SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
{X} ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2005
-----------------------------------------------------
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
For the transition period from _______________________ to ______________________
Commission file number 0-16668
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A. Full title of the plan and the address of the plan:
WSFS Financial Corporation
401(k) Savings and Retirement Plan
838 Market Street
Wilmington, DE 19899
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
WSFS Financial Corporation
838 Market Street
Wilmington, DE 19899
REQUIRED INFORMATION
The audited financial statements required are included herein.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
WSFS Financial Corporation
401(k) Savings and Retirement Plan
DATE: June 29, 2006 /s/Deborah A. Powell
----------------------------------
Deborah A. Powell
Plan Administrator
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Financial Statements and Supplemental Schedules
December 31, 2005 and 2004
(With Report of Independent Registered Public Accounting Firm Thereon)
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Table of Contents
Page
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Report of Independent Registered Public Accounting Firm 1
Statements of Net Assets Available for Benefits, December 31, 2005 and 2004 2
Statements of Changes in Net Assets Available for Benefits, Years ended December 31, 2005
and 2004 3
Notes to Financial Statements 4
Schedules:
1 Schedule H, line 4i - Schedule of Assets (Held at End of Year), December 31, 2005 10
2 Schedule H, line 4j - Schedule of Reportable Transactions, Year ended December 31, 2005 11
Report of Independent Registered Public Accounting Firm
The Participants and Plan Administrator
WSFS Financial Corporation 401(k) Savings and Retirement Plan:
We have audited the accompanying statements of net assets available for benefits
of the WSFS Financial Corporation 401(k) Savings and Retirement Plan (the Plan)
as of December 31, 2005 and 2004, and the related statements of changes in net
assets available for benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2005 and 2004, and the changes in net assets available for benefits
for the years then ended, in conformity with U.S. generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
(held at end of year) and reportable transactions are presented for purposes of
additional analysis and are not a required part of the basic financial
statements but are supplemental information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure Under the Employee
Retirement Income Security Act of 1974. The supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/KPMG LLP
Philadelphia, Pennsylvania
June 27, 2006
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Statements of Net Assets Available for Benefits
December 31, 2005 and 2004
2005 2004
----------- -----------
Assets:
Investments (note 3) $39,520,374 37,047,873
Loans to participants 897,787 759,350
----------- -----------
Total Investments 40,418,161 37,807,223
Receivables:
Employer contribution 108,385 78,967
----------- -----------
Total receivables 108,385 78,967
----------- -----------
Net assets available for benefits $40,526,546 37,886,190
=========== ===========
See accompanying notes to financial statements
2
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Statements of Changes in Net Assets Available for Benefits
Years Ended December 31, 2005 and 2004
2005 2004
----------- -----------
Additions:
Investment income:
Interest and dividends $ 503,005 338,456
Net appreciation in fair value of investments 1,093,066 6,232,595
----------- -----------
1,596,071 6,571,051
----------- -----------
Contributions:
Employer 1,326,137 1,523,298
Participants 1,468,314 1,186,391
----------- -----------
2,794,451 2,709,689
----------- -----------
Total additions 4,390,522 9,280,740
Deductions:
Benefits paid 1,750,166 1,521,593
----------- -----------
Net increase 2,640,356 7,759,147
Net assets available for benefits:
Beginning of year 37,886,190 30,127,043
----------- -----------
End of year $40,526,546 37,886,190
=========== ===========
See accompanying notes to financial statements
3
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements
December 31, 2005 and 2004
(1) Description of Plan
The purpose of the WSFS Financial Corporation 401(k) Savings and
Retirement Plan (the Plan) is to encourage and assist employees
(Associates) in following a systematic savings program suited to their
individual long-term financial objectives. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA). The following description of the Plan provides only general
information. Participants should refer to the plan agreement or the
summary plan description for a more complete description of the Plan's
provisions.
