To our Stockholders, Customers, Neighbors, Associates and Friends:

2003 was a year of strong performance and continued focus for WSFS Financial
Corporation. We are very pleased to report strong earnings and exceptional
momentum.

As we execute on our strategic direction, we continue to experience success
along the way. Our strategic focus is to exceed customer expectations and build
customer advocacy by serving small- and mid-sized businesses while gathering
retail core deposits. The momentum of 2003 is evidence of the strength of this
focus.

WSFS recorded net income of $63 million, or $7.65 per share in 2003. These
earnings included the successful divestiture of a majority-owned mortgage
banking subsidiary, which realized an after-tax gain on the sale of $41.3
million, as well as, an additional after-tax gain of $517,000 from the 2002 sale
of our branchless banking operation. Our return on equity, based on net income
from continuing operations, was 10.60% and our return on assets was 1.09%.
Return on equity is not consistent with our historical standards due to the
excess capital generated by our 2002 and 2003 divestitures. As we reinvest these
proceeds and related liquidity into our core bank operations, we expect to
return to our long-standing goal of 18%.

Strong Growth

As Delaware's independent, locally managed community bank, we continue to grow
and expand our strong footprint in the commercial and retail marketplace.
Serving the needs of businesses while expanding our reach is a key component of
our strategy and our overall success. Business owners and managers are drawn to
working with bankers who understand their need for responsiveness and
flexibility. Business customers find success in working with WSFS because they
can work directly with local decision makers.

As a result of continued strong growth primarily in commercial and commercial
real estate loans, we reported an increase in these categories of $185.1
million, or 37.2% over 2002, to $682.3 million in total. The increase in loan
volume is primarily the result of gaining local market share due to the strong
momentum of seasoned relationship managers built over the past several years,
along with delivering high levels of service.

Our retail banking business maintained strong, stable growth as core deposit
relationships (demand deposits, money market and savings accounts) increased by
$65.8 million, or 11.2% over 2002 at year-end. Residential real estate loans and
consumer loans (primarily home equity loans) grew by $41.1 million, or 6.8% from
the end of 2002. In addition, we continued to increase our customer base for
Private Banking services. As we expand our share of business customers, Private
Banking services are a natural progression in providing extraordinary service.

TOPS Plan Completed

The 18-month Technology, Organization and Process Simplification Plan (TOPS) was
successfully completed on time and under budget at the end of the first quarter
of 2003. The goal of the program was to deliver a better customer experience,
and to improve the Bank's efficiency and financial performance. As a result,
expenses decreased $2.2 million, or 4% from TOPS and other successes, enabling
improvement in our efficiency ratio to 57.9%.

The TOPS initiative is a critical piece of our business strategy. Its successful
completion is a key to future long-term success. TOPS focused on process
simplification and technology. Our new technology infrastructure simplifies the
way we process and service deposits and loans. Data processing is now fully
integrated, creating a consistent customer experience that is designed to exceed
customer expectations--exceeding expectations is the essence of the WSFS brand.

Our business strategy is crystal clear. Our focus is on business banking as we
increase our reach in retail banking. This strategy will increase our footprint
in Delaware, resulting in significant market penetration.

Our Mission

The WSFS Mission Statement is "Strengthening the Core of Delaware." It
summarizes what WSFS stands for in the marketplace. It is deeply influenced by
our history, our resources and our strengths. Our mission comes to life each
time we give a small business the opportunity to grow and succeed, each time we
provide first-time home buyers with a mortgage or each time we collaborate with
local organizations to provide specialized lending programs to enrich our
communities. Supporting community sponsorships is another important way that
WSFS demonstrates a strong commitment to strengthening the core of Delaware.

We are especially proud of our Associate volunteerism. According to a recent
survey, a full 75% of WSFS Associates actively participate in community or
not-for-profit programs--generously giving their personal time and resources.

Our corporate volunteerism program, TEAM WSFS, provides a way for Associates to
participate as part of a team or individually in programs such as March of
Dimes, Adopt-a-Family, Meals on Wheels, Habitat for Humanity and many others. We
are proud of our Associates for their unwavering support and dedication.

Branching Out--the Vision for the Future

On November 21, 2003, we celebrated the unveiling of our prototype banking
office in Bear, Delaware, with a ribbon-cutting ceremony and grand opening
weekend. The new office has been designed from the ground up to create an
extraordinary experience for small business and retail customers. Every aspect
of the office, from the look and feel of the building, to the policies and
procedures that define banking operations, has been developed with the customer
experience in mind.

What Makes this Banking Office Different?

The product of extensive research and planning, this office is designed to
deliver a high level of customer service. Beginning at the greeter station, a
specially trained WSFS Associate stands ready to help direct customers and
answer their questions as soon as they enter the office. All Associates are
Customer Service Representatives who are empowered to make decisions on behalf
of customers. The office also features a Small Business Center complete with a
flat screen TV tuned to a financial news network, plus materials on small
business banking services and information on SBA loans. Associates will pursue
small business customers. The office location was selected because of the many
small businesses in the Bear/Glasgow area.

Our goal is to provide a warm environment with everything from an Internet Cafe
to a cup of Starbucks (R) coffee. A community room is available for use by
non-profit groups because we know meeting space is scarce. Special new ATM
features include the ability to order FTD (R) flowers and movie tickets.

The office provides seven-day banking and extended hours. This prototype is the
first of a number of new offices planned as we expand in southern Delaware.

In the second half of 2004 we anticipate the opening of offices in the Dover,
Delaware market and a permanent office in Rehoboth Beach, Delaware.

Focus on Extraordinary Service

Delivering on our brand promise is an important part of our business strategy.
The WSFS Brand Promise is to deliver extraordinary service by exceeding our
customers' expectations each time we connect with them. Even our All Associate
Bonus is determined by our level of customer service quality.

WSFS Associates

We are proud of our Associates. They are true professionals who share a common
vision of exceptional customer service. WSFS is committed to nurturing a
productive, customer-oriented workplace that begins with Associate commitment to
the organization. WSFS utilizes a highly reputable national organization to
measure this level of commitment. Our 2003 Associate Survey indicates that WSFS
Associates scored above the 50th percentile nationally. We are on target to
reach our goal of being in the top quartile over the next two years. We strongly
believe that Associate commitment will translate into customer profitability and
increased Associate retention.

CashConnect

Our ATM division, CashConnect, provides the largest off-premise ATM network in
Delaware, strengthening our retail banking reach. In addition, CashConnect has
become one of the top vault cash providers in the country, servicing nearly
4,800 ATMs nationwide. CashConnect also has strategic working alliances with
some of the most highly recognized armored carrier and transaction networks
across the nation that service funding locations throughout the United States.

The Future is Bright

With a strong year behind us, we look forward to continuing our momentum in
2004. WSFS is well-positioned for future success as we continue to execute on
our strategic focus. By expanding our reach and leveraging the strength of our
retail franchise, we will aggressively build our business banking customer base.

The coming year will see us continue our expansion strategy. We remain focused
on Delaware and its contiguous markets. Delaware is a state rich in opportunity
as it enjoys a strong and diverse economy.

The coming year will also see us fulfill our commitment to strengthen our wealth
management services. Recently, we announced the formation of Montchanin Capital
Management, an investment management firm created to serve the needs of high net
worth individuals and small- to medium-sized institutions in the Delaware area.
Establishing Montchanin Capital Management was a key element in our strategy to
provide comprehensive financial services to our growing Private Banking clients,
business owners and foundations.

As part of its strategy, in January 2004, Montchanin Capital Management acquired
a majority interest in Cypress Capital Management, a Wilmington-based investment
advisory firm serving a national clientele of high net worth individuals.
Cypress, established in 1984, has been among the more successful value-style
investment managers, and is one of a small number of firms to outperform market
benchmarks over the past three and five-year periods. At December 31, 2003,
Cypress had approximately $350 million in assets under management.

All indications point to a bright future for WSFS Financial Corporation. We see
a future of opportunity and growth. Building on the hard work and success of
2003, we intend to remain focused, stay true to our mission and thrive in years
to come.

/s/ Marvin N. Schoenhals
Marvin N. Schoenhals
Chairman and President

/s/ Karl L. Johnston
Karl L. Johnston
Chief Operating Officer, Chief Lending Officer

/s/ Mark A. Turner
Mark A. Turner
Chief Operating Officer, Chief Financial Officer

Board of Directors, WSFS Financial Corporation

Marvin N. Schoenhals
Chairman and President, WSFS Financial Corporation

Charles G. Cheleden
Vice Chairman, WSFS Financial Corporation
Attorney-At-Law

Dale E. Wolf
Vice Chairman, WSFS Financial Corporation
Former Lieutenant Governor/Governor of the State of Delaware

John F. Downey
Executive Director (Retired), Office of Thrift Supervision

Linda C. Drake
Founder and Chair, TCIM Services, Inc.

David E. Hollowell
Executive Vice President and University Treasurer
University of Delaware

Joseph R. Julian
President and Chief Executive Officer, JJID, Inc.

Thomas P. Preston
Partner, Blank Rome, LLP

Claibourne D. Smith, Ph.D.
Vice President (Retired)
E. I. du Pont de Nemours & Company, Incorporated

Eugene W. Weaver
Financial Vice President (Retired)
John W. Rollins & Associates

R. Ted Weschler
Managing Member, Peninsula Capital Advisors, LLC

Principal Officers, WSFS Financial Corporation

Marvin N. Schoenhals
Chairman and President

Karl L. Johnston
Chief Operating Officer and Chief Lending Officer

Mark A. Turner
Chief Operating Officer, Chief Financial Officer and Secretary

Robert F. Mack
Senior Vice President, Controller

Principal Officers of Principal Subsidiary,
Wilmington Savings Fund Society, FSB

Marvin N. Schoenhals
Chairman and President

Karl L. Johnston
Chief Operating Officer and Chief Lending Officer

Mark A. Turner
Chief Operating Officer and Chief Financial Officer

Deborah A. Powell
Executive Vice President, Human Resources

Thomas E. Stevenson
President, CashConnect Division

Barbara J. Fischer
Senior Vice President, Chief Technology Officer

Paul S. Greenplate
Senior Vice President, Treasurer

Thomas W. Kearney
Senior Vice President, Chief Auditor

Glenn L. Kocher
Senior Vice President, Chief Credit Officer

Robert F. Mack
Senior Vice President, Controller

James H. Noon
Senior Vice President, Manager, Cash Management

Douglas R. Quaintance
Senior Vice President, Manager, Business Banking

Deborah T. Roberts
Senior Vice President, Retail Banking

Ann M. Rudolph
Senior Vice President, Commercial Real Estate

Joan H. Sullivan
Senior Vice President, Director of Marketing

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

OVERVIEW

WSFS Financial Corporation (Company or Corporation) is a thrift holding
company headquartered in Wilmington, Delaware. Substantially all of the
Corporation's assets are held by its subsidiary, Wilmington Savings Fund
Society, FSB (Bank or WSFS). Founded in 1832, WSFS is one of the oldest
financial institutions in the country. As a federal savings bank that was
formerly chartered as a state mutual savings bank, WSFS enjoys broader
investment powers than most other financial institutions. WSFS has served the
residents of the Delaware Valley for 172 years. WSFS is the largest thrift
institution headquartered in Delaware and among the three or four largest
financial institutions in the state on the basis of total deposits traditionally
garnered in-market. The Corporation's primary market area is the mid-Atlantic
region of the United States that is characterized by a diversified manufacturing
and service economy. The long-term strategy of the Corporation is to improve its
status as a high-performing financial services company by focusing on its core
community banking business.

WSFS provides residential and commercial real estate, commercial and
consumer lending services, as well as retail deposit and cash management
services. Lending activities are funded primarily with retail deposits and
borrowings. The Federal Deposit Insurance Corporation (FDIC) insures deposits to
their legal maximum. WSFS serves customers primarily from its main office and 23
retail banking offices located in Delaware and southeastern Pennsylvania. In
2002, for strategic reasons, WSFS transferred six branch offices that were
outside of its core footprint to other financial institutions.

The Corporation has two consolidated subsidiaries, WSFS and Montchanin
Capital Management, Inc. The Corporation also has one unconsolidated affiliate,
WSFS Capital Trust I. The Corporation has no unconsolidated subsidiaries or
off-balance sheet entities. Fully-owned and consolidated subsidiaries of WSFS
include WSFS Credit Corporation (WCC), which is engaged primarily in indirect
motor vehicle leasing; WSFS Investment Group, Inc., which markets various
third-party insurance products and securities through WSFS' retail banking
system; and WSFS Reit, Inc., which holds qualifying real estate assets and may
be used in the future to raise capital.

In 2000, the Board of Directors approved management's plans to discontinue
the operations of WCC. WCC, which had 483 lease contracts and 542 loan contracts
at December 31, 2003, no longer accepts new applications but continues to
service existing loans and leases until their maturity. Management estimates
that substantially all loan and lease contracts will mature by the end of 2004.
See the Discontinued Operations section of Management's Discussion and Analysis
and Note 2 to the Financial Statements for a detailed discussion.

In addition to the wholly owned subsidiaries, WSFS had consolidated two
non-wholly owned subsidiaries, CustomerOne Financial Network, Inc. (C1FN) and
Wilmington Finance, Inc. (WF). C1FN, a 21% owned subsidiary engaged in Internet
and branchless banking, was sold in November 2002. WF, a majority owned
subsidiary engaged in sub-prime residential mortgage banking, was sold in
January 2003. Both subsidiaries are therefore classified as businesses
held-for-sale in the Financial Statements. See the Businesses Held-for-Sale
section of this Management's Discussion and Analysis, and Note 3 to the
Financial Statements for a further discussion.

These divestitures were consistent with strategic actions of WSFS to
simplify its operations and better focus resources and capital on WSFS' core
bank.

RESULTS OF OPERATIONS

The Corporation recorded net income of $63.0 million for the year ended
December 31, 2003, compared to $101.1 million and $17.1 million in 2002 and
2001, respectively. Income from continuing operations was $21.2 million, $88.0
million and $17.8 million for the years ended December 31, 2003, 2002 and 2001,
respectively. Net income for the year ended December 31, 2003 included an after
tax gain of $41.3 million on the sale of Wilmington Finance, Inc. In addition,
the results for 2003 included an after tax gain of $517,000 on the sale of
C1FN/Everbank. See the Businesses Held-for-Sale section of this Management's
Discussion and Analysis and Note 3 to the Financial Statements for a further
discussion. Net income for the year ended December 31, 2002 included a
significant gain on sale of financial assets.

Net Interest Income. Net interest income is the most significant component
of operating income to the Corporation. Net interest income relies upon the
levels of interest-earning assets and interest-bearing liabilities and the
difference or "spread" between the respective yields earned and rates paid. The
interest rate spread is influenced by regulatory, economic and competitive
factors that affect interest rates, loan demand and deposit flows. The level of
nonperforming loans can also impact the interest rate spread by reducing the
overall yield on the loan portfolio.

Net interest income decreased $3.3 million, or 5%, to $58.0 million in 2003
compared to $61.3 million in 2002. Total interest income decreased $5.4 million
between 2002 and 2003, primarily due to the sale of substantially the entire
reverse mortgage

portfolio in November 2002 which contributed $13.1 million. In addition the
yield on total loans and mortgage-backed securities decreased 105 basis points
and 225 basis points, respectively, between 2002 and 2003. This decline in yield
was offset by increases in average loan balances of $179.1 million and average
mortgage-backed securities balances of $338.1 million. For further discussion of
reverse mortgages, see the Investment in Reverse Mortgages discussion included
in this Management's Discussion and Analysis and Note 6 to the Financial
Statements.

Total interest expense, excluding the expense to fund discontinued
operations and businesses held-for-sale, decreased $2.1 million from 2002 to
2003 primarily due to a decrease in the average cost of deposits of 63 basis
points from 1.79% to 1.16%. The decline in interest expense was affected by the
aforementioned decline in interest rates in 2003, as longer-term borrowing and
deposits matured and were replaced at substantially lower rates.

Between 2001 and 2002, interest income decreased $6.6 million, while
interest expense decreased $13.2 million, resulting in an increase in net
interest income of $6.5 million. The decrease in interest income was primarily
due to the decrease in the yield on total loans and mortgage-backed securities
of 106 basis points and 90 basis points, respectively. These decreases were
offset by an increase in average total loans of $68.5 million. In addition,
overall market rates were lower in 2002 than in 2001. The interest income
comparison was also negatively impacted from the sale of substantially the
entire reverse mortgage portfolio in November 2002 which contributed $13.1
million. The decrease in interest expense was primarily due to a decrease in the
average yield on deposits and borrowings. The average yield on deposits
decreased 184 basis points, while the average yield on Federal Home Loan Bank
(FHLB) advances and other borrowings decreased 100 basis points and 279 basis
points, respectively. All decreases in yields are primarily due to the average
market interest rates being lower in 2002 versus 2001.

The following table sets forth certain information regarding changes in net
interest income attributable to changes in the volumes of interest-earning
assets and interest-bearing liabilities and changes in the rates for the periods
indicated. For each category of interest-earning assets and interest-bearing
liabilities, information is provided on changes attributable to: (i) changes in
volume (change in volume multiplied by prior year rate); (ii) changes in rates
(change in rate multiplied by prior year volume); and (iii) net change. Changes
due to the combination of rate and volume changes (changes in volume multiplied
by changes in rate) are allocated proportionately between changes in rate and
changes in volume.

Year Ended December 31,
---------------------------------------------------------------------
2003 vs. 2002 2002 vs. 2001
--------------------------------- ---------------------------------
Volume Rate Net Volume Rate Net
------ ---- --- ------ ---- ---
(Dollars in Thousands)

Interest income:
Real estate loans (1) ..................... $ 8,026 $ (6,988) $ 1,038 $ 1,126 $ (6,081) $ (4,955)
Commercial loans .......................... 3,128 (2,320) 808 3,198 (2,609) 589
Consumer loans ............................ (250) (1,782) (2,032) 771 (1,912) (1,141)
Loans held-for-sale ....................... 184 (15) 169 95 (96) (1)
Mortgage-backed securities ................ 11,613 (4,347) 7,266 (999) (1,349) (2,348)
Investment securities ..................... 1,116 (503) 613 (313) 12 (301)
Investment in reverse mortgages ........... (6,244) (6,872) (13,116) (2,792) 5,729 2,937
Other ..................................... 276 (426) (150) (538) (877) (1,415)
-------- -------- -------- -------- -------- --------
Favorable (unfavorable) ....................... 17,849 (23,253) (5,404) 548 (7,183) (6,635)
-------- -------- -------- -------- -------- --------

Interest expense:
Deposits:
Money market and interest-bearing demand 71 (186) (115) 80 (560) (480)
Savings ................................. 69 (1,356) (1,287) 42 (4,545) (4,503)
Retail time deposits .................... (227) (2,255) (2,482) (250) (4,680) (4,930)
Jumbo certificates of deposit - nonretail 249 (206) 43 (262) (425) (687)
Brokered certificates of deposit ........ (5) (5) (10) (4,463) 319 (4,144)
FHLB of Pittsburgh advances ............... 8,377 (8,195) 182 2,643 (4,275) (1,632)
Trust Preferred borrowings ................ -- (636) (636) -- (766) (766)
Other borrowed funds ...................... 172 (2,081) (1,909) 876 (3,089) (2,213)
Cost of funding discontinued operations ... 1,259 224 1,483 3,429 3,372 6,801
Cost of funding businesses held-for-sale .. 1,299 1,299 2,598 1,041 (1,650) (609)
-------- -------- -------- -------- -------- --------
Unfavorable (favorable) ....................... 11,264 (13,397) (2,133) 3,136 (16,299) (13,163)
-------- -------- -------- -------- -------- --------
Net change favorable (unfavorable) ............ $ 6,585 $ (9,856) $ (3,271) $ (2,588) $ 9,116 $ 6,528
======== ======== ======== ======== ======== ========

(1) Includes commercial mortgage loans.

