As filed with the Securities and Exchange Commission on January 23, 2004
Registration No. 333-

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM SB-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

SE Financial Corp.
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(Exact name of Small Business Issuer as specified in charter)

Pennsylvania 6035 Applied For
- ------------------------------------- ----------------- ------------------
(State or other jurisdiction (Primary SIC No.) (I.R.S. Employer
of incorporation or organization) Identification No.)

1901-03 East Passyunk Avenue, Philadelphia, Pennsylvania 19148-2220
215-468-1700
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(Address and telephone number of principal executive offices and
principal place of business)

Mr. Frank S. DePaolo, President
1901-03 East Passyunk Avenue, Philadelphia, Pennsylvania 19148-2220
215-468-1700
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(Name, address and telephone number of agent for service)

Please send copies of all communications to:

Samuel J. Malizia, Esq. Kent Krudys, Esq.
Tiffany A. Hasselman, Esq. LUSE GORMAN POMERENK & SCHICK, P.C.
MALIZIA SPIDI & FISCH, PC 5335 Wisconsin Avenue, NW
1100 New York Ave., N.W. Suite 400
Suite 340 West Washington, DC 20015-2005
Washington, D.C. 20005 (202) 274-2000
(202) 434-4660

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this registration statement becomes effective.

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

CALCULATION OF REGISTRATION FEE
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Title of Each Shares Proposed Maximum Proposed Maximum Amount of
Class of Securities to be Offering Price Aggregate Registration
To Be Registered Registered Per Unit Offering Price Fee(1)
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Common Stock,
$0.10 Par Value 2,314,375 $10.00 $23,143,750 $1,872.33

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(1) Calculated in accordance with Rule 457(o).

The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.

PROSPECTUS [SE Financial Corp. logo]

SE FINANCIAL CORP.
(Proposed Holding Company for St. Edmond's Federal Savings Bank)

Up to 2,012,500 Shares of Common Stock

SE Financial Corp. is offering for sale up to 2,012,500 shares of
common stock at $10.00 per share in connection with the conversion of St.
Edmond's Federal Savings Bank from a federal mutual savings bank to a federal
stock savings bank. As part of the conversion, St. Edmond's Federal Savings Bank
will become a wholly-owned subsidiary of SE Financial Corp.

We are offering for sale up to 2,012,500 shares of common stock. We may
sell up to 2,314,375 shares because of changes in the market and general
financial and economic conditions without notifying prospective purchasers. We
must sell a minimum of 1,487,500 shares in order to complete the offering.
The minimum purchase is 25 shares. The maximum purchase for any person, or
persons through a single account, is 10,000 shares. The offering is expected to
terminate on ___________, 2004 at 12:00 noon, eastern time. We may extend this
termination date without notice to you until ___________, 2004. Once submitted,
orders are irrevocable unless the offering is terminated or extended beyond
___________, 2004. In no event may the offering be extended beyond ___________,
2006. Funds received prior to completion of the offering will be held in an
escrow account at St. Edmond's Federal Savings Bank and will earn interest at
the savings account rate. In the event the offering is terminated, funds will be
promptly returned with interest.

There is currently no public market for the stock. SE Financial Corp.
anticipates that the stock will be quoted on the OTC Electronic Bulletin Board.
See Market for the Stock on page ___ of this document.

Sandler O'Neill & Partners, L.P. will use its best efforts to assist us
in selling our common stock. Sandler O'Neill & Partners, L.P. is not obligated
to purchase any of the common stock that is being offered.

This investment involves risk, including the possible loss of principal.
Please read "Risk Factors" beginning on page __.

Maximum, as
Minimum Maximum Adjusted
------- ------- -----------
Number of Shares................... 1,487,500 2,012,500 2,314,375
Estimated Offering Expenses........ $437,000 $485,000 $513,000
Estimated Net Proceeds............. $14,438,000 $19,640,000 $22,630,750
Estimated Net Proceeds Per Share... $9.71 $9.76 $9.78

These securities are not deposits or savings accounts and are not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency.

Neither the Securities and Exchange Commission, the Office of Thrift
Supervision, the Federal Deposit Insurance Corporation, nor any state securities
regulator has approved or disapproved these securities or determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.

For assistance, please contact the conversion center at (215) ___-____

Sandler O'Neill & Partners, L.P.

The date of this prospectus is March __, 2004

TABLE OF CONTENTS

Page
----

Summary.........................................................................
Risk Factors....................................................................
Use of Proceeds.................................................................
Dividend Policy.................................................................
Market for the Stock............................................................
Capitalization..................................................................
Pro Forma Data..................................................................
Historical and Pro Forma Capital Compliance ....................................
Selected Consolidated Financial and Other Data..................................
Management's Discussion and Analysis of
Financial Condition and Results of Operations................................
Business of SE Financial Corp...................................................
Business of St. Edmond's Federal Savings Bank ..................................
Regulation......................................................................
Taxation........................................................................
Management......................................................................
The Conversion..................................................................
The Stock Offering..............................................................
Restrictions on Acquisition of SE Financial Corp................................
Description of Capital Stock....................................................
Legal and Tax Opinions..........................................................
Experts.........................................................................
Registration Requirements.......................................................
Where You Can Find Additional Information.......................................
Index to Consolidated Financial Statements......................................

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SUMMARY

This summary highlights selected information from this document and may not
contain all the information that is important to you. To understand the stock
offering fully, you should read this entire document carefully, including the
consolidated financial statements and the notes to the financial statements of
St. Edmond's Federal Savings Bank beginning on page F-1.

SE Financial Corp.

1901-03 East Passyunk Avenue
Philadelphia, PA 19148
(215) 468-1700

SE Financial Corp. is a new company incorporated under Pennsylvania law
and has not engaged in any significant business to date. Its primary activity
will be owning all the stock of St. Edmond's Federal Savings Bank (sometimes
referred to herein as the "Bank"). It will invest its initial capitalization as
discussed under Use of Proceeds on page ___. In the future, it may pursue other
business activities, including the addition of branch offices and
diversification of operations. There are, however, no current arrangements,
understandings or agreements for these activities. See page ___.

St. Edmond's Federal Savings Bank

St. Edmond's Federal Savings Bank is a federally-chartered mutual
savings bank. It is converting from the mutual to the stock form of ownership as
part of the conversion. At October 31, 2003, the Bank had total assets, deposits
and retained earnings of $87.4 million, $72.3 million and $7.7 million,
respectively. Approximately 58.1% of total assets were comprised of loans at
October 31, 2003.

St. Edmond's Federal Savings Bank was originally chartered in 1912 as
St. Edmond's Building and Loan Association. In 1995, it became a
federally-chartered savings bank. The Bank's deposits are federally insured by
the Savings Association Insurance Fund as administered by the Federal Deposit
Insurance Corporation. The Bank is regulated by the Office of Thrift Supervision
and the Federal Deposit Insurance Corporation.

The Bank is a community-oriented savings organization, providing
traditional retail banking services. The Bank's lending products include one- to
four-family residential mortgage loans (including investor loans and mixed-use
loans), multi-family mortgage loans, commercial real estate mortgage loans,
construction loans, home equity loans, savings account loans and other consumer
loans. The Bank's primary source of funds for its lending and investing
activities is deposits, with a focus on certificates of deposit. The Bank
conducts its operations through its main office located in Philadelphia,
Pennsylvania and a branch office located in Sewell, New Jersey. See Business of
St. Edmond's Federal Savings Bank beginning on page __.

Business Strategy.

Our business strategy is to grow and improve our profitability by:

o Emphasizing one- to four-family residential real estate lending,
while continuing to originate multi-family and commercial real
estate lending;

o Increasing our assets;

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o Utilizing the capital raised in the offering to help manage our
interest rate risk;

o Offering new products and services to our customers; and

o Maintaining high asset quality.

A full description of our products and services begins on page ____.

How the Conversion Will Occur.

We will effect the conversion by exchanging the Bank's federal mutual
savings bank charter for a federal stock savings bank charter and becoming a
wholly-owned subsidiary of SE Financial Corp. On the effective date, SE
Financial Corp. will commence business as a savings and loan holding company,
and St. Edmond's Federal Savings Bank will continue its business but as a
federally-chartered stock savings bank. See pages ___ to ___.

Reasons for the Conversion.

Over the past several years, the Board of Directors of St. Edmond's
Federal Savings Bank has extensively discussed both long-range and short-range
business strategies to achieve profitability and growth. The Board concluded
that operation in the future as a mutual thrift would limit the Bank's ability
to raise capital and to compete in a changing business environment. The Board
has therefore determined that it is in the best interest of the Bank to convert
to a stock association. The business purposes for the conversion include the
following:

o The proceeds from the sale of common stock of SE Financial Corp. will
provide the Bank with additional equity capital, which will support future
deposit growth and expanded operations. While the Bank currently exceeds
its regulatory capital requirements, the sale of stock in connection with
the conversion, coupled with the accumulation of earnings, less dividends
or other reductions in capital, from year to year, represents a means for
the orderly preservation and expansion of the Bank's capital base, and
allows it flexibility to respond to sudden and unanticipated capital needs.

o We will be in a position after the conversion and offering, subject to
regulatory limitations and our financial position, to take advantage of any
expansion or diversification opportunities that may arise. The holding
company form of organization is expected to provide us with additional
flexibility to diversify our business activities through existing or newly
formed subsidiaries, or through acquisitions or mergers. However, we do not
have any current arrangements, understandings or agreements regarding any
such opportunities.

Our Use of the Proceeds Raised from the Sale of Stock.

SE Financial Corp. will use at least 50% of the net proceeds from the
offering to purchase all of St. Edmond's Federal Savings Bank's stock. SE
Financial Corp. will also lend St. Edmond's Federal Savings Bank's employee
stock ownership plan cash to enable the plan to buy 8% of the shares sold in the
offering. The balance will be retained as SE Financial Corp.'s initial
capitalization and used for general business purposes, which may include
investment in securities, paying cash dividends or repurchasing shares of its
common stock.

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The funds received by St. Edmond's Federal Savings Bank will be used
for general business purposes, including originating loans and purchasing
securities. In addition, the Bank may also use the proceeds of the offering to
expand either through opening or acquiring branch offices. The Bank does not,
however, have any current arrangements, understandings or agreements for the
expansion of its branch offices. See Use of Proceeds beginning on page ___.

$10.00 Per Share Stock Price and the Number of Shares to be Issued in the
Conversion

As mandated by the regulations of the Office of Thrift Supervision, the
number of shares offered is determined by an independent appraisal of the pro
forma estimated market value of our stock performed by FinPro, Inc. divided by
the purchase price of $10.00. The amount of stock sold in this offering is
required by regulation to be based upon an independent appraisal which is
reviewed by the Office of Thrift Supervision. The appraisal is reviewed but is
not approved by the Board of Directors.

FinPro has determined that as of January 20, 2004, our estimated
aggregate pro forma market value was $17.5 million, the mid-point of the
valuation range. Pursuant to regulations, this value must be within a minimum
valuation range of $14.9 million and a maximum valuation range of $20.1 million,
subject to adjustment.

The following table shows SE Financial Corp.'s pro forma price to core
earnings multiple and pro forma price to tangible book ratio at the minimum,
midpoint, maximum and maximum, as adjusted of the offering range. See Pro Forma
Data on page __ for a description of the assumptions used in calculating the pro
forma price to core earnings multiples and pro forma price to tangible book
ratios for SE Financial Corp.

Pro Forma Pro Forma
Price to Core Price to
Earnings Tangible
Multiple Book Ratio
-------- ----------

SE Financial Corp.:
Minimum (1,487,500 shares sold).................... 23.26x 73.15%
Midpoint (1,750,000 shares sold)................... 27.03x 77.40%
Maximum (2,012,500 shares sold).................... 30.30x 80.84%
Maximum, as adjusted (2,314,375 shares sold)....... 34.48x 84.10%

The independent valuation is not intended, and must not be construed,
as a recommendation of any kind as to the advisability of purchasing the common
stock. The independent appraisal does not indicate market value. Because the
independent valuation is based on estimates and projections on a number of
matters, all of which are subject to change from time to time, no assurance can
be given that persons purchasing the common stock will be able to sell their
shares at a price equal to or greater than the purchase price. See Risk Factors
- - You may not be able to sell your shares when you desire or for $10.00 or more
per share on page ___ and Pro Forma Data on page ___ and The Stock Offering -
Stock Pricing and the Number of Shares to be Offered on page ___.

We received authorization from the Office of Thrift Supervision on
March __, 2004, based on the independent valuation, to issue between a minimum
of 1,487,500 shares and a maximum of 2,012,500 shares. The independent valuation
must be updated and confirmed by FinPro, Inc. before we may complete the stock
offering. Any changes in the appraisal would be subject to regulatory approval.
The maximum amount of common stock being offered may be increased by up to 15%
without notice to persons who have subscribed for stock, so that a total of
2,314,375 shares could be issued. If the updated independent

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valuation would result in more than 2,314,375 shares being issued, we will be
required to notify all persons who have subscribed and such persons would have
the opportunity to change or cancel their subscription orders, and, unless an
affirmative response is received, a subscriber's funds will be returned with
interest at St. Edmond's Federal Savings Bank's regular savings account rate.

The Amount of Stock You May Purchase.

Minimum purchase = 25 shares
Maximum purchase = 10,000 shares

The maximum number of shares that any individual (or individuals through a
single account) may purchase is 10,000. The maximum number of shares that any
individual (or individuals through a single account) may purchase together with
any associate or group of persons acting in concert is 20,000 shares.

The Offering.

You might not receive any or all of the stock you request. St. Edmond's
Federal Savings Bank has granted subscription rights in the following order of
priority:

o Priority 1 - depositors of St. Edmond' Federal Savings Bank at the close of
business on December 31, 2002, with deposits of at least $50.00.

o Priority 2 - the tax qualified employee stock benefit plans of St. Edmond's
Federal Savings Bank.

o Priority 3 - depositors of St. Edmond's Federal Savings Bank at the close
of business on December 31, 2003 with deposits of at least $50.00.

o Priority 4 - depositors as of February __, 2004 and borrowers as of
September 29, 1995 who continue as borrowers as of the close of business on
February __, 2004.

The subscription offering will terminate at 12:00 noon, eastern time,
on ____________, 2004. We may extend this expiration date without notice to you
for up to 45 days, until ____________, 2004. Once submitted, your order is
irrevocable unless the offering is extended beyond ____________, 2004. We may
request permission from the Office of Thrift Supervision to extend the offering
beyond ____________, 2004, but in no event may the offering be extended beyond
____________, 2006. If the offering is extended beyond ____________, 2004, we
will be required to notify each subscriber and resolicit subscriptions. During
any extension period, subscribers will have the right to modify or rescind their
subscriptions, and, unless an affirmative response is received, a subscriber's
funds will be returned with interest at St. Edmond's Federal Savings Bank's
regular savings account rate.

We may cancel the offering at any time prior to the special meeting of
members of the Bank to vote on the plan of conversion. If we do, orders for
common stock already submitted will be canceled and subscribers' funds will be
returned with interest.

We may also offer shares of common stock in a community offering. In
the community offering, people who reside in Philadelphia County, Pennsylvania
and Gloucester County, New Jersey will have first preference. This part of the
offering may commence concurrently with the subscription offering or any time
thereafter and may terminate at any time without notice but no later than
____________, 2004.

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Shares not sold in the subscription or community offering may be
offered for sale in a syndicated community offering, which would be an offering
to the general public on a best efforts basis by a syndicate of broker dealers
managed by Sandler O'Neill & Partners, L.P. This part of the offering may
terminate at any time without notice but no later than ____________, 2004.

You cannot transfer your subscription rights. If you attempt to
transfer your rights, you may lose the right to purchase shares and may be
subject to criminal prosecution and/or other sanctions. Shares purchased in the
subscription offering must be registered in the names of all depositors on the
qualifying account(s). Deleting depositors or adding non-depositors or otherwise
altering the form of beneficial ownership of a qualifying account will result in
a loss of subscription rights.

We have the right to reject any orders of stock in the community
offering and syndicated community offering. We have described the offering in
greater detail beginning on page ___.

Stock Benefit Plans for Management.

In order to tie our employees', officers' and directors' interests
closer to our stockholders' interests, we intend to establish certain benefit
plans that use our stock as compensation. Officers, directors, and employees
will not be required to pay cash in exchange for shares received under the
employee stock ownership plan ("ESOP") or restricted shares but will be required
to pay the exercise price to exercise options.

The following table presents information regarding the participants in
each plan, the total amount, the percentage, and the dollar value of the stock
that we intend to set aside for the employee stock ownership plan and
stock-based incentive plans. The table below assumes the sale of 1,750,000
shares in the offering. It is assumed that the value of the stock in the table
is $10.00 per share. See pages ___ to ___ for more information, including
regulatory restrictions on the maximum amount of benefits participants may
receive and the rate at which benefits may be earned under the incentive plans.

Estimated Percentage of
Value Number Total Shares Sold
Participants of Shares of Shares in the Offering
------------ --------- --------- -----------------

Employee Stock Ownership Plan.... Employees $1,400,000 140,000 8.0%
Stock-Based Incentive Plans:
Stock Awards............ Officers and 700,000 70,000 4.0
Directors
Stock Options........... Officers and
Directors - (1) 175,000 10.0%
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Total.............. $2,100,000 385,000 22.0%
========== ======= ====

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(1) Options are given no value because their exercise price will be equal
to the fair market value of the stock on the day the options are
granted. As a result, anyone who receives an option will only benefit
from the option if the price of the stock rises above the exercise
price and the option is exercised.

Stockholders will experience a reduction or dilution in ownership
interest of approximately 12.3% if we use newly-issued shares to fund stock
options and stock awards made under these plans (dilution of approximately 9.1%
for the stock option plan and 3.8% for the restricted stock plan). It is our
intention to fund these plans through open market purchases.

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Dividend Policy.

We intend to consider paying cash dividends after the conversion. The
timing, amount and frequency will be determined by the Board of Directors.
However, there is no assurance that such funds will be used to pay dividends.
There are also restrictions on our ability to pay dividends. See Use of Proceeds
beginning on page ___ and Dividend Policy on page ___.

Conditions to Be Satisfied to Complete the Offering and Issue the Stock.

The following must occur before we can complete the offering and issue
our stock:

o We must receive all the required approvals from the Office of Thrift
Supervision;
o St. Edmond's Federal Savings Bank's members must approve the conversion by
majority of votes eligible to be cast; and
o We must sell at least the minimum number of shares offered.

Proposed Stock Purchases by Management.

Our directors and executive officers, together with their associates,
are expected to purchase approximately __________ shares of stock in the
offering, _____% if a total of __________ shares are sold. The purchase price
paid by them will be the same $10.00 per share price paid by all other persons
who purchase shares of common stock in the offering. Purchases of common stock
in the offering by these persons will be counted toward the minimum of 1,487,500
shares that must be sold in order to complete the conversion and offering. See
page ___.

Market for the Stock.