(a) Eligibility
All full- and part-time Associates of WSFS Financial Corporation
or its subsidiaries (the Employers) who were employed on or before
June 30, 1993 were eligible to participate on the first of the
month following 90 days of service. Associates hired after June
30, 1993 are eligible to participate following the completion of
one year of continuous employment, 1,000 hours of service, and
attainment of age 21. This eligibility was amended effective July
1, 2004, such that Associates who have completed six months of
service as of July 1, 2004 or who will complete six months of
service on or after July 1, 2004 are eligible to participate
following the completion of six months of continuous employment.
(b) Contributions
Participants may authorize the Employers to make payroll
deductions under the Plan from 0% to 70% of their total
compensation, not to exceed $14,000 in 2005. In addition, those
participants, who are over age 50 or turning age 50 on or before
December 31, 2005, are eligible for an additional catch-up
contribution of $4,000 in 2005. The percentage contribution may be
increased, decreased, revoked, or resumed at any time during the
year. Such changes are effective as of the next pay period.
Contributions made by participants are credited to their
individual accounts and are made on a pretax basis assuming
applicable regulations set forth in the Internal Revenue Code are
satisfied.
All contributions made by the Employers on participants' behalf
are also on a pretax basis. The Employers' contributions comprise
the following:
Company Matching Contribution - The Plan includes an employer
matching contribution program such that the Employers match 100%
of the Associate's contribution up to 5% of total compensation.
The matching contribution is made in cash and is invested in WSFS
Financial Corporation common stock. Participants can opt to
transfer the WSFS Financial Corporation common stock at any time.
Employer Base Profit Sharing Contribution - The Plan includes a
profit sharing program. The contribution for each eligible
participant is calculated as a fixed percentage of the
participant's total compensation. The profit sharing contribution
is in the form of WSFS Financial Corporation common stock.
Participants can opt to transfer the WSFS Financial Corporation
common stock at any time. The two types of profit sharing
contributions are as follows:
o Base Contribution - Participants shall be entitled to a base
contribution in each calendar quarter in which the Board
approves such contributions, based upon the Employers'
performance. It is calculated based on a fixed percentage
established at the beginning of the year.
4
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements
December 31, 2005 and 2004
o Supplemental Contribution - A Participant shall be entitled
to a supplemental contribution at the end of each Plan Year
in which the Board approves such contributions, based upon
the Employers' performance.
For the years ended December 31, 2005 and 2004, the Employers made
Supplemental Contributions of $0.
(c) Participants' Accounts
Participants' accounts are credited for their contributions and
the Employers' contribution made on their behalf. Participants'
accounts are also adjusted by an allocation of the earnings or
losses of the Plan fund in which each participant's account is
invested based upon the change in unit share price of all funds
and for the money market fund upon the ratio of the account
balance to the total of all participants' account balances in that
fund.
(d) Vesting
All Associate contributions are 100% vested and are not subject to
forfeiture for any reason. Employer contributions that are
forfeited by participants reduce future Employer contributions.
Forfeitures were $58,456 and $32,482 for the years ended December
31, 2005 and 2004, respectively. Forfeitures used to offset
Employer contributions amounted to $52,600 and $37,980 for the
years ended December 31, 2005 and 2004, respectively. Employer
contributions were vested immediately for Associates who enrolled
in the Plan prior to June 30, 1993. The Plan's vesting schedule
was amended as of July 1, 1997. The amended vesting schedule
applies to all participants who enrolled in the Plan after June
30, 1993. The table below shows the amended vesting schedule for
Associates who enrolled in the Plan after June 30, 1993:
Years of service Vested percentages as amended
---------------- -----------------------------
0-1 20%
2 40
3 60
4 80
5 100
(e) Withdrawals
Participants' accounts are segregated between pre-January 1, 1988
and post-January 1, 1988 contributions. Associate contributions
made subsequent to January 1, 1988 are made on a pretax basis.
Withdrawals are subject to tax and, in certain instances, penalty.
