SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
{X} ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2003
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OR
{ } TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-16668
A. Full title of the plan and the address of the plan:
WSFS Financial Corporation
401(k) Savings and Retirement Plan
838 Market Street
Wilmington, DE 19899
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
WSFS Financial Corporation
838 Market Street
Wilmington, DE 19899
REQUIRED INFORMATION
The audited financial statements required are incorporated herein by reference
from the Financial Statements and Supplemental Information, December 31, 2003,
attached as Exhibit 1.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
WSFS Financial Corporation
401(k) Savings and Retirement Plan
DATE: June 24, 2004 /s/ DEBORAH A. POWELL
------------------------------------
Deborah A. Powell
Plan Administrator
Exhibit 1
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Financial Statements and Supplemental Schedules
December 31, 2003 and 2002
(With Report of Independent Registered Accounting Firm Thereon)
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Table of Contents
Page
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Report of Independent Registered Public Accounting Firm 1
Statements of Net Assets Available for Benefits, December 31, 2003 and 2002 2
Statements of Changes in Net Assets Available for Benefits, Years ended
December 31, 2003, 2002, and 2001 3
Notes to Financial Statements 4
Schedules:
1 Schedule H, Line 4i - Schedule of Assets (Held at End of Year),
December 31, 2003 9
2 Schedule H, Line 4j - Schedule of Reportable Transactions, Year ended
December 31, 2003 10
Report of Independent Registered Public Accounting Firm
The Participants and Administrator
WSFS Financial Corporation
401(k) Savings and Retirement Plan:
We have audited the accompanying statements of net assets available for benefits
of the WSFS Financial Corporation 401(k) Savings and Retirement Plan (the Plan)
as of December 31, 2003 and 2002, and the related statements of changes in net
assets available for benefits for each of the years in the three-year period
ended December 31, 2003. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the Plan's net assets available for benefits as of
December 31, 2003 and 2002, and changes in net assets available 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.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information included in
the schedules of assets (held at end of year) and reportable transactions is
presented for purposes of additional analysis and is not a required part of the
basic financial statements, but is supplemental information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure Under
the Employee Retirement Income Security Act of 1974. The supplemental schedules
are the responsibility of the Plan's management. The supplemental information
has been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/KPMG LLP
June 24, 2004
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Statements of Net Assets Available for Benefits
December 31, 2003 and 2002
2003 2002
----------- -----------
Assets:
Investments (note 3) $29,436,316 21,874,988
----------- -----------
Receivables:
Employer contribution 39,705 84,681
Loans to participants 651,022 605,492
----------- -----------
Total receivables 690,727 690,173
----------- -----------
Net assets available for benefits $30,127,043 22,565,161
=========== ===========
See accompanying notes to financial statements.
2
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 2003, 2002, and 2001
2003 2002 2001
----------- ----------- -----------
Additions:
Investment income:
Interest and dividends $ 292,143 269,339 254,398
Net appreciation in fair value of investments 6,703,352 4,999,913 1,791,453
----------- ----------- -----------
6,995,495 5,269,252 2,045,851
----------- ----------- -----------
Contributions:
Employer 1,289,723 972,200 1,004,158
Participants 1,014,000 920,278 847,225
----------- ----------- -----------
2,303,723 1,892,478 1,851,383
----------- ----------- -----------
Total additions 9,299,218 7,161,730 3,897,234
Deductions:
Benefits paid 1,737,336 1,917,356 1,715,965
----------- ----------- -----------
Net increase 7,561,882 5,244,374 2,181,269
Net assets available for benefits:
Beginning of year 22,565,161 17,320,787 15,139,518
----------- ----------- -----------
End of year $30,127,043 22,565,161 17,320,787
=========== =========== ===========
See accompanying notes to financial statements.
3
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements
December 31, 2003, 2002, and 2001
(1) Description of Plan
The purpose of the WSFS Financial Corporation 401(k) Savings and
Retirement Plan (the Plan) is to encourage and assist associates in
following a systematic savings program suited to their individual
long-term financial objectives. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974 (ERISA). The
following description of the Plan provides only general information.
