................         57,372                                    53,121
Cash in non-owned ATMs ...........................        158,396                                   138,543
Bank owned life insurance ........................         55,414                                    53,389
Other noninterest-earning assets .................         63,607                                    54,602
                                                       ----------                                ----------
      Total assets ...............................     $3,006,121                                $2,696,171
                                                       ==========                                ==========
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
   Interest-bearing demand .......................     $  121,160          229      0.75%        $  116,518           71       0.24%
   Money market ..................................        227,285        2,080      3.63            183,279        1,025       2.22
   Savings .......................................        241,823          667      1.09            268,880          265       0.39
   Customer time deposits ........................        415,792        4,183      3.99            287,925        2,085       2.87
                                                       ----------      -------                   ----------      -------
      Total interest-bearing customer deposits....      1,006,060        7,159      2.82            856,602        3,446       1.60
   Other jumbo certificates of deposits ..........         77,255        1,039      5.34             46,430          383       3.27
   Brokered certificates of deposit ..............        238,983        3,194      5.30            206,331        1,845       3.55
                                                       ----------      -------                   ----------      -------
      Total interest-bearing deposits ............      1,322,298       11,392      3.42          1,109,363        5,674       2.03
FHLB of Pittsburgh advances ......................      1,002,001       12,384      4.84            894,331        7,955       3.48
Trust preferred borrowings .......................         67,011        1,736     10.14             67,011          954       5.57
Other borrowed funds .............................        123,377        1,499      4.86            166,268        1,338       3.22
                                                       ----------      -------                   ----------      -------
      Total interest-bearing liabilities .........      2,514,687       27,011      4.30          2,236,973       15,921       2.85
Noninterest-bearing demand deposits...............        265,594      -------                      254,807      -------
Other noninterest-bearing liabilities ............         25,970                                    20,691
Minority interest ................................             68                                       201
Stockholders' equity .............................        199,802                                   183,499
                                                       ----------                                ----------
      Total liabilities and stockholders' equity..     $3,006,121                                $2,696,171
                                                       ==========                                ==========
Excess of interest-earning over
   interest bearing liabilities ..................     $  183,583                                $  184,758
                                                       ==========                                ==========
Net interest and dividend income .................                     $19,120                                   $19,215
                                                                       =======                                   =======
Interest rate spread .............................                                  2.58%                                      3.00%
                                                                                    ====                                       ====
Net interest margin ..............................                                  2.88%                                      3.22%
                                                                                    ====                                       ====



(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.
(5)  Includes reverse mortgages.

                                       22





                                                                             Nine months ended September 30,
                                                   ---------------------------------------------------------------------------------
                                                                    2006                                        2005
                                                   ----------------------------------------    -------------------------------------
                                                         Average    Interest &     Yield/          Average     Interest &    Yield/
                                                         Balance    Dividends     Rate (1)         Balance     Dividends    Rate (1)
                                                         -------    ---------     --------         -------     ---------    --------
                                                                                      (Dollars in Thousands)
                                                                                                            
Assets:
Interest-earning assets:
Loans (2) (3):
   Commercial real estate loans .................     $  627,838     $ 38,157      8.10%          $  571,211     $28,611       6.68%
   Residential real estate loans ................        480,609       19,698      5.46              432,566      16,691       5.14
   Commercial loans .............................        567,265       33,085      7.89              423,918      19,729       6.40
   Consumer loans ...............................        257,172       14,031      7.29              217,631      10,888       6.69
                                                      ----------     --------                     ----------     -------
      Total loans ...............................      1,932,884      104,971      7.30            1,645,326      75,919       6.22
Mortgage-backed securities (4) ..................        611,454       21,989      4.79              567,967      18,763       4.40
Loans held-for-sale (3) .........................          1,023           34      4.43                2,360         104       5.88
Investment securities (4) (5) ...................         55,102        1,639      3.97               98,405       2,315       3.14
Other interest-earning assets ...................         52,279        1,843      4.71               47,854       1,086       3.03
                                                      ----------     --------                     ----------     -------
      Total interest-earning assets .............      2,652,742      130,476      6.60            2,361,912      98,187       5.49
Allowance for loan losses .......................        (26,288)    --------                        (24,814)    -------
Cash and due from banks .........................         54,767                                      53,078
Cash in non-owned ATMs ..........................        153,522                                     129,870
Bank owned life insurance .......................         54,884                                      52,881
Other noninterest-earning assets ................         61,928                                      54,278
                                                      ----------                                  ----------
      Total assets ..............................     $2,951,555                                  $2,627,205
                                                      ==========                                  ==========

Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
   Interest-bearing demand ......................     $  122,618          531      0.58%          $  108,955         196       0.24%
   Money market .................................        227,340        5,772      3.39              162,595       2,362       1.94
   Savings ......................................        242,797        1,622      0.89              278,276         816       0.39
   Customer time deposits .......................        367,891       10,367      3.77              284,305       5,817       2.74
                                                      ----------     --------                     ----------     -------
      Total interest-bearing customer deposits...        960,646       18,292      2.55              834,131       9,191       1.47
   Other jumbo certificates of deposits .........         73,959        2,736      4.95               43,591         957       2.94
   Brokered certificates of deposit .............        236,787        8,654      4.89              181,857       4,275       3.14
                                                      ----------     --------                     ----------     -------
      Total interest-bearing deposits ...........      1,271,392       29,682      3.12            1,059,579      14,423       1.82
FHLB of Pittsburgh advances .....................      1,014,156       35,131      4.57              868,090      21,405       3.25
Trust preferred borrowings ......................         67,011        3,859      7.59               61,630       3,633       7.77
Other borrowed funds ............................        119,468        3,995      4.46              179,087       3,620       2.70
                                                      ----------     --------                     ----------     -------
      Total interest-bearing liabilities ........      2,472,027       72,667      3.92            2,168,386      43,081       2.65
Noninterest-bearing demand deposits                      264,233     --------                        248,899     -------
Other noninterest-bearing liabilities ...........         23,205                                      17,554
Minority interest ...............................             95                                         207
Stockholders' equity ............................        191,995                                     192,159
                                                      ----------                                  ----------
      Total liabilities and stockholders' equity.     $2,951,555                                  $2,627,205
                                                      ==========                                  ==========
Excess of interest-earning over
   Interest bearing liabilities .................     $  180,715                                  $  193,526
                                                      ==========                                  ==========
Net interest and dividend income ................                     $57,809                                    $55,106
                                                                      =======                                    =======
Interest rate spread ............................                                  2.68%                                       2.94%
                                                                                   ====                                        ====
Net interest margin .............................                                  2.95%                                       3.16%
                                                                                   ====                                        ====


(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.
(5)  Includes reverse mortgages.

         Net  interest  income for the third  quarter of 2006 was $19.1  million
compared to $19.2  million for the same quarter in 2005.  Higher loan and higher
MBS volumes were offset by higher volumes and yields on  liabilities.  The yield
on earning  assets was higher in the third quarter of 2006 compared to the third
quarter  of 2005.  The yield on loans  increased  1.06%  from 6.53% in the third
quarter of 2005 to 7.59% in the third  quarter  of 2006,  while the yield on MBS
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 third  quarter  of 2006 was  2.88%,  a  decrease  from the third
quarter 2005 which was 3.22%. Rates on  interest-bearing  liabilities rose 1.45%
during the third quarter versus 2005.

                                       23



         The net interest  margin for the third  quarter of 2006 was  negatively
affected by 6 basis points due to a non-cash  charge related to trust  preferred
borrowings  ($411,000).  This amount is related to hedge  accounting at the time
the Company refinanced its trust preferred securities in 2005 and is in addition
to the non-cash  charge  related to the  unamortized  issuance costs recorded at
that time. Without this charge the margin would have been 2.94%.

         Net interest income for the nine-month period ending September 30, 2006
was $57.8 million  compared with $55.1 million for the same period in 2005.  The
increase in net interest  income was driven by higher loan and MBS volumes.  The
yield on loans  increased  1.08% and the yield on MBS increased  0.39%.  The net
interest margin for the first nine months of 2006 was 2.95%, compared with 3.16%
for the same period in 2005.