Effective January 1, 1993, the Plan is required to withhold
federal income taxes at a flat rate of 20% on the taxable portion
of withdrawals that are not directly rolled over into an
Individual Retirement Account (IRA) or another qualified
retirement plan. This withholding tax does not apply to minimum
distributions and annuity payments. Participant interest payments
on loans, which are recorded as earnings, are made on a post-tax
basis.
5
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements
December 31, 2005 and 2004
Under the Plan, participants may request hardship withdrawals of
vested contributions (but not income earned on contributions after
December 31, 1988), which must be approved by the Associate
Benefits Committee and can only be made for one of the following
reasons:
1. Purchase of primary residence of the participant
2. Preservation of primary residence
3. Certain medical expenses of a participant or the
participant's dependents
4. Tuition for the next semester or quarter of postsecondary
education of the participant, spouse, or dependents.
(f) Loan Provision
Under the Plan, participants may obtain loans up to 50% of their
vested account balance with a minimum loan of $1,000 and a maximum
loan of $50,000. The interest rate on loans is 10%. Interest paid
on the loan is added to the participant's account balance. Loans
are secured by the participant's interest in the Plan. To be
eligible for a loan, Associates must make Associate Savings
Contributions of at least 1% of total compensation. They may only
request one new loan or refinancing in any 12-month period.
(g) Administrative Expenses
Expenses relating to the administration of the Plan are paid by
WSFS Financial Corporation. Costs incurred by the Plan relating to
voluntary removal of funds in the form of loan proceeds or
withdrawals are paid by the participants.
(h) Payment of Benefits
Any Participant who separates from service for any reason,
including Disability, but excluding death benefits, shall be
entitled to receive their vested interest in their account
balance. This distribution can be in a lump sum payment, rollover
to an IRA, or rollover to the qualified plan of a new employer.
Upon the death of a Participant prior to payment of all
retirement benefits, the Participant's vested account balance
shall be paid to the Participant's beneficiary in accordance with
the Plan Document.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying financial statements are prepared on the accrual
basis of accounting.
(b) Use of Estimates
The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets, liabilities, and changes therein, and disclosure of
contingent assets and liabilities. Actual results could differ
from those estimates.
6
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements
December 31, 2005 and 2004
(c) Investment Valuation and Income Recognition
Investments in short-term securities are valued at cost that
approximates market. Investments in mutual funds are valued at the
net asset value of the fund, which is based on the quoted year-end
market value of securities held by the fund. WSFS Financial
Corporation common stock is valued at the year-end market price.
Purchases and sales of investments are reflected on a trade-date
basis. Interest income is recorded on the accrual basis. Dividends
are recorded on the ex-dividend date.
(d) Revenue Recognition and Method of Accounting
The Plan records all transactions on an accrual basis. Investment
income is recorded as earned.
(e) Fund Accounting for Income
The mutual funds invest interest and dividend income within the
fund to purchase more fund assets rather than distribute the
income among investors in the fund.
(f) Payment of Benefits
Benefits are recorded when paid.
(3) Investments
The following represents the fair value of investments that are 5% or
more of the Plan's net assets:
December 31
-----------------------------
2005 2004
----------- ---------
Schwab Retirement Advantage Money Fund** $ 2,873,956 2,189,074
Strong Government Securities Fund 2,569,518 2,196,805
WSFS Financial Corporation common stock** 19,346,548 * 19,356,246 *
Weitz Value Fund *** 2,151,724
Vanguard Index 500 Fund 2,495,600 2,431,323
Artisan International Fund 2,600,133 874,071
Royce Total Return Fund 2,161,279 1,187,621
*Nonparticipant directed.