Participants should refer to the Plan Agreement or the Summary Plan
Description for a more complete description of the Plan's provisions.
(a) Eligibility
All full- and part-time associates of WSFS Financial Corporation
or its subsidiaries (the Employers) who were employed on or before
June 30, 1993 were eligible to participate on the first of the
month following 90 days of service. Associates hired after June
30, 1993 are eligible to participate following the completion of
one year of continuous employment, 1,000 hours of service, and
attainment of age 21.
(b) Contributions
Participants may authorize the Employers to make payroll
deductions under the Plan from 1% to 70% of their total
compensation, not to exceed $12,000 in 2003. The percentage
contribution may be increased, decreased, revoked, or resumed at
any time during the year. Such changes are effective as of the
next pay period. Contributions made by participants are credited
to their individual accounts and are made on a pretax basis
assuming applicable regulations set forth in the Internal Revenue
Code are satisfied.
All contributions made by the Employers on participants' behalf
are also on a pretax basis. The Employers' contributions to the
Plan are made monthly and comprise the following:
Company Matching Contribution - An employer matching contribution
program was implemented effective July 1, 1993, under which the
Employers matched 25% of the associate's contribution up to 6%.
This matching contribution program was amended effective July 1,
1997, such that the Employers match 100% of the associate's
contribution up to 5% of total compensation. The matching
contribution is in the form of WSFS Financial Corporation common
stock or cash.
Employer Base Profit Sharing Contribution - Effective July 1,
1993, the Employers implemented a profit sharing program. The
program was amended and effective as of July 1, 1997. The
contribution for each eligible participant is calculated as a
fixed percentage of the participant's total compensation. Prior to
that, the contribution was calculated on a pro rata basis of the
participant's compensation in relation to the total compensation
of all participants. The profit sharing contribution is in the
form of WSFS Financial Corporation common stock and consists of
two parts:
o Base Contribution - Awarded quarterly based on the fixed
percentage established at the beginning of the year.
o Supplemental Contribution - Awarded at year-end or shortly
thereafter at the discretion of the Employers' Board of
Directors based on the Employers' performance.
4 (Continued)
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements
December 31, 2003, 2002, and 2001
For the years ended December 31, 2003, 2002, and 2001, WSFS made
Supplemental Contributions of $343,000, $343,000, and $0,
respectively.
(c) Participants' Accounts
Participants' accounts are credited for their contributions and
the Employers' contribution made on their behalf. Participants'
accounts are also credited with an allocation of the earnings or
losses of the plan fund in which each participant's account is
invested based upon the change in unit share price of all funds
and for the money market fund upon the ratio of the account
balance to the total of all participants' account balances in that
fund.
(d) Vesting
All associate contributions are 100% vested and are not subject to
forfeiture for any reason. Employer contributions that are
forfeited by participants reduce future Employer contributions.
Forfeitures were $67,028 and $66,523 for the years ended December
31, 2003 and 2002, respectively. Forfeitures used to offset
employer contributions amounted to $93,700, $111,996, and $47,996
for the years ended December 31, 2003, 2002, and 2001,
respectively. Employer contributions were vested immediately for
associates who enrolled in the Plan prior to June 30, 1993. The
Plan's vesting schedule was amended as of July 1, 1997. The new
vesting schedule applies to all participants who enrolled in the
Plan after June 30, 1993. The table below shows the vesting
schedule (old and amended) for associates who enrolled in the Plan
after June 30, 1993.
Years of service Vested percentages as amended
---------------- -----------------------------
0-1 20%
2 40%
3 60%
4 80%
5 100%
(e) Withdrawals
Participants' accounts are segregated between pre-January 1, 1988
and post-January 1, 1988 contributions. Associate contributions
made subsequent to January 1, 1988 are made on a pretax basis, and
withdrawals are subject to tax and, in certain instances, penalty.
