SE Financial Corp. Announces First Quarter 2008 Results

PHILADELPHIA - (Business Wire) SE Financial Corp. (trading symbol: SEFL) (the “Company”), the holding company for St. Edmond’s Federal Savings Bank, announced a net loss of $27.6 thousand for the three months ended January 31, 2008 as compared to a net loss of $68.8 thousand for the same period in the prior year.

• Total assets for the quarter were $210.7 million, an increase of $12.5 million as compared to total assets at October 31, 2007, representing a 25% increase on an annualized basis.
• During the quarter loans receivable, net increased $7.3 million to $143.5 million at January 31, 2008, as compared to loans, net at October 31, 2007, representing a 21% increase on an annualized basis. The increase occurred mainly in one-to-four family mortgage loans. The yield on loans for the quarter ended January 31, 2008 decreased 15 basis points as compared to the quarter ended October 31, 2007 due primarily to a decrease in rates on loans tied to the prime rate.
• Deposits increased $3.7 million during the quarter as a result of an increase in savings accounts of $5 million offset by a decrease in certificates of deposit of $2 million. Total deposits at January 31, 2008 were $167.9 million. The cost of deposits decreased 5 basis points for the quarter ended January 31, 2008 as compared to the quarter ended October 31, 2007 due to the Bank’s aggressive repricing of maturing certificates of deposit at lower rates and decreases in rates paid on core accounts.
• Investment securities at January 31, 2008 were $52.0 million as compared to $45.3 million at October 31, 2007. During the quarter ended January 31, 2008, $10 million in investment securities were purchased and funded with Federal Home Loan Bank borrowings. The securities purchased with the increased borrowings provide a weighted average spread of 175 basis points.
• Provisions for loan losses during the quarter totaled $101 thousand compared to $224 thousand for the quarter ended October 31, 2007. Provisions during the quarter ended October 31, 2007 reflected additional provisions for the downgrade of two investment property mortgage loans to substandard. The Bank sold those loans during the quarter ended January 31, 2008 and charged $104 thousand to the allowance in connection therewith, reflecting the sale of the notes at a discount.
• Noninterest income increased $42 thousand to $219 thousand for the quarter ended January 31, 2008 as compared to $177 thousand for the quarter ended October 31, 2007 due to gains on the sale of investment securities available for sale.
• Noninterest expense increased $118 thousand to $1.5 million for the quarter ended January 31, 2008 as compared to $1.4 million for the quarter ended October 31, 2007 due to normal salary increases, increases in payroll tax expense, restricted stock expense and additions to staff. Restricted stock expense increased as the result of a greater amount of shares vesting in accordance with the vesting schedule.

• The Bank is pleased to announce the planned opening of its sixth Neighborhood Banking Office in Drexel Hill, Delaware County, Pennsylvania anticipated to occur in April 2008. Drexel Hill represents a logical progression of our geographic network and is another high-opportunity market with demographics that are in sync with the Bank’s product offerings. This branch is designed to incorporate a coffee shop within the Bank’s premises, which is expected to add a traffic driving dynamic to attract customers. As a sub-tenant, the coffee shop will also offset branch expense by sharing in lease, utility and maintenance costs and allow for marketing and co-branding opportunities.

SE FINANCIAL CORP. QUARTER HIGHLIGHTS (Dollars in Thousands)
		QTR 1/31/2008		QTR 10/31/2007		$ Increase (Decrease)		% Increase (Decrease)
Total Assets		210,745		198,260		12,485		6.30%
Investment Securities		51,995		45,277		6,718		14.84%
Loans		143,485		136,176		7,309		5.37%
Deposits		167,931		164,280		3,651		2.22%
Borrowings		17,746		9,429		8,317		88.21%
Equity		24,271		23,967		304		1.27%
Interest Income		3,167		3,097		70		2.26%
Interest Expense		1,852		1,802		50		2.77%
Net Interest Income		1,315		1,295		20		1.54%
Provision		101		224		(123)		-54.91%
Noninterest Income		219		177		42		23.73%
Noninterest Expense		1,492		1,374		118		8.59%
Net Income (Loss)		(28)		(87)		59		-67.82%
Net Interest Margin		2.81%		2.88%		-0.07%		-2.43%
Yield on Loans		7.41%		7.56%		-0.15%		-1.98%
Yield on Investments		4.76%		4.99%		-0.23%		-4.61%
Cost of Deposits		4.36%		4.41%		-0.05%		-1.13%
Cost of Borrowings		4.79%		5.13%		-0.34%		-6.63%