**Party-in-interest.
***Investment not 5% or more of Plan's net assets for this year.
7
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements
December 31, 2005 and 2004
During 2005 and 2004, the Plan's investments (including gains and losses
on investments bought and sold, as well as held during the year)
appreciated in value as follows:
2005 2004
---------- ----------
Mutual funds $ 642,216 1,061,373
Common stock 450,850 5,171,222
---------- ----------
Total appreciation $1,093,066 6,232,595
========== ==========
(4) Nonparticipant-Directed Investments
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed investments
is as follows:
December 31
----------------------------
2005 2004
------------ ------------
Net assets:
WSFS Financial Corporation common stock and
employer contribution receivable $ 14,949,655 $ 14,721,848
Years ended December 31
----------------------------
2005 2004
------------ ------------
Changes in net assets:
Contributions $ 1,436,122 1,653,841
Investment earnings 424,298 3,937,407
Benefits paid to participants (555,361) (308,040)
Transfers to participant-directed investments (1,077,252) (2,543,650)
------------ ------------
$ 227,807 2,739,558
============ ============
(5) Income Tax Status
On December 15, 2005, the Plan was amended and restated effective March
28, 2005. The Plan received a favorable determination letter from the IRS
dated May 6, 2005. The Employers believe that the Plan currently is
designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code and that, therefore, the Plan
continues to qualify under Section 401(a) and the related trust continues
to be tax-exempt as of December 31, 2005. Therefore, no provision for
income taxes is included in the Plan's financial statements.
8
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements
December 31, 2005 and 2004
(6) Plan Termination
Although WSFS Financial Corporation has not expressed any intention to
terminate the Plan, it may do so at any time. Upon the complete
discontinuation of contributions to the Plan, or the complete or partial
termination of the Plan, the rights of all affected Associates under the
Plan shall become fully vested and nonforfeitable.
(7) Related-Party Transactions
Certain Plan investments consist of shares of mutual funds sponsored by
Charles Schwab Trust Company (the Custodian) and WSFS Financial
Corporation common stock. Investment transactions with the Custodian and
the WSFS Financial Corporation qualify as party-in-interest transactions.
Fees incurred for investment management, custodial, and record-keeping
services were paid by the Employers for the years ended December 31, 2005
and 2004.
(8) Risks and Uncertainties
The Plan provides participants various investment options. Investment
securities are exposed to various risks such as interest rate, market,
and credit risks. Due to the level of risk associated with certain
investments securities, it is at least reasonably possible that changes
in the value of investment securities will occur in the near term and
that such changes could materially affect participants' account balances
and the amounts reported in the statement of net assets available for
benefits.
9
Schedule 1
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Schedule H, line 4i - Schedule of Assets (Held at End of Year)
December 31, 2005
Shares Fair value
----------- -----------
* Schwab Retirement Advantage Money Fund 2,863,072 $ 2,873,956
Strong Government Securities Fund 245,652 2,569,518
Dreyfus Appreciation Fund 41,352 1,643,807
* WSFS Financial Corporation common stock 315,862 19,346,548
Vanguard Index 500 Fund 21,715 2,495,600
Jensen Portfolio 8,389 199,836
Artisan Midcap Fund 30,654 947,810
Weitz Value Fund 55,253 1,957,053
Pax World Fund 26,722 631,972
Artisan International Fund 102,731 2,600,133
Clipper Fund 5,087 448,429
Royce Total Return Fund 171,530 2,161,279
Value Line Emerging Opportunities Fund 58,625 1,644,433
* Loans to participants (interest rate of 10%) 897,787
-----------
Total investments $40,418,161
===========
* Party-in-interest.
See accompanying report of independent registered public accounting firm.
10
Schedule 2
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Schedule H, line 4j - Schedule of Reportable Transactions
Year Ended December 31, 2005
(single transaction or series of transaction in one issue aggregating 5%
or more of the market value of plan assets at January 1, 2005)
Sales Number of Number of
Name of party and ---------------------- purchases and sales and
description of assets Purchases Cost Proceeds Gain issuances redemptions
------------------------------- ---------- ---------- --------- --------- ------------ -----------
Series of transactions:
* WSFS Financial Corporation
common stock $2,023,563 1,069,709 2,483,925 1,414,216 73 153
* Party-in-interest.
See accompanying report of independent registered public accounting firm.
11