We expect the stock to be traded on the over-the-counter market with
quotations available on the OTC Electronic Bulletin Board. Prior to this
offering, there has not been a public market for the stock, and it is highly
unlikely that an active and liquid trading market for the stock will develop.
The lack of an active and liquid trading market may adversely affect the
liquidity and price of the stock. See Market for the Stock.

Restrictions on Acquisition of SE Financial Corp.

Our articles of incorporation and bylaws contain provisions that may
make it difficult for someone to acquire control of SE Financial Corp. These
provisions may discourage takeover attempts and prevent you from receiving a
premium over the market price of your shares as part of a takeover. These
provisions include:

o restrictions on the acquisition of our stock;
o limitations on voting rights;
o the election of only approximately one-fourth of our Board of
Directors each year;
o restrictions on the ability of stockholders to call special
stockholders' meetings;
o restrictions on the ability of stockholders to make stockholder
proposals or nominate persons for election as directors;
o the right of the Board of Directors to issue shares of preferred
or common stock without stockholder approval; and
o the requirement of an 80% vote of stockholders for the approval
of business combinations not approved by two-thirds of the Board
of Directors.

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See Restrictions on Acquisition of SE Financial Corp. on page ___.

Additionally, Office of Thrift Supervision regulations and policies
prohibit anyone from acquiring us for three years after the conversion, unless
such prohibition is waived by the Office of Thrift Supervision.

Receiving a Prospectus and an Order Form

To ensure that each purchaser receives a prospectus at least 48 hours
before the applicable expiration date, in accordance with Rule 15c2-8 of the
Securities Exchange Act of 1934, no prospectus will be mailed any later than
five days prior to the expiration date or otherwise distributed any later than
two prior to the expiration date. Execution of the order form will confirm
receipt or delivery in accordance with Rule 15c2-8. Order forms will only be
distributed with a prospectus.

For assistance, please contact the conversion center at (215) ___-____.

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RISK FACTORS

In addition to the other information in this document, you should
consider carefully the following risk factors in evaluating an investment in our
common stock.

The relatively small amount of stock being offered makes it highly unlikely that
an active and liquid trading market for the stock will exist, and the liquidity
and price of the stock may be adversely affected by a limited trading market.

Prior to this offering, SE Financial Corp. has not offered its stock to
the public. Consequently, there is not, at this time, any market for the stock.
Due to the relatively small size of the offering to the public, an active market
for the stock may not exist after the offering. This means that there may be
limited secondary market liquidity for our stock. This might make it difficult
for you to buy or sell the stock after the initial offering which may negatively
affect the price of the stock and cause significant volatility in the price of
our stock. Following the completion of the offering, we anticipate that
quotations for our stock will be available on the OTC Electronic Bulletin Board.
See Market for the Stock on page __.

The liquidity of the trading market for our stock will also be affected
by the amount of stock purchased by our directors and executive officers and
their associates, who may purchase approximately ________ shares in the
offering, which represents ___%, ___%, and ___% of the total outstanding stock
after the offering at the minimum, midpoint and maximum of the offering range,
respectively. Shares purchased by directors and executive officers cannot be
sold for a period of one year following the offering. Furthermore, if
stockholders of SE Financial Corp. approve the restricted stock plan and the
stock option plan, and if all shares reserved under the restricted stock plan
are awarded and all options reserved under the stock option plan are awarded and
exercised, insider ownership would increase. In addition, St. Edmond's Federal
Savings Bank's employee stock ownership plan will purchase up to 8% of the
shares issued in the offering and such shares will be held in trust, further
limiting the publicly traded shares.

Future changes in interest rates may reduce our profits.

Our ability to make a profit largely depends on our net interest
income, which could be negatively affected by changes in interest rates. Net
interest income is the difference between:

o the interest income we earn on our interest-earning assets, such as
mortgage loans and investment securities; and

o the interest expense we pay on our interest-bearing liabilities, such as
deposits and amounts we borrow.

The rates we earn on our assets and the rates we pay on our liabilities
are generally fixed for a contractual period of time. We, like many savings
institutions, have liabilities that generally have shorter contractual
maturities than our assets. This imbalance can create significant earnings
volatility, because market interest rates change over time. In a period of
rising interest rates, the interest income earned on our assets may not increase
as rapidly as the interest paid on our liabilities. In a period of declining
interest rates, the interest income earned on our assets may decrease more
rapidly than the interest paid on our liabilities. See Management's Discussion
and Analysis of Financial Condition and Results of Operations - Management of
Interest Rate Risk and Market Risk on page ___.

In addition, changes in interest rates can also affect the average life
of loans and mortgage-backed and related securities. A reduction in interest
rates results in increased prepayments of loans and mortgage-backed and related
securities, as borrowers refinance their debt in order to reduce their borrowing
cost. This causes reinvestment risk. This means that we may not be able to
reinvest prepayments at rates that are comparable to the rates we earned on the
prepaid loans or securities. Additionally, in a rising rate environment,
prepayments would decrease, extending the average life of our assets.

Our return on equity after the offering may be low; this may negatively affect
the price of our stock.

The net proceeds from the offering will substantially increase our
equity capital. It will take a significant period of time to prudently invest
this capital. For the year ended October 31, 2003, our return on average equity
was 7.23%. On a pro forma basis assuming that 1,750,000 shares had been sold at
the beginning of the fiscal year, our return on average equity for the year
ended October 31, 2003 would have been approximately 2.41%. As a result, our
return on equity, which is the ratio of our earnings divided by our equity
capital, may be lower than that of similar companies. To the extent that the
stock market values a company based in part on its return on equity, our low
return on equity relative to our peer group could negatively affect the trading
price of our stock.

The expenses related to our stock-based benefit plans and the expenses related
to being a public company will reduce our earnings.

We intend to adopt an employee stock ownership plan as part of the
stock offering. We also intend to adopt other stock-based benefit plans. The
money that we use to buy stock to fund our stock-based benefit plans will not be
available for investment and will increase our future expenses. In addition, the
public company costs of preparing reports for stockholders and the Securities
and Exchange Commission will cause our expenses to be higher than they would be
if we did not conduct the stock offering and become a public company. See Pro
Forma Data on page __ and Management - Potential Stock Benefit Plans on page __.

The future expenses related to the Bank's incentive compensation plan will
impact our future earnings.

The Bank implemented an Incentive Retirement Plan, effective January 1,
2004, to reward key management and the Board of Directors for achieving
strategic goals of the Bank, including long-term growth of net income. Under
such plan, units are awarded to plan participants and the future value of such
units will be based upon accumulated future earnings of the Bank. The aggregate
value of such units awarded will equal up to 10% of the accumulated future
earnings of the Bank. This plan is expected to reduce our future earnings. See
Management - Incentive Retirement Plan on page __.

The implementation of stock-based benefit plans may dilute your ownership
interest in SE Financial Corp.

We intend to adopt a stock option plan and a restricted stock plan
following the stock offering. These stock benefit plans will be funded through
either open market purchases or from the issuance of authorized but unissued
shares. Stockholders would experience a reduction in ownership interest in the
event newly issued shares are used to fund stock options and awards made under
the restricted stock plan. The use of newly issued shares of stock to fund the
restricted stock plan instead of open market purchases would dilute the voting
interests of existing stockholders by approximately 3.8%. The use of newly
issued

shares of stock to fund the stock option plan instead of open market purchases
would dilute the voting interests of existing stockholders by approximately
9.1%. See Management - Potential Stock Benefit Plans on page __.

The Bank originates "investor loans" as well as commercial real estate loans and
intends to continue its origination of such loans after the offering. The
repayment risk related to these types of loans is considered to be greater than
the risk related to mortgage loans on owner-occupied one-to-four residential
properties.

At October 31, 2003, approximately $10.9 million of the Bank's
one-to-four family mortgage loans consisted of mortgage loans on
nonowner-occupied properties, representing 30.1% of one-to-four family mortgage
loans and 21.5% of total loans. These consist primarily of "investor loans"
secured by one- to- four family residences. At October 31, 2003, the Bank also
had $4.0 million of loans classified as multi- family and commercial real estate
loans. It is the Bank's intention to continue to originate these types of loans
going forward. These types of loans are generally considered to involve a higher
degree of credit risk than financing of owner-occupied residential properties
and any late payments or the failure to repay such loans would hurt the Bank's
earnings. See Business of St. Edmond's Federal Savings Bank - Lending Activities
on page __.

We plan to remain independent and you should not invest in our common stock if
you are anticipating our sale.

It is our intention to continue operating as an independent financial
institution, and you are urged not to invest in our stock if you are
anticipating a quick sale of SE Financial Corp. We do not plan to undertake a
sale of SE Financial Corp. even if the acquisition would result in our
stockholders receiving a substantial premium over the market price of our stock
at the time of a sale. Our articles of incorporation and bylaws contain
provisions that may make it difficult for someone to acquire control of us.
These provisions may discourage takeover attempts and prevent you from receiving
a premium over the market price of your shares as part of a takeover.

Additionally, the Office of Thrift Supervision regulations may also
prevent anyone from acquiring us for three years after the conversion. See
Restrictions on Acquisitions of SE Financial Corp. on page ___.

The amount of stock held by our officers and directors and stock benefit plans
could make it difficult for stockholders to adopt proposals or approve takeover
attempts not supported by management.

The amount of ownership and control of our stock by directors and
officers could make it difficult for stockholders to make successful stockholder
proposals if they are opposed by management and the Board of Directors. In
addition, directors and officers could use their voting power to block the
approval of transactions, such as business combinations and amendments to SE
Financial Corp.'s articles of incorporation or bylaws, which are required by the
articles of incorporation to be approved by at least 80% of the stockholders.
Our directors and officers are expected to purchase approximately ____________
shares of stock in the offering, _____% if ____________ shares are sold. In
addition, approximately 8% of the shares of common stock issued in the offering
are expected to be purchased by our employee stock ownership plan. Shares owned
by the St. Edmond's Federal Savings Bank's employee stock ownership plan which
have not yet been allocated to the accounts of employees will be voted by a
committee of non- employee directors. If we implement stock benefit plans, the
ownership and control by officers and

directors would increase, causing voting dilution to the other stockholders. See
Management - Executive Compensation - Employee Stock Ownership Plan and
Management - Potential Stock Benefit Plans.

Increases in market rates of interest could adversely affect our retained
earnings.

At October 31, 2003, St. Edmond's Federal Savings Bank held
approximately $27.3 million in available-for-sale securities. Generally accepted
accounting principles require that these securities be carried at fair value on
the Bank's balance sheet. Unrealized holding gains or losses on these
securities, that is, the difference between the fair value and the amortized
cost of these securities, net of deferred taxes, is reflected in retained
earnings.

When interest rates increase, the fair value of St. Edmond's Federal
Savings Bank's available-for- sale securities generally decreases, which also
decreases retained earnings. As of October 31, 2003, St. Edmond's Federal
Savings Bank's retained earnings included approximately $84,000 in other
comprehensive loss, which was comprised exclusively of net unrealized holding
losses on its available-for- sale securities portfolio.

You may not be able to sell your shares when you desire or for $10.00 or more
per share.

Publicly traded stocks have recently experienced substantial market
price volatility. This is due, in part, to investors' shifting perceptions of
the effect on various industry sectors of changes and potential changes in the
economy. Volatility, therefore, may be unrelated to the current operating
performance of particular companies whose shares are traded. The purchase price
of common stock sold in conversion transactions is based on an independent
appraisal. Independent appraisals are not intended to be, and should not be
construed as, a recommendation as to the advisability of purchasing shares. The
independent appraisal does not indicate market value. After our common stock
begins to trade, the trading price will be determined by the marketplace. The
trading price will fluctuate because it will be influenced by many factors,
including prevailing interest rates, other economic conditions, our operating
performance and investor perceptions of the outlook for us and the banking
industry in general. We cannot assure you that if you choose to sell shares you
purchased in the stock offering, you will be able to sell them at or above the
$10 per share offering price.

Deposits are the Bank's major source of funds for lending and other investment
purposes, and a large portion of its deposits are certificates of deposit, which
are not as stable as other types of deposits.

At October 31, 2003, $51.9 million, or 71.6%, of the Bank's total
deposits were certificates of deposit, and of that amount $9.1 million, or 17.5%
of the certificates of deposit, were "jumbo" certificates of $100,000 or more.
Deposit inflows are significantly influenced by general interest rates and money
market conditions. The inflow of certificates of deposit and the retention of
such deposits upon maturity are particularly sensitive to general interest rates
and money market conditions, making certificates of deposits traditionally a
more volatile source of funding than core deposits. In order to retain
certificates of deposits, the Bank may have to pay a premium rate, resulting in
an increase in its cost of funds. In a rising rate environment, the Bank may be
unwilling or unable to pay a competitive rate. To the extent that such deposits
do not remain with the Bank, they may need to be replaced with borrowings which
could increase the Bank's cost of funds and negatively impact its interest rate
spread and its financial condition.

A downturn in the Bank's local economy may adversely affect its earnings.

The Bank's business of attracting deposits and making loans is
primarily conducted within its primary market areas. A downturn in the local
economy could reduce the amount of funds available for deposit and the ability
of borrowers to repay their loans and could negatively impact collateral values.
As a result, the Bank's earnings could be adversely affected.

We operate in a highly regulated environment and may be adversely affected by
changes in laws and regulations.

We are subject to extensive regulation, supervision and examination by
the Office of Thrift Supervision and by the Federal Deposit Insurance
Corporation. Such regulation and supervision govern the activities in which a
bank and its holding company may engage and are intended primarily for the
protection of the insurance fund and depositors. Regulatory authorities have
extensive discretion in connection with their supervisory and enforcement
activities, including the imposition of restrictions on the operation of a bank,
the classification of assets by a bank and a bank's allowance for loan losses.
The Bank entered into a supervisory agreement with the Office of Thrift
Supervision in February 2002 and operated under such agreement until such
agreement was terminated on December 10, 2003. In addition, the Bank was subject
to a Safety and Soundness Compliance Plan from May 2001 to October 31, 2003. See
Supervisory Agreements on page ___. Any change in regulation and oversight,
whether in the form of regulatory policy, regulations, or legislation could have
a material impact on SE Financial Corp., its subsidiaries and their operations.
See Regulation beginning on page __.

Forward Looking Statements

This document contains forward-looking statements (as defined in the
Private Securities Litigation Reform Act of 1995) about St. Edmond's Federal
Savings Bank and subsidiary. Forward-looking statements include statements about
anticipated operating and financial performance, such as loan originations,
operating efficiencies, loan sales, charge-offs and loan loss provisions, growth
opportunities, interest rates, and deposit growth. Words such as "may," "could,"
"should," "would," "believe," "anticipate," "estimate," "expect," "intend,"
"project," "plan," and similar expressions are intended to identify these
forward-looking statements.

Forward-looking statements are necessarily subject to many risks and
uncertainties. A number of things could cause actual results to differ
materially from those indicated by the forward-looking statements. These
include, but are not limited to, the factors discussed immediately below, those
addressed under the caption Management's Discussion and Analysis of Financial
Condition and Results of Operations, other factors discussed elsewhere in this
document, and those presented elsewhere by management from time to time. Many of
the risks and uncertainties are beyond our control. The following factors could
cause our operating and financial performance to differ materially from the
plans, objectives, assumptions, expectations, estimates, and intentions
expressed in forward-looking statements:

o general economic conditions, either nationally or regionally, may be less
favorable than we expect, resulting in a deterioration in the credit
quality of our loan assets, among other things;

o the effects of, and changes in, trade, monetary and fiscal policies and
laws, including interest-rate policies of the Federal Reserve Board;

o inflation, interest rate, market, and monetary fluctuations;

o the development and acceptance of new products and services of St. Edmond's
Federal Savings Bank and subsidiary and the perceived overall value of
these products and services by users, including the features, pricing, and
quality compared to competitors' products and services;

o the willingness of users to substitute our products and services for those
of competitors;

o the impact of changes in laws and regulations applicable to financial
services (including laws concerning taxes, banking, securities, and
insurance); and

o changes in consumer spending and saving habits.

Forward-looking statements are based on our beliefs, plans, objectives,
goals, assumptions, expectations, estimates, and intentions as of the date the
statements are made. Investors should exercise caution because St. Edmond's
Federal Savings Bank cannot give any assurance that these beliefs, plans,
objectives, goals, assumptions, expectations, estimates, and intentions will be
realized. St. Edmond's Federal Savings Bank disclaims any obligation to update
or revise any forward-looking statements based on the occurrence of future
events, the receipt of new information, or otherwise.

USE OF PROCEEDS

The net proceeds will depend on the expenses incurred by us in
connection with the offering and the total number of shares of stock issued in
the offering, which will depend on the independent valuation and marketing
considerations. Although the actual net proceeds from the sale of the common
stock cannot be determined until the offering is completed, we estimate that we
will receive net proceeds from the sale of common stock of between $14,438,000
at the minimum and $19,640,000 at the maximum of the offering range.

Assuming the sale of $14,875,000, $17,500,000 and $20,125,000 of common
stock at the minimum, midpoint and maximum, respectively, of the offering range,
expenses of $437,000, $461,000 and $485,000, at the minimum, midpoint and
maximum, respectively, and the purchase of 8% of the shares by the employee
stock ownership plan, the following table shows the manner in which we will use
the net proceeds:

MINIMUM MIDPOINT MAXIMUM
----------------- --------------- ----------------
$ % $ % $ %
------- ----- ------- ----- ------- -----
(Dollars in thousands)

Loan to employee stock ownership plan... $ 1,190 8.2% $ 1,400 8.2% $ 1,610 8.2%
Investment in St. Edmond's Federal
Savings Bank........................... 7,219 50.0 8,519 50.0 9,820 50.0
SE Financial Corp. working capital...... 6,029 41.8 7,120 41.8 8,210 41.8
------- ----- ------- ----- ------- -----
Net Proceeds................... $14,438 100.0% $17,039 100.0% $19,640 100.0%
======= ===== ======= ===== ======= =====

We will use at least 50% of the cash received in the offering to
purchase all of St. Edmond's Federal Savings Bank's stock. We will also lend the
Bank's employee stock ownership plan cash to enable the plan to buy 8% of the
shares sold in the offering. The balance will be retained as our initial
capitalization and used for general business purposes which may include
investment in securities, paying

cash dividends or repurchasing shares of our common stock. We will initially
invest the proceeds in short- term investment securities.

The funds received by the Bank from us in exchange for all its stock to
be issued in the conversion will be used for general business purposes,
including originating loans and purchasing securities. Net proceeds may also be
used by the Bank to make contributions to the employee stock ownership plan
which in turn would be used to repay the loan from us.

In addition, the Bank may also use the proceeds of the offering to
expand either through opening or acquiring branch offices. The Bank may also
relocate its Sewell, New Jersey office to a new site. The Bank does not,
however, have any current understandings, agreements or arrangements for the
expansion of its business, either through repositioning existing branches or the
addition of new branch offices.

If the employee stock ownership plan does not purchase common stock in
the offering, it may purchase shares of common stock in the market after the
conversion. If the purchase price of the common stock is higher than $10 per
share, the amount of proceeds required for the purchase by the employee stock
ownership plan will increase and the resulting stockholders' equity will
decrease.