The following table provides information regarding the average balances of, and yields/rates on interest-earning assets and
interest-bearing liabilities during the periods indicated:
Year Ended December 31,
-------------------------------------------------------------------------------------------
2003 2002 2001
------------------------------ ----------------------------- ------------------------------
Average Yield/ Average Yield/ Average Yield/
Balance Interest Rate(1) Balance Interest Rate(1) Balance Interest Rate(1)
------- -------- ------- ------- -------- ------- ------- -------- -------
(Dollars in Thousands)

Assets
Interest-earning assets:
Loans (2) (3):
Real estate loans (4) .......... $ 780,406 $ 45,611 5.84% $ 652,391 $ 44,573 6.83% $ 637,679 $ 49,528 7.77%
Commercial loans ............... 250,577 12,501 5.37 196,343 11,693 6.44 151,200 11,104 7.99
Consumer loans ................. 187,111 13,506 7.22 190,212 15,538 8.17 181,535 16,679 9.19
---------- -------- ---------- -------- ---------- --------
Total loans ................... 1,218,094 71,618 5.97 1,038,946 71,804 7.02 970,414 77,311 8.08
Mortgage-backed securities (5) ... 480,389 14,874 3.10 142,250 7,608 5.35 159,242 9,956 6.25
Loans held-for-sale (3) .......... 5,767 383 6.64 3,013 214 7.10 1,923 215 11.18
Investment securities (5) ........ 41,666 1,503 3.61 14,292 890 6.23 19,297 1,191 6.17
Investment in reverse mortgages .. 659 (24) (3.64) 26,328 13,092 49.73 34,375 10,155 29.54
Other interest-earning assets .... 52,681 945 1.79 40,590 1,095 2.70 54,434 2,510 4.61
---------- -------- ---------- -------- ---------- --------
Total interest-earning assets.. 1,799,256 89,299 5.03 1,265,419 94,703 7.57 1,239,685 101,338 8.27
-------- -------- --------
Allowance for loan losses........... (22,139) (21,358) (21,470)
Cash and due from banks............. 137,239 121,022 78,085
Loans, operating leases and other
assets of discontinued operations. 25,375 79,479 159,989
Assets of businesses held-for-sale.. -- 371,830 311,806
Other noninterest-earning assets ... 34,703 51,020 42,440
---------- ---------- ----------
Total assets................... $1,974,434 $1,867,412 $1,810,535
========== ========== ==========
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Interest-bearing deposits:
Money market and interest-
bearing demand................ $ 108,096 $ 315 0.29% $ 90,585 $ 430 0.47% $ 82,678 $ 910 1.10%
Savings......................... 312,892 1,627 0.52 305,418 2,914 0.95 303,687 7,417 2.44
Retail time deposits............ 253,474 5,785 2.28 260,858 8,267 3.17 265,969 13,197 4.96
Jumbo certificates of deposit
- nonretail................... 30,105 462 1.53 16,674 419 2.51 23,449 1,106 4.72
Brokered certificates of
deposit....................... -- -- -- 137 10 7.30 61,632 4,154 6.74
---------- -------- ---------- -------- ---------- --------
Total interest-bearing
deposits..................... 704,567 8,189 1.16 673,672 12,040 1.79 737,415 26,784 3.63
FHLB of Pittsburgh advances....... 678,680 20,905 3.04 448,103 20,723 4.56 396,542 22,355 5.56
Trust preferred borrowings........ 50,000 1,963 3.87 50,000 2,599 5.13 50,000 3,365 6.64
Other borrowed funds.............. 122,459 1,231 1.01 115,740 3,140 2.71 97,266 5,353 5.50
Cost of funding discontinued
operations...................... -- (987) -- (2,470) -- (9,271)
Cost of funding businesses
held-for-sale................... -- -- -- (2,598) -- (1,989)
---------- -------- ---------- -------- ---------- --------
Total interest-bearing
liabilities.................. 1,555,706 31,301 2.01 1,287,515 33,434 2.60 1,281,223 46,597 3.64
-------- -------- --------
Noninterest-bearing demand deposits. 187,190 159,741 136,229
Liabilities of businesses
held-for-sale..................... -- 271,864 269,402
Other noninterest-bearing
liabilities....................... 31,233 16,181 18,293
Minority interest................... -- 7,597 4,979
Stockholders' equity................ 200,305 124,514 100,409
---------- ---------- ----------
Total liabilities and
stockholders' equity......... $1,974,434 $1,867,412 $1,810,535
========== ========== ==========
Excess (deficit) of interest-earning
assets over interest-bearing
liabilities........................ $ 243,550 $ (22,096) $ (41,538)
========== ========== ==========
Net interest and dividend income..... $ 57,998 $ 61,269 $ 54,741
======== ======== ========
Interest rate spread................. 3.02% 4.97% 4.64%
==== ==== ====
Interest rate margin................. 3.29% 4.93% 4.51%
==== ==== ====

(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 commercial mortgage loans.
(5) Includes securities available-for-sale.
9

Provision for Loan Losses. The Corporation records a provision for loan
losses in order to maintain the allowance for loan losses at a level which
management considers its best estimate of known and probable inherent losses.
Management's evaluation is based upon a continuing review of the portfolio and
requires significant management judgment (see the Allowance for Loan Losses
section of Management's Discussion and Analysis). For the year ended December
31, 2003, the Corporation recorded a provision for loan losses from continuing
operations of $2.6 million compared to $2.2 million in 2002 and $1.9 million in
2001. These increases reflect, among other things, the Company's strong loan
growth, particularly in commercial loans, partially offset by an overall
improvement in the credit quality of the Corporation's loan portfolio.

Noninterest Income. Noninterest income of $26.2 million in 2003, decreased
$97.9 million, or 79% from 2002. This decrease was almost entirely due to the
sale of the reverse mortgage portfolio in 2002. In 2002, substantially all of
WSFS' $33 million reverse mortgage portfolio was sold, resulting in a pretax
gain of $101.5 million. Partially offsetting this decrease was credit/debit card
and ATM income, which grew $1.3 million during 2003 due to the continued
expansion of WSFS' ATM network and card usage. At December 31, 2003, WSFS'
CashConnect division (ATM unit) derived income from 4,716 ATMs compared to 4,251
at December 31, 2002. Of these, WSFS owned and operated 222 ATMs in 2003 and 189
ATMs in 2002. In addition, gains on sales of loans increased $1.1 million during
2003. This increase was mainly the result of the continued low interest rate
environment. Because of low interest rates, WSFS originated a higher than usual
amount of conforming mortgage loans. Some of these loans were sold in the
secondary market (primarily to the Federal Home Loan Mortgage Corporation) for
gains.

Noninterest income of $124.1 million in 2002, increased $102.9 million, or
487% from 2001. This increase was largely attributable to the sale of the
reverse mortgage portfolio in 2002 resulting in a pretax gain of $101.5 million.
Consistent with 2003 results, credit/debit card and ATM income increased $1.7
million largely attributable to the continued expansion of WSFS' ATM servicing
division. At December 31, 2002, WSFS' CashConnect division derived income from
4,251 ATMs compared to 2,724 at December 31, 2001.

Noninterest Expenses. Noninterest expenses of $49.4 million in 2003
decreased $2.2 million, or 4% from 2002. This improvement was mainly due to a
decrease in data processing, professional fees and equipment expenses as a
result of the successful completion of the Corporation's Technology,
Organizational and Process Simplification Plan (TOPS). During the first quarter
of 2003, the Corporation completed the previously announced TOPS program; an
initiative designed to simplify the organization, better integrate technology
solutions and reengineer certain back office processes. Salaries, benefits and
other compensation expenses of $26.5 million increased $891,000 from 2002. This
increase was a direct result of higher levels of variable compensation that was
a direct result of profitable mortgage banking activity, commercial loan growth
and ATM business growth experienced in 2003. Included in salaries and benefits
in 2003 and 2002 was $663,000 and $823,000, respectively, of expenses related to
special management compensation and a special contribution to the Company's
401(k) plan for all Associates. These charges were made possible because of the
sale of WF in 2003 and the sale of the reverse mortgage portfolio in 2002. Also,
following the sale of WF in 2003 and the reverse mortgage portfolio in 2002, the
Company made contributions to the previously established WSFS charitable
foundation of $660,000 and $1.0 million, respectively. Finally, during 2003, the
CashConnect division completed an extensive analysis of its reserves for
business losses. This analysis indicated that a portion of these reserves could
be reduced, based on its historical loss experience. These pretax provisions
amounted to $(261,000) in 2003 and $407,000 in 2002.

Noninterest expenses of $51.6 million in 2002 increased $3.9 million, or 8%
from 2001. This increase was mainly due to a $2.7 million increase in salaries
and benefits. Included in salaries and benefits was $823,000 of expenses related
to special management compensation and a special contribution to the Company's
401(k) plan for all Associates, which were related to the reverse mortgage sale.
Also related to the reverse mortgage sale in 2002, the Company took a $1.0
million charge for the establishment of a WSFS charitable foundation. Expenses,
net of cost savings related to the Corporation's TOPS program, were $1.1 million
in 2002 compared to $433,000 in 2001. These net expenses primarily consisted of
consulting fees and severance charges, partially offset by personnel cost
savings and reduced technology expenses.

Income Taxes. The Corporation recorded a $34.9 million tax provision for
the year ended December 31, 2003 compared to $51.6 million and $8.4 million for
the years ended December 31, 2002 and 2001, respectively. The effective tax
rates for continuing operations for the years ended December 31, 2003, 2002 and
2001 were 34.1%, 33.6% and 32.5%, respectively. The Corporation expects its
effective tax rate for continuing operations to be between 33% and 35% in 2004.
The provision for income taxes includes federal, state and local income taxes
that are currently payable or deferred because of temporary differences between
the financial reporting bases and the tax reporting bases of the assets and
liabilities. In 2002, the Internal Revenue Service (IRS) concluded an
examination of the Corporation's federal income tax returns for all years
through December 31, 2000. The income tax provision for the year ended December
31, 2002 was reduced by $894,000 primarily as a result of the resolution of tax
authority examinations and tax return settlements.

At December 31, 2003, approximately $4.5 million in gross deferred tax
assets of the Corporation are related to net operating losses and tax credits
attributable to a former subsidiary. Management has assessed a valuation
allowance on a portion of these deferred tax assets due to limitations imposed
by the Internal Revenue Code. Approximately $950,000 in gross deferred tax
assets of the Corporation at December 31, 2003 are related to state tax net
operating losses. Management has established a valuation allowance on a portion
of these deferred tax assets due to such net operating losses expiring before
being utilized.

The Corporation analyzes its projection of taxable income on an ongoing
basis and makes adjustments to its provision for income taxes accordingly. For
additional information regarding the Corporation's tax provision and net
operating loss carryforwards, see Note 14 to the Consolidated Financial
Statements.

FINANCIAL CONDITION

Total assets increased $502.1 million, or 29.4%, during 2003 to $2.2
billion. This increase occurred predominantly in mortgage-backed securities and
loans. These increases were partially offset by decreases of $37.9 million in
net assets of discontinued operations, the effect of maturities and repayments
of loans and leases of WCC. Total liabilities increased $509.6 million during
the year to $2.0 billion at December 31, 2003. This increase occurred primarily
in FHLB advances, which increased $439.8 million.

Investments. Between December 31, 2002 and December 31, 2003, total
investments increased $23.2 million. During that time investments
available-for-sale increased $94.8 million, mainly due the purchase of $106.0
million of U.S. Agency notes. Partially offsetting this increase was federal
funds sold and securities purchased under agreements to resell which decreased
$64.0 million in 2003.

Mortgage-backed Securities. Investments in mortgage-backed securities
increased $382.3 million during 2003 to $530.6 million. During 2003, the
Corporation purchased $874.6 million in collateralized mortgage obligations as
it redeployed some of its capital into Agency and AAA-rated securities. This
increase was partially offset by principal repayments of $356.3 million and
sales of $124.3 million.

Loans, net. Net loans, including loans held-for-sale, increased $107.8
million during 2003. This included increases of $101.8 million in commercial
real estate loans, $83.3 million in commercial loans and $39.0 million in
residential loans. Partially offsetting these increases were loans of businesses
held-for-sale that decreased $117.6 million. This decrease was due to the sale
of WF during 2003.

Retail Deposits. Retail deposits increased $11.0 million during 2003 to
$883.1 million. Core deposit relationships (demand deposits, money market and
savings accounts) increased $65.8 million during the year. However, retail time
deposits (CDs) decreased $54.8 million in 2003. These changes reflect the
Corporation's continuing strategy to allow more price-sensitive deposits to
run-off in favor of both attracting core deposits and utilizing wholesale
funding which can be less costly on an incremental basis. The table below
depicts the changes in retail deposits over the last three years:

Year Ended December 31,
----------------------------------------
2003 2002 2001
---- ---- ----
(In Millions)

Beginning balance................ $ 872.1 $ 1,125.7 $ 961.1
Interest credited................ 6.4 16.3 30.6
Deposits sold.................... -- (348.6) --
Deposit inflows, net............. 4.6 78.7(1) 134.0
-------- --------- --------
Ending balance................... $ 883.1 $ 872.1 $ 1,125.7
======== ========= =========

(1) Includes $45.1 million in deposit increases at C1FN that were sold in
November 2002.

Borrowings. Total borrowings increased by $565.1 million between December
31, 2002 and December 31, 2003 to fund the aforementioned asset growth. Advances
from the FHLB increased $439.8 million and federal funds purchased and
securities sold under agreements to repurchase increased $122.5 million. In
addition, $2.8 million in sweep repurchases were added during the year.

Stockholders' Equity. Stockholders' equity increased $5.3 million to $188.0
million at December 31, 2003. This included $63.0 million in net income and $4.9
million in proceeds from the exercise of stock options. This was offset in part
by the acquisition of 1,601,600 shares of treasury stock for $58.4 million and
dividends of $1.6 million paid to stockholders. In addition, other comprehensive
income decreased by $2.7 million.

ASSET/LIABILITY MANAGEMENT

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

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

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

The repricing and maturities of the Corporation's interest-rate sensitive
assets and interest-rate sensitive liabilities at December 31, 2003 are set
forth in the following table:

Less than One to Over
One Year Five Years Five Years Total
--------- ---------- ---------- -----
(Dollars in Thousands)

Interest-rate sensitive assets (1):
Real estate loans (2) ........................... $ 330,681 $ 322,584 $ 194,017 $ 847,282
Commercial loans ................................ 225,835 27,763 38,372 291,970
Consumer loans .................................. 64,178 56,983 64,972 186,133
Mortgage-backed securities ...................... 169,543 360,020 989 530,552
Loans held-for-sale ............................. 1,465 -- -- 1,465
Investment in reverse mortgages ................. 44 180 (31) 193
Investment securities ........................... 43,741 111,155 5,075 159,971
Other investments ............................... 1,095 -- -- 1,095
----------- ----------- ----------- -----------
836,582 878,685 303,394 2,018,661
----------- ----------- ----------- -----------
Interest-rate sensitive liabilities:
Money market and interest-bearing demand deposits 32,900 -- 85,251 118,151
Savings deposits ................................ 106,540 -- 210,436 316,976
Retail time deposits ............................ 161,417 66,859 3,541 231,817
Jumbo certificates of deposit-nonretail ......... 39,122 1,448 -- 40,570
FHLB advances (1) ............................... 460,000 230,000 138,296 828,296
Trust preferred borrowings and interest rate cap 50,000 -- -- 50,000
Other borrowed funds ............................ 162,164 -- 25,598 187,762
----------- ----------- ----------- -----------
1,012,143 298,307 463,122 1,773,572
----------- ----------- ----------- -----------
(Deficiency) excess of interest-rate sensitive
assets over interest-rate sensitive liabilities
("interest-rate sensitive gap") ................. $ (175,561) $ 580,378 $ (159,728) $ 245,089
=========== =========== =========== ===========

Interest-rate sensitive assets/interest-rate
sensitive liabilities ............................ 82.65%
Interest-rate sensitive gap as a percent of
total assets ..................................... (7.95)%

(1) Interest-sensitive assets of discontinued operations are excluded as well
as the interest-sensitive funding of discontinued operations of $15 million
in FHLB advances as of December 31, 2003.
(2) Includes commercial mortgage, construction, and residential mortgage loans.

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

To provide a more accurate one-year gap position of the Corporation,
certain deposit classifications are based on the interest-rate sensitive
attributes and not on the contractual repricing characteristics of these
deposits. Management estimates, based on historical trends of WSFS' deposit
accounts, that 35% of money market and 25% of interest-bearing demand deposits
are sensitive to interest rate changes and that 22% to 44% of savings deposits
are sensitive to interest rate changes. Accordingly, these interest-sensitive
portions are classified in the less than one-year category with the remainder in
the over five-year category.

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

In 1998, the Corporation purchased a ten-year interest rate cap in order to
limit its exposure on $50 million of variable rate trust preferred securities
issued in 1998. This derivative instrument caps the three-month LIBOR rate (the
base rate of the Trust Preferred borrowings) at 6.00%. The Trust Preferred
borrowings are classified in the less than one-year category reflecting the
ability to adjust upward for the balance of the term of the interest rate cap.
If the three-month LIBOR rate equals or exceeds 6.00%, the Trust Preferred
borrowing takes on a fixed characteristic and therefore is classified in the
period corresponding to the cap's maturity.

INVESTMENT IN REVERSE MORTGAGES

Reverse mortgage loans are contracts that require the lender to make
monthly advances throughout the borrower's life or until the borrower relocates,
prepays or the home is sold, at which time the loan becomes due and payable.
Since reverse mortgages are nonrecourse obligations, the loan repayments are
generally limited to the net sale proceeds of the borrower's residence, and the
mortgage balance consists of cash advanced, interest compounded over the life of
the loan and a premium which represents a portion of the shared appreciation in
the home's value, if any, or a percentage of the value of the residence.

In 1993, the Corporation acquired a pool of reverse mortgages from the FDIC
and another lender. In 1994, the Corporation purchased Providential Home Income
Plan, Inc., a California-based reverse mortgage lender, for approximately $24.4
million. Providential's assets at acquisition primarily consisted of cash and
its investment in reverse mortgages. Providential's results have been included
in the Corporation's consolidated statement of operations since the acquisition
date.

Capitalizing on the robust housing and interest rate markets, substantially
all of WSFS' $33 million reverse mortgage portfolio was sold, effective October
1, 2002, for a pretax gain of $101.5 million. The Corporation received $128
million in cash, $10 million in BBB-rated mortgage-backed securities classified
as trading and options to acquire up to 49.9% of Class "O" certificates issued
in connection with mortgage-backed security SASCO RM-1 2002. Since this was the
sale of a financial asset, results are shown in continuing operations in the
accompanying Financial Statements, in accordance with accounting principles
generally accepted in the United States of America. Included in the net gain on
sale of reverse mortgages in 2002 are amounts for transaction costs and other
estimates of costs of future obligations, including an estimated future payment
due to a participant in the value received for certain of the sold reverse
mortgages, under a pre-existing agreement. On December 31, 2003, the Company
entered into a settlement agreement in which the Company agreed to pay a final
settlement of $2.5 million for all amounts, current and future, due to that
participant under the pre-existing agreement. This amount had been previously
reserved. The remaining investment in reverse mortgages of $193,000 at December
31, 2003 represents a participation in reverse mortgages with a third party and
was not part of the previously mentioned sale.

The Corporation accounted for its investment in reverse mortgages in
accordance with the instructions provided by the staff of the Securities and
Exchange Commission (SEC) entitled "Accounting for Pools of Uninsured
Residential Reverse Mortgage Contracts" which requires grouping the individual
reverse mortgages into "pools" and recognizing income based on the estimated
effective yield of the pool. In computing the effective yield, the Corporation
projected the cash inflows and outflows of the pool including actuarial
projections of the life expectancy of the individual contract holder and changes
in the collateral values of the residence. At each reporting date, a new
economic forecast was made of the cash inflows and outflows of each pool of
reverse mortgages; the effective yield of each pool was recomputed, and income
was adjusted retroactively and prospectively to reflect the revised rate of
return. Accordingly, because of this quasi-market-value based accounting, the
recorded value of reverse mortgage assets included significant risk associated
with estimations, and as a result, along with the sale of reverse mortgages in
2002, income varied significantly from reporting period to reporting period. For
the year ended December 31, 2003, the Corporation earned ($24,000) in interest
income on reverse mortgages as compared to $13.1 million in 2002 and $10.2
million in 2001. The yield on the portfolio was (3.64%) in 2003, compared to
49.73% in 2002 and 29.54% in 2001. The negative yield in 2003 was a result of
the quasi-market-value based accounting on the participation in the remaining
reverse mortgages that were not part of the previously mentioned sale.

In addition, on January 1, 2002, the Corporation adopted Statement of
Financial Accounting Standards (SFAS) 142, Goodwill and Other Intangible Assets.
Statement 142 addresses financial accounting and reporting for acquired goodwill
and other intangible assets and supersedes APB Opinion 17, Intangible Assets.
Under this Standard, goodwill can no longer be amortized but instead must be
tested for impairment and its value adjusted accordingly. Negative goodwill is
required to be taken into earnings immediately upon adoption. The Corporation
had $1.2 million in negative goodwill associated with the 1994 purchase of
Providential Home Income Plan, Inc. As a result of adopting this standard, the
Corporation recognized income of $703,000 in the first quarter of 2002 as a
cumulative effect of a change in accounting principle, net of $469,000 in income
tax.

DISCONTINUED OPERATIONS

In 2000, the Corporation approved plans to discontinue the operations of
WCC. WCC, which had 483 lease contracts and 542 loan contracts at December 31,
2003, no longer accepts new applications but will continue to service existing
loans and leases until their maturity. Management estimates that substantially
all loan and lease contracts will mature by the end of 2004.

In accordance with APB 30, which was the authoritative literature in 2000,
accounting for discontinued operations of a business segment at that time
required that the Company forecast operating results over the wind-down period
and accrue any expected net losses. The historic results of WCC's operations,
the accrual of expected losses to be incurred over the wind-down period, and the
future reported results of WCC are required to be treated as Discontinued
Operations of a Business Segment, and shown in a summary form separately from
the Company's results of continuing operations in reported results of the
Corporation. Prior periods are restated, as required by accounting principles
generally accepted in the United States of America.

As a result, at December 31, 2000, a $6.2 million pretax reserve was
established to absorb expected future losses, primarily related to residual
value losses on leases. Consequently, the Corporation recognized an after tax
charge of $2.2 million, net of $4.0 million in tax benefits related to net
operating loss carryforwards, for the expected loss over the projected wind-down
period.

At December 31, 2003, there were $3.0 million in indirect loans and $6.6
million in indirect leases, net, still outstanding. At December 31, 2003, WSFS
had exposure to $7.5 million in remaining used car residuals, for which it
estimates a loss of $1.3 million. Management has provided for this loss in the
Financial Statements. Due to the provision for this estimated exposure in the
financial statements, the loss on the wind-down of discontinued operations, net
of tax, was zero in 2003. Based on the scheduled maturities of leases,
management estimates by December 31, 2004 its residual exposure will be
negligible. At December 31, 2002, WSFS had exposure to $42.3 million in
remaining used car residuals for which it estimated a loss of $8.9 million.

Due to the uncertainty of a number of factors, including residual values,
interest rates, operating costs and credit quality, the reserve for discontinued
operations will be reevaluated quarterly with adjustments, if necessary,
recorded as income/losses on wind-down of discontinued operations.

BUSINESSES HELD-FOR-SALE

In September 2002, WSFS sold its United Asian Bank Division (UAB). The sale
resulted in an after tax gain of $737,000, and included $8.6 million in deposits
and $15.8 million in loans in addition to branch fixed assets and the lease
obligations.

In November 2002, the Corporation completed the sale of C1FN and related
interests in its Everbank Division. Everbank was started with C1FN in 1999 as a
joint initiative in Internet and branchless banking. Consistent with the manner
in which the segment was managed and operated, information in this report
labeled "C1FN" generally represents the pro forma combined results of C1FN and
WSFS' Everbank Division (the C1FN/Everbank segment). The sale included total
assets of $342.8 million and deposits of $340.1 million. WSFS recorded an after
tax gain of $187,000 on the sale.

Under a provision of the agreement between sellers and buyers, certain sale
consideration was withheld in two separate escrow accounts pending the
resolution of certain events. WSFS' portion of these escrow amounts totaled
approximately $786,000. These amounts were not recognized by WSFS in 2002 as
their receipt was not assured beyond a reasonable doubt. During 2003, WSFS
received the entire amount held in escrow. As a result, the Company recorded the
$786,000 ($517,000 after taxes) as a gain on the sale of businesses
held-for-sale. Indemnifications are more fully discussed in Note 16 to the
Financial Statements.

Also in November 2002, WSFS signed a definitive agreement for the sale of
WSFS' majority-owned subsidiary, Wilmington Finance, Inc. This sale was
completed in January 2003. In 2003, WSFS recognized an after-tax gain on the
sale of $41.3 million or $5.01 per diluted share. The sale included $148.2
million in assets, of which $117.6 million were residential mortgage loans
held-for-sale.