         The net interest  margin for the nine months ended  September  30, 2006
was  negatively  affected by 2 basis  points due to the charge  related to trust
preferred  hedge  accounting  referenced  above.  Without this charge the margin
would have been 2.97% for the nine months ended September 30, 2006.

         The net interest  margin for the nine months ended  September  30, 2005
was negatively affected by 6 basis points due to the redemption of $51.5 million
of WSFS Capital Trust I Securities, which carried an interest rate of the London
InterBank  Offered Rate (LIBOR) plus 250 basis points.  In conjunction with this
redemption,  the Company  issued $67.0  million  aggregate  principal  amount of
Pooled Floating Rate Capital  Securities,  which carry an interest rate of LIBOR
plus  177  basis  points.  In  connection  with  the  refinancing,  the  Company
recognized  a  $1.1  million  non-cash  charge  to  interest  expense  from  the
write-down  of the  unamortized  debt issuance  costs of the called  securities.
Without  this charge the margin would have been 3.22 % for the nine months ended
September 30, 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  derived  from  analysis  of  both  the
probability of default and the  probability  of loss should default occur.  As a
result, changes in risk grades of both performing and nonperforming loans affect
the amount of the formula allowance.  Loss factors by risk grade have a basis in
WSFS'  historical  default  experience  for such loans and an  assessment of the
probability of default.  Loss  adjustment  factors are applied based on criteria
discussed below.

         Pooled     loans    are    loans    that    are    usually     smaller,
not-individually-graded  and homogenous in nature, such as consumer  installment
loans  and  residential  mortgages.  Pooled  loan loss  allowances  are based on
historical net charge-offs  over the past 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.

                                       24



         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 provision for loan losses increased from $1.6 million for the first
nine months of 2005 to $1.7 million for the first nine months of 2006, primarily
the result of continued loan growth,  despite continued positive trends in asset
quality.

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

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.

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



                                                          Nine months ended      Nine months ended
                                                          September 30, 2006     September 30, 2005
                                                          ------------------     ------------------
                                                                    (Dollars in Thousands)

                                                                              
Beginning balance .......................................      $ 25,381               $ 24,222
Provision for loan losses................................         1,702                  1,576

Charge-offs:
      Residential real estate ...........................            70                     38
      Commercial real estate (1) ........................             -                      -
      Commercial ........................................           145                    746
      Overdrafts (2).....................................           257                      -
      Consumer ..........................................           365                    434
                                                               --------               --------
         Total charge-offs ..............................           837                  1,218
                                                               --------               --------
Recoveries:
      Residential real estate ...........................            14                     58
      Commercial real estate (1) ........................           166                     42
      Commercial ........................................           189                    155
      Consumer ..........................................           132                     98
                                                               --------               --------
         Total recoveries ...............................           501                    353
                                                               --------               --------

Net charge-offs .........................................           336                    865
                                                               --------               --------
Ending balance ..........................................      $ 26,747               $ 24,933
                                                               ========               ========

Net charge-offs to average gross loans
   outstanding, net of unearned income (3) ..............          0.02%                  0.07%
                                                               ========               ========


(1)  Includes commercial mortgage and construction loans.
(2)  Prior  to  April  2006  overdraft  charge-offs  were  recognized  in  other
     operating expense.
(3)  Ratio for nine months ended  September  30, 2006 and September 30, 2005 are
     annualized.

Noninterest Income

         Noninterest  income for the quarter ended  September 30, 2006 was $10.3
million  compared to $8.6 million for the third  quarter of 2006, an increase of
$1.7 million or 20%.  Noninterest  income for the quarter was impacted by a gain
of $1.9 million in  unanticipated  income  related to the Bank's  investment  in
BOLI. In addition,  there was an increase of $1.1 million in card and ATM income
due to increased  volumes of cash in  non-owned  ATMs and higher rates earned on
this cash during the quarter.  Deposit service  charges also increased  $303,000
mainly due to an  increase  in deposit  accounts  resulting  from the  continued
success of the Company's personal and business checking initiatives begun during
the third quarter of 2004.  Partially  offsetting  these increases was a loss of

                                       25



$1.9 million on the sale of $51.4 million of  below-market  yielding MBS as part
of the Company's efforts to improve its earning asset mix and return on assets.