The net proceeds may vary significantly because total expenses of the
conversion may be significantly more or less than those estimated. The net
proceeds will also vary if the number of shares to be issued in the conversion
are adjusted to reflect a change in the estimated pro forma market value of SE
Financial Corp. and St. Edmond's Federal Savings Bank. Payments for shares made
through withdrawals from existing deposit accounts at the Bank will not result
in the receipt of new funds for investment but will result in a reduction of the
Bank's deposits and interest expense as funds are transferred from
interest-bearing certificates or other deposit accounts.

DIVIDEND POLICY

SE Financial Corp. intends to consider the establishment of a policy to
pay cash dividends. The timing, frequency and initial annual amount of the
dividends will be determined by the Board. Dividends will be subject to
determination and declaration by the Board of Directors of SE Financial Corp. In
making its decision, the Board of Directors will consider several factors,
including financial condition, results of operations, tax considerations,
industry standards and general economic conditions.

There can be no assurance that dividends will in fact be paid on the
stock or that, if paid, dividends will not be reduced or eliminated in future
periods.

SE Financial Corp.'s ability to pay dividends also depends on the
receipt of dividends from St. Edmond's Federal Savings Bank which is subject to
a variety of regulatory limitations on the payment of dividends. See Regulation
- - Regulation of St. Edmond's Federal Savings Bank - Dividend and Other Capital
Distribution Limitations. Furthermore, as a condition to Office of Thrift
Supervision approval of the conversion, SE Financial Corp. has agreed that it
will not initiate any action within one year of completion of the conversion in
the furtherance of payment of a special distribution or return of capital to
stockholders of the Company.

MARKET FOR THE STOCK

SE Financial Corp. has never issued capital stock. Consequently, there
is not, at this time, any market for the stock. Following the completion of the
offering, SE Financial Corp. anticipates that its stock will be traded on the
over-the-counter market with quotations available through the OTC Electronic
Bulletin Board. Sandler O'Neill & Partners, L.P. has advised us that it intends
to make a market in our common stock following the offering, but it is under no
obligation to do so.

The development of an active trading market depends on the existence of
willing buyers and sellers. Due to the small size of the offering, it is highly
unlikely that an active trading market will develop and be maintained after the
offering. The small amount of stock being issued to the public may make it
difficult to buy or sell our stock in the future. You could have difficulty
disposing of your shares and you should not view the shares as a short term
investment. We cannot assure you that an active trading market for the common
stock will develop or that, if it develops, it will continue. Nor can we assure
you that, if you purchase shares of common stock, you will be able to sell them
at or above $10.00 per share.

CAPITALIZATION

Set forth below is the historical capitalization of the Bank as of
October 31, 2003 and the pro forma capitalization of SE Financial Corp. after
giving effect to the offering. The table also gives affect to the assumptions
set forth under Pro Forma Data. A change in the number of shares sold in the
offering may affect materially the pro forma capitalization.

Pro Forma Capitalization at October 31, 2003
---------------------------------------------------------------
Maximum,
Minimum Midpoint Maximum as adjusted
1,487,500 1,750,000 2,012,500 2,314,375
Actual, at Shares at Shares at Shares at Shares at
October 31, $10.00 per $10.00 per $10.00 per $10.00 per
2003 share share share share(1)
---- ------------- ----------------- ---------------- ---------
(In thousands)

Deposits(2) .................................. $ 72,273 $ 72,273 $ 72,273 $ 72,273 $ 72,273
Borrowed funds ............................... 6,637 6,637 6,637 6,637 6,637
-------- -------- -------- -------- --------
Total deposits and borrowed funds ............ $ 78,910 $ 78,910 $ 78,910 $ 78,910 $ 78,910
======== ======== ======== ======== ========
Retained earnings/Stockholders' equity:
Preferred stock, no par value, 2,000,000
shares authorized; none to be issued ....... $ -- $ -- $ -- $ -- $ --
Common stock, $0.10 par value, 8,000,000
shares authorized, assuming shares
outstanding as shown(3) .................. -- 149 175 201 231
Additional paid-in capital(3)(4) ............. -- 14,289 16,864 19,439 22,400
Retained earnings ............................ 7,756 7,756 7,756 7,756 7,756
Accumulated other comprehensive income, net
of taxes ................................. (84) (84) (84) (84) (84)
Less:
Common stock acquired by ESOP(5) ........... -- 1,190 1,400 1,610 1,852
Common stock acquired by
restricted stock plan(6) ................. -- 595 700 805 926
-------- -------- -------- -------- --------
Total retained earnings/stockholders' equity . $ 7,672 $ 20,325 $ 22,611 $ 24,897 $ 27,525
======== ======== ======== ======== ========

- ------------------
(1) As adjusted to give effect to an increase in the number of shares which
could occur due to an increase in the independent valuation and a
commensurate increase in the offering range of up to 15% to reflect changes
in market and financial conditions.
(2) Does not reflect withdrawals from deposit accounts for the purchase of
stock in the offering. Any withdrawals would reduce pro forma deposits by
an amount equal to the withdrawals.
(3) No effect has been given to the issuance of additional shares of stock
pursuant to any stock option plans that may be adopted by SE Financial
Corp. and the Bank and presented for approval by the stockholders after the
offering. An amount equal to 10% of the shares of stock sold in the
offering would be reserved for issuance upon the exercise of options to be
granted under the stock option plans within one year following the
conversion. See Management - Potential Stock Benefit Plans - Stock Options
Plans.
(4) Additional paid-in capital amounts are net of offering expenses.
(5) Assumes that 8% of the shares sold in the offering will be purchased by the
employee stock ownership plan, and that the funds used to acquire the ESOP
shares will be borrowed from SE Financial Corp. For an estimate of the
impact of the loan on earnings, see Pro Forma Data. The Bank intends to
make scheduled discretionary contributions to the employee stock ownership
plan sufficient to enable the plan to service and repay its debt over a ten
year period. The amount of shares to be acquired by the ESOP is reflected
as a reduction of stockholders' equity. See Management - Executive
Compensation - Employee Stock Ownership Plan. If the employee stock
ownership plan is unable to purchase stock in the conversion due to an
oversubscription in the offering by eligible account holders having first
priority, and the purchase price in the open market is greater than the
original $10.00 price per share, there will be a corresponding reduction in
stockholders' equity. See The Offering - Subscription Offering -
Subscription Rights.
(6) Assumes that an amount equal to 4.0% of the shares of stock sold in the
offering is purchased by the restricted stock plan. The stock purchased by
the restricted stock plan is reflected as a reduction of stockholders'
equity. See footnote (2) to the table under Pro Forma Data. See Management
- Potential Stock Benefit Plans - Restricted Stock Plan.

PRO FORMA DATA

The actual net proceeds from the sale of the stock cannot be determined
until the offering is completed. However, investable net proceeds to SE
Financial Corp. are currently estimated to be between approximately $12.7
million and $17.2 million (or $19.9 million if the independent valuation is
increased by 15%) based on the following assumptions:

o an amount equal to 8% of the shares issued will be loaned to the ESOP to
fund its purchase of 8% of the shares issued;

o an amount equal to 4.0% of the shares issued will be awarded pursuant to
the restricted stock plan adopted no sooner than six months following the
offering, funded through open market purchases; and

o expenses of the offering are estimated to be between approximately $437,000
and $485,000 ($513,000 if the independent valuation is increased by 15%).

The following table sets forth our historical net income and net worth
prior to the conversion and our pro forma consolidated net income and
stockholders' equity following the conversion. In preparing this table and in
calculating pro forma data, we have made the following assumptions:

o Pro forma earnings have been calculated assuming the stock had been sold at
the beginning of the period and the net proceeds had been invested at an
average yield of 2.33% for the year ended October 31, 2003, which
approximates the yield on a three-year U.S. Treasury bill on October 31,
2003. The yield on a one-year U.S. Treasury bill, rather than an arithmetic
average of the average yield on interest-earning assets and average rate
paid on deposits, has been used to estimate income on net proceeds because
it is believed that the one-year U.S. Treasury bill rate is a more accurate
estimate of the rate that would be obtained on an investment of net
proceeds from the offering.

o The pro forma after-tax yield on the net proceeds is assumed to be 1.44%
for the year ended October 31, 2003, based on an effective tax rate of
38.00%.

o We did not include any withdrawals from deposit accounts to purchase shares
in the offering.

o Historical and pro forma per share amounts have been calculated by dividing
historical and pro forma amounts by the indicated number of shares of
stock, as adjusted in the pro forma net earnings per share to give effect
to the purchase of shares by the employee stock ownership plan.

o Pro forma stockholders' equity amounts have been calculated as if the stock
had been sold on October 31, 2003, and no effect has been given to the
assumed earnings effect of the transactions.

The following pro forma data relies on the assumptions we outlined
above, and this data does not represent the fair market value of the common
stock, the current value of assets or liabilities, or the amount of money that
would be distributed to stockholders if we liquidated SE Financial Corp. The pro
forma data does not predict how much we will earn in the future.

The following table summarizes historical data of St. Edmond's Federal
Savings Bank and pro forma data of SE Financial Corp. at or for the year ended
October 31, 2003 based on the assumptions set forth above and in the table and
should not be used as a basis for projections of market value of the stock
following the conversion. No effect has been given in the table to the possible
issuance of additional stock reserved for future issuance pursuant to a stock
option plan that may be adopted by the Board of Directors of SE Financial Corp.
within one year following the conversion, nor does book value give any effect to
the liquidation account to be established or the bad debt reserve in
liquidation. See The Conversion - Effects of Conversion - Liquidation Rights and
Management - Potential Stock Benefit Plans - Stock Option Plan.

At or For the Year Ended October 31, 2003
-----------------------------------------------------------
$14,875,000 $17,500,000 $20,125,000 $23,143,750
Independent Independent Independent Independent
Valuation Valuation Valuation Valuation
------------ ------------ ------------ -----------
1,487,500 1,750,000 2,012,500 2,314,375
Shares Shares Shares Shares
------------ ------------ ------------ ---------
(Dollars in thousands, except per share amounts)

Gross proceeds ................................... $ 14,875 $ 17,500 $ 20,125 $ 23,144
Less expenses .................................... (437) (461) (485) (513)
----------- ----------- ----------- -----------
Estimated net proceeds ........................ 14,438 17,039 19,640 22,631
Less ESOP funded by SE Financial Corp. ........... (1,190) (1,400) (1,610) (1,852)
Less restricted stock plan adjustment ............ (595) (700) (805) (926)
----------- ----------- ----------- -----------
Estimated investable net proceeds ............. $ 12,653 $ 14,939 $ 17,225 $ 19,853
=========== =========== =========== ===========
Net Income:
Historical .................................... $ 556 $ 556 $ 556 $ 556
Pro forma income on net proceeds (1) .......... 182 215 248 286
Pro forma ESOP adjustments(2) ................. (74) (87) (100) (115)
Pro forma restricted stock plan adjustment(3) . (74) (87) (100) (115)
----------- ----------- ----------- -----------
Pro forma net income(2)(4)(5) ................. $ 590 $ 597 $ 604 $ 612
=========== =========== =========== ===========
Per share net income
Historical .................................... $ 0.40 $ 0.34 $ 0.30 $ 0.26
Pro forma income on net proceeds .............. 0.13 0.13 0.13 0.13
Pro forma ESOP adjustments(2) ................. (0.05) (0.05) (0.05) (0.05)
Pro forma restricted stock plan adjustment(3) . (0.05) (0.05) (0.05) (0.05)
----------- ----------- ----------- -----------
Pro forma net income per share(2)(4)(5) ....... $ 0.43 $ 0.37 $ 0.33 $ 0.29
=========== =========== =========== ===========
Shares used in calculation of income per share(2) 1,380,400 1,624,000 1,867,600 2,147,740
Stockholders' equity:
Historical .................................... $ 7,672 $ 7,672 $ 7,672 $ 7,672
Estimated net proceeds ........................ 14,438 17,039 19,640 22,631
Less: Common Stock acquired ESOP(2) ........... (1,190) (1,400) (1,610) (1,852)
Less: Common Stock acquired by restricted
stock plan(3) ........................... (595) (700) (805) (926)
----------- ----------- ----------- -----------
Pro forma stockholders' equity(2)(4)(5) ....... $ 20,325 $ 22,611 $ 24,897 $ 27,525
=========== =========== =========== ===========
Stockholders' equity per share:
Historical .................................... $ 5.16 $ 4.38 $ 3.81 $ 3.31
Estimated net proceeds ........................ 9.71 9.74 9.76 9.78
Less: Common Stock acquired by the ESOP(2) .... (0.80) (0.80) (0.80) (0.80)
Less: Common stock acquired by restricted stock
plan(3) ................................. (0.40) (0.40) (0.40) (0.40)
----------- ----------- ----------- -----------
Pro forma stockholders' equity per share(5) ... $ 13.67 $ 12.92 $ 12.37 $ 11.89
=========== =========== =========== ===========
Offering price as a percentage of pro forma
stockholders' equity per share ................. 73.15% 77.40% 80.84% 84.10%
=========== =========== =========== ===========
Offering price to pro forma
net income per share ........................... 23.26X 27.03X 30.30X 34.48X
=========== =========== =========== ===========

Shares used in calculation of stockholders' equity
per share ...................................... 1,487,500 1,750,000 2,012,500 2,314,375

- ---------------

(1) Pro forma income on net proceeds reflects the impact of the Incentive
Retirement Plan, implemented by the Bank effective January 1, 2004. Such
plan provides for the award of units with a value of up to 10% of the
Bank's earnings. See Incentive Retirement Plan on page ____.

(2) Assumes that 8% of the shares of stock sold in the offering will be
purchased by the employee stock ownership plan and that the plan will
borrow funds from SE Financial Corp. The stock acquired by the employee
stock ownership plan is reflected as a reduction of stockholder's equity.
The Bank intends to make annual contributions to the plan in an amount at
least equal to the principal and interest requirement of the loan. This
table assumes a 10 year amortization period. See Management - Executive
Compensation - Employee Stock Ownership Plan. The pro forma net earnings
assumes: (i) that the Bank's contribution to the employee stock ownership
plan for the principal portion of the debt service requirement for year
ended October 31, 2003 was made at the end of the period; (ii) that
1,487,500, 1,750,000, 2,012,500 and 2,314,375 shares at the minimum,
midpoint, maximum, and 15% above the maximum of the range, respectively,
were committed to be released during the year ended October 31, 2003, at an
average fair value of $10.00 per share and were accounted for as a charge
to expense in accordance with Statement of Position ("SOP") No. 93-6; and
(iii) only the employee stock ownership plan shares committed to be
released were considered outstanding for purposes of the net earnings per
share calculations. All employee stock ownership plan shares were
considered outstanding for purposes of the stockholders' equity per share
calculations.

(3) Gives effect to the restricted stock plan that may be adopted by the Bank
following the conversion and presented for approval at a meeting of
stockholders after completion of the conversion. If the restricted stock
plan is approved by the stockholders, the restricted stock plan would be
expected to acquire an amount of stock equal to 4.0% of the shares of stock
sold in the offering, or 59,500, 70,000, 80,500 and 92,575 shares of stock
respectively at the minimum, midpoint, maximum and 15% above the maximum of
the range through open market purchases. Funds used by the restricted stock
plan to purchase the shares will be contributed to the restricted stock
plan by the Bank. In calculating the pro forma effect of the restricted
stock plan, it is assumed that the required stockholder approval has been
received, that the shares were acquired by the restricted stock plan at the
beginning of the year ended October 31, 2003 through open market purchases,
at $10.00 per share, and that 20% of the amount contributed was amortized
to expense during the year ended October 31, 2003. The plan will be
amortized over five years. The issuance of authorized but unissued shares
of stock to the restricted stock plan instead of open market purchases
would dilute the voting interests of existing stockholders by approximately
3.8% and pro forma net income per share for the year ended October 31, 2003
would be $0.42, $0.36, $0.32 and $0.28, at the minimum, midpoint, maximum
and 15% above the maximum of the range, respectively, and pro forma
stockholders' equity per share at October 31, 2003 would be $13.14, $12.42,
$11.90 and $11.44, at the minimum, midpoint, maximum and 15% above the
maximum of the range, respectively. There can be no assurance that
stockholder approval of the restricted stock plan will be obtained, or the
actual purchase price of the shares will be equal to $10.00 per share. See
Management - Potential Stock Benefit Plans - Restricted Stock Plan.

(4) The retained earnings of SE Financial Corp. and the Bank will continue to
be substantially restricted after the conversion. See Dividend Policy, The
Conversion - Effects of Conversion - Liquidation Rights and Regulation -
Regulation of St. Edmond's Federal Savings Bank - Dividends and Other
Capital Distribution Limitations.

(5) No effect has been given to the issuance of additional shares of stock
pursuant to the stock option plan that may be adopted by the Bank following
the conversion which, in turn, would be presented for approval at a meeting
of stockholders to be held within one year after the completion of the
conversion. If the stock option plan is presented and approved by
stockholders, an amount equal to 10% of the stock sold in the offering, or
148,750, 175,000, 201,250 and 231,438 shares at the minimum, midpoint,
maximum and 15% above the maximum of the range, respectively, will be
reserved for future issuance upon the exercise of options to be granted
under the stock option plans. The issuance of authorized but unissued
shares of stock to the stock plan instead of open market purchases would
dilute the voting interests of existing stockholders by approximately 9.1%.
Assuming stockholder approval of the stock option plans and the exercise of
all options at the end of the period at an exercise price of $10.00 per
share, the pro forma net earnings per share would be $0.39, $0.33, $0.29
and $0.26, respectively at the minimum, midpoint, maximum and 15% above the
maximum of the range for the year ended October 31, 2003; pro forma
stockholders' equity per share would be $13.33, $12.66, $12.16 and $11.72,
respectively at the minimum, midpoint, maximum and 15% above the maximum of
the range at October 31, 2003. See Management - Potential Stock Benefit
Plans - Stock Option Plans.

HISTORICAL AND PRO FORMA CAPITAL COMPLIANCE

The following table presents the St. Edmond's Federal Savings Bank's
historical and pro forma capital position relative to its capital requirements
as of October 31, 2003. Pro forma capital levels assume receipt by St. Edmond's
Federal Savings Bank of 50% of the net proceeds. For a discussion of the
assumptions underlying the pro forma capital calculations presented below, see
Use of Proceeds, Capitalization and Pro Forma Data. The definitions of the terms
used in the table are those provided in the capital regulations issued by the
Office of Thrift Supervision. For a discussion of the capital standards
applicable to the Bank, see Regulation - Regulation of St. Edmond's Federal
Savings Bank - Regulatory Capital Requirements.