In accordance with SFAS No. 144, Accounting for the Impairment or Disposal
of Long-Lived Assets, the major classes of assets and liabilities of WF are
presented separately on the statement of condition as of December 31, 2002. The
income (losses) from the operation of these three businesses (UAB, C1FN/Everbank
and WF) have been presented as income (losses) of businesses held-for-sale, and
presented separately for all periods presented.

The gains on the sale of UAB, C1FN and WF are presented separately on the
statement of operations, net of tax. The average balance sheet is presented with
total assets and liabilities of businesses held-for-sale displayed separately.

The completion of these divestiture transactions was consistent with the
Company's strategic direction to focus resources and capital on WSFS' core
community bank network in and around Delaware.

MARKET RISK

Market risk is the risk of loss from adverse changes in market prices and
rates. The Company's market risk arises primarily from interest rate risk
inherent in its lending, investing and funding activities. To that end,
management actively monitors and manages its interest rate risk exposure. One
measure required to be performed by the Office of Thrift Supervision
(OTS)-regulated institutions is the test specified by OTS Thrift Bulletin No.
13A, "Management of Interest Rate Risk, Investment Securities and Derivatives
Activities." This test measures the impact on the net portfolio value of an
immediate change in interest rates in 100 basis point increments. Net portfolio
value is defined as the net present value of the estimated cash flows from
assets and liabilities as a percentage of the net present value of assets. The
following table is the estimated impact of immediate changes in interest rates
on the Company's net interest margin and net portfolio value at the specified
levels at December 31, 2003 and 2002, calculated in compliance with Thrift
Bulletin No. 13A:

December 31,
--------------------------------------------------------------------
2003 2002
------------------------------- -------------------------------
Change in Interest % Change in % Change in
Rate Net Interest Net Portfolio Net Interest Net Portfolio
(Basis Points) Margin (1) Value (2) Margin (1) Value (2)
-------------- ---------- ------------- ------------ -------------

+300 -7% 8.41% 9% 12.86%
+200 -4% 8.74% 6% 12.77%
+100 -2% 8.99% 3% 12.62%
0 0% 9.21% 0% 12.32%
-100 -2% 9.08% -5% 11.60%
-200 (3) -9% 9.04% -12% 10.67%
-300 (3) -21% 9.75% -21% 10.79%

(1) The percentage difference between net interest margin in a stable interest
rate environment and net interest margin as projected under the various
rate environment changes.
(2) The net portfolio value of the Company in a stable interest rate
environment and the net portfolio value as projected under the various rate
environment changes.
(3) Sensitivity indicated by a decrease of 200 and 300 basis points may not be
particularly meaningful at December 31, 2003 and 2002 given the
historically low absolute level of interest rates at these dates.

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

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

NONPERFORMING ASSETS

Nonperforming assets, which include nonaccruing loans, nonperforming real
estate investments and assets acquired through foreclosure, can negatively
affect the Corporation's results of operations. Nonaccruing loans are those on
which the accrual of interest has ceased. Loans are placed on nonaccrual status
immediately if, in the opinion of management, collection is doubtful, or when
principal or interest is past due 90 days or more and the value of the
collateral is insufficient to cover principal and interest. Interest accrued but
not collected at the date a loan is placed on nonaccrual status is reversed and
charged against interest income. In addition, the amortization of net deferred
loan fees is suspended when a loan is placed on nonaccrual status. Subsequent
cash receipts are applied either to the outstanding principal balance or
recorded as interest income, depending on management's assessment of the
ultimate collectibility of principal and interest. Past due loans are defined as
loans contractually past due 90 days or more as to principal or interest
payments but which remain in accrual status because they are considered well
secured and in the process of collection.

The following table sets forth the Corporation's non-performing assets and
past due loans at the dates indicated:

December 31,
--------------------------------------------------
2003 2002 2001 2000 1999
---- ---- ---- ---- ----
(Dollars in Thousands)

Nonaccruing loans:
Commercial ................................... $1,549 $2,242 $1,330 $2,766 $2,630
Consumer ..................................... 240 516 306 383 251
Commercial mortgages ......................... 941 326 1,928 2,272 1,808
Residential mortgages ........................ 2,513 3,246 3,618 2,704 2,617
Construction ................................. -- 199 351 210 --
------ ------ ------ ------ ------
Total nonaccruing loans ........................... 5,243 6,529 7,533 8,335 7,306
Nonperforming investments in real estate........... -- -- -- -- --
Assets acquired through foreclosure ............... 301 904 432 630 853
------ ------ ------ ------ ------
Total nonperforming assets ........................ $5,544 $7,433 $7,965 $8,965 $8,159
====== ====== ====== ====== ======

Past due loans:
Residential mortgages ........................ $ 915 $ 346 $ 88 $ 449 $ 333
Commercial and commercial mortgages........... 129 95 767 790 504
Consumer ..................................... 148 88 244 199 197
------ ------ ------ ------ ------
Total past due loans .............................. $1,192 $ 529 $1,099 $1,438 $1,034
====== ====== ====== ====== ======

Ratio of nonaccruing loans to total
loans (1)..................................... 0.40% 0.60% 0.72% 0.87% 0.85%
Ratio of allowance for loan losses to gross
loans(1)...................................... 1.69% 1.95% 2.05% 2.22% 2.58%
Ratio of nonperforming assets to total assets...... 0.25% 0.44% 0.42% 0.52% 0.47%
Ratio of loan loss allowance to nonaccruing
loans (2)..................................... 421.91% 324.49% 277.77% 248.81% 294.16%
Ratio of loan loss and foreclosed asset
allowance to total nonperforming assets (2)... 399.01% 285.03% 265.48% 234.01% 266.52%

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

Non-performing assets decreased by $1.9 million for the 12 months ended
December 31, 2003. The decline was a direct result of $7.3 million of new
non-performing assets being offset by $7.0 million of collections, $945,000 of
loans transferred to accrual and $1.3 million of charge-offs/write-downs.
Non-accruing loans declined in all loan categories, except commercial mortgages,
which increased $615,000 due to the addition of various commercial mortgage
loans. Foreclosed assets declined by $603,000 primarily as a result of the sale
of one commercial property with a carrying balance of $513,000.

An analysis of the change in the balance of nonperforming assets during the
last three years is presented below:

Year Ended December 31,
-----------------------------------------
2003 2002 2001
---- ---- ----
(In Thousands)

Beginning balance....................................... $ 7,433 $ 7,965 $ 8,965
Additions......................................... 7,299 8,442 7,386
Collections ..................................... (6,992) (4,854) (5,596)
Transfers to accrual/restructured status.......... (945) (1,762) (1,542)
Charge-offs/write-downs........................... (1,251) (2,358) (1,248)
-------- --------- --------
Ending balance......................................... $ 5,544 $ 7,433 $ 7,965
======== ========- ========

The ratio of nonaccruing loans to total loans decreased from 0.60% in 2002
to 0.40% in 2003. The decrease was due to a reduction in nonaccruing loans, as
well as an increase in total loans for the year. The ratio of nonperforming
assets to total assets decreased from 0.44% in 2002 to 0.25% in 2003. The
decrease was due to the reduction in nonaccruing loans and a reduction in assets
acquired through foreclosure.

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 management
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, with consideration given to examinations performed
by regulatory authorities.

Management establishes the loan loss allowance in accordance with
accounting principles generally accepted in the United States of America and the
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. Changes in risk grades of both performing and
nonperforming loans affect the amount of the formula allowance. Loss factors by
risk grade have a basis in WSFS' historical loss experience for such loans and
may be adjusted for significant factors that, in management's judgment, affect
the collectability of the portfolio as of the evaluation date. See the
discussion of historical loss adjustment factors below.

Pooled loans are loans that are usually smaller, not-individually-graded
and homogenous in nature, such as consumer installment loans and residential
mortgages. Pooled loan loss allowances are based on historical net charge-offs
for six years which management believes approximates the average business cycle.
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, as
adjusted for historical loss adjustment factors. Historical loss adjustment
factors are based upon management's evaluation of various current conditions.
The evaluation of the inherent loss with respect to these more current
conditions is subject to a higher degree of uncertainty because they are not
identified with specific credits. The more current conditions, analyzed in
connection with the adjustment factors, include an evaluation of the following:

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

WSFS' loan officers and risk managers meet monthly to discuss and review
these conditions and risks associated with individual problem loans. By
assessing the probable estimated losses inherent in the loan portfolio on a
monthly basis, management is able to adjust specific and inherent loss estimates
based upon the availability of more recent information. In addition, various
regulatory agencies, as an integral part of their examination process,
periodically review the Corporation's allowance for such losses. The Company
also gives consideration to the results of these regulatory agency examinations.

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

Year Ended December 31,
--------------------------------------------------------
2003 2002 2001 2000 1999
---- ---- ---- ---- ----
(Dollars in Thousands)

Beginning balance .......................................... $ 21,452 $ 21,597 $ 21,423 $ 22,223 $ 22,732
Provision for loan losses .................................. 2,550 2,243 1,865 864 1,004
Provision for loan losses - business held-for-sale.......... -- 211 347 30 --
Sale of businesses held-for-sale ........................... -- (269) -- -- --
Balance at acquisition of credit card portfolio ............ -- -- -- 175 --

Charge-offs:
Residential real estate ................................ 329 725 106 133 172
Commercial real estate (1) ............................. -- 333 195 376 692
Commercial ............................................. 827 895 1,000 998 437
Consumer ............................................... 860 1,551 1,031 1,002 720
-------- -------- -------- -------- --------
Total charge-offs .......................................... 2,016 3,504 2,332 2,509 2,021
-------- -------- -------- -------- --------

Recoveries:
Residential real estate ................................ -- 76 1 6 --
Commercial real estate (1) ............................. 202 181 61 252 271
Commercial ............................................. 79 483 100 70 116
Consumer ............................................... 119 434 132 312 121
-------- -------- -------- -------- --------
Total recoveries ........................................... 400 1,174 294 640 508
-------- -------- -------- -------- --------

Net charge-offs ............................................ 1,616 2,330 2,038 1,869 1,513
-------- -------- -------- -------- --------
Ending balance ............................................. $ 22,386 $ 21,452 $ 21,597 $ 21,423 $ 22,223
======== ======== ======== ======== ========

Net charge-offs to average gross loans outstanding,
net of unearned income.................................. 0.13% 0.22% 0.20% 0.20% 0.19%
======== ======== ======== ======== ========

(1) Includes commercial mortgage and construction loans.

For the year ended December 31, 2003, the Corporation provided $2.6 million
for loan losses, which was greater than the amounts provided in 2002 and 2001.
This increase reflects, among other things, the Company's strong loan growth,
particularly in commercial loans, partially offset by an overall improvement in
credit quality of the Corporation's loan portfolio.

The allowance for losses is allocated by major portfolio type. As these
portfolios have seasoned, they have become a source of historical data in
projecting loss exposure; however, such allocations may not be indicative of
where future losses will occur. The allocation of the allowance for loan losses
by portfolio type at the end of each of the last five fiscal years, and the
percentage of loan outstandings in each category to total gross outstandings at
such dates follow:

December 31,
---------------------------------------------------------------------------------------------
2003 2002 2001 2000 1999
---- ---- ---- ---- ----
Amount Percent Amount Percent Amount(1) Percent Amount Percent Amount Percent
------ ------- ------ ------- --------- ------- ------ ------- ------ -------
(Dollars in Thousands)

Residential real estate $ 2,736 34.6% $ 3,620 38.2% $ 4,039 38.2% $ 1,754 43.2% $ 1,389 42.7%
Commercial real estate 8,338 29.3 7,208 26.2 6,927 24.3 3,187 22.9 8,240 25.9
Commercial ............ 8,368 22.0 7,375 19.1 6,963 18.7 13,985 15.7 9,983 13.4
Consumer .............. 2,944 14.1 3,249 16.5 3,668 18.8 2,497 18.2 2,611 18.0
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Total ................. $22,386 100.0% $21,452 100.0% $21,597 100.0% $21,423 100.0% $22,223 100.0%
======= ===== ======= ===== ======= ===== ======= ===== ======= =====

(1) The implementation of SAB 102 in 2001 led to a change in the allocation
methodologies for anticipated loan losses.

LIQUIDITY

In accordance with Thrift Bulletin 77, the OTS requires institutions such
as WSFS to maintain adequate liquidity to assure safe and sound operation. WSFS'
liquidity ratio of cash and qualified assets to net withdrawable deposits and
borrowings due within one year was 6.1% at December 31, 2003, compared to 13.3%
at December 31, 2002. The December 31, 2002 liquidity was unusually high due to
the sale of the reverse mortgage portfolio, from which cash proceeds totaled
$128 million. The decrease in liquidity is due primarily to the extension of
maturities in the investment securities portfolio and the increase in FHLB
borrowings maturing in less than one year. The Corporation's primary funding
sources are operating earnings, deposits, repayments of loans and investment
securities, sales of loans and other borrowings. The Corporation also has
substantial unused borrowing capacity at the FHLB of Pittsburgh and unpledged
securities that could be used as collateral for repurchase agreements or that
could be sold. Management believes that these sources are sufficient to maintain
the required and prudent levels of liquidity. At December 31, 2003 and 2002,
WSFS had outstanding advances from the FHLB of $843.3 million and $403.5
million, respectively. At December 31, 2003, WSFS had the capacity to borrow up
to $957 million.

During 2003, operating activities used $28.3 million in cash and cash
equivalents, investing activities used $597.6 million, while financing
activities provided $522.1 million. The cash from financing activities resulted
primarily from additional FHLB borrowings and repurchase agreements. The cash
used in investing activities went primarily to increased volumes of
mortgage-backed securities and loans.

During 2002, investing activities provided $41.9 million in cash and cash
equivalents, while operating and financing activities used $46.9 million and
$7.2 million, respectively. The cash provided by investing activities resulted
primarily from the sales of businesses held-for-sale, as well as the sale of
loans, investment securities, mortgage-backed securities and reverse mortgages.
This cash was used primarily to repay borrowings and invest in investment and
mortgage-backed securities.

The Corporation has not used and has no intention of using any significant
off-balance-sheet financing arrangement for liquidity management purposes. The
Corporation's financial instruments with off-balance-sheet risk are limited to
obligations to fund loans to customers pursuant to existing commitments and an
interest rate cap which limits the interest rate exposure on $50 million of
trust-preferred floating rate debt. In addition, WSFS has not had and has no
intention to have any significant transactions, arrangements or other
relationships with any unconsolidated, limited purpose entities that could
materially affect its liquidity or capital resources. Finally, WSFS has not
traded in, and does not intend to trade in commodity contracts.

In January 2004, the Corporation purchased $50 million (cash surrender
value) of Bank-Owned Life Insurance (BOLI) which insures the lives of certain
senior Associates of the Company, for the Company and provides tax-free income
to the Company over the life of the insurance contract. The Corporation intends
to use the proceeds to help defray the rapidly increasing costs of Associate
benefits. The Corporation paid a single premium of $50 million to purchase the
BOLI through the liquidation of mortgage-backed securities. Proceeds are
returned to the Corporation as life insurance death benefits, but substantial
amounts may not be returned for periods of 20 years or more depending on the
mortality of the insured Associates. The Corporation may terminate the insurance
contracts early, but that event would result in payments of taxes and penalties
on accumulated earnings.

CAPITAL RESOURCES

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

The Federal Deposit Insurance Corporation Improvement Act (FDICIA), as well
as other requirements, established five capital tiers: well-capitalized,
adequately capitalized, under capitalized, significantly under capitalized and
critically under capitalized. A depository institution's capital tier depends
upon its capital levels in relation to various relevant capital measures, which
include leverage and risk-based capital measures and certain other factors.
Depository institutions that are not classified as well-capitalized are subject
to various restrictions regarding capital distributions, payment of management
fees, acceptance of brokered deposits and other operating activities.

At December 31, 2003, WSFS is classified as well-capitalized and is in
compliance with all regulatory capital requirements. For additional information
concerning WSFS' regulatory capital compliance see Note 12 to the Financial
Statements.

As part of its capital management strategy, the Corporation from time to
time purchases its own shares of common stock to be included as treasury shares.
Since 1996, the Board of Directors has approved several stock repurchase
programs to acquire common stock outstanding. As part of these programs, the
Corporation acquired approximately 1.6 million shares in 2003 and 490,000 shares
in 2002. At December 31, 2003, the Corporation held 7.8 million shares of its
common stock as treasury shares. The Corporation intends to continue
repurchasing shares in 2004 in amounts depending on stock price and alternative
uses of capital.

OFF BALANCE SHEET ARRANGEMENTS

The Corporation has no off balance sheet arrangements that currently have,
or are reasonably likely to have a material future effect on the Corporation's
financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources. See
Note 16 to the Financial Statements for additional information.

CONTRACTUAL OBLIGATIONS

At December 31, 2003, the Corporation had contractual obligations relating
to operating leases, long-term debt, data processing and credit obligations.
These obligations are summarized below. See Notes 9, 11, and 16 to the Financial
Statements for further discussion.

Less than More than
Total 1 year 1-3 Years 3-5 Years 5 Years
---------- ---------- ---------- ---------- ----------
(Amounts in Thousands)

Operating lease obligations $ 11,451 $ 1,873 $ 3,176 $ 1,937 $ 4,465
Long-term debt obligations 843,296 475,000 180,000 50,000 138,296
Data processing contracts . 16,093 3,340 5,572 4,372 2,809
Credit obligations ........ 271,604 271,604 -- -- --
---------- ---------- ---------- ---------- ----------
Total ..................... $1,142,444 $ 751,817 $ 188,748 $ 56,309 $ 145,570
========== ========== ========== ========== ==========

IMPACT OF INFLATION AND CHANGING PRICES

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

RECENT LEGISLATION

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

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

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

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 accounting principles generally accepted in the
United States of America. The preparation of these Financial Statements requires
management to make estimates and assumptions affecting the reported amounts of
assets, liabilities, revenue and expenses. Management evaluates these estimates
and assumptions on an ongoing basis, including those related to the allowance
for loan losses, investment in reverse mortgages, the reserve for discontinued
operations, 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 bases 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.

Investment in Reverse Mortgages

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

Reserve for Discontinued Operations

The Corporation discontinued the operations of WCC in 2000. In accordance
with APB 30, which was the authoritative literature in 2000, accounting for
discontinued operations of a business segment required that the Company forecast
operating results over the wind-down period and accrue any expected net losses.
As a result, the Corporation has established a reserve to absorb expected future
net losses of WCC. Due to the uncertainty of a number of factors, including
residual values, interest rates, credit quality and operating costs, this
reserve is re-evaluated quarterly with adjustments, if necessary, recorded as
income/losses on wind-down of discontinued operations.

Contingencies (Including Indemnifications)

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

Deferred Taxes

The Corporation accounts for income taxes in accordance with SFAS 109,
which requires the recording of deferred income taxes that reflect the net tax
effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax
purposes. Management has assessed the Company's valuation allowances on deferred
income taxes resulting from, among other things, limitations imposed by Internal
Revenue Code and uncertainties, including the timing of settlement and
realization of these differences.

RECENT ACCOUNTING PRONOUNCEMENTS

In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities and subsequently revised it in December 2003. This
Interpretation clarifies the application of Accounting Research Bulletin No. 51
and applies immediately to any variable interest entities created after January
31, 2003 and to variable interest entities which interest is obtained after that
date. The application of this Interpretation did not have an impact on the
Corporation's earnings, financial condition, or equity.

In April 2003, the FASB issued Statement No. 149, Amendment of Statement
133 on Derivative Instruments in Hedging Activities. This Statement amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives) and for hedging activities under FASB
Statement No. 133, Accounting for Derivative Instruments and Hedging Activities.
With some exceptions, this Statement is effective for contracts entered into or
modified after September 30, 2003. The adoption of this Statement did not have
an impact on the Corporation's earnings, financial condition, or equity.

In May 2003, the FASB issued Statement No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity. This
Statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. It requires that an issuer classify a financial instrument that is
within its scope as a liability (or an asset in some circumstances). This
Statement is effective for financial instruments entered into or modified after
May 31, 2003, and otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003, except for mandatorily redeemable
financial instruments of nonpublic entities. The adoption of this Statement did
not have an impact on the Corporation's earnings, financial condition, or
equity.

FORWARD-LOOKING STATEMENTS

Within this annual report and financial statements, management has included
certain "forward-looking statements" concerning the future operations of the
Corporation. It is management's desire to take advantage of the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995. This
statement is for the express purpose of availing the Corporation of the
protections of such safe harbor with respect to all "forward-looking statements"
contained in its financial statements. Management has used "forward-looking
statements" to describe the future plans and strategies including expectations
of the Corporation's future financial results. Management's ability to predict
results or the effect of future plans and strategy is inherently uncertain.
Factors that could affect results include interest rate trends, competition, the
general economic climate in Delaware, mid-Atlantic region and the country as a
whole, loan delinquency rates, operating risk, and uncertainty of estimates in
general, and changes in federal and state regulation, 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.

MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

WSFS Financial Corporation's Common Stock is traded on The Nasdaq Stock
MarketSM under the symbol WSFS. At December 31, 2003, the Corporation had 1,574
registered common stockholders of record. The following table sets forth the
range of high and low sales prices for the Common Stock for each full quarterly
period within the two most recent fiscal years as well as the quarterly
dividends paid.

The closing market price of the common stock at December 31, 2003 was
$44.85.

Stock Price Range
-----------------------
Low High Dividends
--- ---- ---------

2003 4th $41.61 $46.98 $ 0.05
3rd 38.00 45.41 0.05
2nd 31.25 39.19 0.05
1st 30.85 33.40 0.05
------
$ 0.20
======

2002 4th $26.05 $34.12 $ 0.05
3rd 20.65 32.00 0.05
2nd 18.10 25.19 0.05
1st 16.95 18.90 0.04
------
$ 0.19
======

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of WSFS Financial Corporation

We have audited the accompanying consolidated statement of condition of
WSFS Financial Corporation and subsidiaries (the Corporation) as of December 31,
2003 and 2002, and the related consolidated statements of operations, changes in
stockholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 2003. These consolidated financial statements are the
responsibility of the Corporation's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of WSFS
Financial Corporation and subsidiaries as of December 31, 2003 and 2002, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 2003 in conformity with accounting
principles generally accepted in the United States of America.

As discussed in Note 6 to the Financial Statements, the Company adopted
Statement 142, "Goodwill and Other Intangible Assets," in 2002.

