UNITED STATES
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, 2002
-----------------------------------------------------
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
For the transition period from to
---------------- ----------------
Commission file number 0-16668
--------
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, 2002,
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, 2003 /s/ Deborah A. Powell
---------------------------------
Deborah A. Powell
Plan Administrator
WSFS FINANCIAL CORPORATION
401(k) savings and retirement plan
Financial Statements and Supplemental Schedules
December 31, 2002 and 2001
(With Independent Auditors' Report Thereon)
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Table of Contents
Page
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits, December 31, 2002 and 2001 2
Statements of Changes in Net Assets Available for Benefits, Years ended
December 31, 2002, 2001, and 2000 3
Notes to Financial Statements 4
Schedules:
1 Schedule H, Line 4i - Schedule of Assets (Held at End of Year),
December 31, 2002 9
2 Schedule H, Line 4j - Schedule of Reportable Transactions, Year ended
December 31, 2002 10
Independent Auditors' Report
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 401(k) Savings and Retirement Plan of WSFS Financial Corporation (the
Plan) as of December 31, 2002 and 2001, 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, 2002. 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 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 financial statements referred to above present fairly, in
all material respects, the Plan's net assets available for benefits as of
December 31, 2002 and 2001, and changes in net assets available for each of the
years in the three-year period ended December 31, 2002, 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 6, 2003
WSFS FInancial Corporation
401(k) savings and retirement plan
Statements of Net Assets Available for Benefits
December 31, 2002 and 2001
2002 2001
----------- -----------
Assets:
Investments (note 3) $21,874,988 16,698,779
Receivables:
Employer contributions 84,681 82,751
Loans to participants 605,492 539,257
----------- -----------
Total receivables 690,173 622,008
----------- -----------
Net assets available for plan benefits $22,565,161 17,320,787
=========== ===========
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, 2002, 2001, and 2000
2002 2001 2000
----------- ----------- -----------
Additions:
Investment income:
Interest and dividends $ 269,338 254,398 290,107
Net appreciation (depreciation) in
fair value of investments 4,999,913 1,791,453 (253,407)
----------- ----------- -----------
5,269,251 2,045,851 36,700
Contributions:
Employer 972,201 1,004,158 884,609
Participants 920,278 847,225 1,477,399
----------- ----------- -----------
1,892,479 1,851,383 2,362,008
----------- ----------- -----------
Total additions 7,161,730 3,897,234 2,398,708
----------- ----------- -----------
Deductions:
Benefits paid 1,917,356 1,715,965 1,943,908
----------- ----------- -----------
Net increase 5,244,374 2,181,269 454,800
Net assets available for plan benefits:
Beginning of year 17,320,787 15,139,518 14,684,718
----------- ----------- -----------
End of year $22,565,161 17,320,787 15,139,518
=========== =========== ===========
See accompanying notes to financial statements.
3
WSFS FInancial Corporation
401(k) savings and retirement plan
Notes to Financial Statements
December 31, 2002, 2001, and 2000
(1) Description of Plan
The purpose of the WSFS Financial Corporation 401(k) Savings and
Retirement Plan (the Plan) is to encourage and assist employees 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 employees 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. Employees 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 15% of their total
compensation not to exceed $11,000 in 2002. 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 pre-tax 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 pre-tax 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 employee's contribution up to 6%.
This matching contribution program was amended effective July 1,
1997, such that the Employers match 100% of the employee's
contribution up to 5% of total compensation. The matching
contribution is in the form of WSFS Financial Corporation common
stock.
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 in the event the Employers equaled or exceeded
budgeted targets for the entire year.
4 (Continued)
WSFS FInancial Corporation
401(k) savings and retirement plan
Notes to Financial Statements
December 31, 2002, 2001, and 2000
For the years ended December 31, 2002, 2001, and 2000, no
Supplemental Contribution was made.
Excess Flexible Benefit Funds - Under the Employers' BeneFlex
programs, employees are provided a fixed amount of funds by the
Employers that can be used to purchase optional employee benefits.
In lieu of purchasing such benefits, employees may direct all or
part of these funds to be contributed to the Plan on their behalf.
(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 employee 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 for the years ended December 31, 2002 and 2001 were
$66,623 and $40,931, respectively. Forfeitures used to offset
employer contributions for the years ended December 31, 2002, 2001
and 2000 amounted to $111,996, $47,996 and $36,685, respectively.
Employer contributions were vested immediately for employees 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 employees who enrolled in the Plan after June 30,
1993.