Pro Forma at October 31, 2003
-------------------------------------------------------------------------------------
Actual, at $14,875,000 $17,500,000 $20,125,000 $23,143,750
October 31, 2003 Offering Offering Offering Offering(1)
------------------- -------------------- --------------------- -------------------- -------------------

Percentage Percentage Percentage Percentage Percentage
Amount of Assets(2) Amount of Assets(2) Amount of Assets(2) Amount of Assets(2) Amount of Assets(2)
------ ------------ ------ ------------ ------ ------------ ------ ------------ ------ ------------
(Dollars in thousands)

GAAP Capital(3)........ $ 7,672 8.78% $13,106 14.12% $14,092 15.03% $15,077 15.91% $16,210 16.90%

Tangible Capital:
Actual or Pro Forma.. $ 7,756 8.86% $13,190 14.19% $14,176 15.09% $15,161 15.97% $16,294 16.97%
Required............. 1,313 1.50 1,394 1.50 1,409 1.50 1,424 1.50 1,441 1.50
------- ----- ------- ----- ------- ----- ------- ------- ------- --------
Excess............... $ 6,443 7.36% $11,796 12.69% $12,767 13.59% $13,737 14.47% $14,853 15.47%
======= ===== ======= ===== ======= ===== ======= ======= ====== =======

Core Capital:
Actual or Pro Forma.. $ 7,756 8.86% $13,190 14.19% $14,176 15.09% $15,161 15.97% $16,294 16.97%
Required(4).......... 3,500 4.00 3,717 4.00 3,757 4.00 3,796 4.00 3,842 4.00
------- ----- ------- ----- ------- ----- ------- -------- ------- --------
Excess............... $ 4,256 4.86% $ 9,473 10.19% $10,419 11.09% $11,365 11.97% $12,452 12.97%
======= ===== ======= ===== ======= ===== ======= ======= ====== =======

Risk-Based Capital:
Actual or
Pro Forma(5)(6).... $ 8,018 21.03% $13,452 34.31% $14,438 36.64% $15,423 38.95% $16,556 41.57%
Required............. 3,050 8.00 3,137 8.00 3,152 8.00 3,168 8.00 3,186 8.00
------- ----- ------- ----- ------- ----- ------- -------- ------- --------
Excess............... $ 4,968 13.03% $10,315 26.31% $11,286 28.64% $12,255 30.95% $13,370 33.57%
======= ===== ======= ===== ======= ===== ======= ======== ====== =======

- -----------------
(1) As adjusted to give effect to an increase in the number of shares which
could occur due to an increase in the offering range of up to 15% as a
result of regulatory considerations or changes in market or general
financial and economic conditions following the commencement of the
offerings.
(2) Tangible and core capital levels are shown as a percentage of total
adjusted assets. The risk-based capital level is shown as a percentage of
risk-weighted assets.
(3) GAAP Capital includes unrealized gain on available-for-sale securities,
net, which is not included as regulatory capital.
(4) The current Office of Thrift Supervision core capital requirement for
savings banks is 3% of total adjusted assets for thrifts that receive the
highest supervisory rating for safety and soundness and a 4% to 5% core
capital ratio requirement for all other thrifts. See Regulation -
Regulation of St. Edmond's Federal Savings Bank - Regulatory Capital
Requirements.
(5) Assumes net proceeds are invested in assets that carry a 50% risk-weighing.
(6) The difference between retained earnings under GAAP and regulatory
risk-based capital is attributable to the addition of the general valuation
allowance of $263,000 at October 31, 2003 and the subtraction of net
unrealized losses on available for sale securities of $84,000.

SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

The following consolidated financial information and other data in this
section are derived from the Bank's audited consolidated financial statements
for the years ended October 31, 2003 and 2002 and should be read together with
the Bank's consolidated financial statements and the notes thereto beginning on
page F-2 of this prospectus. References to 2003 or 2002 refer to the fiscal
years ended October 31, 2003 and 2002, respectively.

At October 31,
-------------------------
2003 2002
------- -------
(In thousands)

Balance Sheet:
Assets.................................... $87,367 $85,261
Loans receivable, net..................... 50,730 51,689
Investment securities..................... 27,337 23,492
Cash and cash equivalents................. 6,304 7,301
Deposits.................................. 72,273 70,015
FHLB borrowings........................... 6,637 6,694
Total retained earnings................... 7,672 7,387

For the Year Ended
October 31,
------------------------
2003 2002
------ ------
(In thousands)
Summary of Operations:
Interest and dividend income.............. $5,120 $5,837
Interest expense.......................... 2,450 2,999
------ ------
Net interest income....................... 2,670 2,838
Provision for loan losses................. 33 25
------ ------
Net interest income after provision
for loan losses......................... 2,637 2,813
Noninterest income........................ 386 365
Noninterest expense....................... 2,177 2,285
------ ------
Income before income taxes................ 846 893
Income taxes.............................. 290 364
------ ------
Net income................................ $ 556 $ 529
====== ======

Actual number (not in thousands):
Real estate loans outstanding............. 863 1,007
Deposit accounts.......................... 6,709 7,126
Offices................................... 2 2

Selected Financial Ratios

At or For
the Year Ended
October 31,
------------------
2003 2002
------- -------

Performance Ratios:
Return on average assets (net income divided by
average total assets) .......................... 0.64% 0.63%

Return on average equity (net income divided by
average equity) ................................. 7.23% 7.48%

Net interest rate spread ........................... 2.95% 3.18%

Net interest margin on average interest-earning
assets .......................................... 3.26% 3.54%

Average interest-earning assets to average
interest-bearing liabilities .................... 110.36% 109.56%

Efficiency ratio (noninterest expense divided by the
sum of net interest income and noninterest
income) ......................................... 71.24% 71.34%

Asset Quality Ratios:
Non-performing loans to total loans, net ........... 0.75% 1.06%

Non-performing assets to total assets .............. 0.48% 0.65%

Net charge-offs to average loans outstanding ....... 0.07% 0.33%

Allowance for loan losses to total loans ........... 0.51% 0.51%

Capital Ratios:
Average equity to average assets
(average equity divided by average total assets) 8.89% 8.40%

Equity to assets at period end ..................... 8.78% 8.66%

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

The consolidated analysis of St. Edmond's Federal Savings Bank and its
wholly-owned subsidiary, SE Investment Services Corp, is intended to assist the
reader in evaluating the performance of the Bank for the years ended October 31,
2003 and 2002. This information should be read in conjunction with the audited
consolidated financial statements and accompanying notes to the financial
statements.

The Bank, which is subject to regulation and supervision by the Office
of Thrift Supervision, is a federally-chartered savings bank headquartered in
Philadelphia, Pennsylvania. The Bank's principal sources of revenue consist of
income from its investment securities, residential real estate loans, commercial
real estate loans and consumer loans as well as from a variety of deposit
services offered to its customers through two offices located in Philadelphia
County, Pennsylvania, and Gloucester County, New Jersey.

For the year ended October 31, 2003, the Bank recognized net income of
$556,000 as compared to $529,000 for 2002. Return on average equity for 2003 was
7.23% as compared to 7.48% for 2002. The Bank's earnings reflect strategies
implemented in previous years to strengthen financial discipline by evaluating
inefficiencies within the organization that resulted in consolidation of some of
the branch network. Savings on occupancy and equipment more than offset a
reduction in net interest margin to 3.26% for 2003 from 3.54% for 2002.
Meanwhile, asset quality continued to improve as the Bank focused on enhancing
its credit risk management procedures that resulted in a reduction of
nonperforming assets. Loan volume continued to decline during the period due to
refinancings of mortgage loans as customers took advantage of the low interest
rate environment with other mortgage providers. The Bank's market area, which is
encompasses a large base of non-owner occupied rental property, will be
evaluated for further expansion in light of the current fixed rate environment.
Funding for operations continues to be primarily from a competitively priced
deposit product portfolio, as well as from investment repayments and maturities.
Leverage capital ratios remained strong at 8.89% in 2003. Overall, this
performance for the year was achieved during one of the most challenging periods
for the financial services industry.

The Bank is presently is in the process of a reorganization to a
holding company structure and is in the initial stages of a public offering that
is anticipated to commence in the second quarter of 2004. The proceeds from the
offering will be used for general business purposes. In addition, the Bank
expects to diversify its noninterest income in the upcoming year with bank-owned
life insurance of approximately $1,500,000. The earnings associated with this
product are considered to offset current employee benefits, as well as the
possible addition of supplemental employer retirement plans for executive
officers. The Bank's intention is to maintain a core group of employees for
managing the future of the Bank. Furthermore, costs resulting from an employee
stock ownership and restricted stock plan are anticipated as well in the near
future.

Business Strategy

The Bank's business strategy is to grow and improve its profitability
by:

o Emphasizing one- to four-family residential real estate lending,
while continuing to originate multi-family and commercial real
estate lending;

o Increasing assets;

o Utilizing the capital raised in the offering to help manage
interest rate risk;

o Offering new products and services to the Bank's customers; and

o Maintaining high asset quality.

A full description of the Bank's products and services begins on page
____.

Critical Accounting Policies

The Bank's accounting policies are integral to understanding the
results reported. The accounting policies are described in detail in Note 1 of
the financial statements. The Bank's most complex accounting policies require
management's judgment to ascertain the valuation of assets, liabilities,
commitments and contingencies. The Bank has established detailed policies and
control procedures that are intended to ensure valuation methods are well
controlled and applied consistently from period to period. In addition, the
policies and procedures are intended to ensure that the process for changing
methodologies occurs in an appropriate manner. Management believes that the
determination of the allowances for loan losses is a critical policy.

Allowance for Loan Losses. Arriving at an appropriate level of
allowance for loan losses involves a high degree of judgment. The Bank's
allowance for loan losses provides for losses based upon evaluations of known
and inherent losses in the loan portfolio that are both probable and reasonable
to estimate. Accordingly, all loan losses are charged to the allowance, and all
recoveries are credited to it.

Management uses historical information to assess the allowance for loan
losses as well as the prevailing business environment, as it is affected by
changing economic conditions and various external factors, which may impact the
portfolio in ways currently unforeseen. The allowance is increased by provisions
for loan losses and by recoveries of loans previously charged-off and reduced by
loans charged- off. For a full discussion of the Bank's methodology of assessing
the reserve for loan losses, refer to Note 1 of the financial statements
commencing on page F-7.

Comparison of the Results of Operations for the Fiscal Years Ended October 31,
2003 and October 31, 2002

The Bank recorded net income of $556,000 in 2003, which represents an
increase of $27,000, or 5.1%, over 2002. This increase in net income is
primarily due to a reduction in noninterest expenses of $108,000, which resulted
from savings associated with closing a branch office located in Germantown,
Pennsylvania coupled with a reduction in income taxes of $74,000. Partially
offsetting these reductions in expenses in 2003 was a decrease in net interest
income of $168,000.

Net Interest Income. Net interest income for 2003 decreased to
$2,670,000 as compared to $2,838,000 for 2002. Interest income for 2003 was
$5,120,000 as compared to $5,837,000 for 2002. This decrease of $717,000 or
12.3% was influenced primarily by a decrease in the interest earned on loans
receivable of $716,000 and was the product of both volume and rate fluctuations
during the period. The average balance of loans receivable decreased $5,597,000
to $49,785,000 during 2003 and was the result of mortgage loan repayments due to
customers' refinancing in the current low interest rate environment. The
tax-equivalent yield on interest earning assets decreased to 6.21% for 2003 from
7.27% for 2002, and

primarily resulted from a 113 basis point and 50 basis point decrease in
investment securities and loans receivable, respectively. During 2003,
$15,076,000 in called, matured, and repayed investment securities were
reinvested at substantially lower rates. The inflow of deposits coupled with the
rapid repayment of mortgage-backed securities has resulted in reinvestment
options at substantially lower rates than the previous year. The overall lower
interest rate environment resulted during 2002, when interest rates were driven
downward by an aggressive rate reduction policy by the Federal Reserve Board.

Interest expense decreased $550,000 or 18.3% for 2003 to $2,450,000
from $3,000,000 for 2002. Interest expense incurred on deposits decreased
$478,000 for 2003 as compared to 2002 and was primarily attributable to the
current interest rate environment that resulted in a lowering of the cost of
funds to 3.25% for 2003 as compared to 4.08% for 2002. Although the Bank reduced
its costs on all deposit products during 2003, certificates of deposits were the
primary target as such costs decreased by 94 basis points. Interest expense on
borrowings also decreased to $222,000 for 2003 as compared to $294,000 for 2002
as a result of a decline in average balances.

Loan Loss Provision. The provision for loan losses was $33,000 in 2003
as compared to $25,000 in 2002. The loan loss provision is based upon
management's assessment of a variety of factors, including types and amounts of
nonperforming loans, historical loss experience, collectibility of collateral
values and guaranties, pending legal action for collection of loans and related
guaranties, and current economic conditions. The loan loss provision reflects
management's judgment of the known and inherent losses in the loan portfolio
that are both probable and reasonable to estimate. Although management believes
the loan loss provision has been sufficient to maintain an adequate allowance
for loan losses, actual loan losses could exceed the amounts that have been
charged to operations.

Noninterest Income. Total noninterest income increased slightly in 2003
to $386,000 from $365,000 for 2002. Noninterest income items are primarily
comprised of service charges and fees on deposit account activity, along with
fee income derived from other financial related services. The increase is
principally due to the recognition of additional fee income from deposit
accounts due to an increase in both the transactional fees being charged and the
volume of related transactions. The Bank anticipates the investment in a
bank-owned life insurance product in 2004 which should generate additional
noninterest income.

Noninterest Expense. Noninterest expense decreased 4.7% to $2,177,000
for 2003 as compared to $2,285,000 for 2002. Noninterest expense items are
primarily comprised of compensation and employee benefits, occupancy and
equipment, federal insurance premiums, data processing, professional fees and
various other operational expenses. Compensation and employee benefits decreased
$70,000, or 6.0%, primarily as a result of a decrease in the number of full time
equivalent employees coupled with a reduction in discretionary benefit costs.
Occupancy and equipment expenses decreased 29.8% or $116,000 as a result of
closing the Bank's former Germantown branch and a reduction in depreciation
recognized on capitalized assets. Net real estate operations, which consist of
the costs incurred in the temporary operation of other real estate owned, as
well as the gains and losses associated with the disposal of such properties,
increased $74,000 in 2003 as a result of a reduction in gains on the sale of
other real estate. In addition, federal deposit insurance premiums decreased
39.6% for 2003 as a result of the lowering of the Bank's risk rating, while
professional fees increased $20,000 during 2003 from increased services for
general business activities. Noninterest expenses will be expected to increase
in 2004 due to the additional costs of professional fees associated with
becoming a public company, the expected implementation of supplemental employer
retirement plans for key employees, and expenses from an employee stock
ownership and restricted stock plan.

Income Taxes. Income taxes declined 20.3% to $290,000 for 2003 from
$364,000 for 2002 due to a reduction in income and a decrease in the tax rate.
The effective tax rate was reduced to 34.2% for 2003 from 40.7% for 2002 as a
result of an increase in tax-exempt income.

Comparison of Financial Condition at October 31, 2003 and October 31, 2002

Assets and Liabilities. The Bank's total assets increased $2,106,000,
or 2.5%, to $87,367,000 at October 31, 2003 from $85,261,000 at October 31,
2002. This increase primarily resulted from a $3,845,000, or 16.4%, increase in
investment securities available for sale that was primarily funded by a
$2,258,000 net increase in customer deposits.

Cash and cash equivalents decreased $997,000 to $6,304,000 at October
31, 2003 from $7,301,000 at October 31, 2002. The decrease resulted from
temporary fluctuations with deposits with other banks due to the timing of
customer activity.

Investment securities available for sale increased to $27,337,000 at
October 31, 2003 from $23,492,000 at October 31, 2002. The increase in 2003 is
due to investment purchases of $19,541,000, primarily in U.S. Government agency
securities, which was partially offset by investment calls and maturities of
$15,076,000. Purchases of U.S. Government agency securities, which have all been
classified as available for sale, typically have maturities ranging from 1 to 5
years with yields between 3.0% and 4.8%. During 2003, principal repayments on
mortgage-backed securities were utilized for other operational purposes,
including the purchase of U.S. Government agency securities. This has resulted
in a more diversified investment portfolio mix between U.S. Government agency
and mortgage- backed securities. Management was able to fund this growth with an
influx of deposits coupled with the utilization of excess cash and cash
equivalents, and the reinvestment of called and matured securities during the
year.

Net loans receivable, which remained relatively stable in 2003, were
$50,730,000 at October 31, 2003 as compared to $51,689,000 at October 31, 2002.
A slight decrease in one-to-four family mortgages was noted during the year as
customers' refinanced loans in light of the continued low interest rate
environment. Management maintains a loan pricing structure that while
competitive, also considers interest rate risk and liquidity risk. As of October
31, 2003, the Bank had commitments to fund loans of $3,273,000.

At October 31, 2003, the allowance for loan losses decreased to
$263,000 from $267,000 at October 31, 2002, and represented 0.51% of the gross
loan portfolio at October 31, 2003 and 2002. Nonperforming loans as a percentage
of total net loans at October 31, 2003 decreased to 0.75% from 1.06% for 2002.
The Bank had nonaccrual loans of $370,000 and $543,000 at October 31, 2003 and
2002, respectively. Management does not believe the nonaccrual loans or any
amounts classified as nonperforming will have a significant effect on operations
or liquidity in 2004. Furthermore, management is not aware of any trends or
uncertainties related to any loans classified as doubtful or substandard that
might have a material effect on earnings, liquidity, or capital resources.

Total deposits increased $2,258,000, or 3.2%, to $72,273,000 at October
31, 2003 from $70,015,110 at October 31, 2002. Such growth, which was primarily
concentrated in transactional, savings, and money market deposits, increased
$1,281,000, $1,114,000, and $727,000, respectively, and resulted from continual
marketing efforts by management, as well as management's competitive pricing of
such products. Deposit growth also was driven by a general shift in customer
preference away from

the equity markets and into insured bank deposits. Although time deposits
declined, they continued to account for 71.6% of the total deposit portfolio and
remain a dominant resource for funds.

Federal Home Loan Bank borrowings decreased slightly in 2003 to
$6,637,000 and approximately 60% of these borrowings will mature in 2004. The
proceeds from these borrowings were originally utilized to supplement the
funding of loan demand.

Retained Earnings. Total retained earnings increased $285,000 at
October 31, 2003 due to net income of $556,000 that was offset partially by a
decrease in accumulated other comprehensive income of $271,000. Accumulated
other comprehensive income decreased as a result of changes in the net
unrealized gain on investment securities available for sale due to fluctuations
in interest rates. Because of interest rate volatility, accumulated other
comprehensive income could materially fluctuate for each interim period and
year-end period depending on economic and interest rate conditions. The Bank is
currently in the process of an initial stock offering, which will include an
employee stock ownership plan and a restricted stock plan. The proceeds would
result in additional equity in the immediate future which will be used for
general business purposes.

Liquidity and Capital Resources

Liquidity management for the Bank is measured and monitored on both a
short- and long-term basis, allowing management to better understand and react
to emerging balance sheet trends. After assessing actual and projected cash flow
needs, management seeks to obtain funding at the most economical cost to the
Bank. Both short- and long-term liquidity needs are addressed by maturities and
sales of investments securities, and loan repayments and maturities. The use of
these resources, in conjunction with access to credit, provides the core
ingredients for satisfying depositor, borrower, and creditor needs.