         For the nine months ended  September 30, 2006,  noninterest  income was
$29.2  million,  an  increase  of $4.0  million  over the same  period  in 2005.
Consistent  with the year over year  trend,  this  increase  was  mainly  due to
increases in card and ATM income at CashConnect and deposit service charges. The
nine-months  ended September 30, 2006 also included the gain related to BOLI and
the loss on the sale of MBS mentioned above.

Noninterest Expense

         For the quarter ended September 30, 2006, noninterest expense was $17.6
million  compared to $16.2  million for the same period in 2005,  an increase of
$1.4 million or 9%.  Increases in salaries,  benefits and other  compensation as
well as data processing expense contributed to the additional expense. Both were
the result of the Bank's  continued  growth  efforts as the number of  full-time
Associates  increased  from 512 at September  30, 2005 to 592 at  September  30,
2006. The increase in salaries,  benefits and other  compensation  also includes
$301,000  of  expense  related  to stock  options.  As of  January  1,  2006 the
Corporation  implemented SFAS No. 123 (revised 2004),  Share-Base  Payment (SFAS
123R),  which  requires that  share-based  payments to  participants,  including
grants of stock  options,  be recognized as  compensation  expense in the income
statement based on their fair values.

         Noninterest  expense for the nine months ended  September  30, 2006 was
$50.8 million,  an increase of $4.0 million over the $46.7 million  reported for
the same period in 2005. This increase was mainly due to salaries,  benefits and
other  compensation.  These  expenses  increased  primarily due to the Company's
continued growth efforts including branch expansion, renovation initiatives, and
the recently formed Wealth Management division. In addition, and consistent with
the discussion above, the increase in salaries,  benefits and other compensation
was  impacted  by  expense  related to stock  options  which  resulted  from the
implementation of SFAS 123R.

         The   Corporation's   stock  option  plans  contain   provisions  which
accelerate  vesting  of  stock  options  upon  retirement.  SFAS  123R  requires
accelerated  expensing of option awards to  participants  who are or will become
eligible for retirement  under those plans.  There are a number of  participants
who qualify for this  accelerated  vesting.  Had the Corporation been subject to
SFAS 123R at the time of the Corporation's award in December 2005, it would have
expensed   $309,000,   or  $0.03  per  share   related  to  awards   granted  to
retirement-eligible  participants.  Historically, the Corporation awards options
in the fourth quarter of each year and expects this practice to continue.

Income Taxes

         The Corporation and its subsidiaries,  with the exception of WSFS Reit,
Inc.,  file a  consolidated  Federal income tax return and separate state income
tax  returns.  WSFS Reit,  Inc.  files a separate  Federal and state  income tax
return.  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 and nine months  ended  September  30, 2006 of $3.5 million and
$11.7 million, respectively, compared to an income tax provision of $4.0 million
and $11.1 million for the same periods in 2005.  The effective tax rates for the
three  and  nine  month  periods  ended  September  30,  2006  were 31% and 34%,
respectively, compared to 35% for the comparable periods in 2005. This decreased
effective  tax rate was  primarily  due to the receipt of $1.9 million  tax-free
death benefit  pursuant to the BOLI plan in September 2006,  partially offset by
the non-deductibility of stock option expense related to incentive stock options
in accordance with SFAS 123R.

         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 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.

                                       26



         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.

         In July 2006, the FASB issued FASB  Interpretation  No. 48,  Accounting
for  Uncertainty in Income Taxes,  an  interpretation  of FASB Statement No. 109
(FIN 48). This interpretation of SFAS No. 109 prescribes a recognition threshold
and  measurement   attribute  for  the  financial   statement   recognition  and
measurement  of a tax  position  taken or  expected to be taken in a tax return.
This  interpretation  also provides guidance on de-recognition,  classification,
interest  and  penalties,   accounting  in  interim   periods,   disclosure  and
transition.  The  interpretation  is effective for fiscal years  beginning after
December 15, 2006. The  Corporation  has reserves  related to certain of its tax
positions  which would be subject to analysis under FIN 48. The  Corporation has
not yet determined the impact on its Consolidated Financial Statements,  if any,
that would result as a consequence of adopting this interpretation in 2007.