Comparison of the Results of Operations for the Three Months Ended January 31, 2008 and January 31, 2007

For the three months ended January 31, 2008 and 2007 respectively, net interest income before provision for loan losses totaled $1.3 million and $1.1 million. The increase was due to an increase in the average balance of interest-earning assets of $21.9 million to $187.9 million for the three months ended January 31, 2008 as compared to $165.9 million for the three months ended January 31, 2007.

The provision for loan losses increased $133.0 thousand to $101.1 thousand for the three months ended January 31, 2008 versus a recovery of $32.0 thousand for the three months ended January 31, 2007. The increase was due mainly to the payoff in full of a $424 thousand previously classified loan during the quarter ended January 31, 2007.

Non-interest income was $219.3 thousand for the three months ended January 31, 2008 compared to $118.2 thousand for the three months ended January 31, 2007. The increase was due mainly to gains on the sale of investment securities totaling $81.7 thousand for the quarter ended January 31, 2008.

Non-interest expense increased $73.9 thousand to $1.5 million for the three months ended January 31, 2008 compared to $1.4 million for the three months ended January 31, 2007. The increase in non-interest expense was due mainly to increases in compensation and employee benefits and occupancy and equipment costs offset by a decrease in professional fees and other expenses. The increase in compensation and employee benefits of $107.3 thousand was due primarily to increased expenses for the Bank’s Restricted Stock Plan, additions to staff and higher payroll taxes and employee benefits expense. The increase in occupancy and equipment costs was due to an increase in depreciation, utilities and maintenance expense related to a full quarter of expense for the Deptford banking office opened in December 2006. The decrease in professional fees was due to the fact that the Company is no longer a public reporting entity. The decrease in other expense was due mainly to advertising expense paid in the quarter ended January 31, 2007 for the opening of the Deptford Banking office.

Comparison of Financial Condition at January 31, 2008 and October 31, 2007

Total assets increased $12.5 million to $210.7 million at January 31, 2008 as compared to $198.3 million at October 31, 2007. Cash and cash equivalents decreased $1.7 million to $2.9 million at January 31, 2008 from $4.6 million at October 31, 2007. Investment securities increased $6.7 million to $52.0 million at January 31, 2008 from $45.3 million at October 31, 2007 due mainly to purchases of $14.8 million (which includes $10 million in purchases funded by FHLB borrowings) offset by sales of $6.2 million, maturities and calls of $1.5 million and repayments of $400 thousand. Loans increased $7.3 million to $143.5 million at January 31, 2008 from $136.2 million at October 31, 2007. Deposits increased $3.7 million to $167.9 million at January 31, 2008 from $164.3 million at October 31, 2007. Borrowed money increased $8.3 million to $17.7 million at January 31, 2008 from $9.4 million at October 31, 2007. Stockholders’ equity increased $304 thousand to $24.3 million at January 31, 2008 from $24.0 million at October 31, 2007 due mainly to an increase in accumulated other comprehensive income of $556.5 thousand as a result of an increase in the market value of the Company’s investment portfolio offset by the purchase of 26,000 shares of treasury stock.

