WSFS FINANCIAL CORPORATION. Moderator: Stephen A. Fowle October 29, :00 p.m. CT

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1 Page 1 WSFS FINANCIAL CORPORATION October 29, :00 p.m. CT Good day, ladies and gentlemen, welcome to your WSFS Financial Corporation s Third Quarter 2010 Earnings Release conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. If anyone should require assistance during the program, please press star then zero on your touchtone telephone. And as a reminder, this is being recorded. I would now like to introduce Mr. Stephen Fowle, Chief Financial Officer. Please begin. Stephen Fowle: Thank you, Mary. Today I also have participating on the call, Mark Turner, our President and CEO, Rick Wright, Head of Retail Lending, Rodger Levenson, Head of Commercial. And before we start, I am going to read our Safe Harbor statement. The following discussion may contain statements which are not historical facts and are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of Such forward-looking statements, which are based on various assumptions, some of which may be beyond the company's control, are subject to risks and uncertainties and other factors which could cause actual results to differ materially from those currently anticipated.

2 Page 2 Such risks and uncertainties include, but are not limited to, those related to the economic environment, particularly in the market areas in which the company operates; the volatility of the financial and securities markets, including changes with respect to the market value of our financial assets; changes in government laws and regulations affecting financial institutions, including potential expenses associated therewith. Changes resulting from our participation in the CPP including additional conditions that may be imposed in the future on participating companies; costs and expense that may be incurred pending future acquisitions including risks and uncertainties related to the integration of any such acquisitions; and the costs associated with resolving any problem loans and other risks and uncertainties discussed in the documents filed by WSFS Financial Corporation with the Securities and Exchange Commission from time to time. The Corporation does not undertake to update any forward-looking statements whether written or oral that may be made from time to time by, or on behalf of the company. With that, I will turn the discussion over to Mark Turner. Thanks, Steve, and thanks everyone on the call for your time. We're pleased to have reported our highest quarter of earnings in over two years, $8.2 million or 94 cents a share. Excluding our recovery and other items which were positive, core earnings were still our highest in over two years. Overall it was a quarter with many highlights. Deposit growth continued to be strong, up 15 percent annualized. Recently released FDIC data also shows that our deposit growth and traditional customer deposits far outstripped market competitors' growth. Further, bucking an industry trend, loans grew in the quarter at a 2 percent annualized rate as desirable commercial and industrial loan growth of 14 percent annualized offset planned attrition in construction loans and consumer mortgages.

3 Page 3 Our above-market growth is coming from a solid reputation, a focused business model, and our engaged Associates. And we have attracted more talented, seasoned Associates each month, including lenders and branch managers, as we were again named number one on the list of top workplaces in Delaware in an independent survey conducted by the state's largest newspaper. Our talent and market share gains have been further accelerated by distracted competitors in and around our core markets. We see this trend continuing for some time. To better serve those customers, in the past year we have relocated and upgraded two of our existing branches in southeastern Pennsylvania. We are doing similar things in our Delaware market and now have approval for adding two more branches in nearby markets in coming months. The margin declined modestly 5 basis points to 3.61 percent primarily due to sales, pay-downs, and reinvestments of securities as we continue to actively manage this high-quality portfolio. Some interest reversals on non-accrual loans impacted the margin, as well. We expect the margin will remain at about this level next quarter as securities reinvestment risk at lower rates is offset by greater than $100 million of maturing Federal Home Loan Bank advances currently costing us about 4.5 percent. These could re-price to short-term funding, costing only about 50 to 60 basis points right now while still maintaining our healthy interest rate risk position. Importantly, asset quality was stable to improved in key areas. There was a slight uptick in later stage metrics, like nonperforming assets, which increased just under $3 million or only 3 percent. We continue to be proactive in managing and reserving for distressed situations. Essentially, one large land development loan, which we aggressively reserved for in the quarter, was responsible for the small uptick in NPAs and exceeded our otherwise very successful resolution efforts. We still have a few larger loans that we are managing closely and have taken appropriate reserves for at this time.

4 Page 4 Notably, our construction loan portfolio is now only 7 percent of total loans and residential construction loans, a component of that makes up only 3 percent of total loans. And we're seeing other positive trends, as well. As there is strong improvement in early-stage metrics, like total problem loans which consist of all criticized classified and nonperforming loans and other real estate owned, which improved 13 percent in this quarter alone and 17 percent year-overyear. Total delinquencies also improved over $5 million or 22 basis points to 2.60 percent. As a result of the improvement in early stage metrics and stable late-stage loan quality metrics, the loan loss provision declined slightly to $10 million in the quarter, and is still on track for the full-year 2010 to be modestly or even moderately better than the full year `09 provision. We are in the process of preparing our 2011 projections and will be running scenarios and stress tests on our expected loan performance. At a later date, we will have more specific guidance on the 2011 provision. However, we can provide the following very broad and hopefully helpful information at this time. The third quarter provision was $2.2 million greater than charge-offs in the quarter, continuing a build in our allowance for loan losses to a healthy 2.55 percent of total loans. We have built our allowance for loan losses meaningfully in every quarter of this cycle. We have been aggressively dealing with problems identified earlier in the cycle, including through sales, charge-offs, and reserve builds. The number of those earlier stage problems are declining. And we are now seeing a lesser flow of new problem loans into the pipeline. Both of these portend well for future provisions. Therefore we may be nearing that point in the cycle and in our own trends where it is appropriate for us to use the ample reserves we've built and charge-offs may exceed provisions in coming quarters. This all, of course, assumes no surprises in the economy or other