The Bank's liquid assets consist of cash and cash equivalents,
certificates of deposit in other financial institutions and investment
securities classified as available for sale. The level of these assets is
dependent on the Bank's operating, investing, and financing activities during
any given period. At October 31, 2003, cash and cash equivalents totaled
$6,304,000 or 7.2% of total assets while investment securities classified as
available for sale and certificates of deposit in other financial institutions
totaled $27,521,000 or 31.5% of total assets. Management believes that the
liquidity needs of the Bank are satisfied by the current balance of cash and
cash equivalents, readily available access to traditional funding sources, FHLB
borrowings, and the portion of the investment and loan portfolios that matures
within one year. These sources of funds will enable the Bank to meet cash
obligations and off-balance sheet commitments of $3,273,000 as they come due in
the upcoming year. Certificates of deposit maturing within one year or less at
October 31, 2003 totaled $21,717,000. Management believes these will stay with
the Bank upon maturity.

Operating activities provided net cash of $604,000 and $532,000 for
2003 and 2002, respectively, and were generated principally from net income of
$556,000 and $529,000 in each of these respective periods.

Investing activities consist primarily of loan originations and
repayments and investment purchases and maturities. For 2003, cash used by
investing activities primarily consisted of investment purchases of $19,541,000.
Partially offsetting the cash used by investing activities was $15,076,000 of
proceeds from investment security maturities and repayments, as well as net loan
repayments of $746,000. For the same period ended 2002, investing activities
provided $1,649,000 in funds principally from the net

repayment of loans, the proceeds from repayments and maturities of investment
securities, and proceeds from the sales of real estate acquired through
foreclosure of $7,304,000, $8,752,000, and $953,000 respectively. Partially
offsetting these amounts was the purchase of investment securities for
$15,372,000. For both periods, the lower interest rate environment has resulted
in numerous securities being called and one to four family loans being
refinanced. The Bank anticipates the purchase of a bank- owned life insurance
product in 2004.

Financing activities consist of the solicitation and repayment of
customer deposits, borrowings and repayments, and advances by borrowers for
taxes and insurance. During 2003, net cash provided by financing activities
totaled $2,112,000 and was principally derived from an increase in deposits.
During 2002, net cash used for financing activities totaled $204,000, and was
principally derived from repayments of Federal Home Loan Bank borrowings of
$1,151,000 that were partially offset by an increase in deposits of $1,099,000.
The Bank has $4,061,000 in FHLB borrowings coming due in 2004 and is expected to
roll a portion of this into another loan with the FHLB. The funds from the
initial public offering are expected to reduce the remaining portion, as well as
fund general business operations.

The following table discloses the Bank's contractual borrowing
obligations as of October 31, 2003.

Less Than After
Total 1 Year 1-3 Years 4-5 Years 5 Years
------ --------- ----------- --------- -------
(Dollars in thousands)

Federal Home Loan Bank borrowings.... $6,637 $4,061 $ 76 $1,500 $1,000
====== ====== ===== ====== ======

At October 31, 2003, the Bank had a maximum borrowing capacity of $58.8
million with the Federal Home Loan Bank.

The following table discloses the Bank's new loan commitments as of
October 31, 2003, including unused lines of credit.

Total
Amounts Less Than Over
Committed 1 Year 1-3 Years 4-5 Years 5 Years
--------- ------ --------- --------- -------
(Dollars in thousands)

Construction loans in process(1)............. $ 31 $ 31 $ - $ - $ -
Other commitments to extend credit(2)........ 3,242 3,242 - - -
------ ------ ------- ------- -------
Total..................................... $3,273 $3,273 $ - $ - $ -
====== ====== ======= ======= =======

- ------------------
(1) Includes construction loans which will convert to permanent loans.
(2) Represents amounts committed to customers.

Historically, the Bank's primary source of capital has been retained
earnings, which, with net retained income, has supported past growth and
expansion. The proceeds of the stock offering in connection with the Bank's
mutual-to-stock conversion are part of management's new capital planning policy
to ensure compliance with regulations and to permit future expansion.

The Bank is subject to federal regulations imposing minimum capital
requirements. Management monitors the Bank's Total risk-based, Tier I
risk-based, and Tier I leverage capital ratios to assess compliance with
regulatory guidelines. At October 31, 2003, the Bank exceeded the minimum
capital ratio requirements. The Bank's Total risk-based, Tier I risk-based, and
Tier I leverage capital ratios were 21.0%, 20.3%, and 8.9%, respectively, at
October 31, 2003.

Recent Accounting Pronouncements

In August 2001, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("FAS") No. 143, Accounting
for Asset Retirement Obligations, which requires that the fair value of a
liability be recognized when incurred for the retirement of a long-lived asset
and the value of the asset be increased by that amount. The statement also
requires that the liability be maintained at its present value in subsequent
periods and outlines certain disclosures for such obligations. The adoption of
this statement, which was effective November 1, 2002, did not have a material
effect on the Bank's financial position or results of operations.

In July 2002, the FASB issued FAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities, which requires companies to
recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of a commitment to an exit or disposal plan.
This statement replaces EITF Issue No. 94-3, Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (Including
Certain Costs Incurred in a Restructuring). The new statement is effective for
exit or disposal activities initiated after December 31, 2002. The adoption of
this statement did not have a material effect on the Bank's financial position
or results of operations.

On December 31, 2002, the FASB issued FAS No. 148, Accounting for
Stock-Based Compensation -- Transition and Disclosure, which amends FAS No. 123,
Accounting for Stock-Based Compensation. FAS No. 148 amends the disclosure
requirements of FAS No. 123 to require more prominent and more frequent
disclosures in financial statements about the effects of stock-based
compensation. Under the provisions of FAS No. 123, companies that adopted the
preferable, fair value based method were required to apply that method
prospectively for new stock option awards. This contributed to a "ramp-up"
effect on stock-based compensation expense in the first few years following
adoption, which caused concern for companies and investors because of the lack
of consistency in reported results. To address that concern, FAS No. 148
provides two additional methods of transition that reflect an entity's full
complement of stock-based compensation expense immediately upon adoption,
thereby eliminating the ramp-up effect. FAS No. 148 also improves the clarity
and prominence of disclosures about the pro forma effects of using the fair
value based method of accounting for stock-based compensation for all companies
- -- regardless of the accounting method used -- by requiring that the data be
presented more prominently and in a more user-friendly format in the footnotes
to the financial statements. In addition, the statement improves the timeliness
of those disclosures by requiring that this information be included in interim
as well as annual financial statements. The transition guidance and annual
disclosure provisions of FAS No. 148 are effective for fiscal years ending after
December 15, 2002, with earlier application permitted in certain circumstances.
The interim disclosure provisions are effective for financial reports containing
financial statements for interim periods beginning after December 15, 2002. The
adoption of this statement did not have a material effect on the Bank's
financial position or results of operations, but may in the future after the
implementation of stock benefit plans.

activities under FAS No. 133. The amendments set forth in FAS No. 149 improve
financial reporting by requiring that contracts with comparable characteristics
be accounted for similarly. In particular, this statement clarifies under what
circumstances a contract with an initial net investment meets the characteristic
of a derivative as discussed in FAS No. 133. In addition, it clarifies when a
derivative contains a financing component that warrants special reporting in the
statement of cash flows. FAS No.149 amends certain other existing
pronouncements. Those changes will result in more consistent reporting of
contracts that are derivatives in their entirety or that contain embedded
derivatives that warrant separate accounting. This statement is effective for
contracts entered into or modified after September 30, 2003, except as stated
below and for hedging relationships designated after September 30, 2003. The
guidance should be applied prospectively. The provisions of this statement that
relate to FAS No. 133 Implementation Issues that have been effective for fiscal
quarters that began prior to September 15, 2003, should continue to be applied
in accordance with their respective effective dates. In addition, certain
provisions relating to forward purchases or sales of when-issued securities or
other securities that do not yet exist, should be applied to existing contracts
as well as new contracts entered into after September 30, 2003. The adoption of
this statement did not have a material effect on the Bank's financial position
or results of operations.

In May 2003, the FASB issued FAS 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). Such
instruments may have been previously classified as equity. 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. These financial instrument are subject to the
provisions of this Statement for the first fiscal period beginning after
December 15, 2003. The adoption of this statement has not and is not expected to
have a material effect on the Bank's reported equity.

In November 2002, the FASB issued Interpretation No. 45, Guarantor's
Accounting and Disclosure requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others. This interpretation elaborates on the
disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued.
This interpretation clarifies that a guarantor is required to disclose (a) the
nature of the guarantee, including the approximate term of the guarantee, how
the guarantee arose, and the events or circumstances that would require the
guarantor to perform under the guarantee; (b) the maximum potential amount of
future payments under the guarantee; (c) the carrying amount of the liability,
if any, for the guarantor's obligations under the guarantee; and (d) the nature
and extent of any recourse provisions or available collateral that would enable
the guarantor to recover the amounts paid under the guarantee. This
interpretation also clarifies that a guarantor is required to recognize, at the
inception of a guarantee, a liability for the obligations it has undertaken in
issuing the guarantee, including its ongoing obligation to stand ready to
perform over the term of the guarantee in the event that the specified
triggering events or conditions occur. The objective of the initial measurement
of that liability is the fair value of the guarantee at its inception. The
initial recognition and initial measurement provisions of this interpretation
are applicable on a prospective basis to guarantees issued or modified after
December 31, 2002, irrespective of the guarantor's fiscal year-end. The
disclosure requirements in this interpretation are effective for financial
statements of interim or annual periods ending after December 15, 2002. The
adoption of this interpretation did not have a material effect on the Bank's
financial position or results of operations.

In January 2003, the FASB issued Interpretation No. 46, Consolidation
of Variable Interest Entities, in an effort to expand upon and strengthen
existing accounting guidance that addresses when a company should include in its
financial statements the assets, liabilities and activities of another entity.
The objective of this interpretation is not to restrict the use of variable
interest entities but to improve financial reporting by companies involved with
variable interest entities. Until now, one company generally has included
another entity in its consolidated financial statements only if it controlled
the entity through voting interests. This interpretation changes that by
requiring a variable interest entity to be consolidated by a company if that
company is subject to a majority of the risk of loss from the variable interest
entity's activities or entitled to receive a majority of the entity's residual
returns or both. The consolidation requirements of this interpretation apply
immediately to variable interest entities created after January 31, 2003. The
consolidation requirements apply to older entities in the first fiscal year or
interim period beginning after June 15, 2003. Certain of the disclosure
requirements apply in all financial statements issued after January 31, 2003,
regardless of when the variable interest entity was established. In October,
2003, the FASB decided to defer to the fourth quarter from the third quarter the
implementation date for Interpretation No. 46. This deferral only applies to
variable interest entities that existed prior to February 1, 2003. The adoption
of this interpretation has not and is not expected to have a material effect on
the Bank's financial position or results of operations.

Impact of Inflation and Changing Prices

The Bank's consolidated financial statements and related data herein
have been prepared in accordance with accounting principles generally accepted
in the United States of America, which require measurement of financial
condition and results of operations in terms of historical dollars, without
considering changes in the relative purchasing power of money over time due to
inflation.

Because the primary assets and liabilities of the Bank are monetary in
nature, changes in the general level of prices for goods and services have a
relatively minor impact on total expenses. Increases in operating expenses such
as salaries and maintenance are in part attributable to inflation. However,
interest rates have a far more significant effect than inflation on the
performance of financial institutions, including the Bank.

Market Risk and Net Portfolio Value

Market risk is the risk of loss of income from adverse changes in
prices and rates that are set by the market. The Bank is at risk that changes in
interest rates may affect the income it receives on lending and investment
activities, as well as the costs associated with its deposits and borrowings. A
sudden and substantial change in interest rates may affect earnings if the rates
of interest that the Bank earns on its loans and investments does not change at
the same speed, to the same extent or on the same basis as the interest rates
the Bank pays on its deposits and borrowings. The Bank makes it a high priority
to actively monitor and manage its exposure to interest rate risk.

The Bank seeks to manage interest rate sensitivity through its asset
and liability committee which is comprised of members of management and the
Board of Directors. The committee accomplishes this by first evaluating the
interest rate risk that is inherent in the makeup of the Bank's assets and
liabilities. The committee then considers the Bank's business strategy, current
operating environment, capital and liquidity requirements, as well as the Bank's
current performance objectives, to determine an appropriate level of risk. The
Board of Directors has adopted guidelines within which the Bank manages its
interest rate risk, trying to minimize to the extent practical its vulnerability
to changes in interest rates. These strategies include focusing the Bank's
investment activities on short and medium-term securities,

emphasizing shorter-term loans and loans with adjustable rate features, and
maintaining and increasing the transaction deposit accounts, as these accounts
are considered to be relatively resistant to changes in interest rates and
utilizing deposit marketing programs to adjust the term or repricing of its
liabilities.

The Bank also monitors its interest rate sensitivity through the use of
an asset/liability management (ALM) model which estimates the change in its net
portfolio value ("NPV") in the event of a range of assumed changes in market
interest rates. Net portfolio value is defined as the current market value of
assets, less the current market value of liabilities, plus or minus the current
value of off-balance sheet items. The change in NPV measures the Bank's
vulnerability to changes in interest rates by estimating the change in the
market value of its assets, liabilities and off-balance sheet items as a result
of an instantaneous change in the general level of interest rates (i.e. shock
analysis). At October 31, 2003, the Bank had off-balance sheet items which are
described in Note 9 to the consolidated financial statements.

As market interest rates decreased during 2003, the average maturities
of loans and investment securities shortened due to quicker prepayments, causing
an increase in their value. Deposit accounts have only relatively minor
movements in a declining interest rate environment, since they are primarily
short term in nature, resulting in the value of deposits decreasing more quickly
than the value of assets increase. If market interest rates begin to increase,
the average maturities of loans and securities will lengthen as prepayments
decrease. Decreases in the value of these loans and securities occur at a more
rapid rate in the Bank's NPV model than increases in the value of its deposits.
The slow increase in the value of the Bank's deposits in a rising interest rate
environment is due to the high concentration of time deposits in the deposit
base which have terms of one year or less.

The following table lists the percentage change in the Bank's net
portfolio value (NPV) assuming an immediate change in interest rates of plus or
minus up to 300 basis points from the level at September 30, 2003. The -200bp
and -300bp scenarios are not shown due to low prevailing interest rate
environment.

NPV as % of
(Net Portfolio Value ("NPV") Present Value of Assets
------------------------------------------------- ----------------------------
Change in Change
Rates (basis Estimated Amount of Percent of NPV (basis
points) NPV ($)Change(1) NPV Change(2) Ratio(%)(3) points)(4)
- ------------------------------------------------------------------- ----------------------------
(Dollars in thousands)

+300 $7,435 $(3,193) (30)% 8.70% (289)
+200 8,716 (1,912) (18)% 9.94% (165)
+100 9,812 (816) (8)% 10.93% (67)
0 10,628 11.59% -
-100 10,500 (128) (1)% 11.32% (27)
-200 - - - % -% -
-300 - - - % -% -

- --------------
(1) Represents the excess (deficiency) of the estimated NPV assuming the
indicated change in interest rates minus the estimated NPV assuming no
change in interest rates.
(2) Calculated as the amount of change in the estimated NPV divided by the
estimated NPV assuming no change in interest rates.
(3) Calculated as estimated NPV divided by present value of total assets.
(4) Calculated as the excess (deficiency) of the NPV ratio assuming the
indicated change in interest rates over the estimated NPV ratio assuming no
change in interest rates.

The NPV model, shown above, which is prepared by the Office of Thrift
Supervision , has certain shortcomings and is as of September 30, 2003, and not
the Bank's fiscal year end of October 31, 2003. Based on the model, certain
assumptions are made that may or may not actually reflect how actual yields

and costs will react to market interest rates. For example, the NPV model
assumes that the makeup of its interest rate sensitive assets and liabilities
will remain constant over the period being measured. Thus, although using such a
model can be instructive in providing an indication of the Bank's exposure to
interest rate risk, the Bank cannot precisely forecast the effects of a change
in market interest rates, and the results indicated by the model are likely to
differ from actual results.

Average Balance Sheet. The following table sets forth certain
information relating to the Bank for the years ended October 31, 2003 and 2002.
The average yields and costs are derived by dividing income or expense by the
average balance of assets or liabilities, respectively, for the years presented.
Average balances are derived from daily balances. Yields on investment
securities have been computed on a tax-equivalent basis.

For the Year Ended October 31,
---------------------------------------------------------------------------------

2003 2002
--------------------------------------- -----------------------------------
Average Average Average Average
Balance Interest Yield/Cost Balance Interest Yield/Cost
------- -------- ---------- ------- -------- ----------
(Dollars in thousands)

Interest-earning assets:
Loans receivable net (1)....................... $49,785 $3,934 7.90% $55,382 $4,650 8.40%
Investment securities ......................... 27,839 1,111 4.13 20,972 1,094 5.26
Other interest-earning assets.................. 5,487 75 1.37 4,117 93 2.26
------- ------ ------- ------
Total interest-earning assets................. 83,111 $5,120 6.21 80,471 $5,837 7.27
------ ------
Non-interest-earning assets..................... 3,375 3,659
------- -------
Total assets.................................. $86,486 $84,130
======= =======
Interest-bearing liabilities:
Interest-bearing demand deposits............... $ 2,968 $ 36 1.21% $ 2,865 $ 39 1.36%
Money market deposits.......................... 4,108 80 1.95 3,528 97 2.75
Savings accounts............................... 9,081 146 1.61 8,657 178 2.06
Certificates of deposit........................ 52,490 1,966 3.75 51,038 2,391 4.68
FHLB borrowings................................ 6,664 222 3.33 7,359 294 4.00
------- ------ ------- ------
Total interest-bearing liabilities............ 75,311 $2,450 3.24 73,447 $2,999 4.09
------ ------
Non-interest-bearing liabilities................ 3,486 3,614
------- -------
Total liabilities.............................. 78,797 77,061
Retained earnings............................... 7,689 7,069
------- -------
Total liabilities and retained earnings........ $86,486 $84,130
======= =======
Net interest income............................. $2,670 $2,838
====== ======
Interest rate spread (2)........................ 2.95% 3.18%
====== ======
Net yield on interest-earning assets(3)......... 3.26% 3.54%
====== ======
Ratio of average interest-earning assets to
average interest-bearing liabilities......... 110.36% 109.56%
====== ======

- --------------------------------------
(1) Non-accruing loans have been included in loans receivable, net, and the
effect of such inclusion was not material.
(2) Interest rate spread represents the difference between the average yield on
interest-earning assets and the average cost of interest-bearing
liabilities.
(3) Net yield on interest-earning assets represents net interest income as a
percentage of average interest-earning assets.

Rate/Volume Analysis. The relationship between the volume and rates of
the Bank's interest-bearing assets and interest-bearing liabilities influences
the Bank's net interest income. The following table reflects the sensitivity of
the Bank's interest income and interest expense to changes in volume and in
prevailing interest rates during the periods indicated. Each category reflects
the: (1) changes in volume (changes in volume multiplied by old rate); (2)
changes in rate (changes in rate multiplied by old volume); and (3) net change.
The net change attributable to the combined impact of volume and rate has been
allocated proportionally to the absolute dollar amounts of change in each.