/s/ KPMG LLP

February 27, 2004
Philadelphia, Pennsylvania

MANAGEMENT'S STATEMENT ON FINANCIAL REPORTING

To Our Stockholders:

The management of WSFS Financial Corporation (the Corporation) is
responsible for establishing and maintaining effective internal control over
financial reporting presented in conformity with accounting principles generally
accepted in the United States of America, including controls over the
safeguarding of assets. This internal control contains monitoring mechanisms,
and actions are taken to correct deficiencies identified.

There are inherent limitations in any internal control, including the
possibility of human error and the circumvention or overriding of controls.
Accordingly, even effective internal control can provide only reasonable
assurance with respect to financial statement preparation. Further, because of
changes in conditions, the effectiveness of internal control may vary over time.

Management assessed the Corporation's internal control over financial
reporting presented in conformity with accounting principles generally accepted
in the United States of America, including controls over the safeguarding of
assets, as of December 31, 2003. This assessment was based on criteria for
effective internal control over financial reporting established in "Internal
Control-Integrated Framework" issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this assessment, management
believes, as of December 31, 2003 the Corporation maintained effective internal
control over financial reporting, presented in conformity with accounting
principles generally accepted in the United States of America, including
controls over the safeguarding of assets.

Management is also responsible for compliance with the federal laws and
regulations concerning dividend restrictions and loans to insiders designated by
the Office of Thrift Supervision as safety and soundness laws and regulations.

The Corporation assessed its compliance with the designated laws and
regulations relating to safety and soundness. Based on this assessment,
management believes that the Corporation complied, in all material respects,
with the designated laws and regulations related to safety and soundness for the
year ended December 31, 2003.

/s/ Marvin N. Schoenhals /s/ Mark A. Turner
Marvin N. Schoenhals Mark A. Turner
Chairman and President Chief Operating Officer
and Chief Financial Officer

CONSOLIDATED STATEMENT OF OPERATIONS

Year Ended December 31,
----------------------------------------------
2003 2002 2001
---------- ---------- ----------
(Dollars in Thousands, Except Per Share Data)

Interest income:
Interest and fees on loans ................................................ $ 72,001 $ 72,018 $ 77,526
Interest on mortgage-backed securities .................................... 14,874 7,608 9,956
Interest and dividends on investment securities ........................... 1,503 890 1,191
Interest on investments in reverse mortgages .............................. (24) 13,092 10,155
Other interest income ..................................................... 945 1,095 2,510
--------- --------- ---------
89,299 94,703 101,338
--------- --------- ---------
Interest expense:
Interest on deposits ...................................................... 8,189 12,040 25,554
Interest on Federal Home Loan Bank advances ............................... 19,918 18,166 15,923
Interest on federal funds purchased and securities sold under
agreements to repurchase ................................................ 927 542 1,572
Interest on trust preferred borrowings .................................... 1,963 2,599 3,365
Interest on other borrowings .............................................. 304 87 183
--------- --------- ---------
31,301 33,434 46,597
--------- --------- ---------
Net interest income ....................................................... 57,998 61,269 54,741
Provision for loan losses ................................................. 2,550 2,243 1,865
--------- --------- ---------
Net interest income after provision for loan losses ....................... 55,448 59,026 52,876
--------- --------- ---------

Noninterest income:
Loan servicing fee income ................................................. 2,850 3,025 3,149
Deposit service charges ................................................... 9,119 8,568 8,626
Credit/debit card and ATM income .......................................... 9,749 8,489 6,754
Securities gains .......................................................... 515 23 4
Gain on sale of reverse mortgages ......................................... -- 101,518 --
Gain on sale of loans ..................................................... 1,517 443 420
Other income .............................................................. 2,416 1,994 2,172
--------- --------- ---------
26,166 124,060 21,125
--------- --------- ---------
Noninterest expenses:
Salaries, benefits and other compensation ................................. 26,544 25,653 22,987
Equipment expense ......................................................... 3,777 4,185 3,594
Data processing and operations expense .................................... 2,812 3,815 3,648
Occupancy expense ......................................................... 4,040 3,794 4,307
Marketing expense ......................................................... 1,602 1,427 1,391
Professional fees ......................................................... 2,673 3,621 1,901
Other operating expenses .................................................. 7,969 9,122 9,861
--------- --------- ---------
49,417 51,617 47,689
--------- --------- ---------
Income from continuing operations before taxes and cumulative effect of
change in accounting principle .......................................... 32,197 131,469 26,312
Income tax provision ...................................................... 10,964 44,154 8,550
--------- --------- ---------
Income from continuing operations before cumulative effect of change in
accounting principle .................................................... 21,233 87,315 17,762
Cumulative effect of change in accounting principle, net of taxes ......... -- 703 --
--------- --------- ---------
Income from continuing operations ......................................... 21,233 88,018 17,762
Loss on wind-down of discontinued operations, net of taxes ................ -- (2,766) (2,026)
Income on discontinued operations of businesses held-for-sale, net of taxes -- 14,965 1,347
Gain on sale of businesses held-for-sale, net of taxes .................... 41,789 924 --
--------- --------- ---------
Net income ................................................................ $ 63,022 $ 101,141 $ 17,083
========= ========= =========

CONSOLIDATED STATEMENT OF OPERATIONS (continued)

Year Ended December 31,
----------------------------------------------
2003 2002 2001
---------- ---------- ----------
(Dollars in Thousands, Except Per Share Data)

Earnings per share:
Basic:
Income from continuing operations before cumulative effect of change in
accounting principle ............................................... $ 2.73 $ 9.61 $ 1.85
Cumulative effect of change in accounting principle, net of taxes .... -- 0.08 --
------ ------ ------
Income from continuing operations ..................................... 2.73 9.69 1.85
Loss on wind-down of discontinued operations, net of taxes ............ -- (0.30) (0.21)
Income on businesses held-for-sale .................................... -- 1.64 0.14
Gain on sale of businesses held-for-sale .............................. 5.38 0.10 --
------ ------ ------
Net income ........................................................ $ 8.11 $11.13 $ 1.78
====== ====== ======

Diluted:
Income from continuing operations before cumulative effect of change in
accounting principle ................................................ $ 2.58 $ 9.27 $ 1.84
Cumulative effect of change in accounting principle, net of taxes .... -- 0.07 --
------ ------ ------
Income from continuing operations ..................................... 2.58 9.34 1.84
Loss on wind-down of discontinued operations, net of taxes ............ -- (0.30) (0.21)
Income on businesses held-for-sale .................................... -- 1.59 0.14
Gain on sale of businesses held-for-sale .............................. 5.07 0.10 --
------ ------ ------
Net income ........................................................ $ 7.65 $10.73 $ 1.77
====== ====== ======

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

CONSOLIDATED STATEMENT OF CONDITION

December 31,
----------------------------
2003 2002
------------ ------------
(In Thousands)

Assets

Cash and due from banks ............................................................. $ 160,420 $ 162,258
Federal funds sold and securities purchased under agreements to resell .............. -- 64,045
Interest-bearing deposits in other banks ............................................ 1,095 7,476
Investment securities held-to-maturity (market value: 2003-$11,231, 2002-$11,797) ... 10,410 10,724
Investment securities available-for-sale ............................................ 105,885 11,053
Mortgage-backed securities held-to-maturity (market value: 2003-$1,816, 2002-$40,481) 1,814 39,157
Mortgage-backed securities available-for-sale ....................................... 517,211 98,081
Mortgage-backed securities trading .................................................. 11,527 11,000
Investment in reverse mortgages, net ................................................ 193 1,131
Loans held-for-sale ................................................................. 1,458 3,516
Loans, net of allowance for loan losses of $22,386 at December 31, 2003 and
$21,452 at December 31, 2002 ...................................................... 1,303,419 1,075,870
Loans of businesses held-for-sale ................................................... -- 117,646
Stock in Federal Home Loan Bank of Pittsburgh, at cost .............................. 43,676 21,979
Assets acquired through foreclosure ................................................. 301 904
Premises and equipment .............................................................. 13,345 13,838
Accrued interest receivable and other assets ........................................ 26,849 15,116
Other assets of businesses held-for-sale ............................................ -- 3,810
Loans, operating leases and other assets of discontinued operations ................. 9,474 47,396
----------- -----------
Total assets ........................................................................ $ 2,207,077 $ 1,705,000
=========== ===========

Liabilities and Stockholders' Equity

Liabilities:

Deposits:
Noninterest-bearing demand ........................................................ $ 215,819 $ 182,957
Money market and interest-bearing demand .......................................... 118,151 109,259
Savings ........................................................................... 316,976 292,917
Time .............................................................................. 192,037 236,793
Jumbo certificates of deposit - retail ............................................ 40,076 50,146
----------- -----------
Total retail deposits ........................................................ 883,059 872,072
Jumbo certificates of deposit - nonretail ......................................... 40,274 26,324
----------- -----------
Total deposits .............................................................. 923,333 898,396

Federal funds purchased and securities sold under agreements to repurchase .......... 148,381 25,925
Federal Home Loan Bank advances ..................................................... 843,296 403,500
Trust preferred borrowings .......................................................... 50,000 50,000
Other borrowed funds ................................................................ 39,381 36,581
Accrued expenses and other liabilities .............................................. 14,694 37,219
Other liabilities of businesses held-for-sale ....................................... -- 57,862
----------- -----------
Total liabilities ................................................................... 2,019,085 1,509,483
----------- -----------

Commitments and contingencies (see Note 16)

Minority Interest ................................................................... -- 12,845

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 15,080,162
at December 31, 2003 and 14,859,721 at December 31, 2002 .......................... 151 149
Capital in excess of par value ...................................................... 64,738 59,789
Accumulated other comprehensive (loss) income ....................................... (1,748) 904
Retained earnings ................................................................... 268,797 207,358
Treasury stock at cost, 7,758,869 shares at December 31, 2003 and 6,162,269
shares at December 31, 2002 ....................................................... (143,946) (85,528)
----------- -----------
Total stockholders' equity .......................................................... 187,992 182,672
----------- -----------
Total liabilities, minority interest and stockholders' equity ....................... $ 2,207,077 $ 1,705,000
=========== ===========

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

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

Accumulated
Capital Other Total
Common in Excess Comprehensive Retained Treasury Stockholders'
Stock of Par Value (Loss) Income Earnings Stock Equity
(In Thousands)

Balance, January 1, 2001 .................... $ 148 $ 58,985 $ 197 $ 92,409 $ (54,593) $ 97,146
Comprehensive income:
Net income ............................... -- -- -- 17,083 -- 17,083
Other comprehensive income (1) ........... -- -- 2,949 -- -- 2,949
----------
Total comprehensive income .................. 20,032
----------
Cash dividend, $0.16 per share .............. -- -- -- (1,542) -- (1,542)
Exercise of common stock options ............ -- 88 -- -- -- 88
Treasury stock at cost, 1,047,400
shares (2) ................................ -- 6 -- -- (15,727) (15,721)
------- ---------- --------- --------- --------- ----------
Balance, December 31, 2001 .................. $ 148 $ 59,079 $ 3,146 $ 107,950 $ (70,320) $ 100,003
======= ========== ========= ========= ========= ==========

Comprehensive income:
Net income ............................... -- -- -- 101,141 -- 101,141
Other comprehensive loss (1) ............. -- -- (2,242) -- -- (2,242)
----------
Total comprehensive income .................. 98,899
----------
Cash dividend, $0.19 per share .............. -- -- -- (1,733) -- (1,733)
Exercise of common stock options ............ 1 517 -- -- -- 518
Treasury stock at cost, 485,100 shares (3) .. -- 26 -- -- (15,208) (15,182)
Tax benefit from exercises of common
stock options.............................. -- 167 -- -- -- 167
------- ---------- --------- --------- --------- ----------
Balance, December 31, 2002 .................. $ 149 $ 59,789 $ 904 $ 207,358 $ (85,528) $ 182,672
======= ========== ========= ========= ========= ==========

Comprehensive income:
Net income ............................... -- -- -- 63,022 -- 63,022
Other comprehensive loss (1) ............. -- -- (2,652) -- -- (2,652)
----------
Total comprehensive income .................. 60,370
------ ---
Cash dividend, $0.20 per share .............. -- -- -- (1,583) -- (1,583)
Exercise of common stock options ............ 2 3,054 -- -- -- 3,056
Treasury stock at cost, 1,596,600 shares(4).. -- 93 -- -- (58,418) (58,325)
Tax benefit from exercises of common
stock options.............................. -- 1,802 -- -- -- 1,802
------- ---------- --------- --------- --------- ----------
Balance, December 31, 2003 .................. $ 151 $ 64,738 $ (1,748) $ 268,797 $(143,946) $ 187,992
======= ========== ========= ========= ========= ==========

(1) Other Comprehensive Income: 2003 2002 2001
---- ---- -----

Net unrealized holding (losses) gains on securities
available-for-sale arising during the period
net of taxes (2003 - $(1.5) million,
2002 - $(1.5) million, 2001 - $1.7 million)......... $ (2,374) $ (2,511) $ 2,743

Net unrealized holding gains (losses) arising during
the period on derivatives used for cash flow hedge,
net of taxes (2003 - $22,000, 2002 - $(415,000),
2001 - $31,000)..................................... 41 (771) 257

Reclassification for (gains) losses included in
income, net of taxes (2003 - $(196,000),
2002 - $637,000, 2001 - $(31,000)).................. (319) 1,040 (51)
-------- --------- ---------

Total other comprehensive (loss) income................. $ (2,652) $ (2,242) $ 2,949
========= ========== ========

(2) Net of reissuance of 5,000 shares.
(3) Net of reissuance of 5,000 shares.
(4) Net of reissuance of 5,000 shares.

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

CONSOLIDATED STATEMENT OF CASH FLOWS

Year Ended December 31,
------------------------------------------
2003 2002 2001
---- ---- ----
(In Thousands)

Operating activities:

Net income ..................................................... $ 63,022 $ 101,141 $ 17,083
Adjustments to reconcile net income to net cash provided by
(used for) operating activities:
Provision for loan losses ................................. 2,550 2,243 2,212
Depreciation, accretion and amortization .................. 11,562 8,891 4,983
(Increase) decrease in accrued interest receivable
and other assets ........................................ (10,060) 5,363 (3,022)
Origination of loans held-for-sale ........................ (73,679) (1,946,047) (624,481)
Proceeds from sales of loans held-for-sale ................ 68,338 1,857,789 567,106
Gain on sale of loans held-for-sale ....................... (751) (443) (420)
Gain on sale of investments ............................... (515) (23) (4)
Gain on sale of reverse mortgage .......................... -- (101,518) --
Gain on businesses held-for-sale .......................... (65,689) (1,516) --
Gain on sale of assets acquired through foreclosure ....... (99) (73) (100)
(Decrease) increase in accrued interest payable
and other liabilities ................................... (22,526) 26,792 (5,568)
Decrease (increase) in capitalized interest, net .......... (502) (16,184) (10,003)
Minority interest in net income ........................... -- 16,731 (189)
----------- ----------- -----------
Net cash used for operating activities ......................... (28,349) (46,854) (52,403)
----------- ----------- -----------

Investing activities:

Net decrease (increase) of interest-bearing deposits
in other banks .......................................... 6,381 (176,987) (21,042)
Maturities of investment securities ....................... 500 182,467 90,349
Sales of investment securities available-for-sale ......... 21,292 1,788 644
Sales of mortgage-backed securities available-for-sale .... 109,502 128,316 4,095
Sales of mortgage-backed securities held-to-maturity ...... 14,772 -- --
Purchases of investment securities available-for-sale ..... (116,088) (241,110) (75,246)
Repayments of mortgage-backed securities held-to-maturity . 22,809 30,747 37,116
Repayments of mortgage-backed securities available-for-sale 333,460 253,860 220,076
Purchases of mortgage-backed securities available-for-sale (874,560) (261,658) (280,969)
Purchases of mortgage-backed securities trading ........... -- (1,000) --
Repayments on reverse mortgages ........................... 1,789 23,641 17,304
Disbursements for reverse mortgages ....................... (877) (5,536) (7,413)
Sale of reverse mortgages ................................. -- 127,580 --
Sale of loans ............................................. 47,174 5,986 --
Purchase of loans ......................................... (14,370) (32,077) (24,512)
Gain on sale of loans ..................................... (766) -- --
Sale of businesses held-for-sale .......................... 129,283 14,332 --
Net (increase) decrease in loans .......................... (254,676) 71,767 (72,146)
Net increase in loans of businesses held-for-sale ......... -- (83,397) --
Net (increase) decrease in stock of Federal Home Loan Bank
of Pittsburgh ........................................... (21,697) 6,771 (250)
Receipts from investments in real estate .................. -- -- 270
Sales of assets acquired through foreclosure, net ......... 1,322 1,116 766
Premises and equipment, net ............................... (2,800) (4,750) (1,992)
----------- ----------- -----------

Net cash (used for) provided by investing activities ........... (597,550) 41,856 (112,950)
----------- ----------- -----------

(Continued on next page)

CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)

Year Ended December 31,
-------------------------------------------
2003 2002 2001
---- ---- ----
(In Thousands)

Financing activities:

Net increase in demand and savings deposits .................... $ 68,612 $ 10,733 $ 147,319
Net (decrease) increase in time deposits ....................... (40,876) 93,768 (115,715)
Receipts from FHLB borrowings .................................. 5,240,359 825,356 370,000
Repayments of FHLB borrowings .................................. (4,800,562) (941,856) (201,000)
Receipts from reverse repurchase agreements .................... 835,601 257,063 --
Repayments of reverse repurchase agreements .................... (763,145) (276,138) (24,300)
Net decrease in federal funds purchased ........................ 50,000 -- --
Increase of other borrowing of businesses held-for-sale ........ -- 50,000 --
Net decrease in obligations under capital lease ................ -- (199) (125)
Dividends paid on common stock ................................. (1,583) (1,733) (1,542)
Issuance of common stock and exercise of employee stock options 4,951 711 94
Purchase of treasury stock, net of reissuance .................. (58,418) (15,208) (15,727)
Minority interest .............................................. (12,845) (9,687) 114
----------- ----------- -----------
Net cash provided by (used for) financing activities ........... 522,094 (7,190) 159,118
----------- ----------- -----------
Decrease in cash and cash equivalents from continuing operations (103,805) (12,188) (6,235)
Change in net assets from discontinued operations .............. 37,922 67,899 85,478
Cash and cash equivalents at beginning of period ............... 226,303 170,592 91,349
----------- ----------- -----------
Cash and cash equivalents at end of period ..................... $ 160,420 $ 226,303 $ 170,592
=========== =========== ===========

Supplemental Disclosure of Cash Flow Information:

Cash paid for interest during the year ......................... $ 31,617 $ 39,119 $ 62,977
Cash paid for income taxes, net ................................ 63,071 21,701 8,874
Loans transferred to assets acquired through foreclosure ....... 620 1,262 648
Net change in other comprehensive income ....................... (2,652) (2,242) 2,949
Transfer of loans held-for-sale to loans ....................... 8,150 -- --
Loans, net of allowance, of businesses held-for-sale ........... -- 117,646 --
Other assets transferred to businesses held-for-sale ........... -- 3,810 --
Other liabilities transferred to businesses held-for-sale ...... -- 7,862 --

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------

WSFS Financial Corporation (Company or Corporation) is a thrift holding
company organized under the laws of the State of Delaware. The Corporation's
principal wholly-owned subsidiary, Wilmington Savings Fund Society, FSB (the
Bank or WSFS), is a federal savings bank organized under the laws of the United
States which at December 31, 2003 serves customers from its main office and 23
retail banking offices located in northern Delaware and southeastern
Pennsylvania.

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

Basis of Presentation

The consolidated Financial Statements include the accounts of the parent
company, Montchanin Capital Management, Inc. (Montchanin), WSFS and its
wholly-owned subsidiaries, WSFS Investment Group, Inc., WSFS Reit, Inc. and WSFS
Credit Corporation (WCC), as well as not wholly-owned, but majority controlled
and consolidated subsidiaries, Wilmington Finance, Inc. (WF) and CustomerOne
Financial Network, Inc. (C1FN). C1FN was sold in November 2002 and WF was sold
in January 2003. These subsidiaries were classified as businesses held-for-sale
and the statement of operations was retroactively restated for all periods
presented. WF was classified as a business held-for-sale on the statement of
condition at December 31, 2002. See Note 3 of the Financial Statements for
further discussion of Businesses Held-for-Sale . As discussed in Note 2 of the
Financial Statements, the results of WCC, the Corporation's wholly-owned
indirect auto financing and leasing subsidiary, are also presented as
discontinued operations.

WSFS Capital Trust I is an unconsolidated affiliate of the Company and was
formed in 1998 to sell Trust Preferred Securities. The Trust invested all of the
proceeds from the sale of the Trust Preferred Securities in Junior Subordinated
Debentures of the Corporation. The Corporation used the proceeds from the Junior
Subordinated Debentures for general corporate purposes, including the redemption
of higher rate debt. WSFS Investment Group, Inc. markets various third-party
insurance and securities products to Bank customers through WSFS' retail banking
system. WSFS Reit, Inc. is a real estate investment trust formed in 2002 to hold
qualifying real estate assets and may be used in the future as a vehicle to
raise capital. Montchanin Capital Management, Inc. was formed in 2003 to provide
asset management products and services to customers in the Bank's primary market
area.

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

Cash and Cash Equivalents

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

Debt and Equity Securities

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

o Debt securities with the positive intention to hold to maturity are
classified as "held-to-maturity" and reported at amortized cost.
o Debt and equity securities purchased with the intention of selling
them in the near future are classified as "trading securities" and are
reported at fair value, with unrealized gains and losses included in
earnings.
o Debt and equity securities not classified in either of the above are
classified as "available-for-sale securities" and reported at fair
value, with unrealized gains and losses excluded from earnings and
reported, net of tax, as a separate component of stockholders' equity.

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

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

Investment in Reverse Mortgages

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

Loans

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

Impaired loans are measured based on the present value of expected future
discounted cash flows, the market price of the loan or the fair value of the
underlying collateral if the loan is collateral dependent. Impaired loans
include loans within the Corporation's commercial, commercial mortgage and
commercial construction portfolios. The Company's policy for recognition of
interest income on impaired loans is the same as for nonaccrual loans discussed
below.