5 Page 5 things either in and out of our control. It is still a dynamic environment and we have learned to take nothing for granted. During the quarter we also significantly strengthened our capital from both earnings and a successful common capital raise of $50 million in August. All regulatory capital measures are substantially above well-capitalized levels. The tangible common equity ratio increased a robust 144 basis points and is now above 8 percent. And we have also preserved $75 million in cash at the holding company that we can use for support of the balance sheet, help with eventual repayment of TARP, and more immediately for dividends, the pending accretive Christiana Bank & Trust acquisition, and other good growth opportunities. I thank you for your time and attention and at this point we'll take your questions. Thank you. Ladies and gentlemen, if you do have a question, please press star then one on your touchtone telephone. If your question has been answered or if you wish to remove yourself from the queue, press the pound key. Our first question comes from Michael Sarcone from Sandler O'Neill. Michael Sarcone: Hi, guys. First question, there's been rumors about the possible acquisition of a local competitor. Can you comment on the potential for market share gains, should these rumors materialize? Michael, it s obviously not appropriate for us to comment on specific rumors. However, as we have seen over many years, our business model is powered by being one of the oldest, largest, locally-managed banks with a full state presence and full service capabilities to meet our market's needs. And that's in a market that has historically put a premium on local management and local decision-making. So anything that would add to that formula enhances our opportunities and our franchise value. That's, of course, assuming we execute well and we're focused on doing that.

6 Page 6 Michael Sarcone: OK. And then second, can you give us any guidance on when you expect NPAs to peak? Rodger Levenson who runs our commercial division is here and I'll have Rodger answer that question. Rodger Levenson: Hi, Michael. I just wanted to reiterate some of the comments Mark made and maybe provide a little bit more color. We believe we identified problem loans early in this cycle and provided for them appropriately. And what we're seeing now is many of these situations coming to resolution and so an expected outcome at this stage of the process would be some lumpiness in NPAs and, as Mark said, charge-offs. We would expect this trend to continue for the next several quarters. Making an absolute prediction is difficult but we're at that part in the cycle where these trends are expected. Michael Sarcone: OK, thanks, guys. Our next question comes from Steve Moss from Janney Montgomery Scott. Steve Moss: Good morning, guys, or good afternoon. For the quarter, there's pretty good commercial loan growth here. How is the pipeline looking? Rodger Levenson: Hi, Steve, it s Rodger again. Our pipeline continues to be strong and we expect the fourth quarter to look very similar to the third quarter in terms of growth. It will be primarily in C&I and it will be offset by flat commercial real estate and a planned decline in our construction portfolio. The C&I growth that we're seeing is, again, taking market share from a number of our larger local and regional competitors.

7 Page 7 Steve Moss: OK. And then with regard to the $9.8 million credit that went to nonperforming status this quarter where is that located and where do you see things trending there? Rodger Levenson: Yes, Steve, it s a land loan in Kent County, Delaware, just south of the Dover Air Force Base. It was a planned residential and commercial project that was being carried for a period of time by a sponsor who, because of situations in his global cash flow, is unable to continue to carry it. Steve Moss: OK. And any color as to where land prices are these days around that area and also in southern Delaware? Rodger Levenson: Yes. They continue to be very distressed in southern Delaware, although it depends on the particular project. Again, this is raw land so it is unimproved land and so the prices that you see could be anywhere from 25 cents to 35 cents on the dollar for that type of property. Steve Moss: OK, thank you very much. Our next question comes from Matt Schultheis from Boenning & Scattergood. Matt Schultheis: Good afternoon. A quick question. With your loan to deposit ratio now at about 100 percent as far as customer-based deposits are concerned, is there any interest in de-levering the balance sheet with regard primarily to the mortgage backed and wholesale borrowings as an offset to that, freeing up some capital? Matt, yes, that's something we have been thinking about. We also understand that the significant inflow of deposits we and the banking industry have seen recently may not be permanent so we want to factor that in. But we're at the point where we're having to make more razor's edge decisions about what we do with the deposits we're get in, repaying funding as well as letting our