Year Ended October 31,
----------------------------------------------------
2003 vs. 2002 2002 vs. 2001
------------------------- -------------------------
Increase (Decrease) Increase (Decrease)
Due to Due to
------------------- -------------------
Volume Rate Net Volume Rate Net
------ ---- --- ------ ---- ---
(Dollars in thousands)

Interest and dividend income:
Loans receivable .................. $(452) $(264) $(716) $(511) (130) $(641)
Investment securities ............. 49 (32) 17 249 (100) 149
Other interest-earning assets ..... 96 (114) (18) 21 (121) (100)
----- ----- ----- ----- ----- -----
Total interest-earning assets .... $(307) $(410) $(717) $(241) $(351) $(592)
===== ===== ===== ===== ===== =====

Interest expense:
Interest-bearing demand deposits .. 1 (4) (3) 5 1 6
Money market deposits ............. 22 (39) (17) 39 (50) (11)
Savings accounts .................. 9 (41) (32) (13) (33) (46)
Certificates of deposit ........... 70 (495) (425) 111 (489) (378)
FHLB borrowings ................... (26) (46) (72) (140) (161) (301)
----- ----- ----- ----- ----- -----
Total interest-bearing liabilities $ 76 $(625) $(549) $ 2 $(732) $(730)
===== ===== ===== ===== ===== =====

Change in net interest income ...... $(383) $ 215 $(168) $(243) $ 381 $ 138
===== ===== ===== ===== ===== =====

BUSINESS OF SE FINANCIAL CORP.

Upon completion of the conversion we will own all of the stock of the
Bank. We have not engaged in any significant business to date. Prior to the
conversion, we will not transact any material business. We will invest our
initial capitalization as discussed in the Use of Proceeds section on page ___.
In the future, we may pursue other business activities, including investment
alternatives and diversification of operations. There are, however, no current
plans for these activities. Initially, we will not maintain offices separate
from those of the Bank or employ any persons other than certain of the Bank's
officers. Officers of SE Financial Corp. will not be separately compensated for
their service.

BUSINESS OF ST. EDMOND'S FEDERAL SAVINGS BANK

General

St. Edmond's Federal Savings Bank was originally chartered and began
operations in 1912 as St. Edmond's Building and Loan Association. It became a
federally-chartered savings bank in 1995. The Bank's deposits are federally
insured by the Savings Association Insurance Fund as administered by the Federal
Deposit Insurance Corporation. The Bank is regulated by the Office of Thrift
Supervision and the Federal Deposit Insurance Corporation.

At October 31, 2003, the Bank had total assets, deposits, and retained
earnings of $87.4 million, $72.3 million, and $7.7 million, respectively. The
Bank attracts deposits from the general public and uses these deposits primarily
to originate loans and to purchase mortgage-backed and other securities. The
principal sources of funds for the Bank's lending and investing activities are
deposits, the repayment and maturity of loans and the sale, maturity, and call
of securities. The principal source of income is interest on loans and
investment and mortgage-backed securities. The principal expense is interest
paid on deposits.

Market Area and Competition

The Bank defines its primary market areas to include certain postal
codes surrounding its main office located in Philadelphia, Pennsylvania, with an
emphasis on the south Philadelphia market, and certain postal codes surrounding
its branch office located in Sewell, New Jersey. The Bank also originates loans
on real estate located within a 100 mile radius of its main office and considers
this area as within its primary market area.

The Philadelphia market is an urban market area and can be
characterized as having a blue collar customer base, lower average household
incomes and lower average home prices. In comparison to the Philadelphia market,
the Sewell market is a more affluent suburban area with a more white collar
customer base with higher average household incomes and higher average home
prices.

The Philadelphia office is the primary office for the Bank's
activities. At October 31, 2003, deposits at the Philadelphia office totaled
approximately $68.3 million and deposits at the Sewell office totaled
approximately $4.0 million.

The Bank's business of attracting deposits and making loans is
primarily conducted within its primary market areas. A downturn in the local
economy could reduce the amount of funds available for deposit, the ability of
borrowers to repay their loans and collateral values, which would likely hurt
the Bank's profitability.

The Bank faces substantial competition in attracting deposits, which
are its primary source of funds for lending, and in the origination of loans.
Many of the Bank's competitors are significantly larger institutions and have
greater financial and managerial resources. The Bank's ability to compete
successfully is a significant factor affecting its profitability.

The Bank's competition for deposits and loans historically has come
from other insured financial institutions such as local and regional commercial
banks, thrift institutions, and credit unions located in the Bank's primary
market areas. The Bank also competes with mortgage banking companies for real
estate loans, and commercial banks and savings institutions for consumer loans.
The Bank also faces competition for funds from investment products such as
mutual funds, short-term money funds and corporate and government securities.

Lending Activities

General. The Bank's loan portfolio is primarily comprised of one- to
four-family residential real estate loans, most of which have fixed rates of
interest.

Going forward, the Bank intends to grow its total loan portfolio while
generally maintaining the same relative percentage of each category as they
stood at October 31, 2003.

The following table analyzes the composition of the Bank's loan
portfolio by loan category at the dates indicated.

At October 31,
-------------------------------------------------------
2003 2002
----------------------- ------------------------
Amount Percent Amount Percent
------ ------- ------ -------
(Dollars in thousands)

Type of Loans:
Mortgage loans:
One-to-four family(1).................... $36,151 70.78% $37,810 72.51%
Multi-family.............................. 466 0.91 1,289 2.47
Commercial real estate.................... 4,006 7.84 4,334 8.31
Construction.............................. 1,416 2.77 151 0.29

Home equity loans........................... 8,409 16.46 7,794 14.95

Loans on savings accounts.................. 473 0.93 425 0.82
Other....................................... 151 0.30 343 0.66
------- ------ ------- ------

Total loans................................. 51,072 100.00% 52,146 100.00%
====== ======

Less:
Net deferred loan fees and
unamortized premiums.................. 79 190
Allowance for loan losses................. 263 267
------- -------

Total loans, net............................ $50,730 $51,689
======= =======

- ---------------------
(1) Included in this category are lines of credit.

Loan Maturity Schedule. The following table sets forth the maturity or
repricing of the Bank's loan portfolio at October 31, 2003.

One-to - Home Loans
four Multi- Commercial equity on savings
family(1) family real estate Construction loans accounts Other Total
--------- ------ ----------- ------------ ----- -------- ----- -----
(In thousands)

Amounts Due:
Within 1 Year.............. $ 271 $ 53 $ 187 $ 634 $ 263 $ 44 $ 58 $ 1,510
------- ------ ------ ------ ------ ---- ---- -------

After 1 year:
1 to 3 years............. 591 213 469 782 404 163 16 2,638
3 to 5 years............. 1,061 - 96 - 547 266 39 2,009
5 to 10 years............ 12,768 21 2,576 - 6,738 - - 22,103
10 to 15 years........... 21,096 179 678 - 457 - 38 22,448
Over 15 years............ 364 - - - - - - 364
------- ------ ------ ------ ------ ---- ---- -------

Total due after one year... 35,880 413 3,819 782 8,146 429 93 49,562
------- ------ ------ ------ ------ ---- ---- -------
Total amount due........... $36,151 $ 466 $4,006 $1,416 $8,409 $473 $151 $51,072
======= ====== ====== ====== ====== ==== ==== =======

- ------------------------
(1) Included in this category are lines of credit.

The following table sets forth the dollar amount of all loans at
October 31, 2003 due after October 31, 2004, which have fixed interest rates and
which have floating or adjustable interest rates.

Floating or
Fixed Rates Adjustable Rates Total
----------- ---------------- -----
(In thousands)
One-to -four family(1)........... $30,654 $5,226 $35,880
Multi-family..................... 413 - 413
Commercial real estate........... 2,892 927 3,819
Construction..................... - 782 782
Home equity loans................ 6,489 1,657 8,146
Loans on savings accounts........ 429 - 429
Other............................ 93 - 93
------- ------ -------
Total.......................... $40,970 $8,592 $49,562
======= ====== =======
- ------------------------
(1) Included in this category are lines of credit.

One- To-Four Family Mortgage Loans. The Bank's primary lending activity
consists of the origination of one- to four-family mortgage loans, the majority
of which are secured by property located in Philadelphia County, Pennsylvania.
Included in this category are mortgage loans on one- to-four family properties
that include retail or service activities and are considered mixed-use
properties. Also included in the one- to-four family category are home equity
lines of credit.

The Bank generally originates mortgage loans in amounts of up to 80% of
the lesser of the appraised value or purchase price of a mortgaged property, but
will also permit loan-to-value ratios of up to 95%. For loans exceeding an 80%
loan-to-value ratio, the Bank requires the borrower to obtain private mortgage
insurance covering the Bank for any loss on the amount of the loan in excess of
80% in the event of foreclosure. The majority of the Bank's one- to four-family
mortgage loans are originated with fixed rates and have terms of up to thirty
years, however, the maturities of such loans are generally 15 years or less. The
Bank also offers adjustable-rate loans which have interest rates that adjust
annually to the yield on one-year, three-year or five-year U.S. Treasury
securities plus a margin. The Bank's adjustable-rate loans have terms of up to
30 years with initial fixed-rate periods of one, three or five years according
to the terms of the loan. The Bank's one and three-year adjustable-rate
mortgages generally have a cap of two percentage points on rate adjustments
during any one year and five percentage points over the life of the loan. The
five-year adjustable rate loan does not have such limitations.

The Bank generally makes its fixed rate mortgage loans to meet the
secondary mortgage market standards of Fannie Mae. The Bank also makes some
non-conforming loans in order to meet the needs of its community and customers.

Substantially all of the Bank's residential mortgages include "due on
sale" clauses, which are provisions giving the Bank the right to declare a loan
immediately payable if the borrower sells or otherwise transfers an interest in
the property to a third party. Property appraisals on real estate securing the
Bank's single-family residential loans are made by state certified or licensed
independent appraisers approved by the Board of Directors. Appraisals are
performed in accordance with applicable regulations and policies. The Bank
generally requires title insurance policies on all first mortgage real estate
loans originated. All property secured loans require fire and casualty
insurance. Loans made on property located in designated flood zones require
minimum flood insurance coverage based on the amount of the loan.

Reflecting the Bank's Philadelphia market area, at October 31, 2003 and
2002, approximately $10.9 million and $12.7 million, respectively, of the Bank's
one-to-four family mortgage loan portfolio consisted of mortgage loans on
nonowner-occupied properties, representing 30.1% and 33.6% of one-to- four
family mortgage loans and 21.5% and 24.6% of total loans. These consist
primarily of "investor loans" secured by one- to-four family residences. Such
loans are generally originated in amounts of up to 75% of the lesser of the
appraised value or purchase price of a mortgaged property. These loans generally
have fixed rates and terms of up to 20 years.

Multi-Family and Commercial Real Estate Loans. The Bank originates a
limited number of commercial real estate mortgage loans, including loans on
multi-family dwellings, retail/service space, and other income-producing
properties. The Bank generally requires no less than 25% downpayment or equity
for loans on multi-family properties and 30% for non-residential properties.
Typically these loans are made with fixed rates of interest with terms of up to
twenty-five years and may have a balloon feature. Essentially all of the Bank's
commercial real estate loans are within the Bank's primary market areas.

Commercial real estate loans generally are considered to entail
significantly greater risk than that which is involved with single family real
estate lending. The repayment of these loans typically is dependent on the
successful operations and income stream of the commercial real estate and the
borrower. These risks can be significantly affected by economic conditions. In
addition, commercial real estate lending generally requires substantially
greater evaluation and oversight efforts compared to residential real estate
lending.

Construction Lending. The Bank's construction lending includes loans to
individuals for construction of a primary residence. The Bank also participates
in loans to builders/developers for the construction of multi-unit or mixed-use
properties. The Bank originates construction loans in an amount up to 75% of the
appraised value for a multi-family or commercial real estate construction loan,
and up to 80% for a one- to four-family residential construction loan. The Bank
typically converts construction loans to individuals to permanent loans on
completion of construction but does not require take-out financing prior to
origination. Essentially all of the Bank's construction lending is in its
primary market areas.

Construction lending is generally considered to involve a higher degree
of credit risk than long- term permanent financing of residential properties.
The Bank's risk of loss on a construction loan is dependent largely upon the
accuracy of the initial estimate of the property's value at completion of
construction and the estimated cost of construction. If the estimate of
construction cost and the marketability of the property upon completion of the
project prove to be inaccurate, the Bank may be compelled to advance additional
funds to complete the construction. Furthermore, if the final value of the
completed property is less than the estimated amount, the value of the property
might not be sufficient to assure the repayment of the loan. If the Bank is
forced to foreclose on a project prior to completion, there is no assurance that
it will be able to recover all of the unpaid portion of the loan and it may have
to advance additional amounts for completion and/or hold the property for an
indeterminate period of time.

Home Equity Loans. The Bank's home equity loan portfolio includes fixed
rate second mortgage loans with terms of up to fifteen years. Home equity loans
are primarily originated in the Bank's primary market areas and are made in
amounts of up to 80% of value. The Bank also offers home equity loans on
investment properties in addition to loans on primary residences. Loans on
investment properties are made in amounts of up to 75% of value.

Loans on Savings Accounts. The Bank originates loans on passbook
savings accounts for terms up to five years and loans on certificates of deposit
with the Bank for terms equal to the certificate maturity. The Bank will
generally lend up to 90% of the account balance on a savings secured loan, not
to exceed $100,000. Amortization on such loans may be up to thirty years, with a
balloon payment on the maturity date.

Other Loans. Other loans offered by the Bank consist of unsecured
consumer loans up to a maximum of $5,000 per loan with terms generally up to
five years. Such loans have fixed rates of interest.

Consumer loans entail greater risks than residential mortgage loans,
particularly consumer loans that are unsecured. Further, consumer loan repayment
is dependent on the borrower's continuing financial stability and is more likely
to be adversely affected by job loss, divorce, illness or personal bankruptcy.
Finally, the application of various federal laws, including federal and state
bankruptcy and insolvency laws, may limit the amount which can be recovered on
consumer loans in the event of a default.

Loans to One Borrower. Under federal law, savings institutions have,
subject to certain exemptions, lending limits to one borrower in an amount equal
to the greater of $500,000 or 15% of the institution's unimpaired capital and
surplus. Accordingly, as of October 31, 2003, the Bank's loans to one borrower
limit was approximately $1.2 million.

The Bank's largest single borrower had an aggregate loan balance
outstanding of approximately $842,000 at October 31, 2003, representing one loan
secured by a residential investment property and one construction loan for
condominiums. The Bank's second largest borrower had an aggregate loan balance
outstanding of approximately $670,000 at October 31, 2003, representing a loan
secured by his personal residence. The Bank's third largest borrower had an
aggregate loan balance outstanding of approximately $500,000 at October 31,
2003, representing four loans secured by commercial real estate, including one
commercial property and four mixed-use properties, and one loan secured by a
residential investment property. The Bank's fourth largest borrower had an
aggregate loan balance outstanding of approximately $499,000 at October 31,
2003, representing a loan secured by his personal residence. The Bank's fifth
largest borrower had an aggregate loan balance outstanding of approximately
$464,000 at October 31, 2003, representing four real estate loans secured by two
commercial properties and three two- to four-family real estate in the Bank's
market areas and one loan secured by a second home. At October 31, 2003, all of
these lending relationships were current and performing in accordance with the
terms of their loan agreements.

Loan Originations, Purchases and Solicitation and Processing. The
Bank's customary sources of loan applications include repeat customers,
real-estate brokers who meet the Bank's underwriting standards, referrals, and
"walk-in" customers, and from advertising in local publications.

The Bank generally does not purchase whole loans. The Bank does
occasionally purchase participations in loans originated by others. The Bank
purchased participations totaling $1.8 million in 2003 and did not purchase any
participations in 2002. As of October 31, 2003, the Bank's largest participation
loan had a balance of approximately $634,000, representing a 50% participation
on a condominium construction project in downtown Philadelphia.

Loan Commitments. The Bank gives written commitments to prospective
borrowers on all mortgage loans. Generally, the commitment requires acceptance
within sixty days of the date of the

issuance. The total amount of commitments to extend credit for mortgage and
consumer loans as of October 31, 2003, was approximately $3.3 million, including
commitments on lines of credit and including undisbursed portions of
construction loans totaling $31,000.

Loan Approvals. The management committee has authority to approve real
estate loans to any one borrower up to an aggregate of $300,000. Loans in excess
of $300,000 and less than 10% of the Bank's unimpaired capital may be approved
by the Board loan committee. Loans in excess of 10% of the Bank's unimpaired
capital must be approved by the full Board of Directors.

Non-Performing Loans and Problem Assets

Collection Procedures. The borrower is notified by mail when a loan is
15 days delinquent. If the delinquency continues, subsequent efforts are made to
contact the delinquent borrower and a second collection notice is sent. When a
loan is ninety days delinquent, it is referred to an attorney for collection.
All reasonable attempts are made to collect from borrowers prior to referral to
an attorney for collection. In certain instances, the Bank may at its
determination modify the loan to enable the borrower to reorganize his financial
affairs and the Bank attempts to work with the borrower to establish a repayment
schedule to cure the delinquency.

As to mortgage loans, if a foreclosure action is taken and the loan is
not reinstated, paid in full or refinanced, the property is sold at judicial
sale at which the Bank may be the buyer if there are no adequate offers to
satisfy the debt. Any property acquired as the result of foreclosure or by deed
in lieu of foreclosure is classified as real estate owned ("REO") until it is
sold or otherwise disposed of by the Bank. When REO is acquired, it is recorded
at the lower of the unpaid principal balance of the related loan or its fair
market value less estimated selling costs. The initial writedown of the property
is charged to the allowance for loan losses. Adjustments to the carrying value
of the properties that result from subsequent declines in value are charged to
operations in the period in which the declines occur.

Loans are reviewed on a regular basis and are placed on a non-accrual
status when they are more than ninety days delinquent. Loans may be placed on a
non-accrual status at any time if, in the opinion of management, the collection
of additional interest is doubtful. Interest accrued and unpaid at the time a
loan is placed on non-accrual status is charged against interest income.
Subsequent payments are either applied to the outstanding principal balance or
recorded as interest income, depending on the assessment of the ultimate
collectibility of the loan.

Non-Performing Assets. The following table provides information
regarding the Bank's non- performing loans and other non-performing assets as of
the end of each of the last two fiscal years.