Nonaccrual Loans

Nonaccrual loans are those on which the accrual of interest has ceased.
Loans are placed on nonaccrual status immediately if, in the opinion of
management, collection is doubtful, or when principal or interest is past due 90
days or more and collateral is insufficient to cover principal and interest.
Interest accrued but not collected at the date a loan is placed on nonaccrual
status is reversed and charged against interest income. In addition, the
amortization of net deferred loan fees is suspended when a loan is placed on
nonaccrual status. Subsequent cash receipts are applied either to the
outstanding principal or recorded as interest income, depending on management's
assessment of ultimate collectibility of principal and interest. Loans are
returned to an accrual status when the borrower's ability to make periodic
principal and interest payments has returned to normal (i.e. - brought current
with respect to principal or interest or restructured) and the paying capacity
of the borrower and/or the underlying collateral is deemed sufficient to cover
principal and interest in accordance with the Corporation's previously
established loan-to-value policies.

Allowances for Loan Losses

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

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

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

The formula allowances for commercial and commercial real estate loans are
calculated by applying loss factors to outstanding loans in each case based on
the internal risk grade of loans. Changes in risk grades of both performing and
nonperforming loans affect the amount of the formula allowance. Loss factors by
risk grade have a basis in WSFS' historical loss experience for such loans and
may be adjusted for significant factors that, in management's judgment, affect
the collectability of the portfolio as of the evaluation date. See discussion of
historical loss adjustment factors below.

Pooled loans are loans that are usually smaller, not-individually-graded
and homogenous in nature, such as consumer installment loans and residential
mortgages. Pooled loan loss allowances are based on historical net charge-offs
for six years which management believes approximates an average business cycle.
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, as
adjusted for historical loss adjustment factors. Historical loss adjustment
factors are based upon management's evaluation of various current conditions.
The evaluation of the inherent loss with respect to these more current
conditions is subject to a higher degree of uncertainty because they are not
identified with specific credits. The more current conditions, evaluated in
connection with the adjustment factors, include an evaluation of the following:

WSFS' loan officers and risk managers meet monthly to discuss and review
these conditions, and also risks associated with individual problem loans. By
assessing the probable estimated losses inherent in the loan portfolio on a
monthly basis, management is able to adjust specific and inherent loss estimates
based upon the availability of more recent information. In addition, various
regulatory agencies, as an integral part of their examination process,
periodically review the Corporation's allowance for loan losses. The Company
also gives consideration to the results of these regulatory agency examinations.

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

Assets Held-for-Sale

Assets held-for-sale include loans held-for-sale and are carried at the
lower of cost or market of the aggregate or in some cases individual assets.
Vehicles that have been returned to the Company upon the expiration of their
lease terms have been included in the net assets of discontinued operations.

Assets Acquired Through Foreclosure

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

Premises and Equipment

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

Federal Funds Purchased and Securities Sold Under Agreements to Repurchase

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

Income Taxes

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

Earnings Per Share

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

2003 2002 2001
---- ---- ----
(In Thousands, Except Per Share Data)

Numerator:
Income from continuing operations before cumulative effect
of change in accounting principle, net of tax benefit ............... $ 21,233 $ 87,315 $ 17,762
Cumulative effect of change in accounting principle, net of tax benefit -- 703 --
--------- --------- ---------
Income from continuing operations ..................................... 21,233 88,018 17,762
Loss on wind-down of discontinued operations, net of tax .............. -- (2,766) (2,026)
Income from discontinued operations of businesses held-for-sale,
net of taxes ...................................................... -- 14,965 1,347
Gain on sale of businesses held-for-sale, net of tax .................. 41,789 924 --
--------- --------- ---------
Net income ............................................................ $ 63,022 $ 101,141 $ 17,083
========= ========= =========

Denominator:
Denominator for basic earnings per share - weighted average shares .... 7,774 9,086 9,579
Effect of dilutive employee stock options .............................. 464 336 97
--------- --------- ---------
Denominator for diluted earnings per share - adjusted weighted average
shares and assumed exercise .......................................... 8,238 9,422 9,676
========= ========= =========

Earnings per share:
Basic:
Income from continuing operations before cumulative effect
of change in accounting principle, net of tax benefit ................ $ 2.73 $ 9.61 $ 1.85
Cumulative effect of change in accounting principle, net of tax benefit -- 0.08 --
--------- --------- ---------
Income from continuing operations ...................................... 2.73 9.69 1.85
Loss on wind-down of discontinued operations, net of tax ............... -- (0.30) (0.21)
Income from discontinued operations of businesses held-for-sale,
net of taxes ....................................................... -- 1.64 0.14
Gain on sale of businesses held-for-sale, net of tax ................... 5.38 0.10 --
--------- --------- ---------
Net income ............................................................. $ 8.11 $ 11.13 $ 1.78
========= ========= =========

Diluted:
Income from continuing operations before cumulative effect
of change in accounting principle, net of tax benefit ................ $ 2.58 $ 9.27 $ 1.84
Cumulative effect of change in accounting principle, net of tax benefit -- 0.07 --
--------- --------- ---------
Income from continuing operations ...................................... 2.58 9.34 1.84
Loss on wind-down of discontinued operations, net of tax ............... -- (0.30) (0.21)
Income from discontinued operations of businesses held-for-sale,
net of taxes ....................................................... -- 1.59 0.14
Gain on sale of businesses held-for-sale, net of tax ................... 5.07 0.10 --
--------- --------- ---------
Net income ............................................................. $ 7.65 $ 10.73 $ 1.77
========= ========= =========

Outstanding common stock equivalents having no dilutive effect,
in thousands ......................................................... 4 4 146

Stock Options

At December 31, 2003, the Corporation had two stock-based employee
compensation plans that are described more fully in Note 15 to the Financial
Statements. The Corporation accounts for these plans under the recognition and
measurement principles of APB Opinion No. 25, Accounting for Stock Issued to
Employees, and Related Interpretations. No stock-based employee compensation
cost is reflected in the net income, as all options granted under those plans
had an exercise price at least equal to the market value of the underlying
common stock on the date of grant. The following table illustrates the effect on
net income and earnings per share had the company applied the fair value
recognition provision of FASB Statement No. 123, Accounting for Stock-Based
Compensation, to stock-based employee compensation.

2003 2002 2001
---- ---- ----
(In Thousands, Except Per Share Data)

Income from continuing operations, as reported ................................. $ 21,233 $ 88,018 $ 17,762
Less: Total stock-based employee compensation expense determined
under fair value based methods for all awards, net of related tax effects . (729) (739) (783)
---------- ---------- ----------
Pro forma income from continuing operations .................................... $ 20,504 $ 87,279 $ 16,979
========== ========== ==========

Earnings per share:
Basic:
Income from continuing operations ............................................ $ 2.73 $ 9.69 $ 1.85
Less: Total stock-based employee compensation expense determined
under fair value based methods for all awards, net of related tax effects . (0.09) (0.08) (0.08)
---------- ---------- ----------
Pro forma income from continuing operations .................................. $ 2.64 $ 9.61 $ 1.77
========== ========== ==========

Diluted:
Income from continuing operations ............................................ $ 2.58 $ 9.34 $ 1.84
Less: Total stock-based employee compensation expense determined
under fair value based methods for all awards, net of related tax effects . (0.09) (0.08) (0.09)
---------- ---------- ----------
Pro forma income from continuing operations .................................. $ 2.49 $ 9.26 $ 1.75
========== ========== ==========

2. Discontinued Operations of a Business Segment
- --------------------------------------------------------------------------------

In 2000, the Board of Directors approved management's plans to discontinue
the operations of WCC. WCC, which had 483 lease contracts and 542 loan contracts
at December 31, 2003, no longer accepts new applications but will continue to
service existing loans and leases until their maturities. Management estimates
that substantially all loan and lease contracts will mature by the end of 2004.

In accordance with APB 30, which was the authoritative literature in 2000,
accounting for discontinued operations of a business segment at that time
required that the Company forecast operating results over the wind-down period
and accrue any expected net losses. The historic results of WCC's operations,
the accrual of expected losses to be incurred over the wind-down period, and the
future reported results of WCC are required to be treated as Discontinued
Operations of a Business Segment, and shown in summary form separately from the
Company's results of continuing operations in reported results of the
Corporation.

In 2000, a $6.2 million pretax reserve was established to absorb expected
future losses, primarily related to residual value losses on leases.
Consequently, the Corporation recognized an after tax charge of $2.2 million,
net of $4.0 million in tax benefits related to net operating loss carryforwards,
for the expected loss over the projected wind-down period.

During 2002 and 2001, because of the heavy incenting of new car purchases
by manufacturers and other factors, both used car prices and WSFS' exposure to
residual values on its outstanding leases continued to deteriorate. As a result,
management recorded additional provisions for residual losses of $2.0 million in
2002 and $3.1 million in 2001. Extensive analyses of remaining leases as of
December 31, 2003, indicated that no additional reserves were needed for the
expected losses in the business during its remaining wind-down period. At
December 31, 2003, there were $3.0 million in indirect loans and $6.6 million in
indirect leases, net, still outstanding. At December 31, 2003, WSFS had exposure
to $7.5 million in remaining used car residuals, for which it estimates a loss
of $1.3 million. Management has provided for this loss in the Financial
Statements. Due to the provision for this estimated exposure in the financial
statements, the loss on the wind-down of discontinued operations, net of tax,
was zero in 2003. Based on the scheduled maturities of leases, management
estimates by December 31, 2004 its residual exposure will be negligible. At
December 31, 2002, WSFS had exposure to $42.3 million in remaining used car
residuals, for which it estimated a loss of $8.9 million.

The following table depicts loans, operating leases and other assets of
discontinued operations at December 31, 2003 and 2002:

At December 31,
-----------------------
2003 2002
---- ----
(In Thousands)

Vehicles under operating leases, net............. $ 6,542 $ 44,693
Net loans........................................ 2,359 7,285
Other non-cash assets 573 2,367
Less:
Reserve for losses of discontinued
operations................................... -- 6,949
------- --------
Loans, operating leases and other assets of
discontinued operatins......................... $ 9,474 $ 47,396
======= ========

The following table depicts the net loss from discontinued operations for
the years ended December 31, 2003, 2002 and 2001:

Year Ended December 31,
-----------------------------
2003 2002 2001
---- ---- ----
(In Thousands)

Interest income ....................................... $ 422 $ 974 $ 1,870
Allocated interest expense (1) ........................ 987 2,470 9,271
------- ------- -------

Net interest expense .................................. (565) (1,496) (7,401)

Loan and lease servicing fee income ................... 292 379 301
Rental income on operating leases, net ................ (529) 2,229 7,730
Other income .......................................... 2 7 14
------- ------- -------
Net revenues ........................................ (800) 1,119 644

Noninterest expenses .................................. 557 1,234 2,066
------- ------- -------

Loss before taxes ..................................... (1,357) (115) (1,422)
Charges against the reserve for discontinued operations 1,357 115 1,422
Income tax provision .................................. -- -- --
------- ------- -------

Income from discontinued operations ................... $ -- $ -- $ --
Loss on wind-down of discontinued operations .......... -- (2,766) (2,026)
------- ------- -------
Total ............................................... $ -- $(2,766) $(2,026)
======= ======= =======

(1) The allocated interest expense for 2003 and 2002 is based on a direct
matched-maturity funding of the net non-cash assets of discontinued
operations. The average funding rate for 2003 and 2002 was 3.51% and 2.87%,
respectively, on average net assets of $28.1 million and $86.0 million,
respectively. Allocated interest expense for 2001 was 5.65% and was based
on the Company's annual average wholesale borrowing rate, which
approximated a marginal funding cost of this business segment.

3. BUSINESSES HELD-FOR-SALE
- --------------------------------------------------------------------------------

In November 2002, the Corporation completed the sale of C1FN and related
interests in its Everbank Division. Everbank was started with C1FN in 1999 as a
joint initiative in Internet and branchless banking. Consistent with the manner
in which the segment was managed and operated, information in this report
labeled "C1FN" generally represents the profoma combined results of C1FN and
WSFS' Everbank Division (the C1FN/Everbank segment). The sale included total
assets of $342.8 million and deposits of $340.1 million. WSFS recorded an
after-tax gain of $187,000 on this sale.

Under a provision of the agreement between sellers and buyers, certain sale
consideration was withheld in two separate escrow accounts pending the
resolution of certain events. WSFS' portion of these escrow amounts totaled
approximately $786,000. These amounts were not recognized by WSFS in 2002, as
their receipt was not assured beyond a reasonable doubt. During 2003, WSFS
received the entire amount held in escrow. As a result, the Company recorded the
$786,000 ($517,000 after taxes) as a gain on the sale of businesses
held-for-sale. Indemnifications are more fully discussed in Note 16 to the
Financial Statements.

Also in November 2002, WSFS signed a definitive agreement for the sale of
WSFS' majority-owned subsidiary, Wilmington Finance, Inc. (WF). The sale was
completed in January 2003 and WSFS recognized an after-tax gain on the sale of
$41.3 million or $5.01 per diluted share. The sale included $148.2 million in
assets, of which $117.6 million were residential mortgage loans held-for-sale.
Under a provision of the agreement between the sellers and buyers, certain sale
consideration was withheld in a separate escrow account pending the resolution
of certain events. During 2003, WSFS received the entire amount held in escrow.
As a result, the Company recorded $325,000 ($208,000 after taxes) as a gain on
sale of businesses held-for-sale and is included in the total recorded gain on
sale of $41.3 million.

In accordance with Statement of Financial Accounting Standards (SFAS) No.
144, Accounting for the Impairment or Disposal of Long-Lived Assets, the major
classes of assets and liabilities of WF are presented separately on the
statement of condition as of December 31, 2002. The income (losses) from the
operation of these three businesses (UAB, C1FN/Everbank and WF) have been
presented as income/losses of businesses held-for-sale, and presented separately
for all periods presented.

The gains realized on the sale of UAB, C1FN, and WF are presented
separately on the statement of operations, net of tax. The average balance sheet
is presented with total assets and liabilities of businesses held-for-sale
displayed separately.

The following tables present the net income from businesses held-for-sale
for the years ended December 31, 2002 and 2001. No activity was recorded during
2003 other than the above referenced gains on sales of WF and C1FN.

For the Year Ended December 31, 2002
-------------------------------------------

WF(1) C1FN UAB Total
----- ---- --- -----
(In Thousands)

Net interest income ..................... $ 6,835 $ 3,738 $ 863 $ 11,436
Provision for loan losses ............... -- 154 57 211
-------- -------- -------- --------
Net interest income after provision ..... 6,835 3,584 806 11,225
Noninterest income ...................... 74,163 5,797 51 80,011
-------- -------- -------- --------
Total revenues .......................... 80,998 9,381 857 91,236
Noninterest expenses .................... 40,113 10,842 1,059 52,014
-------- -------- -------- --------

Income before taxes and minority interest 40,885 (1,461) (202) 39,222
Minority interest ....................... 20,111 (3,380) -- 16,731
-------- -------- -------- --------
Income before taxes ..................... 20,774 1,919 (202) 22,491
Provision for income taxes .............. 7,997 (391) (80) 7,526
-------- -------- -------- --------

Income from businesses held-for-sale .... $ 12,777 $ 2,310 $ (122) $ 14,965
======== ======== ======== ========

Gain on sale of businesses held-for-sale N/A $ 187 $ 737 $ 924
======== ======== ======== ========

(1) Includes $2.6 million in interest expense allocated to fund the average net
assets of $97.0 million of businesses held-for-sale. The rate of 2.68% is
based on the weighted average rate on other borrowed funds which
approximates the marginal funding rate for this niche business.

For the Year Ended December 31, 2001
-------------------------------------------
WF(1) C1FN UAB Total
----- ---- --- -----
(In Thousands)

Net interest income ..................... $ 1,773 $ 5,016 $ 760 $ 7,549
Provision for loan losses ............... -- 329 18 347
-------- -------- -------- --------
Net interest income after provision ..... 1,773 4,687 742 7,202
Noninterest income ...................... 19,671 3,224 111 23,006
-------- -------- -------- --------
Total revenues .......................... 21,444 7,911 853 30,208
Noninterest expenses .................... 16,252 10,669 1,218 28,139
-------- -------- -------- --------

Income before taxes and minority interest 5,192 (2,758) (365) 2,069
Minority interest ....................... 2,119 (2,308) -- (189)
-------- -------- -------- --------
Income before taxes ..................... 3,073 (450) (365) 2,258
Provision for income taxes .............. 1,245 (188) (146) 911
-------- -------- -------- --------

Income from businesses held-for-sale .... $ 1,828 $ (262) $ (219) $ 1,347
======== ======== ======== ========

(1) Includes $2.0 million in interest expense allocated to fund the average net
assets of $37.4 million of businesses held-for-sale. The rate of 5.32% is
based on the weighted average rate on other borrowed funds which
approximates the marginal funding rate for this niche business.

4. INVESTMENT SECURITIES
- --------------------------------------------------------------------------------

Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---------- ---------- ---------- ------
(In Thousands)

Available-for-sale securities:

December 31, 2003:
U.S. Government and agencies ... $105,761 $ 256 $ 132 $105,885
======== ======== ======== ========

December 31, 2002:
U.S. Government and agencies ... $ 10,880 $ 173 $ -- $ 11,053
======== ======== ======== ========

Held-to-maturity:

December 31, 2003:
Corporate bonds ................ $ 310 $ 26 $ -- $ 336
State and political subdivisions 10,100 806 11 10,895
-------- -------- -------- --------
$ 10,410 $ 832 $ 11 $ 11,231
======== ======== ======== ========

December 31, 2002:
Corporate bonds ................ $ 310 $ 8 $ 1 $ 317
State and political subdivisions 10,414 1,123 57 11,480
-------- -------- -------- --------
$ 10,724 $ 1,131 $ 58 $ 11,797
======== ======== ======== ========

Securities with book values aggregating $110.3 million at December 31, 2003
were pledged as collateral for WSFS' Treasury Tax and Loan account with the
Federal Reserve Bank, securities sold under agreement to repurchase and certain
municipal deposits which require collateral. Accrued interest receivable
relating to investment securities was $956,000 and $227,000 at December 31, 2003
and 2002, respectively.

The scheduled maturities of investment securities held-to-maturity and
securities available-for-sale at December 31, 2003 were as follows :

Held-to-Maturity Available-for-Sale
------------------- --------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
--------- ----- -------- ------
(In Thousands)
Within one year .................... $ -- $ -- $ -- $ --
After one year but within five years 4,636 5,159 105,761 105,885
After five but within ten years .... 1,517 1,794 -- --
After ten years .................... 4,257 4,278 -- --
-------- -------- --------
$ 10,410 $ 11,231 $105,761 $105,885
======== ======== ======== ========

During 2003, proceeds from the sale of investment securities classified as
available-for-sale were $21.3 million, with a gain of $200,000 realized on the
sales. Municipal bonds totaling $395,000 were called by the issuers. Proceeds
from the sale of investments during 2002 and 2001 were $1.8 million and
$644,000, respectively. There was a net loss of $15,000 realized on sales in
2002 and no net gain or loss realized on sales in 2001. The cost basis for all
investment security sales was based on the specific identification method. There
were no sales of investment securities classified as held-to-maturity.

At December 31, 2003, the Company owned investment securities totaling
$26.6 million where the amortized cost basis exceeded fair value. Total
unrealized losses on those securities were $143,000 at December 31, 2003. This
temporary impairment is the result of changes in market interest rates since the
purchase of the securities. Only one security amounting to $64,000 has been
impaired for 12 months or longer. The Corporation has determined that this
security is not "other than temporarily" impaired. The following table lists the
unrealized losses aggregated by category:

Less than 12 months 12 months or longer Total
-------------------- ------------------- --------------------
Fair Unrealized Fair Unrealized Fair Unrealized
Value Loss Value Loss Value Loss
------- ---------- ------- ---------- ------- ----------
(Dollars in Thousands)

Held-to-maturity
State and political subdivisions ....... $ 70 $ 1 $ 64 $ 10 $ 134 $ 11

Available-for-sale
U.S. Government and agencies ............ 26,507 132 -- -- 26,507 132
------- ------- ------- ------- ------- -------

Total temporarily impaired investments $26,577 $ 133 $ 64 $ 10 $26,641 $ 143
======= ======= ======= ======= ======= =======

5. MORTGAGE-BACKED SECURITIES
- --------------------------------------------------------------------------------

Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ----------- ---------- -------
(In Thousands)

Available-for-sale securities:

December 31, 2003:
Collateralized mortgage obligations..... $390,529 $ 2,400 $ 2,462 $390,467
FNMA ................................... 71,597 63 1,315 70,345
FHLMC .................................. 39,129 -- 1,193 37,936
GNMA ................................... 18,341 122 -- 18,463
-------- -------- -------- --------
$519,596 $ 2,585 $ 4,970 $517,211
======== ======== ======== ========

Weighted average yield................. 4.19%

December 31, 2002:
Collateralized mortgage obligations ... $ 83,099 $ 1,659 $ 23 $ 84,735
FNMA................................... 13,073 273 -- 13,346
-------- -------- -------- --------
$ 96,172 $ 1,932 $ 23 $ 98,081
======== ======== ======== ========

Weighted average yield................. 4.69%

Held-to-maturity securities:

December 31, 2003:
Collateralized mortgage obligations.... $ 1,785 $ 1 $ -- $ 1,786
FNMA................................... -- -- -- --
FHLMC.................................. 29 1 -- 30
-------- -------- -------- --------
$ 1,814 $ 2 $ -- $ 1,816
======== ======== ======== ========

Weighted average yield................. 6.18%

December 31, 2002:
Collateralized mortgage obligations.... $ 13,881 $ 345 $ -- $ 14,226
FNMA................................... 11,614 387 -- 12,001
FHLMC.................................. 13,662 595 3 14,254
--------- -------- -------- --------
$ 39,157 $ 1,327 $ 3 $ 40,481
======== ======== ======== ========

Weighted average yield................. 5.90%

Trading securities:

December 31, 2003:
Collateralized mortgage obligations.... $ 11,527 $ -- $ -- $ 11,527
-------- -------- -------- --------
$ 11,527 $ -- $ -- $ 11,527
======== ======== ======== ========

Weighted average yield................. 4.14%

December 31, 2002:
Collateralized mortgage obligations.... $ 11,000 $ -- $ -- $ 11,000
--------- -------- -------- --------
$ 11,000 $ -- $ -- $ 11,000
======== ======== ======== ========

Weighted average yield................. 4.42%

At December 31, 2003, mortgage-backed securities with book values
aggregating $426.2 million were pledged as collateral for retail customer
repurchase agreements, municipal deposits and Federal Home Loan Bank advances.
Accrued interest receivable relating to mortgage-backed securities was $2.0
million and $715,000 at December 31, 2003 and 2002, respectively. Proceeds from
the sale of mortgage-backed securities available-for-sale were $109.5 million in
2003, resulting in a loss of $109,000. Proceeds from the sale of mortgage-backed
securities classified as held-to-maturity (HTM) were $14.8 million, resulting in
a net gain of $424,000. These HTM securities were sold after the Corporation
collected more than 85% of the principal outstanding at the time of acquisition,
and therefore these sales are considered maturities in accordance with SFAS No.
115, Accounting for Certain Investments in Debt and Equity Securities. In 2002
proceeds from the sale of mortgage-backed securities classified as
available-for-sale were $128.3 million resulting in a gain of $1.7 million. Also
in 2002, proceeds from the sale of mortgage-backed securities classified as HTM
were $569,000 resulting in a gain of $36,000. This sale was also considered a
maturity consistent with SFAS 115. The cost bases of all mortgage-backed
securities sales are based on specific identification method.