         In  September   2006,   the  FASB  issued  SFAS  No.  157,  Fair  Value
Measurements.  This  Statement  defines fair value,  establishes a framework for
measuring  fair value in generally  accepted  accounting  principals and expands
disclosures about fair value measurements.  Additionally,  it establishes a fair
value  hierarchy  that   prioritizes  the  information  used  to  develop  those
assumptions.  SFAS 157 is effective for financial  statements  issued for fiscal
years  beginning after November 15, 2007 and interim periods within those fiscal
years.  The  Corporation  has not yet determined the impact on its  Consolidated
Financial  Statements,  if any, that would result as a  consequence  of adopting
this Statement in 2008.

         Also in  September  2006,  the FASB  issued  SFAS No.  158,  Employers'
Accounting  for  Defined  Benefit  Pension and Other  Postretirement  Plans - an
amendment of FASB Statement No. 87, 88, 106, and 132(R). This Statement requires
recognition  of the  funded  status of a benefit  plan and other  postretirement
plans in the  statement of  financial  position.  The  Statement  also  requires
recognition in other  comprehensive  income, net of tax, the gains or losses and
prior  service  costs or  credits  that  arise  during  the  period  but are not
recognized as components of net periodic  benefit cost.  Additionally,  SFAS 158
requires  employers to measure the funded status of a plan as of the date of its
year-end  statement of financial  position.  SFAS 158 provides  recognition  and
disclosure  elements to be  effective  as of the end of the fiscal  years ending
after  December 15, 2006 and  measurement  elements to be  effective  for fiscal
years ending after December 15, 2008. The Corporation has not yet determined the
impact on its Consolidated Financial Statements,  if any, that would result as a
consequence of adopting this Statement in 2006.

         In addition,  the Securities and Exchange Commission (SEC) issued Staff
Accounting  Bulletin  (SAB) No.  108,  Considering  the  Effects  of Prior  Year
Misstatements   when   Quantifying   Misstatements  in  Current  Year  Financial
Statements  in  September  2006.  This  Statement  provides  SEC staff  views on
diversity in practice in quantifying  financial statement  misstatements and the
potential  under  current  practice for the build up of improper  amounts on the
balance sheet.  The SEC staff believes that  registrants  should quantify errors
using both a balance sheet and an income statement approach and evaluate whether
either  approach  results in quantifying a misstatement  that, when all relevant
quantitative and qualitative  factors are considered,  is material.  These prior
year misstatements should be considered in quantifying  misstatements in current
year  financial  statements.  SAB 108 is effective for fiscal years ending after
November 15, 2006.  The  Corporation  has not yet  determined  the impact on its
Consolidated Financial Statements, if any, that would result as a consequence of
adopting this Statement in 2006.

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  to ensure  that
          information  required  to be  disclosed  by the Company in the reports
          that it files or submits under the Securities  Exchange Act of 1934 is
          recorded,  processed,  summarized and reported within the time periods
          specified in the Securities and Exchange  Commission's rules and forms
          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.

                                       27



Part II.  OTHER INFORMATION

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

          The  Company  is not  engaged in any legal  proceedings  of a material
          nature at September 30, 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.

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

          The  following  table lists  purchases of the  Company's  Common Stock
          during the third quarter of 2006.



                                                               Total                      Total Number of        Maximum Number
                                                               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 the Plans
                                                              ---------     ---------     ---------------       ---------------

                                                                                                     
          July 1, to July 31, 2006                                 0           $0.00                     0               637,500

          August 1, to August 31, 2006                        19,400          $60.39                19,400               618,100

          September 1, to September 30, 2006                       0           $0.00                     0               618,100

          Total for the quarter ended September 30, 2006      19,400          $60.39
          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

                                       28





         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:  November 7, 2006                /s/ Marvin N. Schoenhals
                                           -------------------------------------
                                           Marvin N. Schoenhals
                                           President and Chief Executive Officer






Date:  November 7, 2006                /s/ Stephen A. Fowle
                                           -------------------------------------
                                           Stephen A. Fowle
                                           Executive Vice President and
                                           Chief Financial Officer

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