At
October 31,
----------------------
2003 2002
---- ----
(Dollars in thousands)

Loans accounted for on a non-accrual basis:
Mortgage loans:
One-to-four family......................................... $311 $499
Multi-family............................................... 59 -
Commercial real estate..................................... - 18
Home equity loans............................................ - 26
---- ----
Total........................................................ $370 $543
==== ====

Accruing loans which are contractually past due 90 days or more:
Loans on savings accounts.................................... 12 1
Other........................................................ - 6
----- -----
Total........................................................ $ 12 $ 7
===== =====
Total non-performing loans................................... $ 382 $ 550
===== ====
Real estate owned............................................ $ 39 $ 25
===== =====
Other non-performing assets.................................. $ - $ -
===== =====
Total non-performing assets.................................. $ 421 $ 575
==== =====
Total non-performing loans to net loans...................... 0.75% 1.06%
==== ====
Total non-performing loans to total assets................... 0.44% 0.65%
==== ====
Total non-performing assets to total assets.................. 0.48% 0.67%
==== ====

For the year ended October 31, 2003, the amount of interest that would
have been recorded on loans accounted for on a non-accrual basis if those loans
had been current according to the original loan agreements for the entire period
was $15,000. This amount was not included in the Bank's interest income for the
period. The amount of interest income on loans accounted for on a non-accrual
basis that was included in income during the year ended October 31, 2003 was $0.

Classified Assets. Management, in compliance with Office of Thrift
Supervision guidelines, has instituted an internal loan review program, whereby
loans are classified as special mention, substandard, doubtful or loss. When a
loan is classified as substandard or doubtful, management is required to
establish a valuation reserve for loan losses in an amount considered prudent by
management. When management classifies a portion of a loan as loss, a reserve
equal to 100% of the loss amount is required to be established or the loan is to
be charged-off.

An asset is considered substandard if it is inadequately protected by
the paying capacity and net worth of the obligor or the collateral pledged, if
any. Substandard assets include those characterized by the distinct possibility
that the insured institution will sustain some loss if the deficiencies are not
corrected. Assets classified as doubtful have all of the weaknesses inherent in
those classified substandard, with the added characteristic that the weaknesses
present make collection or liquidation in full, highly questionable and
improbable, on the basis of currently existing facts, conditions, and values.
Assets classified as loss are those considered uncollectible and of so little
value that their continuance as

assets without the establishment of a specific loss reserve is not warranted.
Assets which do not currently expose the insured institution to a sufficient
degree of risk to warrant classification in one of the aforementioned categories
but possess credit deficiencies or potential weaknesses are required to be
designated special mention by management.

Management's classification of assets is reviewed by the Board on a
monthly basis and by the regulatory agencies as part of their examination
process. The following table discloses the Bank's classification of assets and
designation of certain loans as special mention as of October 31, 2003. At
October 31, 2003, all of the classified assets and special mention designated
assets were loans.

At October 31,
2003
--------------
(In thousands)

Special Mention........................ $551
Substandard............................ 305
Doubtful............................... -
Loss................................... -
----
Total................................ $856
====

Allowance for Loan Losses. The allowance for loan losses is a valuation
account that reflects the Bank's evaluation of the losses known and inherent in
its loan portfolio that are both probable and reasonable to estimate associated
both with lending activities and particular problem assets. The Bank maintains
the allowance through provisions for loan losses that are charged to income in
the period they are established. The Bank charges losses on loans against the
allowance for loan losses when it believes the collection of loan principal is
unlikely. Recoveries on loans previously charged-off are added back to the
allowance.

The Bank's evaluation of the appropriate amount to provide for loan
losses includes separate review of all loans on which the collectibility of
principal may not be reasonably assured. The Bank evaluates all classified loans
individually and bases its determination of a loss factor on the likelihood of
collectibility of principal including consideration of the value of the
underlying collateral securing the loan. Larger loans, which would generally
include multi-family mortgages, other commercial real estate loans and
construction loans, are also generally evaluated for impairment individually.
The Bank also segregates loans by loan category as part of its allowance
evaluation, and evaluates homogenous loans as a group.

Although there may be other factors that also warrant consideration in
maintaining an allowance at a level sufficient to provide for probable and
reasonably estimable losses, the Bank considers the following factors in
connection with its determination of appropriate loss factors and as part of its
overall evaluation of the allowance for loan losses:

o its historical loan loss experience;
o internal analysis of credit quality;
o general levels of non-performing loans and delinquencies;
o changes in loan concentrations by loan category;
o current estimated collateral values;
o evaluation of credit quality conducted in bank regulatory
examinations; and
o economic and market trends impacting the Bank's lending area.

This evaluation is inherently subjective as it requires estimates that
are susceptible to significant revisions as more information becomes available
or as future events change. Future additions to the allowance for loan losses
may be necessary if economic and other conditions in the future differ
substantially from the current operating environment. In addition, the Office of
Thrift Supervision as an integral part of its examination process, periodically
reviews the Bank's loan and foreclosed real estate portfolios and the related
allowance for loan losses and valuation allowance for foreclosed real estate.
The Office of Thrift Supervision may require the Bank to increase the allowance
for loan losses or the valuation allowance for foreclosed real estate based on
its review of information available at the time of the examination, which would
negatively affect the Bank's earnings.

It is the Bank's policy to review its loan portfolio, in accordance
with regulatory classification procedures, on at least a quarterly basis.
Additionally, the Bank maintains a program of reviewing loan applications prior
to making the loan and immediately after loans are made in an effort to maintain
loan quality.

The following table sets forth information with respect to the Bank's
allowance for loan losses for the periods indicated:

For the Year Ended
October 31,
---------------------
2003 2002
-------- --------
(Dollars in thousands)

Allowance balance (at beginning of period) $ 267 $ 424
-------- --------
Provision for loan losses ................ 33 25
-------- --------

Loans charged-off:
Mortgage loans:
One-to-four family ..................... 45 179
Multi-family ........................... - 9
Other .................................... 4 9
-------- --------
Total charge-offs ........................ 49 197

Recoveries:
Mortgage loans ........................... - -
Other .................................... 12 15
-------- --------
Total recoveries ......................... 12 15
-------- --------
Net (charge-offs) recoveries ............. (37) (182)
-------- --------
Allowance balance (at end of period) ..... $ 263 $ 267
======== ========

Total loans outstanding .................. $ 51,072 $ 52,146
======== ========
Average loans outstanding ................ $ 49,785 $ 55,382
======== ========
Allowance for loan losses as a percent
of total loans outstanding ............ 0.51% 0.51%
======== ========
Net loans charged off as a percent of
average loans outstanding ............. 0.07% 0.33%
======== ========

Allocation of Allowance for Loan Losses. The following table sets forth
the allocation of the Bank's allowance for loan losses by loan category and the
percent of loans in each category to total loans receivable, net, at the dates
indicated. The portion of the loan loss allowance allocated to each loan
category does not represent the total available for future losses which may
occur within the loan category since the total loan loss allowance is a
valuation reserve applicable to the entire loan portfolio.

At October 31,
--------------------------------------------------
2003 2002
----------------------- -----------------------
Percent of Percent of
Loans to Loans to
Amount Total Loans Amount Total Loans
------ ----------- ------ -----------
(Dollars in thousands)

At end of period allocated to:
Mortgage loans:
One-to-four family............... $193 70.78% $211 72.51%
Multi-family..................... 4 0.91 3 2.47
Commercial real estate........... 32 7.84 33 8.31
Construction..................... 10 2.77 1 0.29
Home equity loans.................. 17 16.46 10 14.95
Loans on savings accounts.......... - 0.93 - 0.82
Other.............................. 7 0.30 9 0.66
---- ------ ---- ------
Total allowance.................... $263 100.00% $267 100.00%
==== ====== ==== ======

Investment Activities

General. Federally chartered savings banks have the authority to invest
in various types of liquid assets, including United States Government and
government agency obligations, securities of various federal agencies and
government-sponsored entities (including securities collateralized by
mortgages), certificates of deposits of insured banks and savings institutions,
municipal securities and corporate debt securities.

SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," requires that securities be categorized as "held to maturity,"
"trading securities" or "available for sale," based on management's intent as to
the ultimate disposition of each security. SFAS No. 115 allows debt securities
to be classified as "held to maturity" and reported in financial statements at
amortized cost only if the reporting entity has the positive intent and ability
to hold these securities to maturity. Securities that might be sold in response
to changes in market interest rates, changes in the security's prepayment risk,
increases in loan demand, or other similar factors cannot be classified as "held
to maturity."

The Bank does not currently use or maintain a trading account. Debt and
equity securities not classified as "held to maturity" are classified as
"available for sale." These securities are reported at fair value, and
unrealized gains and losses on the securities are excluded from earnings and
reported, net of deferred taxes, as a separate component of equity.

All of the Bank's securities carry market risk insofar as increases in
market rates of interest may cause a decrease in their market value. Investments
in securities are made based on certain considerations, which include the
interest rate, tax considerations, yield, settlement date and maturity of the
security, the Bank's liquidity position, and anticipated cash needs and sources.
The effect that the

proposed security would have on the Bank's credit and interest rate risk and
risk-based capital is also considered. The Bank purchases securities to provide
necessary liquidity for day-to-day operations, and when investable funds exceed
loan demand.

The investment policy of the Bank, which is established by the Board of
Directors, is designed to foster earnings and liquidity within prudent interest
rate risk guidelines, while complementing the Bank's lending activities.
Generally, the Bank's investment policy is to invest funds in various categories
of securities and maturities based upon the Bank's liquidity needs,
asset/liability management policies, investment quality, marketability and
performance objectives. Investment authority is held by the President and
Executive Vice President/Chief Financial Officer, individually up to $2.0
million and jointly up to $5.0 million. All investments greater than $5.0
million must be approved by the Board. The Board of Directors reviews the Bank's
securities portfolio on a monthly basis.

The Bank's investment policy does not permit participation in hedging
programs, interest rate swaps, or other activities involving the use of
off-balance sheet derivative financial instruments. Further, the Bank's
investment policy does not permit investment in securities which are not rated
investment grade 'A' or higher.

The various obligations held in the Bank's securities portfolio have
varying characteristics as to rate, maturity and call provisions. Expected
maturities will differ from contractual maturities due to scheduled repayments
and because borrowers may have the right to call or prepay obligations with and
without prepayment penalties. Callable securities totaled approximately $14.9
million at October 31, 2003, and the Bank's investment yield could be reduced if
these securities are called prior to maturity.

Mortgage-backed Securities. Mortgage-backed securities represent a
participation interest in a pool of one- to four-family or multi-family
mortgages, although the Bank focuses its investments on mortgage-backed
securities secured by one- to four-family mortgages.

The mortgage originators use intermediaries (generally United States
Government agencies and government-sponsored enterprises) to pool and repackage
the participation interests in the form of securities, with investors such as
the Bank receiving the principal and interest payments on the mortgages. Such
United States Government agencies and government-sponsored enterprises guarantee
the payment of principal and interest to investors.

Mortgage-backed securities are typically issued with stated principal
amounts, and the securities are backed by pools of mortgages that have loans
with interest rates that are within a specific range and have varying
maturities. The life of a mortgage-backed pass-through security thus
approximates the life of the underlying mortgages. The characteristics of the
underlying pool of mortgages, i.e., fixed-rate or adjustable-rate, as well as
prepayment risk, are passed on to the certificate holder. Mortgage-backed
securities are generally referred to as mortgage participation certificates or
pass-through certificates. The Bank's mortgage-backed securities consist
primarily of securities issued by the Government National Mortgage Association,
Freddie Mac and Fannie Mae. Mortgage-backed securities generally yield less than
the mortgage loans underlying such securities because of their payment
guarantees or credit enhancements which offer nominal credit risk to the
security holder.

Securities Portfolio

The following table sets forth the carrying value of the Bank's
investment and mortgage-backed securities portfolio at the dates indicated. At
the dates indicated, the Bank had no securities classified as held-to-maturity.

At October 31,
-----------------
2003 2002
------- -------
(In thousands)

Securities Available for Sale (at fair value):
- ----------------------------------------------
Mortgage-backed securities ................... $10,933 $17,523
U.S. government agency securities ............ 13,482 4,779
Municipal securities ......................... 2,741 1,012
Mutual funds ................................. 181 178
------- -------
Total securities available for sale ......... $27,337 $23,492
======= =======

Carrying Values, Yields and Maturities. The following table sets forth
certain information regarding the carrying values, weighted average yields and
maturities of the Bank's investment and mortgage-backed securities portfolio at
October 31, 2003.

At October 31, 2003
-----------------------------------------------------------------------------------------------------
More than
One Year or Less One to Five Years Five to Ten Years Ten Years Total Investment Securities
----------------- ----------------- ----------------- ---------------- ---------------------------
Carrying Average Carrying Average Carrying Average Carrying Average Carrying Average Market
Value Yield Value Yield Value Yield Value Yield Value Yield Value
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------
(Dollars in thousands)

Mortgage-backed securities.. $ - -% $ 74 8.00% $ - -% $10,859 4.99% $10,933 4.99% $10,933

U.S. government agency
securities............... - - 976 4.30 2,215 3.89 10,291 4.08 13,482 4.06 13,482

Municipal securities........ - - 457 3.74 2,004 3.73 280 6.50 2,741 3.99 2,741

Mutual funds................ 181 2.09 - - - - - - 181 2.12 181
----- ---- ------ ---- ------ ---- ------- ---- ------- ---- -------
Total..................... $ 181 2.09% $1,507 4.31% $4,219 3.81% $21,430 4.57% $27,337 4.41% $27,337
===== ==== ====== ==== ====== ==== ======= ==== ======= ==== =======

Sources of Funds

General. Deposits are the major source of the Bank's funds for lending
and other investment purposes. In addition, the Bank derives funds from loan and
mortgage-backed securities principal repayments, and proceeds from the maturity,
call and sale of mortgage-backed securities and investment securities. While
scheduled loan and mortgage-backed securities payments are a relatively stable
source of funds, deposit inflows and loan and mortgage-backed securities
prepayments are significantly influenced by general interest rates and money
market conditions. Borrowings (principally from the FHLB) are also periodically
used to supplement the amount of funds for lending and investment.

Deposits. Deposits are obtained primarily from residents of
Philadelphia County, Pennsylvania, and to a lesser degree, Gloucester County,
New Jersey. Historically, the Bank has used traditional methods of advertising,
including print media, direct mail and inserts included with customer
statements, however, it relies primarily on its reputation in the community and
referrals to attract new customers and deposits. The Bank has from time to time
utilized the services of deposit brokers but does not currently do so. At
October31, 2003, brokered deposits totalled $1.1 million. The Bank occasionally
offers premiums or incentives for opening accounts.

The Bank's determination of interest rates is based upon a number of
factors, including: (1) the Bank's need for funds based on loan demand, current
maturities of deposits and other cash flow needs; (2) a current survey of a
selected group of competitors' rates for similar products; (3) the Bank's
current cost of funds and its yield on assets; and (4) the alternate cost of
funds on a wholesale basis, in particular the cost of borrowings from the FHLB.
Interest rates are reviewed and set by management weekly.

The Bank has a high percentage of certificates of deposit in its
deposit portfolio (71.6% at October, 31, 2003). The Bank's liquidity could be
reduced if a significant amount of certificates of deposit, maturing within a
short period of time, were not renewed. A significant portion of the
certificates of deposit remain with the Bank after they mature and the Bank
believes that this will continue. However, the need to retain these time
deposits could result in an increase in the Bank's cost of funds.

Deposit accounts are summarized at October 31, as follows:

2003 2002
------------------------------------ -----------------------------------
Amount % Amount %
------------------- ---------------- --------------------- ------------

Non interest-bearing demand.... $2,889,656 4.0% $2,478,535 3.5%
NOW accounts................... 3,232,298 4.5 2,362,208 3.4
Money market deposit........... 4,612,594 6.5 3,885,936 5.6
Savings........................ 9,683,297 13.4 8,569,198 12.2
----------- ----- ----------- -----
20,417,845 28.4 17,295,877 24.7
----------- ----- ----------- -----
Time certificates of deposit:
0.90 - 2.00%................. 13,400,400 18.5 100,578 0.1
2.01 - 4.00%................. 18,534,202 25.6 26,451,371 37.8
4.01 - 6.00%................. 18,953,245 26.2 24,926,897 35.6
6.01 - 8.00%................. 967,142 1.3 1,240,387 1.8
----------- ----- ----------- -----
51,854,989 71.6 52,719,233 75.3
----------- ----- ----------- -----
Total..................... $72,272,834 100.0% $70,015,110 100.0%
=========== ===== =========== =====

The scheduled maturities of time certificates of deposit as of October
31, 2003 are as follows:

Within one year......................................... $21,716,551
Beyond one year but within two years.................... 6,186,512
Beyond two years but within three years................. 6,476,535
Beyond three years but within four years................ 6,562,823
Beyond four years but within five years................. 10,912,568
-----------
Total.......................................... $51,854,989
===========

The following table shows the amount of the Bank's certificates of
deposit of $100,000 or more by time remaining until maturity as of October 31,
2003.

Certificates of Deposits
Maturity Period (In thousands)
- ---------------

Within three months................................... $1,579
Three through six months.............................. 778
Six through twelve months............................. 1,396
Over twelve months.................................... 5,331
------
Total............................................ $9,084
======

Borrowings. Deposits are the primary source of funds of the Bank's
lending and investment activities and for its general business purposes. The
Bank, as the need arises or in order to take advantage of funding opportunities,
borrows funds in the form of borrowings from the FHLB to supplement its supply
of lendable funds and to meet deposit withdrawal requirements. Borrowings from
the FHLB are typically secured by the Bank's stock in the FHLB and a portion of
the Bank's residential mortgage loans and may be secured by other assets, mainly
securities which are obligations of or guaranteed by the U.S. Government.

Maturities of other borrowings at December 31, are summarized as
follows:

2003 2002
------------------------------ --------------------------------
Year Ending Weighted- Weighted-
October 31, Amount Average Rate Amount Average Rate
- ----------- ------ ------------ ------ ------------

2003 $ - - $ 57,138 2.04%
2004 4,060,946 1.38% 4,060,946 6.47%
2005 65,009 6.47% 65,009 6.47%
2006 11,249 6.47% 11,249 6.47%
2008 1,500,000 6.24% 1,500,000 6.24%
2010 1,000,000 5.91% 1,000,000 5.91%
--------- ---------
$6,637,204 3.22% $6,694,342 3.65%
========= =========

See Note 7 of the notes to the financial statements for more
information regarding the Bank's borrowings.

Subsidiary Activity

The Bank is permitted to invest its assets in the capital stock of, or
originate secured or unsecured loans to, subsidiary corporations. The Bank has
one inactive service corporation.

Personnel

As of October 31, 2003, the Bank had twenty-one full-time employees and
two part-time employees. The employees are not represented by a collective
bargaining unit. The Bank believes its relationship with its employees to be
satisfactory.

Properties and Equipment

The Bank's main office is located at 1901-03 East Passyunk Avenue,
Philadelphia, Pennsylvania. The Bank uses an outside service company for its
data processing.

The following table sets forth the location of the Bank's main office
and branch office, the year the offices were opened and the net book value of
each office and its related equipment.

Year Facility Leased or Net Book Value at
Office Location Opened Owned October 31, 2003
- --------------- ------ ----- ----------------

Main Office
1901-03 E. Passyunk Avenue 1991 Owned $1,057,500
Philadelphia, PA 19148

Washington Township Branch
438 Ganttown Road
Suite 1-A
Sewell, NJ 08080 1996 Owned $ 91,500

Legal Proceedings

The Bank, from time to time, is a party to routine litigation, which
arises in the normal course of business, such as claims to enforce liens and
other issues incident to the business of the Bank. There were no lawsuits
pending or known to be contemplated against the Bank at October 31, 2003 that
would have a material effect on our operations or income.