The Corporation owns $11.5 million of SASCO RM-1 2002 securities, including
accrued interest, classified as "trading." $10.0 million was received as partial
consideration for the sale of the reverse mortgage portfolio, while an
additional $1.0 million was purchased at par at the time of the securitization.
These floating rate notes represent the BBB traunche of the reverse mortgage
securitization underwritten by Lehman Brothers and carry a coupon rate of
one-month LIBOR plus 300 basis points. For a further discussion of reverse
mortgages, see the Investment in Reverse Mortgages discussion in Management's
Discussion and Analysis and Note 6 to the Financial Statements.

At the time of the acquisition of these securities it was the Corporation's
intent to sell these securities in the near term. Therefore, based on rules
promulgated under SFAS 115, the securities were classified as "trading." An
active market for these securities has not developed since the issuance, but it
continues to be the intent of the Corporation to sell these securities if and
when an active market develops. Since there is no active market for these
securities, the Corporation has used the guidance under SFAS 115 to provide a
reasonable estimate of fair value. The Corporation utilized matrix pricing and a
fundamental analysis of the actual cash flows of the underlying reverse
mortgages to estimate a reasonable fair value as of December 31, 2003. The
Corporation also obtained a fair value estimate from an independent securities
dealer.

At December 31, 2003, the Company owned mortgage-backed securities totaling
$271.9 million where the amortized cost basis exceeded fair value. Total
unrealized losses on those securities were $5.0 million at December 31, 2003.
This temporary impairment is the result of changes in market interest rates
since the purchase of the securities. No security has been impaired for 12
months or longer. The following table lists the unrealized losses aggregated by
category:

Less than 12 months 12 months or longer Total
-------------------- --------------------- ---------------------
Fair Unrealized Fair Unrealized Fair Unrealized
Value Loss Value Loss Value Loss
-------- --------- -------- ---------- -------- ----------
(Dollars in Thousands)

Available-for-Sale
Collateralized mortgage obligations.... $163,561 $ 2,462 $ -- $ -- $163,561 $ 2,462
FNMA .................................. 69,204 1,315 -- -- 69,204 1,315
FHLMC ................................. 39,129 1,193 -- -- 39,129 1,193
-------- -------- -------- -------- -------- --------
Total temporarily impaired MBS ...... $271,894 $ 4,970 $ -- $ -- $271,894 $ 4,970
======== ======== ======== ======== ======== ========

6. INVESTMENT IN AND ACQUISITION OF REVERSE MORTGAGES
- --------------------------------------------------------------------------------

Reverse mortgage loans are contracts that require the lender to make
monthly advances throughout the borrower's life or until the borrower relocates,
prepays or the home is sold, at which time the loan becomes due and payable.
Since reverse mortgages are nonrecourse obligations, the loan repayments are
generally limited to the sale proceeds of the borrower's residence, and the
mortgage balance consists of cash advanced, interest compounded over the life of
the loan and a premium which represents a portion of the shared appreciation in
the home's value, if any, or a percentage of the value of the residence.

On November 22, 2002, substantially all of WSFS' $33 million reverse
mortgage portfolio was sold, effective October 1, 2002, for a pretax gain of
$101.5 million. The Corporation received $128 million in cash and $10 million in
BBB-rated mortgage-backed securities classified as trading and options to
acquire up to 49.9% of the Class "O" certificates issued in connection with
mortgage-backed security SASCO RM-1 2002. These mortgage-backed securities were
part of a larger issuance of securities backed, in part, by the sold reverse
mortgages. Since this was the sale of a financial asset, results are shown in
continuing operations in the accompanying Financial Statements, in accordance
with accounting principles generally accepted in the United States of America.
The Corporation has retained the servicing of these sold reverse mortgages and
receives $35 per loan per month, or $244,000 in 2003 and an estimated $183,000
for 2004. No excess servicing rights were assigned. Included in the net gain on
sale of reverse mortgages in 2002 are amounts for transaction costs and other
estimates of costs of future obligations, including an estimated future payment
due to a participant in the value received for certain of the sold reverse
mortgages, under a pre-existing agreement. On December 31, 2003 the Company
entered into a settlement agreement in which the Company agreed to pay a final
settlement of $2.5 million for all amounts, current and future, due to that
participant under the pre-existing agreement. The Corporation's remaining
investment in reverse mortgages of $193,000 at December 31, 2003 represents a
participation in reverse mortgages with a third party and was not part of the
previously mentioned sale.

The Corporation accounted for its investment in reverse mortgages in
accordance with the instructions provided by the staff of the Securities and
Exchange Commission entitled "Accounting for Pools of Uninsured Residential
Reverse Mortgage Contracts" which requires grouping the individual reverse
mortgages into "pools" and recognizing income based on the estimated effective
yield of the pool. In computing the effective yield, the Corporation projected
the cash inflows and outflows of the pool including actuarial projections of the
life expectancy of the individual contract holder and changes in the collateral
values of the residence. At each reporting date, a new economic forecast was
made of the cash inflows and outflows of each pool of reverse mortgages; the
effective yield of each pool was recomputed, and income was adjusted
retroactively and prospectively to reflect the revised rate of return.
Accordingly, because of this quasi-market-value based accounting, the recorded
value of reverse mortgage assets included significant risk associated with
estimations, and income varied significantly from reporting period to reporting
period. For the year ended December 31, 2003, the Corporation earned $(24,000)
in interest income on reverse mortgages compared to $13.1 million in 2002 and
$10.2 million in 2001. The yield on the portfolio was (3.64)% in 2003, compared
to 49.73% in 2002 and 29.54% in 2001. The negative yield in 2003 was a result of
the quasi-market-value based accounting on the participation in the remaining
reverse mortgages that were not part of the previously mentioned sale.

In addition, on January 1, 2002, the Corporation adopted SFAS 142, Goodwill
and Other Intangible Assets. Statement 142 addresses financial accounting and
reporting for acquired goodwill and other intangible assets and supersedes APB
Opinion 17, Intangible Assets. It also addresses how intangible assets that are
acquired individually or with a group of other assets (i.e. those not acquired
in a business combination) should be accounted for in Financial Statements upon
their acquisition. Statement 142 also addresses how goodwill and other
intangible assets should be accounted for after they have been initially
recognized in the Financial Statements. Under this Statement, goodwill can no
longer be amortized but instead must be tested for impairment and its value
adjusted accordingly. Negative goodwill is required to be taken into earnings
immediately upon adoption. The Corporation had $1.2 million in negative goodwill
associated with the 1994 purchase of Providential Home Income Plan, Inc. As a
result of adopting this Statement, the Corporation recognized income of $703,000
in 2002 as a cumulative effect of a change in accounting principle, net of
$469,000 in income tax.

7. LOANS
- --------------------------------------------------------------------------------

December 31,
2003 2002
---- ----
(In Thousands)
Real estate mortgage loans:
Residential (1-4 family) ............. $ 456,943 $ 420,116
Other ................................ 343,270 229,482
Real estate construction loans ............ 64,406 67,251
Commercial loans .......................... 293,807 211,437
Consumer loans ............................ 186,133 181,851
----------- -----------
1,344,559 1,110,137
Less:
Loans in process .......................... 19,175 10,959
(Deferred fees) unearned income ........... (421) 1,856
Allowance for loan losses ................. 22,386 21,452
----------- -----------
Net loans ............................ $ 1,303,419 $ 1,075,870
=========== ===========

The Corporation had impaired loans of approximately $5.2 million at
December 31, 2003 compared to $6.5 million at December 31, 2002. The average
recorded investment in impaired loans was $6.1 million, $7.5 million and $8.1
million during 2003, 2002 and 2001, respectively. The allowance for losses on
impaired loans was $516,000 at December 31, 2003, as compared to $749,000 at
December 31, 2002. There was no interest income recognized on impaired loans.

The total amount of loans serviced for others was $244.7 million, $234.1
million and $262.2 million at December 31, 2003, 2002 and 2001, respectively.

Accrued interest receivable on loans outstanding was $4.8 million at
December 31, 2003 and $5.0 million at December 31, 2002 and 2001.

Nonaccruing loans aggregated $5.2 million, $6.5 million and $7.5 million at
December 31, 2003, 2002 and 2001, respectively. If interest on all such loans
had been recorded in accordance with contractual terms, net interest income
would have increased by $218,000 in 2003, $599,000 in 2002 and $939,000 in 2001.

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

Year Ended December 31,
-----------------------------------------
2003 2002 2001
---- ---- ----
(In Thousands)

Beginning balance ............................................ $ 21,452 $ 21,597 $ 21,423
Provision for loan losses ............................... 2,550 2,243 1,865
Provision for loan losses - businesses held-for-sale..... -- 211 347
Sale of business held-for-sale .......................... -- (269) --
Loans charged-off ....................................... (2,016) (3,504) (2,332)
Recoveries .............................................. 400 1,174 294
-------- -------- --------
Ending balance ............................................... $ 22,386 $ 21,452 $ 21,597
======== ======== ========

8. ASSETS ACQUIRED THROUGH FORECLOSURE
- --------------------------------------------------------------------------------

December 31,
---------------
2003 2002
---- ----
(In Thousands)

Real estate ............................ $301 $904
Less allowance for losses............... -- --
---- ----
Ending balance ......................... $301 $904
==== ====

A summary of changes in the allowance for foreclosed assets follows:

Year Ended December 31,
----------------------------
2003 2002 2001
---- ---- ----
(In Thousands)

Beginning balance........................ $ -- $ 253 $ 273
Net charge-offs ......................... -- 253 20
------- ------- -------
Ending balance .......................... $ -- $ -- $ 253
======= ======= =======

9. PREMISES AND EQUIPMENT
- --------------------------------------------------------------------------------

December 31,
---------------------
2003 2002
---- ----
(In Thousands)

Land ........................ $ 1,086 $ 1,086
Buildings ................... 8,614 8,465
Leasehold improvements ...... 8,106 6,399
Furniture and equipment...... 19,683 19,088
Renovations-in-process ...... 386 262
------- -------
37,875 35,300
Less:
Accumulated depreciation..... 24,530 21,462
------- -------
$13,345 $13,838
======= =======

The Corporation occupies certain premises and operates certain equipment
under noncancelable leases with terms ranging from 1 to 25 years. These leases
are accounted for as operating leases. Accordingly, lease costs are expensed as
incurred. Rent expense was $1.8 million in 2003, $2.0 million in 2002, and $2.2
million in 2001. Future minimum payments under these leases at December 31, 2003
are as follows:

(In Thousands)

2004 ........................................... $ 1,873
2005 ........................................... 1,665
2006 ........................................... 1,511
2007 ........................................... 1,208
2008 ........................................... 729
Thereafter ......................................... 4,465
---------
Total future minimum lease payments ....... $ 11,451
=========

10. DEPOSITS
- --------------------------------------------------------------------------------

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

December 31,
-------------------
2003 2002
---- ----
(In Thousands)

Money market and demand:
Noninterest-bearing demand ....................... $215,819 $182,957
Money market and interest-bearing demand ......... 118,151 109,259
-------- --------
Total money market and demand ................. 333,970 292,216
-------- --------

Savings .............................................. 316,976 292,917
-------- --------

Retail certificates of deposits by maturity:
Less than one year ............................... 134,114 168,547
One year to two years ............................ 47,582 36,668
Two years to three years ......................... 5,314 26,445
Three years to four years ........................ 2,086 2,721
Four years to five years ......................... 2,195 2,097
Over five years .................................. 746 315
-------- --------
Total retail time certificates ................ 192,037 236,793
-------- --------

Jumbo certificates of deposit-retail, by maturity:
Less than one year ............................... 30,518 40,441
One year to two years ............................ 8,773 3,879
Two years to three years ......................... 480 5,530
Three years to four years ........................ -- 159
Four years to five years ......................... 163 --
Over five years .................................. 142 137
-------- --------
Total jumbo certificates of deposit-retail ..... 40,076 50,146
-------- --------
Subtotal retail deposits ............................. 883,059 872,072
-------- --------

Jumbo certificates of deposit non-retail, by maturity:
Less than one year ............................... 39,024 24,734
One year to two years ............................ -- 1,490
Two years to three years ......................... -- --
Three years to four years ........................ 1,250 --
Four years to five years ......................... -- 100
-------- --------
Total jumbo time certificates, non-retail ..... 40,274 26,324
-------- --------

Total deposits ....................................... $923,333 $898,396
======== ========

Time deposits include certificates of deposit in denominations of $100,000
or more, which aggregated $80.3 million and $76.5 million at December 31, 2003
and 2002, respectively. Interest expense, restated for continuing operations, by
category follows:

Year Ended December 31,
-------------------------------
2003 2002 2001
---- ---- ----
(In Thousands)

Money market and interest-bearing demand..... $ 315 $ 430 $ 910
Savings ..................................... 1,627 2,914 7,417
Retail time deposits ........................ 5,785 8,267 13,197
------- ------- -------
Total retail interest expense ......... 7,727 11,611 21,524
------- ------- -------

Jumbo certificates of deposit-non-retail..... 462 419 1,106
Brokered certificates of deposit ............ -- 10 2,924
------- ------- -------

Total interest expense on deposits $ 8,189 $12,040 $25,554
======= ======= =======

11. BORROWED FUNDS
- --------------------------------------------------------------------------------

The following is a summary of borrowed funds by type:

Maximum
Amount Weighted
Outstanding Average Average
Weighted at Month Amount Interest
Balance at Average End Outstanding Rate
End of Interest During the During the During the
Period Rate Period Period Period
---------- -------- ----------- ----------- ----------
(Dollars in Thousands)
2003
----

FHLB advances............................................ $843,296 2.61% $843,296 $678,680 3.04%
Trust preferred borrowings............................... 50,000 3.67 50,000 50,000 3.87
Federal funds purchased and securities
sold under agreements to repurchase ................... 148,381 1.08 158,645 80,152 1.17
Other borrowed funds .................................... 39,381 0.40 48,087 42,307 0.72

2002
----

FHLB advances............................................ $403,500 4.70% $480,000 $448,103 4.56%
Trust preferred borrowings............................... 50,000 3.97 50,000 50,000 5.13
Federal funds purchased and securities
sold under agreements to repurchase ................... 25,925 1.34 121,138 79,714 3.37
Other borrowed funds .................................... 36,581 1.00 42,640 36,026 1.27

Federal Home Loan Bank Advances

Advances from the Federal Home Loan Bank (FHLB) of Pittsburgh with fixed
rates ranging from 1.15% to 5.01% at December 31, 2003 are due as follows:

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

2004.................................. $ 475,000 1.87%
2005.................................. 150,000 2.25
2006.................................. 30,000 2.50
2012 - 2013........................... 43,296 4.27
----------
$ 698,296
==========

Four advances are outstanding at December 31, 2003 totaling $145.0 million,
with a weighted average rate of 4.96% maturing in 2008 and beyond. They are
convertible on a quarterly basis (at the discretion of the FHLB) to a variable
rate advance based upon the three-month LIBOR rate, after an initial fixed term.
WSFS has the option to prepay these four advances at predetermined times or
rates. Pursuant to collateral agreements with the FHLB, advances are secured by
qualifying first mortgage loans, collateralized mortgage obligations, FHLB stock
and an interest-bearing demand deposit account with the FHLB.

As a member of the FHLB of Pittsburgh, WSFS is required to acquire and
hold shares of capital stock in the FHLB of Pittsburgh in an amount at least
equal to 5% of its advances (borrowings) from the FHLB of Pittsburgh, plus 0.7%
of the unused borrowing capacity. WSFS was in compliance with this requirement
with an investment in FHLB of Pittsburgh stock at December 31, 2003, of $43.7
million.

Trust Preferred Borrowings

On November 20, 1998, the Corporation issued $50.0 million of Trust
Preferred securities, due on December 1, 2028, pursuant to a shelf registration
under the Securities Act of 1933. These securities were issued at a floating
rate of 250 basis points over three-month LIBOR, repricing quarterly. The
maturity date on these securities may be shortened to a date not earlier than
December 1, 2003 if certain conditions are met.

The Trust Preferred securities were issued by a subsidiary of the
Corporation, a Delaware statutory trust, which invested the proceeds in junior
subordinated debentures issued by the Corporation. The net proceeds from the
sale of Trust Preferred securities were used primarily as replacement financing
for the early retirement of other Corporation debt. The Corporation benefits
from reduced long-term financing costs and the flexibility of additional Bank
regulatory capital.

At the same time, the Corporation also entered into an agreement to limit
the interest rate exposure in the Trust Preferred securities by purchasing an
interest rate cap, which provides a ceiling on three-month LIBOR of 6.00% for
the first ten years (expires

November 2008). This limits the net interest rate coupon (or cash paid) on the
Trust Preferred securities to no more than 8.50% through the first ten years.
The cost of this interest rate cap was $2.4 million, which, prior to the
adoption of SFAS 133, was to be amortized as a yield adjustment over the
ten-year period. On January 1, 2000, the Corporation adopted SFAS No. 133 which
changed the accounting treatment of the cap. See Note 19 to the Financial
Statements for a further discussion. The effective accounting rate of the Trust
Preferred securities including amortization of transactional costs and certain
changes in value of the cap was 3.67% and 3.97% at December 31, 2003 and 2002,
respectively. The Corporation received payments from the cap of $92,000 in 2001.
The Corporation did not receive any payments in 2002 or 2003.

Federal Funds Purchased and Securities Sold Under Agreements to Repurchase

During 2003, WSFS purchased federal funds as a short-term funding source.
At December 31, 2003, WSFS had purchased $50.0 million in federal funds at a
rate of 1.03%. At December 31, 2002, WSFS had no federal funds purchased.

During 2003, WSFS sold securities under agreements to repurchase as a
short-term funding source. At December 31, 2003, securities sold under
agreements to repurchase had fixed rates ranging from 1.07% to 1.13%. The
underlying securities are U.S. Government agency securities with a book value of
$99.7 million at December 31, 2003. Securities sold under agreements to
repurchase with the corresponding carrying and market values of the underlying
securities are due as follows:

Collateral
-----------------------------------------
Borrowing Carrying Market Accrued
Amount Rate Value Value Interest
--------- --------- ---------- ---------- ----------

(Dollars in Thousands)
2003
- ----

Up to 30 days.................... $ 98,381 1.11% $ 99,739 $ 98,867 $ 792
========= ========= ========= =========

2002
- ----

Up to 30 days.................... $ 25,925 1.34% $ 28,291 $ 28,291 $ 151
========= ========= ========= =========

Other Borrowed Funds

Included in other borrowed funds are collateralized borrowings of $39.4
million and $36.6 million at December 31, 2003 and 2002, respectively,
consisting of outstanding retail repurchase agreements, contractual arrangements
under which portions of certain securities are sold on an overnight basis to
retail customers under agreements to repurchase. Such borrowings were
collateralized by mortgaged-backed securities. The average rates on these
borrowings were .40% and 1.00% at December 31, 2003 and 2002, respectively.

12. STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------

Under Office of Thrift Supervision (OTS) capital regulations, savings
institutions such as WSFS, must maintain "tangible" capital equal to 1.5% of
adjusted total assets, "core" capital equal to 4.0% of adjusted total assets,
"Tier 1" capital equal to 4.0% of risk-weighted assets and "total" or
"risk-based" capital (a combination of core and "supplementary" capital) equal
to 8.0% of risk-weighted assets. Failure to meet minimum capital requirements
can initiate certain mandatory - and possibly additional discretionary - actions
by regulators that, if undertaken, could have a direct material effect on WSFS'
Financial Statements. At December 31, 2003 and 2002, WSFS was in compliance with
regulatory capital requirements and was deemed a "well-capitalized" institution.

The following table presents WSFS' consolidated capital position as of
December 31, 2003 and 2002:

To Be Well-Capitalized
Consolidated For Capital Under Prompt Corrective
Bank Capital Adequacy Purposes Action Provisions
------------------- -------------------- -----------------------
Amount Percent Amount Percent Amount Percent
------ ------- ------ ------- ------ -------
(Dollars in Thousands)

As of December 31, 2003:
Total Capital (to risk-weighted assets)...... $246,967 17.94% $110,103 8.00% $ 137,629 10.00%
Core Capital (to adjusted tangible assets)... 235,019 10.63 88,413 4.00 110,516 5.00
Tangible Capital (to tangible assets)........ 235,019 10.63 33,155 1.50 N/A N/A
Tier 1 Capital (to risk-weighted assets)..... 235,019 17.08 55,051 4.00 82,577 6.00

As of December 31, 2002:
Total Capital (to risk-weighted assets)..... $ 245,470 20.12% $ 97,583 8.00% $ 121,978 10.00%
Core Capital (to adjusted tangible assets).. 235,868 13.74 68,665 4.00 85,831 5.00
Tangible Capital (to tangible assets)....... 235,868 13.74 25,749 1.50 N/A N/A
Tier 1 Capital (to risk-weighted assets).... 235,868 19.34 48,791 4.00 73,187 6.00

The Corporation has a simple capital structure with one class of $ 0.01 par
common stock outstanding, each share having equal voting rights. In addition,
the Corporation has authorized 7,500,000 shares of $0.01 par preferred stock. No
preferred stock was outstanding at December 31, 2003 and 2002. The Trust
Preferred securities issued in 1998 qualify as Tier 1 capital. WSFS is
prohibited from paying any dividend or making any other capital distribution if,
after making the distribution, WSFS would be undercapitalized within the meaning
of the OTS Prompt Corrective Action regulations. Since 1996, the Board of
Directors has approved several stock repurchase programs to reacquire common
shares. As part of these programs, the Corporation acquired approximately
1,601,600 shares in 2003 and 490,000 shares in 2002. At December 31, 2003, the
Corporation held 7.8 million shares of its common stock in the treasury.