Vested percentages
Year of service Vested percentages as amended prior to amendment
--------------- ----------------------------- ------------------
0-1 20% 0%
2 40% 0%
3 60% 20%
4 80% 40%
5 100% 60%
6 100% 80%
7 100% 100%
(e) Withdrawals
Participants' accounts are segregated between pre-January 1, 1988
and post-January 1, 1988 contributions. Employee contributions
made subsequent to January 1, 1988 are made on a pre-tax 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
5 (Continued)
WSFS FInancial Corporation
401(k) savings and retirement plan
Notes to Financial Statements
December 31, 2002, 2001, and 2000
payments. Participant interest payments on loans, which are
recorded as earnings, are made on a post-tax basis.
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 Employee
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 their
dependents
4. Tuition for the next semester or quarter of postsecondary
education of the employee, spouse, or dependents.
Hardship withdrawals are subject to applicable withholding taxes.
(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 Plan participants.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying financial statements are prepared on the accrual
basis of accounting. Revenues and expenses are recognized when
earned or incurred in accordance with accounting principles
generally accepted in the United States of America.
(b) 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, 2002, 2001, and 2000
(c) 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.
(d) 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.
(3) Investments
The following represents investments, at fair value, that are 5% or more
of the Plan's net assets.
December 31,
2002 2001
------------- ----------
Schwab Institutional Advantage Money Fund** $ 1,846,642 1,178,199
Strong Government Securities Fund 1,364,349 991,408
Dreyfus Appreciation Fund 1,161,767 1,365,147
WSFS Financial Corporation common stock** 13,328,848 7,937,048
Weitz Value Fund 1,116,387 1,339,497
Vanguard Index 500 Fund -- 1,080,948
Janus Worldwide Fund -- 1,189,795
Dreyfus Small Company Value Fund -- 1,419,357
*Nonparticipant directed.
**Party-in-interest.
During 2002, 2001, and 2000, 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 $4,999,913, $1,791,453, and
$(253,407), respectively, as follows:
2002 2001 2000
----------- ----------- -----------
Mutual funds $(1,761,944) (226,028) (360,025)
Common stock 6,761,857 2,017,481 106,618
----------- ----------- -----------
Total investments $ 4,999,913 1,791,453 (253,407)
=========== =========== ===========
7 (Continued)
WSFS FInancial Corporation
401(k) savings and retirement plan
Notes to Financial Statements
December 31, 2002, 2001, and 2000
(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,
2002 2001
----------- -----------
Net assets:
WSFS Financial Corporation Common Stock and
employer contribution receivable $13,413,529 8,019,799
Years ended December 31,
2002 2001 2000
----------- ----------- -----------
Changes in net assets:
Contributions $ 1,010,890 1,002,953 948,726
Interest and dividends 89,473 76,912 71,490
Net appreciation (depreciation) 6,761,857 2,017,481 106,618
Benefits paid to participants (1,076,130) (753,296) (416,410)
Transfers to participant-directed investments (1,392,359) (153,898) (535,289)
----------- ----------- -----------
$ 5,393,731 2,190,152 175,135
=========== =========== ===========
(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 Employers have requested an updated determination letter
from the IRS, but have not yet received it for the amended and restated
Plan. 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, 2002. Therefore, no provision for income taxes is included
in the Plan's financial statements.
(6) Description of Priorities Upon Plan Termination
Although WSFS Financial Corporation has not expressed any intention to
terminate the Plan, it may do so at any time. In the event of a
termination, each participant will receive a total distribution equal to
their vested share of each of the funds. All unvested Employer
contributions revert to the Employers in the event of a plan termination.
8 (Continued)
WSFS FInancial Corporation
401(k) savings and retirement plan
Notes to Financial Statements
December 31, 2002, 2001, and 2000
(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 recordkeeping services were paid by the
Employers for the years ended December 31, 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, 2002
Shares Fair value
------ ----------
* Schwab Institutional Advantage Money Fund 1,846,642 $ 1,846,642
Strong Government Securities Fund 122,473 1,364,349
Dreyfus Appreciation Fund 37,236 1,161,767
Dreyfus Small Company Value Fund 70,518 861,728
* WSFS Financial Corporation common stock 404,069 13,328,848
Vanguard Index 500 Fund 11,235 911,741
Janus Worldwide Fund 26,762 859,859
Artisan Midcap Fund 10,590 207,139
Weitz Value Fund 39,985 1,116,387
Pax World Fund 3,496 62,306
White Oak Growth Fund 2,478 57,154
Artisan International Fund 6,563 97,068
-----------
Total investments $21,874,988
===========
* Loans to participants (interest rate of 10%) $ 605,492
===========
*Party-in-interest.
See accompanying independent auditors' report.
10
Schedule 2
WSFS FINANCIAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
Schedule H, Line 4j - Schedule of Reportable Transactions
Year ended December 31, 2002
(single transaction or series of transactions in one issue
aggregating 5% or more of the market value of plan assets at January 1, 2002)
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 $1,646,963 1,841,699 2,998,830 1,157,131 80 185
*Party-in-interest.
See accompanying independent auditors' report.
11