8 Page 8 mortgage-backed securities portfolio run off to fund our expected loan growth. Stephen Fowle: This is Steve Fowle. To add to that, the securities we have been purchasing have been very short duration, purposefully, so that we have the opportunity in the future to deleverage, should we need to for another opportunity. Matt Schultheis: OK, thank you very much. Our next question comes from Andy Stapp from B. Riley & Co. Good afternoon. A related question. Do you expect deposit growth to continue to be at a robust pace with interest rates being so low? Andy, as you know, for probably two years now, we've had very robust deposit growth rates. And this year, actually, it s been up and down so it s a little bit hard to interpret, except that I believe the disruption of competitors in the marketplace, large and small, in and outside of our market, continued to provide us with lots of opportunity for deposit growth. It just may not be completely even. OK. And you talked about securities being shorter duration. What type of yields are you getting on these securities? Steve Fowle: The new securities we're purchasing, the yields are in the 3s. OK. And what was the yield on the mortgage-backed securities that you sold? Steve Fowle: Andy, I'm not certain of the yield of what we sold. They were some of our higher coupon securities that we did sell. And that was on purpose. We were seeing a lot of prepayment in them and wanted to take the gain before the gain

9 Page 9 ran off. So while I don't know the exact yield, I'd expect it would have been something slightly over 5 percent. OK. And you gave some good guidance for the Q4 margin. What about longer term? What do you see going on? Steve Fowle: Longer term, I think we're subject to the same dynamics as the rest of the industry, that there is not a lot of additional room for deposit costs to move down, and as securities mature and re-price downwards, we'll have some pressure. Offsetting that, we are seeing some loan growth and I think the direction of the margin will really depend on our success in continuing to attract loan customers from our market and contiguous markets. The only thing I would add to that, Andy, it s in our three-year strategic plan, which we're a year into now, by the end of that strategic plan, to have a margin of 3.75 percent. That will clearly involve some work but that's our goal over the next two years. And no more borrowings of consequence, high-cost borrowings that will mature? Not a great deal beyond what I mentioned, but what I mentioned is significant and will help hold our margin relative to others, I believe. Yes, I was talking about into Yes, a little bit here and there but nothing substantial. OK. Last question, can you provide an update on your cost reduction program?

10 Page 10 Stephen Fowle: Yes. We have implemented most of the programs inside that CORE project that we had going on, so as of this past quarter, we had almost 90 percent of the benefit already baked in the numbers. OK, so Q3 is a pretty good run rate going forward? We'll probably get a little bit more benefit from that. I think of the almost $7 million in annual run rate expected, we had a little more than $6 million in, and the remainder to come in the coming quarters, and we've accrued, in terms of costs, consultant costs, to help us implement that program, all but about $100,000 of related costs. So it s close to being fully in on the cost side and the savings side. OK, nice quarter. Thanks, guys. Our next question comes from Nancy Frohna from 1492 Capital Management. Nancy Frohna: Good afternoon. I had a quick question, or actually, a couple of questions. One is on pricing on your C&I portfolio and the new loans that you're making, what is that looking like? Second is, if you could rank the use of the excess cash at the hold-co level, what that rank might look like. And then a full year run rate impact of Reg E on the service charge revenue. Rodger Levenson: Hi, Nancy, this is Rodger Levenson. I'll comment on the C&I pricing. We are seeing some competitive pressure, particularly at the larger end of our market, which we would define as the lower end of the traditional middle market. But in our core business banking market, we continue to maintain a pretty healthy pricing margin. You may recall that we price our loans off of WSFS prime, which is currently at 4 percent. And in most situations we're getting some margin above that. And for selective real estate transactions or real estate-related transactions, I would say that it s significantly above that.

11 Page 11 Nancy Frohna: Thank you. That's helpful. To your second question, first, we have to meet dividend needs. We have about $6 million to $7 million a year closer to $7 million now with the additional common capital raise in dividends -- common capital dividends, trust preferred dividends and TARP dividends. So that's obviously the first use of that. The second use, immediate use coming up, will be the Christiana Bank and Trust acquisition. That's, as you remember, a $34.5 million acquisition. Third, behind that, I put other growth, organic and/or potential small acquisitions. They would have to be in market, very low risk and very well priced. But we're seeing some opportunities out there. And then further, much further behind that, in terms of use of that money would be repayment of TARP. Nancy Frohna: OK. So then TARP basically is down a little bit on the totem pole. At this point, Nancy, I would say, yes. Down on the totem pole does not necessarily mean that far away. Rick Wright: This is Rick Wright. I was going to answer the Reg E question. For the third quarter we were about $300,000 below our number for `09 third quarter. We're anticipating about a $600,000 negative versus fourth quarter `09 and we think the run rate will be less than that going into And when I give you those numbers, those don't have anything to do with netting out some of the additional cost and revenue enhancement programs that we've put in place as of yet. Nancy Frohna: OK, Very good. Thank you.

12 Page 12 If there are no other questions at this time, thank you for attending and have a great day. Thanks, everybody. END