The Holding Company

Although the holding company does not have significant assets or engage in
significant operations separate from WSFS, the Corporation has agreed to cause
WSFS' required regulatory capital level to be maintained by infusing sufficient
additional capital as necessary. In November 1998, the Corporation issued $50
million of Trust Preferred securities at a variable interest rate of 250 basis
points over the three-month LIBOR rate. At December 31, 2003, the coupon rate on
these securities was 3.67% with a scheduled maturity of December 1, 2028. The
Corporation purchased an interest rate cap that effectively limits three-month
LIBOR to 6.00% until 2008. The effective rate of these securities, including
amortization of issuance costs and the cost of the interest rate cap was 3.93%
at December 31, 2003. The effective rate will vary, however, due to fluctuations
in interest rates. See Note 19 to the Financial Statements for further
discussion of the interest rate cap. These securities were issued by WSFS
Financial Corporation's unconsolidated affiliate, WSFS Capital Trust I. The
proceeds from the issue were invested in Junior Subordinated Debentures issued
by WSFS Financial Corporation. These securities are treated as borrowings with
the interest included in interest expense on the consolidated statement of
operations. See Notes 11 and 19 to the Financial Statements for additional
information. The proceeds were used primarily to extinguish higher rate debt and
for general corporate purposes.

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

13. ASSOCIATE (EMPLOYEE) BENEFIT PLANS
- --------------------------------------------------------------------------------

Associate 401(k) Savings Plan

Certain subsidiaries of the Corporation maintain a qualified plan in which
Associates may participate. Participants in the plan may elect to direct a
portion of their wages into investment accounts that include professionally
managed mutual and money market funds and the Corporation's common stock.
Generally, the principal and earnings thereon are tax deferred until withdrawn.
The Company matches a portion of the Associates' contributions and periodically
makes discretionary contributions based on Company performance into the plan for
the benefit of Associates. To that end, in each of December 2002 and January
2003, the Corporation set aside $343,000 of its gain on the sale of reverse
mortgages and WF as special contributions to the Associate 401(k) plan. The
Corporation's total cash contributions to the plan on behalf of its Associates
resulted in a cash expenditure of $1.3 million, $848,000 and $892,000 for 2003,
2002 and 2001, respectively. The plan purchased 56,000, 72,000 and 91,000 shares
of common stock of the Corporation during 2003, 2002 and 2001, respectively.

All Company contributions are made in the form of the Corporation's common
stock that Associates may transfer to various other investment vehicles without
any significant restrictions.

Postretirement Benefits

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

The Corporation accounts for its obligations under the provisions of SFAS
No. 106, Employers' Accounting for Postretirement Benefits Other Than Pensions.
SFAS 106 requires that the costs of these benefits be recognized over an
Associate's active working career. Disclosures are in accordance with SFAS No.
132, Employer's Disclosure About Pensions and Other Postretirement Benefits,
that standardized the applicable disclosure requirements.

On December 8, 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. The Corporation sponsors a retiree medical program and expects that this
legislation will eventually reduce its costs for this program.

At this point, the Corporation's investigation into its response to the
legislation is preliminary, as management awaits guidance from various
governmental and regulatory agencies concerning the requirements that must be
met to obtain these cost reductions as well as the manner in which such savings
should be measured. Based on this preliminary analysis, it appears that the
Corporation's retiree medical plan will need to be changed in order to qualify
for beneficial treatment under the Act.

Because of the uncertainties related to the Corporation's response to this
legislation and the appropriate accounting methodology for this event, the
Corporation has elected to defer financial recognition of this legislation until
the FASB issues final accounting guidance. When issued, that guidance could
require the Corporation to change previously reported information. This deferral
election is permitted under FASB Staff Position FAS 106-1.

The following disclosures are in accordance with SFAS No. 132 (as revised in
2003) and were measured at January 1, 2004:

2003 2002 2001
---- ---- ----
(Dollars in Thousands)

Change in benefit obligation:
Benefit obligation at beginning of year ............ $ 1,815 $ 1,430 $ 1,086
Service Cost ....................................... 74 59 37
Interest cost ...................................... 119 100 78
Actuarial loss ..................................... 169 298 364
Benefits paid ...................................... (94) (72) (135)
------- ------- -------
Benefit obligation at end of year ............ $ 2,083 $ 1,815 $ 1,430
======= ======= =======

Change in plan assets:
Fair value of plan assets at beginning of year...... $ -- $ -- $ --
Employer contributions ............................. 94 72 135
Benefits paid ...................................... (94) (72) (135)
------- ------- -------
Fair value of plan assets at end of year...... $ -- $ -- $ --
======= ======= =======

Funded status:
Funded status ...................................... $(2,083) $(1,815) $(1,430)
Unrecognized transition obligation ................. 552 613 675
Unrecognized net loss .............................. 563 407 109
------- ------- -------
Net amount recognized ........................ $ (968) $ (795) $ (646)
======= ======= =======

Components of net periodic benefit cost:
Service cost ....................................... $ 97 $ 74 $ 60
Interest cost ..................................... 122 119 100
Amortization of transition obligation .............. 61 61 61
Net loss recognition ............................... 21 13 --
------- ------- -------
Net periodic benefit cost .................... $ 301 $ 267 $ 221
======= ======= =======

Sensitivity analysis of healthcare cost trends:
Effect of +1% on service cost plus interest cost..... $ 2 $ 2 $ --
Effect of -1% on service cost plus interest cost..... -- (1) --
Effect of +1% on APBO................................ 15 9 5
Effect of -1% on APBO................................ (8) (3) (2)

Assumptions used to value the Accumulated
Postretirement Benefit Obligation (APBO):
Discount rate................................. 6.00% 6.75% 7.25%
Health care cost trend rate................... 5.50% 6.00% 6.50%

The Corporation assumes that the average annual rate of increase for
medical benefits will decrease by one-half of 1% per year and stabilizes at an
average increase of 5% per annum. The costs incurred for retirees' health care
are limited since certain current and all future retirees are restricted to an
annual medical premium cap indexed (since 1995) by the lesser of 4% or the
actual increase in medical premiums paid by the Corporation. For 2003, this
annual premium cap amounted to $1,972 per retiree. The Corporation estimates
that it will contribute approximately $114,000 to the plan during fiscal 2004.

14. TAXES ON INCOME
- --------------------------------------------------------------------------------

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

Year Ended December 31,
---------------------------------
2003 2002 2001
---- ---- ----
(In Thousands)

From current operations:
Current income taxes:
Federal taxes ................................. $ 11,212 $ 34,635 $ 5,017
State and local taxes ......................... 1,695 3,543 1,039
Deferred income taxes:
Federal taxes ................................. (1,943) 5,976 2,494
State and local taxes ......................... -- -- --
-------- -------- --------
Subtotal ................................ 10,964 44,154 8,550
-------- -------- --------
From discontinued operations:
Current income taxes:
Federal taxes ................................. 26,826 9,247 4,645
State and local taxes ......................... 2,210 778 174
Deferred income taxes:
Federal taxes ................................. (4,258) (2,494) (6,307)
State and local taxes ......................... (878) (547) 1,308
-------- -------- --------
Subtotal ................................ 23,900 6,984 (180)
-------- -------- --------

Current taxes from adoption of accounting principle:
Federal taxes on SFAS 142 adoption ............ -- 469 --
-------- -------- --------
Subtotal ................................ -- 469 --
-------- -------- --------
Total ................................... $ 34,864 $ 51,607 $ 8,370
======== ======== ========

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

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The following is a
summary of the significant components of the Corporation's deferred tax assets
and liabilities as of December 31, 2003 and 2002:

2003 2002
-------- ---------
(In Thousands)

Deferred tax liabilities:
Accelerated depreciation .............................. $(16,453) $(21,958)
Other ................................................. (22) (18)
Investments in non-wholly owned subsidiaries .......... -- (4,866)
Unrealized gains on available-for-sale securities...... -- (583)
-------- --------
Total deferred tax liabilities ............................. (16,475) (27,425)
-------- --------

Deferred tax assets:
Bad debt deductions ................................... 18,149 16,591
Tax credit carryforwards .............................. 150 150
Net operating loss carryforwards ...................... 5,020 5,778
Loan fees ............................................. 68 99
Discontinued operations ............................... 3,154 4,042
Reserves and other .................................... 1,469 3,201
Capital loss carryforwards ............................ -- 1,438
Unrealized losses on available-for-sale securities..... 1,046 --
-------- --------
Total deferred tax assets .................................. 29,056 31,299
-------- --------

Valuation allowance ........................................ (2,377) (2,377)
-------- --------
Net deferred tax asset ..................................... $ 10,204 $ 1,497
======== ========

Included in the table above is the effect of certain temporary differences
for which no deferred tax expense or benefit was recognized. Such items
consisted primarily of unrealized gains and losses on certain investments in
debt and equity securities accounted for under SFAS 115 and certain adjustments
in non-wholly owned subsidiaries. A decrease in 2002 for deferred tax
liabilities of investments in non-wholly owned subsidiaries for which no
deferred tax benefit was recognized was $434,000.

Based on the Corporation's history of prior earnings and its expectations
of the future, it is anticipated that operating income and the reversal pattern
of its temporary differences will, more likely than not, be sufficient to
realize a net deferred tax asset of $10.2 million at December 31, 2003. No
adjustments to the valuation allowance were made in 2003. Adjustments to the
valuation allowance were made in 2002 to reflect the lapsing of uncertainties
related to certain tax benefits that were deemed to be realizable as a result of
the closure of an IRS examination along with the sale of the reverse mortgage
portfolio. Further adjustments to the valuation allowance were made in 2002
concerning previously unrecorded tax benefits related to C1FN that were
realizable as a result of the sale of WF. This was offset by adjustments for
benefits previously recognized for state tax net operating losses that are not
realizable due to changes in state tax law enacted in 2002. The adjustments to
the valuation allowance in 2001 were based on the realization of certain state
net operating loss tax benefits relating to the discontinuance of the leasing
company.

At December 31, 2003, approximately $4.5 million in gross deferred tax
assets of the Corporation were related to net operating losses and tax credits
attributable to a former subsidiary. The Corporation has assessed a valuation
allowance of $2.0 million on a portion of these deferred tax assets due to
limitations imposed by the Internal Revenue Code.

Approximately $950,000 in gross deferred tax assets of the Corporation at
December 31, 2003 are related to state tax net operating losses. The Company has
assessed a valuation allowance of $419,000 on a portion of these deferred tax
assets due to such net operating losses expiring before being utilized.

In 2002, the Internal Revenue Service (IRS) concluded an examination of the
Corporation's federal income tax returns for all the years ended December 31,
2000. The income tax provision for the year ended December 31, 2002 was reduced
by $894,000 primarily as a result of the favorable resolution of tax authority
examinations and tax return settlements.

Net operating loss carryforwards (NOLs) of $27.7 million remain at December
31, 2003. The expiration dates and amounts of such carryforwards are listed
below:

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

2007................................... $ -- $11,180
2008................................... 4,879 --
2009................................... 6,755 --
2018................................... -- 4,853
------- -------
$11,634 $16,033
======= =======

The Corporation's ability to use its federal NOLs to offset future income
is subject to restrictions enacted in Section 382 of the Internal Revenue Code.
These restrictions limit a company's future use of NOLs if there is a
significant ownership change in a company's stock (an "Ownership Change"). The
utilization of approximately $11.6 million of federal net operating loss
carryforwards is limited to approximately $1.3 million each year as a result of
such Ownership Change in a former subsidiary's stock.

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

Year Ended December 31,
-----------------------
2003 2002 2001
---- ---- ----

Statutory federal income tax rate ...... 35.0% 35.0% 35.0%
State tax net of federal tax benefit ... 1.2 1.5 5.0
Interest income 50% excludable ......... (0.8) (0.5) (2.9)
Utilization of loss carryforwards and
valuation allowance adjustments....... -- (1.9) (3.3)
Other .................................. 0.2 (0.3) (0.9)
---- ---- ----
Effective tax rate ..................... 35.6% 33.8% 32.9%
==== ==== ====

15. STOCK OPTION PLANS
- --------------------------------------------------------------------------------

The Corporation has stock options outstanding under two stock option plans
(collectively, "Option Plans") for officers, directors and Associates of the
Corporation and its subsidiaries. The 1986 Stock Option Plan ("1986 Plan")
expired in 1996, on the tenth anniversary of its effective date. No future
awards may be granted under the 1986 Plan. The 1997 Stock Option Plan ("1997
Plan") was approved by shareholders to replace the expired 1986 Plan. The 1997
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
1997 Plan is 1,615,000. At December 31, 2003, there were 440,805 shares
available for future grants under the 1997 Plan.

The Option Plans provide for the granting of incentive stock options as
defined in Section 422 of the Internal Revenue Code as well as nonincentive
stock options (collectively, "Stock Options"), phantom stock awards and stock
appreciation rights. All awards are to be granted at not less than the market
price of the Corporation's common stock on the date of the grant and expire no
later than ten years from the grant date. All Stock Options granted after
October 1996 are exercisable one year from grant date and vest in 20% per annum
increments. Generally, all awards become immediately exercisable in the event of
a change in control, as defined within the Option Plans.

A summary of the status of the Corporation's Option Plans as of December
31, 2003, 2002 and 2001, and changes during the years then ended is presented
below:

2003 2002 2001
--------- ---------- ---------
Weighted- Weighted- Weighted-
Average Average Average
Shares Exercise Price Shares Exercise Price Shares Exercise Price
------ -------------- ------ -------------- ------ --------------

Stock Options:
Outstanding at beginning of year 1,080,060 $ 16.33 1,001,605 $ 14.42 826,345 $ 13.85
Granted 91,455 42.52 125,075 30.83 196,500 16.51
Exercised (220,441) 13.86 (36,070) 14.35 (9,360) 9.44
Canceled (12,810) 14.55 (10,550) 14.28 (11,880) 13.41
--------- --------- ---------
Outstanding at end of year 938,264 19.49 1,080,060 16.33 1,001,605 14.42

Exercisable at end of year 436,863 15.70 466,194 14.55 312,589 14.52

Weighted-average fair value
of awards granted $ 9.19 $ 8.73 $ 5.73

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 3.3% in 2003, 2.6% in 2002 and 4.4%
in 2001; expected option life of six years for all awards; and expected stock
price volatility of 17% in 2003, 26% in 2002 and 24% in 2001. For the purposes
of this option pricing model 1% was used as the expected dividend yield.

The Black-Scholes and other option-pricing models assume that options are
freely tradable and immediately vested. Since executives' options are not
transferable, have long 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.

SFAS No. 123, Accounting for Stock-based Compensation, encourages, but does
not require, the adoption of fair-value accounting for stock-based compensation
to Associates. The Company, as permitted, has elected not to adopt the fair
value accounting provisions of SFAS 123, and has instead continued to apply
Accounting Principles Board Opinion 25 and related interpretations in accounting
for the Stock Plans and to provide the required pro forma disclosures of SFAS
123. Had the grant-date fair-value provisions of SFAS 123 been adopted, the
Corporation would have recognized pretax compensation expense of $1.1 million in
2003, $1.2 million in 2002 and $1.3 million in 2001 related to its Option Plans.
As a result, pro forma income from continuing operations for the Corporation
would have been $20.5 million in 2003, $ 87.3 million in 2002 and $17.0 million
in 2001. Pro forma diluted earnings per share from continuing operations would
have been $2.49 in 2003, $9.26 in 2002 and $1.75 in 2001.

The effects on pro forma net income and diluted earnings per share of
applying the disclosure requirement of SFAS 123 in past years may not be
representative of the future pro forma effects on net income and EPS due to the
vesting provisions of the options and future awards that are available to be
granted.

The following table summarizes all stock options outstanding and
exercisable for Option Plans as of December 31, 2003, segmented by range of
exercise prices:

Outstanding Exercisable
-------------------------------------------- ----------------------
Weighted- Weighted- Weighted-
Average Average Average
Exercise Remaining Exercise
Number Price Contractual Life Number Price
------ --------- ---------------- ------ ---------
Stock Options:

$ 8.87-$13.30 214,720 $ 11.34 6.5 years 115,220 $ 11.37
$13.31-$17.74 504,574 15.99 6.5 years 275,788 15.89
$17.75-$22.17 25,100 18.81 3.7 years 25,100 18.81
$31.04-$35.48 111,415 33.27 9.0 years 20,755 33.40
$35.49-$39.91 410 37.77 9.5 years -- --
$39.92-$44.35 82,045 43.73 10.0 years -- --
------- -------

Total 938,264 $19.49 7.0 years 436,863 $15.70
======= =======

16. COMMITMENTS AND CONTINGENCIES
- --------------------------------------------------------------------------------

Lending Operations

At December 31, 2003, the Corporation had commitments to extend credit of
$271.6 million. Consumer lines of credit totaled $60.4 million of which $50.5
million was secured by real estate. Outstanding letters of credit were $7.4
million and outstanding commitments to make or acquire mortgage loans aggregated
$23.3 million. Approximately $9.0 million of which were at fixed rates ranging
from 4.63% to 7.25%, and approximately $14.3 million were at variable rates
ranging from 3.88% to 6.88%. All mortgage commitments are expected to have
closing dates within a six-month period.

Data Processing Operations

In September 2000, the Company entered into a five-year contract with
MCI/WorldCom and Intergraph Corporation to manage network operations. The
projected amount (in thousands) of future minimum payments contractually due is
as follows:

2004....................................... $1,280
2005....................................... 1,344

In October 2002, the Company entered into a 7 1/2-year contract with
Metavante Corporation for data processing and other related services. The
projected amount of future minimum payments contractually due (in thousands) is
as follows:

2004....................................... $2,060
2005....................................... 2,096
2006....................................... 2,132
2007....................................... 2,168
2008....................................... 2,204
2009....................................... 2,240
2010....................................... 569

Legal Proceedings

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

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

Financial Instruments With Off-Balance Sheet Risk

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

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

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

December 31,
-------------------
2003 2002
---- -----
(In Thousands)
Financial instruments with contract amounts which
represent potential credit risk:
Construction loan commitments .................... $ 40,123 $ 41,412
Commercial mortgage loan commitments ............. 29,691 6,518
Commercial loan commitments ...................... 110,752 42,373
Commercial standby letters of credit ............. 7,338 4,262
Residential mortgage loan commitments ............ 23,299 28,226
Consumer lines of credit ......................... 60,401 66,516

Commitments to extend credit are agreements to lend to a customer as long
as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. Since many of the commitments are expected to
expire without being completely drawn upon, the total commitment amounts do not
necessarily represent future cash requirements. Standby letters of credit are
conditional commitments issued to guarantee the performance of a customer to a
thirdparty. The Corporation evaluates each customer's creditworthiness and
obtains collateral based on management's credit evaluation of the counterparty.

During 2003, WSFS entered into certain agreements that provide for the
assumption of credit and market risk by WSFS for the benefit of a secured party
in a multi-party swap transaction. The agreements guarantee payment upon the
occurrence of an event of default by the other party to the transaction. WSFS'
obligation in the agreements is in conjunction with its participation in
underlying credits. WSFS' exposure under the agreements is defined as the amount
payable to a secured party by the other party, under the swap agreements, if the
swap agreements were terminated on such date by the secured party due to an
event of default by the other party. The terms of the performance guarantees a
range from three to eleven years. As of December 31, 2003, WSFS estimates the
maximum undiscounted exposure on these agreements is $923,000. The total
carrying value of the liabilities associated with these commitments were $3,500
at December 31, 2003. The underlying credits at December 31, 2003 were $19.8
million.

Indemnifications

Secondary Market Loan Sales. In the normal course of business, WSFS and its
subsidiaries sell loans in the secondary market. As is customary in such sales,
WSFS provides indemnification to the buyer under certain circumstances. This
indemnification may include the repurchase of loans by WSFS. In most cases
repurchases and losses are rare, and no provision is made for losses at the time
of sale.

Sale of C1FN/Everbank. In 2002, the C1FN/Everbank segment of WSFS was sold
by WSFS and other shareholders of C1FN. In connection with the sale, WSFS
provided an indemnification to the buyer for damages, if any, that may result
from C1FN shareholders bringing claims against the buyer as a result of the
Services Agreement and amendments (collectively, "Services Agreements") between
WSFS and C1FN over the life of those arrangements. This indemnification was
provided by WSFS purely to facilitate the timely sale of C1FN/Everbank, and is
not specifically related to a change in an underlying asset or liability. This
indemnification extends for two years from the sale date and is capped at
approximately $8.2 million. WSFS is not aware of any claims under this
indemnification, and given the facts and circumstances surrounding both the
Services Agreements and the sale of C1FN, management of WSFS believes the
likelihood of any payments under this separate indemnification is very remote.
As a result of these circumstances, and the general nature of the
indemnification, no provision for loss has been made in WSFS' financial
statements at December 31, 2003 or 2002.

Sale of Wilmington Finance, Inc. In January 2003, WSFS completed the sale
of its majority-owned subsidiary, Wilmington Finance, Inc. (WF). As is customary
in the sale of a privately held business, certain indemnifications were provided
by WSFS and the other shareholders of WF to the buyer.

Indemnifications provided by the sellers to cover damages incurred by, and
successfully claimed by the buyer, fall into four separate categories. These
include: (1) indemnification for sellers' ownership, which indemnification
extends indefinitely and is uncapped in amount; (2) indemnification for tax,
environmental, and benefit plan related issues, all of which indemnifications
extend for their respective statute of limitations and are uncapped in amount;
(3) breaches of sellers' representations and warranties and covenants in the
sale agreement (sellers' breaches indemnification), which extends for 18 months
from the sale date and are capped at the purchase price (approximately $123
million); and (4) protection to the buyer in the event of successful third-party
claims that result from the operation of the business prior to the sale date
(third-party claims indemnification). This third-party claims indemnification
includes the remaining time limits and dollar limits as follows: (i) from months
13

through 18 the dollar limit is $52 million; and (ii) from months 19 through 30
the dollar limit is $32 million. Buyer must incur $2 million of damages and
exhaust any related reserves provided in the closing balance sheet before an
initial dollar claim may be made against the sellers for any third-party claims
and sellers' breaches indemnifications. Dollar liability is uncapped for the
indemnifying party if damages are due to willful misconduct, fraud, or bad
faith.