Effective January 1, 1993, the Plan is required to withhold
federal income taxes at a flat rate of 20% on the taxable portion
of withdrawals that are not directly rolled over into an
Individual Retirement Account (IRA) or another qualified
retirement plan. This withholding tax does not apply to minimum
distributions and annuity payments. Participant interest payments
on loans, which are recorded as earnings, are made on a post-tax
basis.
5 (Continued)
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements
December 31, 2003, 2002, and 2001
Under the Plan, participants may request hardship withdrawals of
vested contributions (but not income earned on contributions after
December 31, 1988), which must be approved by the Associate
Benefits Committee and can only be made for one of the following
reasons:
1. Purchase of primary residence of the participant
2. Preservation of primary residence
3. Certain medical expenses of a participant or the
participant's dependents
4. Tuition for the next semester or quarter of postsecondary
education of the participant, spouse, or dependents.
(f) Loan Provision
Under the Plan, participants may obtain loans up to 50% of their
vested account balance with a minimum loan of $1,000 and a maximum
loan of $50,000. The interest rate on loans is 10%. Interest paid
on the loan is added to the participant's account balance. Loans
are secured by the participant's interest in the Plan.
(g) Administrative Expenses
Expenses relating to the administration of the Plan are paid by
WSFS Financial Corporation. Costs incurred by the Plan relating to
voluntary removal of funds in the form of loan proceeds or
withdrawals are borne by the participants.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying financial statements are prepared on the accrual
basis of accounting.
(b) Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets, liabilities, and changes therein, and disclosure of
contingent assets and liabilities. Actual results could differ
from those estimates.
(c) Investments in Securities
Investments in short-term securities are valued at cost that
approximates market. Investments in mutual funds are valued at the
net asset value of the fund, which is based on the quoted year-end
market value of securities held by the fund. WSFS Financial
Corporation common stock is valued at the year-end market price.
6 (Continued)
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements
December 31, 2003, 2002, and 2001
(d) Revenue Recognition and Method of Accounting
The Plan records all transactions on an accrual basis. Investment
income is recorded as earned. The Plan calculates realized gains
and losses and unrealized appreciation and depreciation as the
difference between market value and cost; IRS Form 5500 calculates
realized gains and losses and unrealized appreciation and
depreciation as the difference between market value at time of
sale and market value at the prior period year-end.
(e) Fund Accounting for Income
The mutual funds invest interest and dividend income within the
fund to purchase more fund assets rather than distribute the
income among investors in the fund.
(f) Payment of Benefits
Benefits are recorded when paid.
(3) Investments
The following represents investments, at fair value, that are 5% or more
of the Plan's net assets.
December 31
-------------------------
2003 2002
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Schwab Institutional Advantage Money Fund ** $ 2,098,327 1,846,642