Company Information

SE Financial Corp. is the holding company for St. Edmond’s Federal Savings Bank, a federally chartered stock savings institution with five Neighborhood Banking Offices serving South Philadelphia, Roxborough and Ardmore, Pennsylvania and Deptford and Sewell, New Jersey. SE Financial Corp. is incorporated under the laws of the Commonwealth of Pennsylvania and its executive offices are located at 1901-03 East Passyunk Avenue, Philadelphia, Pennsylvania 19148. As of January 31, 2008, there were issued and outstanding 2,228,095 shares of common stock, par value $0.10 per share of SE Financial Corp. Registrar and Transfer Company serves as the transfer agent for SE Financial Corp. and its address is 10 Commerce Drive, Cranford, New Jersey 07016.

Senior Management: Pamela M. Cyr, President and CEO, J. Christopher Jacobsen, EVP and Chief Operating Officer, and Charles F. Miller, EVP and Chief Lending and Credit Officer.

Board of Directors: Marcy C. Panzer (Chairman), Samuel Barsky (Secretary), Charles M. Cahn, Andrew A. Hines, Megan L. Mahoney, J. W. Parker, Jr., CPA, David M. Rosenberg, William F. Saldutti, III, Susanne Spinell Shuster, CPA.

Forward-Looking Statements Disclaimer

This news release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any statement that is not a historical fact is a forward-looking statement. Such forward-looking statements are subject to risk and uncertainties, which could cause actual results to differ materially from those currently anticipated due to a number of factors.

SE FINANCIAL CORP.
Selected Income Statement Data (Unaudited)
(Dollars in thousands except per share data)		Three Months Ended January 31,
			2008				2007
Interest income		$	3,167			$	2,728
Interest expense			1,852				1,587
Net interest income			1,315				1,141
Provision for (recovery of) loan losses			101				(32	)
Net interest income after provision for (recovery of) loan losses			1,214				1,173
Noninterest income			219				112
Noninterest expense			1,492				1,414
Loss before taxes			(59	)			(129	)
Income tax (benefit) expense			(31	)			(59	)
Net income (loss)		$	(28	)		$	(70	)
Weighted average shares outstanding (1)			1,886,743				1,905,905
(Loss) earnings per share (1)			($0.01	)			($0.04	)
Performance Ratios (Unaudited)		Three Months Ended January 31,
			2008				2007
Return on average assets (2)			-0.06	%			-0.16	%
Return on average equity (2)			-0.46	%			-1.16	%
Net interest margin on average interest earning assets (2)(3)			2.81	%			2.80	%

Selected Balance Sheet Data (Unaudited)
(Dollars in thousands except per share data)		January 31,				October 31,
			2008				2007
Assets		$	210,745			$	198,260
Loan receivable, net			143,485				136,176
Cash and cash equivalents			2,859				4,609
Investment securities			51,995				45,277
Deposits			167,931				164,280
FHLB borrowings			17,746				9,429
Total stockholders' equity			24,271				23,967
Ending shares outstanding (1)			1,873,102				1,893,365
Book value per share (1)			12.96				12.66
Stockholders' equity to total assets			11.52	%			12.09	%
Asset Quality (Unaudited)
(Dollars in thousands)		January 31,				October 31,
			2008				2007
Non-performing assets (4)		$	642			$	447
Allowance for losses			1,262				1,161
Non-performing assets to total assets			0.30	%			0.23	%
Allowance for losses to total loans			0.88	%			0.85	%
Allowance for losses to non-performing assets			196.57	%			259.83	%

(1)		Shares outstanding does not include unreleased ESOP shares, unearned nonvested RSP shares, or shares held in the Stock Compensation Trust for purposes of the weighted average shares outstanding calculation and the ending shares outstanding calculation.
(2)		Annualized for the three months ended January 31, 2008 and 2007.
(3)		The yield on municipal securities has been adjusted to a tax-equivalent basis.
(4)		Non-performing assets include non-accrual loans and real estate owned.

SE Financial Corp.
Pamela M. Cyr
President and CEO
215-468-1700