Generally speaking, WSFS is proportionately liable for its ownership share
of WF (which is 65%, after the exercise of its warrant just prior to sale) of
the related successful claims under indemnification provisions, except that, in
order to facilitate the sale, WSFS agreed to assume a portion of the management
shareholders' indemnification obligations. This additional indemnification
totals as much as approximately $13 million and was assumed in exchange for a
payment of $225,000 from the management shareholders. Because such payment acts
like an insurance premium, WSFS has deferred this $225,000 and is accreting it
to income over the life of the 30-month arrangement.

WSFS is not aware of any claims to date made under the WF indemnification
provisions that could result in payment. Further, indemnifications provided in
the WF sale agreement are general in nature and not specifically related to the
changes in an underlying asset or liability. Any potential claims related to
indemnification on repurchased loans in the normal course of business have been
provided for in the closing balance sheet and are further subject to the $2
million indemnification threshold. Therefore, given these circumstances, any
amounts that may be paid under these indemnification provisions are neither
probable nor reasonably estimable, or have a probability-weighted net present
value of zero. As such, no additional provision for losses or deferral of sale
consideration, other than the amount above, are contemplated as of December 31,
2003.

There can be no assurances those payments, if any, under all
indemnifications provided by the Corporation will not be material or exceed any
reserves that the Company may have established for such contingencies.

17. FAIR VALUE OF FINANCIAL INSTRUMENTS
- --------------------------------------------------------------------------------

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

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

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

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

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

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

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

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

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

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

December 31,
------------------------------------------------
2003 2002
--------------------- ----------------------
Book Fair Book Fair
Value Value Value Value
---------- -------- -------- ---------
(In Thousands)

Financial assets:
Cash and other investments .................. $ 205,384 $ 205,384 $ 256,889 $ 256,889
Investment securities ....................... 116,295 117,116 21,777 22,850
Mortgage-backed securities .................. 530,552 530,554 148,238 149,562
Loans, net .................................. 1,304,877 1,322,748 1,079,386 1,100,478
Interest rate cap ........................... 1,072 1,072 1,012 1,012
Short-term forward foreign exchange contracts -- -- -- --

Financial liabilities:
Deposits .................................... 923,333 926,292 898,396 901,581
Borrowed funds .............................. 1,081,058 1,109,272 516,006 533,672

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

December 31,
----------------------
2003 2002
---- ----
(In Thousands)
Off-balance sheet instruments:
Commitments to extend credit................. $2,038 $1,185
Standby letters of credit.................... 73 43

18. PARENT COMPANY FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

Condensed Statement of Financial Condition
December 31,
----------------------
2003 2002
---- ----
(In Thousands)
Assets:
Cash ................................ $ 662 $ 4,395
Investment in subsidiaries .......... 233,473 224,270
Investment in interest rate cap ..... 1,072 1,012
Investment in Capital Trust I ....... 1,547 1,547
Other assets ........................ 1,473 1,703
--------- ---------
Total assets ............................. $ 238,227 $ 232,927
========= =========
Liabilities:
Borrowings .......................... $ 50,000 $ 50,000
Interest payable .................... 163 174
Other liabilities ................... 72 81
--------- ---------
Total liabilities ................... 50,235 50,255
--------- ---------
Stockholders' equity:
Common stock ........................ 151 149
Capital in excess of par value ...... 64,738 59,789
Comprehensive (loss) income ......... (1,748) 904
Retained earnings ................... 268,797 207,358
Treasury stock ...................... (143,946) (85,528)
--------- ---------
Total stockholders' equity .......... 187,992 182,672
--------- ---------
Total liabilities and stockholders' equity $ 238,227 $ 232,927
========= =========

Condensed Statement of Operations Year Ended December 31,
-----------------------------------
2003 2002 2001
---- ---- -----
(In Thousands)

Income:
Interest income ................................ $ 631 $ 353 $ 362
Noninterest income ............................. 118 144 187
--------- --------- ---------
749 497 549
--------- --------- ---------
Expenses:
Interest expense ............................... 2,023 2,667 3,421
Other operating expenses ....................... (401) (714) (1,111)
--------- --------- ---------
1,622 1,953 2,310
--------- --------- ---------

Loss before equity in undistributed income of WSFS... (873) (1,456) (1,761)
Equity in undistributed income of WSFS .............. 63,895 102,597 18,844
--------- --------- ---------
Net income .......................................... $ 63,022 $ 101,141 $ 17,083
========= ========= =========

Condensed Statement of Cash Flows

Year Ended December 31,
------------------------------------
2003 2002 2001
---- ---- ----
(In Thousands)

Operating activities:
Net income ............................................................ $ 63,022 $ 101,141 $ 17,083
Adjustments to reconcile net income to net cash
(used for) provided by operating activities:
Equity in undistributed income of WSFS ........................... (63,895) (102,597) (18,844)
Amortization ..................................................... 50 383 (93)
Decrease (increase) in other assets .............................. 160 (154) 88
Decrease in other liabilities .................................... (20) (17) (209)
--------- --------- ---------
Net cash used for operating activities ................................ (683) (1,244) (1,975)
--------- --------- ---------

Investing activities:
Decrease in investment in WSFS ................................... 52,000 16,000 22,500
--------- --------- ---------
Net cash provided by investing activities ............................. 52,000 16,000 22,500
--------- --------- ---------

Financing activities:
Issuance of common stock ......................................... 4,951 711 94
Dividends paid on common stock ................................... (1,583) (1,733) (1,542)
Treasury stock, net of reissuance ................................ (58,418) (15,208) (15,727)
--------- --------- ---------
Net cash used for financing activities ................................ (55,050) (16,230) (17,175)
--------- --------- ---------

(Decrease) increase in cash ........................................... (3,733) (1,474) 3,350
Cash at beginning of period ........................................... 4,395 5,869 2,519
--------- --------- ---------
Cash at end of period ................................................. $ 662 $ 4,395 $ 5,869
========= ========= =========

19. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING
- --------------------------------------------------------------------------------

The Corporation has an interest-rate cap with a notional amount of $50
million, which limits three-month LIBOR to 6% for the ten years ending December
1, 2008. The cap is being used to hedge the cash flows on $50 million in Trust
Preferred floating rate debt. The cap was recorded at the date of purchase in
other assets, at a cost of $2.4 million.

At July 1, 2002, the inception date of the redesignated hedging
relationship, the fair value of the interest rate cap was $1.6 million. This
amount was allocated to the respective multiple "caplets" on a fair value basis.
The change in each "caplet's" respective allocated fair value amount is
reclassified out of other comprehensive income and into interest expense when
each of the quarterly interest payments is made on the Trust Preferred debt. The
redesignation of the cash flow hedge has the effect of providing a more
systematic method for amortizing the cost of the cap against earnings.
Management is not aware of any events that would result in the reclassification
into earnings of gains and losses that are currently reported in accumulated
other comprehensive income except for those discussed above. The fair value of
the interest rate cap at December 31, 2003 was $1.1 million.

Everbank entered into short-term forward exchange contracts to provide an
effective fair value hedge on the foreign currency denominated deposits from
fluctuations that may occur in world currency markets. At December 31, 2001
Everbank had entered into such contracts with notional amounts of $60.4 million.
During the years ended December 31, 2002 and 2001, the expense associated with
these hedging contracts was almost entirely offset by changes in the fair value
of the world currency denominated deposits. There was no material impact on
noninterest income. On November 5, 2002, WSFS sold C1FN/Everbank and therefore
had no foreign exchange contracts at December 31, 2003.

While not meeting the definition of a derivative under SFAS 133, related to
its sale of reverse mortgages in November 2002, the Corporation received as
consideration a series of options to acquire up to 49.9% of the Class "O"
certificates issued in connection with mortgage-backed security SASCO RM-1 2002.
The aggregate exercise price of the series of options is $1.0 million. Because
the net present value of the estimated cash flows coming from WSFS' options on
the highly illiquid Class "O" certificates is significantly less than the $1.0
million exercise price, WSFS has valued the option at $0 at December 31, 2003.
The option will be evaluated quarterly for any changes in the estimated
valuation.

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

Carrying Value Carrying Value Carrying Value Carrying Value
at January 1, at December 31, at December 31, at December 31,
2001 Activity 2001 Activity 2002 Activity 2003
-------------- -------- --------------- -------- --------------- -------- ---------------
(In Thousands)

Interest rate cap:
Intrinsic Value
Dedsignated cap $ 193 $ 396 $ 589(1) $ (589) $ -- $ -- $ --
Time Value
Dedsignated cap 1,804 141(2) 1,945 (1,945) -- -- --
Redesignated cap -- -- -- 1,012 1,012 60 1,072
------- ------- ------- ------- ------- ------- -------
$ 1,997 $ 537 $ 2,534 $(1,522) $ 1,012 $ 60 $ 1,072
======= ======= ======= ======= ======= ======= =======

Foreign Exchange
Contracts
Time Value $ 1,385 $(1,780)(3) $ (395) $ 395 N/A N/A N/A
======== ======= ======= ======= ====== ======= =======

(1) Included in other comprehensive income, net of taxes.
(2) Included in interest expense on the hedged item (Trust Preferred
borrowings).
(3) Included in noninterest income and offset by corresponding changes in
foreign currency denominated deposits.

20. SEGMENT INFORMATION

Under the definition of SFAS No. 131, Disclosures About Segments of an
Enterprise and Related Information, the Corporation has two operating segments:
WSFS and Cash Connect, the ATM division of WSFS. WSFS provides financial
products through its retail banking offices to commercial and retail customers.
Cash Connect provides turnkey ATM services through strategic partnerships with
several of the largest networks, manufacturers and service providers in the ATM
industry.

Reportable segments are business units that are managed separately and
offer different services to distinct customer bases. The Corporation evaluates
performance based on pretax ordinary income relative to resources used, and
allocates resources based on these results. Segment information for the years
ended December 31, 2003, 2002 and 2001 are shown below.

For the year ended December 31, 2003 (in thousands):

WSFS CashConnect Total
---------- ----------- ----------

External customer revenues:
Interest income ........................... $ 89,299 $ -- $ 89,299
Noninterest income ........................ 18,386 7,780 26,166
---------- ----------- ----------
Total external customer revenues .............. 107,685 7,780 115,465
---------- ----------- ----------

Inter-segment revenues:
Interest income ........................... 1,110 -- 1,110
Noninterest income ........................ 662 747 1,409
---------- ----------- ----------
Total inter-segment revenues .................. 1,772 747 2,519
---------- ----------- ----------

Total revenue ................................. 109,457 8,527 117,984
---------- ----------- ----------

External customer expenses:
Interest expense .......................... 31,301 -- 31,301
Noninterest expenses ...................... 45,930 2,786 48,716
Other depreciation and amortization ....... 2,931 320 3,251
---------- ----------- ----------
Total external customer expenses .............. 80,162 3,106 83,268
---------- ----------- ----------

Inter-segment expense:
Interest expense .......................... -- 1,110 1,110
Noninterest expenses ...................... 747 662 1,409
---------- ----------- ----------
Total inter-segment expenses .................. 747 1,772 2,519
---------- ----------- ----------

Total expenses ................................ 80,909 4,878 85,787
---------- ----------- ----------

Income before taxes and extraordinary item..... $ 28,548 $ 3,649 32,197

Provision for income taxes .................... 10,964
Gain on sale of businesses held-for-sale ...... 41,789
----------
Consolidated net income ....................... $ 63,022
==========

Segment assets................................. $2,089,871 $ 117,206 $2,207,077

Capital expenditures........................... $ 2,496 $ 301 $ 2,797

For the year ended December 31, 2002 (in thousands):

WSFS CashConnect Total
---------- ----------- --------

External customer revenues:
Interest income ................................................... $ 94,703 $ -- $ 94,703
Noninterest income ................................................ 117,518 6,542 124,060
---------- -------- ----------
Total external customer revenues ...................................... 212,221 6,542 218,763
---------- -------- ----------

Inter-segment revenues:
Interest income ................................................... 1,200 -- 1,200
Non interest income ............................................... 644 726 1,370
---------- -------- ----------
Total inter-segment revenues .......................................... 1,844 726 2,570
---------- -------- ----------

Total revenue ......................................................... 214,065 7,268 221,333
---------- -------- ----------

External customer expenses:
Interest expense .................................................. 33,434 -- 33,434
Noninterest expenses .............................................. 47,450 2,823 50,273
Other depreciation and amortization ............................... 3,049 538 3,587
---------- -------- ----------
Total external customer expenses ...................................... 83,933 3,361 87,294
---------- -------- ----------

Inter-segment expense:
Interest expense .................................................. -- 1,200 1,200
Noninterest expenses .............................................. 726 644 1,370
---------- -------- ----------
Total inter-segment expenses .......................................... 726 1,844 2,570
---------- -------- ----------

Total expenses ........................................................ 84,659 5,205 89,864
---------- -------- ----------

Income before taxes and extraordinary item............................. $ 129,406 $ 2,063 131,469

Provision for income taxes ............................................ 44,154
Cumulative effect of change in accounting principle.................... 703
Loss on wind-down of discontinued operation............................ (2,766)
Income on discontinued operations of businesses held-for-sale.......... 14,965
Gain on sale of businesses held-for-sale .............................. 924
----------
Consolidated net income ............................................... $ 101,141
==========

Segment assets......................................................... $1,606,974 $ 98,026 $1,705,000

Capital expenditures................................................... $ 3,373 $ 164 $ 3,537

For the year ended December 31, 2001 (in thousands):

WSFS CashConnect Total
----------- ----------- -----------

External customer revenues:
Interest income ......................................... $ 101,338 $ -- $ 101,338
Noninterest income ...................................... 16,200 4,925 21,125
----------- ----------- -----------
Total external customer revenues ............................ 117,538 4,925 122,463
----------- ----------- -----------

Inter-segment revenues:
Interest income ......................................... 1,325 -- 1,325
Non interest income ..................................... 485 692 1,177
----------- ----------- -----------
Total inter-segment revenues ................................ 1,810 692 2,502
----------- ----------- -----------

Total revenue ............................................... 119,348 5,617 124,965
----------- ----------- -----------

External customer expenses:
Interest expense ........................................ 46,597 -- 46,597
Noninterest expenses .................................... 43,520 2,795 46,315
Other depreciation and amortization ..................... 2,624 615 3,239
----------- ----------- -----------
Total external customer expenses ............................ 92,741 3,410 96,151
----------- ----------- -----------

Inter-segment expense:
Interest expense ........................................ -- 1,325 1,325
Noninterest expenses .................................... 692 485 1,177
----------- ----------- -----------
Total inter-segment expenses ................................ 692 1,810 2,502
----------- ----------- -----------

Total expenses .............................................. 93,433 5,220 98,653
----------- ----------- -----------

Income before taxes and extraordinary item .................. $ 25,915 $ 397 26,312

Provision for income taxes .................................. 8,550
Loss on wind-down of discontinued operations ................ (2,026)
Income on discontinued operations of businesses held-for-sale 1,347
-----------
Consolidated net income ..................................... $ 17,083
===========

Segment assets .............................................. $ 1,866,383 $ 47,537 $ 1,913,920

Capital expenditures ........................................ $ 1,277 $ 257 $ 1,534

21. Subsequent Event
- --------------------------------------------------------------------------------

Effective January 2004, the Corporation, through its subsidiary, Montchanin
Capital Management, Inc., acquired a 60% interest in Cypress Capital Management
LLC (Cypress), a Delaware-based investment advisory firm serving a national
clientele of primarily high net worth individuals with assets under management
of approximately $350 million at acquisition. Balance sheet presentations,
operating results and accounting for minority interests will be included in
WSFS' Financial Statements beginning in January 2004. Under the terms of the
purchase agreement, the Corporation acquired its interest in Cypress for
approximately $1.2 million in cash and will purchase the remaining interest over
the next three years at a price based on the trailing financial performance of
Cypress.

QUARTERLY FINANCIAL SUMMARY (Unaudited)
- --------------------------------------------------------------------------------

Three Months Ended
-----------------------------------------------------------------------------------------------
12/31/03 9/30/03 6/30/03 3/31/03 12/31/02 9/30/02 6/30/02 3/31/02
--------- --------- --------- --------- --------- --------- --------- ---------
(In Thousands, Except Per Share Data)

Interest income ............ $ 23,745 $ 21,177 $ 22,470 $ 21,907 $ 20,051 $ 22,303 $ 24,913 $ 27,436
Interest expense ........... 7,964 7,778 7,867 7,692 8,053 8,239 8,662 8,480
--------- --------- --------- --------- --------- --------- --------- ---------
Net interest income ........ 15,781 13,399 14,603 14,215 11,998 14,064 16,251 18,956
Provision for loan losses .. 525 525 725 775 525 507 504 707
--------- --------- --------- --------- --------- --------- --------- ---------
Net interest income after
provision for loan losses 15,256 12,874 13,878 13,440 11,473 13,557 15,747 18,249

Noninterest income ......... 6,514 6,542 7,300 5,810 107,355 5,953 5,728 5,024
Noninterest expenses ....... 12,562 11,526 12,359 12,970 14,878 12,401 12,312 12,026
--------- --------- --------- --------- --------- --------- --------- ---------
Income from continuing
operations before
minority interest, taxes
and accounting change .... 9,208 7,890 8,819 6,280 103,950 7,109 9,163 11,247
--------- --------- --------- --------- --------- --------- --------- ---------
Income tax provision ....... 3,020 2,562 3,183 2,199 34,545 2,093 3,356 4,160
--------- --------- --------- --------- --------- --------- --------- ---------

Income from continuing
operations before
accounting change ........ 6,188 5,328 5,636 4,081 69,405 5,016 5,807 7,087
Change in accounting
principles, net ......... -- -- -- -- -- -- -- 703
--------- --------- --------- --------- --------- --------- --------- ---------
Income from continuing
operations .............. 6,188 5,328 5,636 4,081 69,405 5,016 5,807 7,790
Income from businesses
held-for-sale, net of tax -- -- -- -- 6,923 4,292 2,114 1,636
--------- --------- --------- --------- --------- --------- --------- ---------
Loss on wind-down of
discontinued operations . -- -- -- -- (2,203) (563) -- --
Gain on sale of businesses
held-for-sale ........... 400 -- 208 41,181 187 737 -- --
--------- --------- --------- --------- --------- --------- --------- ---------
Net income ................. $ 6,588 $ 5,328 $ 5,844 $ 45,262 $ 74,312 $ 9,482 $ 7,921 $ 9,426
========= ========= ========= ========= ========= ========= ========= =========

Earnings per share:
Basic:
Income from continuing
operations before
accounting change ....... $ 0.84 $ 0.70 $ 0.73 $ 0.49 $ 7.69 $ 0.55 $ 0.64 $ 0.77
Change in accounting
principles, net .......... -- -- -- -- -- -- -- 0.08
--------- --------- --------- --------- --------- --------- --------- ---------
Income from continuing
operations ............... 0.84 0.70 0.73 0.49 7.69 0.55 0.64 0.85
Income from businesses
held-for-sale, net of tax -- -- -- -- 0.77 0.47 0.23 0.18
Loss on wind-down of
discontinued operations -- -- -- -- (0.25) (0.06) -- --
Gain on sale of businesses
held-for-sale .......... 0.05 -- 0.02 4.92 0.02 0.08 -- --
--------- --------- --------- --------- --------- --------- --------- ---------
Net income................. $ 0.89 $ 0.70 $ 0.75 $ 5.41 $ 8.23 $ 1.04 $ 0.87 $ 1.03
========= ========= ========= ========= ========= ========= ========= =========
Diluted:

Income from continuing
operations before
accounting change ......... $ 0.79 $ 0.66 $ 0.69 $ 0.46 $ 7.34 $ 0.53 $ 0.62 $ 0.76
Change in accounting
principles, net ............ -- -- -- -- -- -- -- 0.08
--------- --------- --------- --------- --------- --------- --------- ---------
Income from continuing
operations ................. 0.79 0.66 0.69 0.46 7.34 0.53 0.62 0.84
Income from businesses
held-for-sale, net of tax.. -- -- -- -- 0.73 0.45 0.22 0.18
Loss on wind-down of
discontinued operations ... -- -- -- -- (0.23) (0.06) -- --
Gain on sale of businesses
held-for-sale ............. 0.05 -- 0.02 4.68 0.02 0.08 -- --
--------- --------- --------- --------- --------- --------- --------- ---------
Net income ................... $ 0.84 $ 0.66 $ 0.71 $ 5.14 $ 7.86 $ 1.00 $ 0.84 $ 1.02
========= ========= ========= ========= ========= ========= ========= =========

Corporate Information

Annual Meeting Stockholders or others seeking information
The annual meeting of stockholders regarding the Company may call or write:
will be held Thursday, April 22, 2004 WSFS Financial Corporation
at the Hotel du Pont in Wilmington, Delaware. Investor Relations
838 Market Street
Wilmington, Delaware 19801
302-571-7184
Transfer Agent
American Stock Transfer & Trust Company
6201 15th Avenue Website
Brooklyn, NY 11219 www.wsfsbank.com

Independent Auditors Operating Subsidiaries
KPMG LLP WSFS Credit Corporation
1601 Market Street 30 Blue Hen Drive
Philadelphia, PA 19013-7212 Newark, DE 19713
302-283-4500
Mark A. Turner, President
Stock Listing
The Nasdaq Stock Market
Symbol: WSFS WSFS Investment Group, Inc.
7450 Lancaster Pike
Hockessin, DE 19707
Market Makers 302-235-7610
Paul G. Toub, President
Boenning Scattergood, Inc.
BrokerageAmerica, LLC WSFS Reit, Inc.
Citigroup Global Markets, Inc. 227 East Main Street
Crown Financial Group, Inc. Elkton, MD 21921
F.J. Morrissey & Co., Inc. 410-398-7041
FIG Partners, LLC Marvin N. Schoenhals, President
Ferris Baker Watts, Inc.
Friedman Billings Ramsey & Co. Montchanin Capital Management, Inc.
Goldman Sachs & Company 838 Market Street
Keefe, Bruyette & Woods, Inc. Wilmington, DE 19801
Knight Equity Markets, L.P. 302-571-7183
Merrill Lynch, Pierce, Fenner & Smith, Inc. Charles A. Burton, President
Moors & Cabot, Inc.
Morgan Stanley & Co., Inc.
Prudential Equity Group, Inc.
Ryan Beck & Co., LLC
Sandler O'Neill & Partners, L.P.
Schwab Capital Markets L.P.
Susquehanna Capital Group