Strong Government Securities Fund 1,650,385 1,364,349
Dreyfus Appreciation Fund *** 1,161,767
WSFS Financial Corporation common stock** 16,148,915* 13,328,848*
Weitz Value Fund 1,619,450 1,116,387
Vanguard Index 500 Fund 1,579,476 ***
Dreyfus Small Company Value Fund 1,901,119 ***
* Nonparticipant directed
** Party-in-interest.
*** Investment not 5% or more of Plan's net assets for this year.
During 2003, 2002, and 2001, the Plan's investments (including gains and
losses on investments bought and sold, as well as held during the year)
appreciated (depreciated) in value by $6,703,352, $4,999,913, and
$1,791,453, respectively, as follows:
2003 2002 2001
---------- ---------- ----------
Mutual funds $2,111,211 (1,761,944) (226,028)
Common stock 4,592,141 6,761,857 2,017,481
---------- ---------- ----------
Total appreciation $6,703,352 4,999,913 1,791,453
========== ========== ==========
7 (Continued)
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements
December 31, 2003, 2002, and 2001
(4) Nonparticipant-Directed Investments
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed investments
is as follows:
December 31
------------------------
2003 2002
----------- ----------
Net assets:
WSFS Financial Corporation common stock and
employer contribution receivable $16,196,493 13,413,529
=========== ==========
Years ended December 31
-----------------------------------------
2003 2002 2001
----------- ----------- -----------
Changes in net assets:
Contributions $ 1,455,133 1,010,890 1,002,953
Interest and dividends 84,581 89,473 76,912
Net appreciation 4,592,141 6,761,857 2,017,481
Benefits paid to participants (651,187) (1,076,130) (753,296)
Transfers to participant-directed investments (2,697,704) (1,392,359) (153,898)
----------- ----------- -----------
$ 2,782,964 5,393,731 2,190,152
=========== =========== ===========
(5) Income Tax Status
The Plan has received a determination letter from the Internal Revenue
Service (IRS) dated January 26, 1987, stating that the Plan is qualified
under Section 401(a) of the Internal Revenue Code and, therefore, the
related trust is exempt from taxation. Once qualified, the Plan is
required to operate in conformity with the Internal Revenue Code to
maintain its qualification.
On February 28, 2002, the Plan was amended and restated effective January
1, 1997. The Plan received a favorable determination letter from the IRS
dated February 25, 2003. The Employers believe that the Plan currently is
designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code and that, therefore, the Plan
continues to qualify under Section 401(a) and the related trust continues
to be tax-exempt as of December 31, 2003. Therefore, no provision for
income taxes is included in the Plan's financial statements.
(6) Plan Termination
Although WSFS Financial Corporation has not expressed any intention to
terminate the Plan, it may do so at any time. Upon the complete
discontinuation of contributions to the Plan, or the complete or partial
termination of the Plan, the rights of all affected associates under the
Plan shall become fully vested and nonforfeitable.
8 (Continued)
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Notes to Financial Statements
December 31, 2003, 2002, and 2001
(7) Related-Party Transactions
Certain Plan investments consist of shares of mutual funds sponsored by
Charles Schwab Trust Company (the Custodian) and common stock of the
Employers. Investment transactions with the Custodian and the Employers
qualify as party-in-interest transactions. Fees incurred for investment
management, custodial, and record-keeping services were paid by the
Employers for the years ended December 31, 2003, 2002, and 2001.
9
Schedule 1
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2003
Shares Fair value
----------- -----------
* Schwab Institutional Advantage Money Fund 2,093,757 $ 2,098,327
Strong Government Securities Fund 151,690 1,650,385
Dreyfus Appreciation Fund 39,905 1,482,061
Dreyfus Small Company Value Fund 83,382 1,901,119
* WSFS Financial Corporation common stock 360,065 16,148,915
Vanguard Index 500 Fund 15,351 1,579,476
Janus Worldwide Fund 26,558 1,053,264
Artisan Midcap Fund 17,484 450,735
Weitz Value Fund 45,173 1,619,450
Pax World Fund 11,480 237,415
White Oak Growth Fund 9,474 333,388
Artisan International Fund 18,146 343,134
Clipper Fund 2,355 207,166
Royce Total Return Fund 18,547 198,266
Value Line Emerging Opportunities Fund 5,905 133,215
-----------
Total investments $29,436,316
===========
* Loans to participants (interest rate of 10%) $ 651,022
===========
* Party-in-interest.
See accompanying report of independent registered accounting firm.
10
Schedule 2
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Schedule H, Line 4j - Schedule of Reportable Transactions
Year ended December 31, 2003
(single transaction or series of transaction in one issue aggregating 5% or more
of the market value of plan assets at January 1, 2003)
Sales Number of Number of
Name of party and --------------------------- purchases and sales and
description of assets Purchases Cost Proceeds Gain issuances redemptions
----------------------------- ------------------ ----------- ------------- ----------- -------------- --------------
Series of transactions:
*WSFS Financial Corporation
common stock $ 2,059,650 1,726,348 3,840,803 2,114,455 93 185
* Party-in-interest.
See accompanying report of independent registered accounting firm.
11