REGULATION

Set forth below is a brief description of certain laws that relate to
the regulation of the Bank and SE Financial Corp. The description does not
purport to be complete and is qualified in its entirety by reference to
applicable laws and regulations. The Bank and SE Financial Corp. operate in a
highly regulated industry. This regulation and supervision establishes a
comprehensive framework of activities in which a federal savings institution may
engage and is intended primarily for the protection of the deposit insurance
fund and depositors.

Any change in applicable statutory and regulatory requirements, whether
by the Office of Thrift Supervision, the Federal Deposit Insurance Corporation
or the United State Congress, could have a

material adverse impact on SE Financial Corp. and St. Edmond's Federal Savings
Bank, and their operations. The adoption of regulations or the enactment of laws
that restrict the operations of St. Edmond's Federal Savings Bank and/or SE
Financial Corp. or impose burdensome requirements upon one or both of them could
reduce their profitability and could impair the value of the Bank's franchise,
resulting in negative effects on the trading price of SE Financial Corp. common
stock.

Regulation of SE Financial Corp.

General. Upon completion of the conversion, SE Financial Corp. will
become a savings and loan holding company within the meaning of Section 10(o) of
the Home Owners' Loan Act. It will be required to register as a savings and loan
holding company and file reports with the Office of Thrift Supervision and will
be subject to regulation and examination by the Office of Thrift Supervision. In
addition, the Office of Thrift Supervision will have enforcement authority over
SE Financial Corp. and any non-savings institution subsidiaries. This will
permit the Office of Thrift Supervision to restrict or prohibit activities that
it determines to be a serious risk to the Bank. This regulation is intended
primarily for the protection of the depositors and not for the benefit of you,
as stockholders of SE Financial Corp.

Activities Restrictions. As a savings and loan holding company, SE
Financial Corp. will be subject to statutory and regulatory restrictions on its
business activities. The nonbanking activities of SE Financial Corp. are
restricted to certain activities specified by Office of Thrift Supervision
regulation, which include performing services and holding properties used by a
savings institution subsidiary, activities authorized for savings and loan
holding companies as of March 5, 1987, and nonbanking activities permissible for
bank holding companies pursuant to the Bank Holding Company Act of 1956 or
authorized for financial holding companies pursuant to the Gramm-Leach-Bliley
Act. Before engaging in any non-banking activity or acquiring a company engaged
in any such activities, SE Financial Corp. must file with the Office of Thrift
Supervision either a prior notice of (in the case of non-banking activities
permissible for bank holding companies) an application regarding its planned
activity or acquisition.

Mergers and Acquisitions. SE Financial Corp. must obtain approval from
the Office of Thrift Supervision before acquiring more than 5% of the voting
stock of another savings institution or savings and loan holding company or
acquiring such an institution or holding company by merger, consolidation or
purchase of its assets. In evaluating an application for SE Financial Corp. to
acquire control of a savings institution, the Office of Thrift Supervision would
consider the financial and managerial resources and future prospects of SE
Financial Corp. and the target institution, the effect of the acquisition on the
risk to the insurance funds, the convenience and the needs of the community
(including St. Edmond's Federal Savings Bank's record of performance under the
Community Reinvestment Act) and competitive factors.

Sarbanes-Oxley Act of 2002. On July 30, 2002, the President signed into
law the Sarbanes-Oxley Act of 2002 (the "Act"), which implemented legislative
reforms intended to address corporate and accounting fraud. In addition to the
establishment of a new accounting oversight board that will enforce auditing,
quality control and independence standards and will be funded by fees from all
publicly traded companies, the Act places certain restrictions on the scope of
services that may be provided by accounting firms to their public company audit
clients. Any non-audit services being provided to a public company audit client
will require preapproval by the company's audit committee. In addition, the Act
makes certain changes to the requirements for partner rotation after a period of
time. The Act requires chief executive officers and chief financial officers, or
their equivalent, to certify to the accuracy of periodic reports filed with the
Securities and Exchange Commission, subject to civil and

criminal penalties if they knowingly or willingly violate this certification
requirement. In addition, under the Act, counsel will be required to report
evidence of a material violation of the securities laws or a breach of fiduciary
duty by a company to its chief executive officer or its chief legal officer,
and, if such officer does not appropriately respond, to report such evidence to
the audit committee or other similar committee of the board of directors or the
board itself.

Under the Act, longer prison terms will apply to corporate executives
who violate federal securities laws; the period during which certain types of
suits can be brought against a company or its officers is extended; and bonuses
issued to top executives prior to restatement of a company's financial
statements are now subject to disgorgement if such restatement was due to
corporate misconduct. Executives are also prohibited from insider trading during
retirement plan "blackout" periods, and loans to company executives (other than
loans by financial institutions permitted by federal rules and regulations) are
restricted. In addition, a provision directs that civil penalties levied by the
Securities and Exchange Commission as a result of any judicial or administrative
action under the Act be deposited to a fund for the benefit of harmed investors.
The Federal Accounts for Investor Restitution provision also requires the
Securities and Exchange Commission to develop methods of improving collection
rates. The legislation accelerates the time frame for disclosures by public
companies, as they must immediately disclose any material changes in their
financial condition or operations. Directors and executive officers must also
provide information for most changes in ownership in a company's securities
within two business days of the change.

The Act also increases the oversight of, and codifies certain
requirements relating to audit committees of public companies and how they
interact with the company's "registered public accounting firm." Audit Committee
members must be independent and are absolutely barred from accepting consulting,
advisory or other compensatory fees from the issuer. In addition, companies must
disclose whether at least one member of the committee is a "financial expert"
(as such term will be defined by the Securities and Exchange Commission) and if
not, why not. Under the Act, a company's registered public accounting firm will
be prohibited from performing statutorily mandated audit services for a company
if such company's chief executive officer, chief financial officer, comptroller,
chief accounting officer or any person serving in equivalent positions had been
employed by such firm and participated in the audit of such company during the
one-year period preceding the audit initiation date. The Act also prohibits any
officer or director of a company or any other person acting under their
direction from taking any action to fraudulently influence, coerce, manipulate
or mislead any independent accountant engaged in the audit of the company's
financial statements for the purpose of rendering the financial statements
materially misleading. The Act also requires the Securities and Exchange
Commission to prescribe rules requiring inclusion of any internal control report
and assessment by management in the annual report to shareholders. The Act
requires the company's registered public accounting firm that issues the audit
report to attest to and report on management's assessment of the company's
internal controls.

Regulation of St. Edmond's Federal Savings

General. As a federally chartered, Federal Deposit Insurance
Corporation-insured savings bank, St. Edmond's Federal Savings Bank is subject
to extensive regulation by the Office of Thrift Supervision and the Federal
Deposit Insurance Corporation. This regulatory structure gives the regulatory
authorities extensive discretion in connection with their supervisory and
enforcement activities and examination policies, including policies regarding
the classification of assets and the level of the allowance for loan losses. The
activities of federal savings banks are subject to extensive regulation,
including restrictions or requirements with respect to loans to one borrower,
percentages of certain types of loans and investments to total assets, capital
distributions, permissible investments and lending activities, liquidity,

transactions with affiliates and community reinvestment. Federal savings banks
are also subject to reserve requirements imposed by the Federal Reserve System.
St. Edmond's Federal Savings Bank's relationship with its depositors and
borrowers is also regulated by federal law, especially in such matters as the
ownership of savings accounts and the form and content of the Bank's mortgage
documents.

St. Edmond's Federal Savings Bank must file reports with the Office of
Thrift Supervision and the Federal Deposit Insurance Corporation concerning its
activities and financial condition, and must obtain regulatory approvals prior
to entering into certain transactions such as mergers with or acquisitions of
other financial institutions. Any change in applicable statutory and regulatory
requirements, whether by the Office of Thrift Supervision, the Federal Deposit
Insurance Corporation or the United States Congress, could have a material
adverse impact on SE Financial Corp. and St. Edmond's Federal Savings Bank, and
their operations.

Supervisory Agreements. The Office of Thrift Supervision regularly
examines St. Edmond's Federal Savings Bank and prepares reports to the Bank's
Board of Directors on deficiencies, if any, found in its operations. Based on an
examination of the Bank commenced in August 2001, the Office of Thrift
Supervision concluded that the Bank had engaged in acts and practices that (i)
had resulted in violations of laws and regulations to which the Bank is subject
and/or (ii) were considered by the Office of Thrift Supervision to be unsafe and
unsound. As a result of this determination by the Office of Thrift Supervision,
the Bank entered into a supervisory agreement with the Office of Thrift
Supervision in February 2002 and operated under such agreement until such
agreement was terminated on December 10, 2003. The Bank's asset growth was
restricted while it was operating under such agreement. In addition, the Bank
was subject to a Safety and Soundness Compliance Plan from May 2001 to October
31, 2003.

Insurance of Deposit Accounts. The Federal Deposit Insurance
Corporation administers two separate deposit insurance funds. Generally, the
Bank Insurance Fund (the "BIF") insures the deposits of commercial banks and the
SAIF ("SAIF") insures the deposits of savings institutions. The Federal Deposit
Insurance Corporation is authorized to increase deposit insurance premiums if it
determines such increases are appropriate to maintain the reserves of either the
SAIF or BIF or to fund the administration of the Federal Deposit Insurance
Corporation. In addition, the Federal Deposit Insurance Corporation is
authorized to levy emergency special assessments on BIF and SAIF members.

In addition, all Federal Deposit Insurance Corporation-insured
institutions are required to pay assessments to the Federal Deposit Insurance
Corporation to fund interest payments on bonds issued by the Financing
Corporation, an agency of the federal government established to recapitalize the
predecessor to the Savings Association Insurance Fund. These assessments will
continue until the Financing Corporation bonds mature in 2019.

Regulatory Capital Requirements. Office of Thrift Supervision capital
regulations require savings institutions to meet three capital standards: (1)
tangible capital equal to 1.5% of total adjusted assets, (2) "Tier 1" or "core"
capital equal to at least 4% (3% if the institution has received the highest
possible rating on its most recent examination) of total adjusted assets, and
(3) risk-based capital equal to 8% of total risk-weighted assets. For St.
Edmond's Federal Savings Bank's compliance with these regulatory capital
standards, see Historical and Pro Forma Capital Compliance on page ___.

In addition, the Office of Thrift Supervision may require that a
savings institution that has a risk- based capital ratio of less than 8%, a
ratio of Tier 1 capital to risk-weighted assets of less than 4% or a ratio of
Tier 1 capital to total adjusted assets of less than 4% (3% if the institution
has received the highest

rating on its most recent examination) take certain action to increase its
capital ratios. If the savings institution's capital is significantly below the
minimum required levels of capital or if it is unsuccessful in increasing its
capital ratios, the Office of Thrift Supervision may restrict its activities.

Tier 1 is defined as common stockholders' equity, non-cumulative
perpetual preferred stock and related surplus, minority interests in the equity
accounts of consolidated subsidiaries and certain non- withdrawable accounts and
pledged deposits of mutual savings banks. St. Edmond's Federal Savings Bank does
not have any active subsidiaries, non-withdrawable accounts or pledged deposits.
Tier 1 capital is reduced by an institution's intangible assets, with limited
exceptions for certain servicing rights, interest-only strips and purchased
credit card relationships. Tier 1 capital is further reduced by an amount equal
to the savings institution's debt and equity investments in "non-includable"
subsidiaries engaged in activities not permissible for national banks, other
than subsidiaries engaged in activities undertaken as agent for customers or in
mortgage banking activities and subsidiaries that are depository institutions or
their holding companies.

Total capital equals the sum of Tier 1 and supplementary capital. The
components of supplementary capital include, among other items, cumulative
perpetual preferred stock, perpetual subordinated debt, mandatory convertible
subordinated debt, intermediate-term preferred stock, the allowance for loan
losses not designated for specific loan losses (up to 1.25% of risk-weighted
assets) and up to 45% of unrealized gains on equity securities. Overall,
supplementary capital is limited to 100% of Tier 1 capital. For purposes of
determining total capital, a savings institution's assets are reduced by the
amount of capital instruments held by other depository institutions pursuant to
reciprocal arrangements and by the amount of the institution's equity
investments (other than those deducted from Tier 1 and tangible capital) and its
high loan-to-value ratio land loans and non-residential construction loans. A
savings institution's risk-based capital requirement is measured against
risk-weighted assets, which equal the sum of each on-balance-sheet asset and the
credit-equivalent amount of each off-balance-sheet item after being multiplied
by an assigned risk weight. These risk weights range from 0% for cash to 100%
for delinquent loans, property acquired through foreclosure, commercial loans,
and certain other assets.

Prompt Corrective Regulatory Action. Under the Office of Thrift
Supervision Prompt Corrective Action regulations, the Office of Thrift
Supervision is required to take supervisory actions against undercapitalized
institutions, the severity of which depends upon the institution's level of
capital. Generally, a savings institution that has total risk-based capital of
less than 8.0%, or a leverage ratio or a Tier 1 capital ratio of less than 4.0%
is considered to be undercapitalized. A savings institution that has total
risk-based capital less than 6.0%, a Tier 1 risk-based capital ratio of less
than 3.0% or a leverage ratio that is less than 3.0% is considered to be
"significantly undercapitalized." A savings institution that has a tangible
capital to assets ratio equal to or less than 2.0% is deemed to be "critically
undercapitalized." Generally, the banking regulator is required to appoint a
receiver or conservator for an institution that is "critically
undercapitalized." The regulation also provides that a capital restoration plan
must be filed with the Office of Thrift Supervision within forty-five days of
the date an institution receives notice that it is "undercapitalized,"
"significantly undercapitalized" or "critically undercapitalized." In addition,
numerous mandatory supervisory actions become immediately applicable to the
institution, including, but not limited to, restrictions on growth, investment
activities, capital distributions, and affiliate transactions. The Office of
Thrift Supervision may also take any one of a number of discretionary
supervisory actions against undercapitalized institutions, including the
issuance of a capital directive and the replacement of senior executive officers
and directors.

Dividend and Other Capital Distribution Limitations. The Office of
Thrift Supervision imposes various restrictions or requirements on the ability
of savings institutions to make capital distributions, including cash dividends.

A savings institution that is a subsidiary of a savings and loan
holding company, as St. Edmond's Federal Savings Bank will be following the
conversion, must file an application or a notice with the Office of Thrift
Supervision at least thirty days before making a capital distribution. A savings
institution must file an application for prior approval of a capital
distribution if: (i) it is not eligible for expedited treatment under the
applications processing rules of the Office of Thrift Supervision; (ii) the
total amount of all capital distributions, including the proposed capital
distribution, for the applicable calendar year would exceed an amount equal to
the savings institution's net income for that year to date plus the
institution's retained net income for the preceding two years; (iii) it would
not adequately be capitalized after the capital distribution; or (iv) the
distribution would violate an agreement with the Office of Thrift Supervision or
applicable regulations.

The Office of Thrift Supervision may disapprove a notice or deny an
application for a capital distribution if: (i) the savings institution would be
undercapitalized following the capital distribution; (ii) the proposed capital
distribution raises safety and soundness concerns; or (iii) the capital
distribution would violate a prohibition contained in any statute, regulation or
agreement. In addition, a federal savings institution cannot distribute
regulatory capital that is required for its liquidation account.

St. Edmond's Federal Savings Bank will be required to file a capital
distribution notice or application with the Office of Thrift Supervision before
paying any dividend to SE Financial Corp. However, capital distributions by SE
Financial Corp., as a savings and loan holding company, will not be subject to
the Office of Thrift Supervision capital distribution rules.

Qualified Thrift Lender Test. Federal savings institutions must meet a
qualified thrift lender ("QTL") test or they become subject to the business
activity restrictions and branching rules applicable to national banks. To
qualify as a QTL, a savings institution must either (i) be deemed a "domestic
building and loan association" under the Internal Revenue Code by maintaining at
least 60% of its total assets in specified types of assets, including cash,
certain government securities, loans secured by and other assets related to
residential real property, educational loans and investments in premises of the
institution or (ii) satisfy the statutory QTL test set forth in the Home Owners'
Loan Act by maintaining at least 65% of its "portfolio assets" in certain
"Qualified Thrift Investments" (defined to include residential mortgages and
related equity investments, certain mortgage-related securities, small business
loans, student loans and credit card loans, and 50% of certain community
development loans). For purposes of the statutory QTL test, portfolio assets are
defined as total assets minus intangible assets, property used by the
institution in conducting its business and liquid assets equal to 20% of total
assets. A savings institution must maintain its status as a QTL on a monthly
basis in at least nine out of every twelve months. St. Edmond's Federal Savings
Bank met the QTL test as of October 31, 2003 and in each of the last twelve
months and, therefore, qualifies as a QTL.

Transactions with Affiliates. Generally, federal banking law requires
that transactions between a savings institution or its subsidiaries and its
affiliates must be on terms as favorable to the savings institution as
comparable transactions with non-affiliates. In addition, certain types of these
transactions are restricted to an aggregate percentage of the savings
institution's capital. Collateral in specified amounts must usually be provided
by affiliates in order to receive loans from the savings institution. In
addition, a savings institution may not extend credit to any affiliate engaged
in activities not permissible for a bank holding company or acquire the
securities of any affiliate that is not a subsidiary. The Office

of Thrift Supervision has the discretion to treat subsidiaries of savings
institutions as affiliates on a case-by-case basis.

Community Reinvestment Act. Under the Community Reinvestment Act
("CRA"), every insured depository institution, including St. Edmond's Federal
Savings Bank, has a continuing and affirmative obligation consistent with its
safe and sound operation to help meet the credit needs of its entire community,
including low and moderate income neighborhoods. The CRA does not establish
specific lending requirements or programs for financial institutions nor does it
limit an institution's discretion to develop the types of products and services
that it believes are best suited to its particular community. The CRA requires
the Office of Thrift Supervision to assess each savings institution's record of
meeting the credit needs of its community and to take such record into account
in its evaluation of certain applications by such institution, such as a merger
or the establishment of a branch by St. Edmond's Federal Savings Bank. An
unsatisfactory CRA examination rating may be used as the basis for the denial of
an application by the Office of Thrift Supervision. St. Edmond's Federal Savings
Bank received a "satisfactory" overall rating in its most recent CRA assessment
by the Office of Thrift Supervision.

Federal Home Loan Bank System. St. Edmond's Federal Savings Bank is a
member of the FHLB of Pittsburgh, which is one of twelve regional FHLBs. Each
FHLB serves as a reserve or central bank for its members within its assigned
region. It is funded primarily from funds deposited by financial institutions
and proceeds derived from the sale of consolidated obligations of the FHLB
System. It makes loans to members pursuant to policies and procedures
established by the board of directors of the FHLB.

As a member, St. Edmond's Federal Savings Bank is required to purchase
and maintain stock in the FHLB of Pittsburgh in an amount equal to the greater
of 1% of its aggregate unpaid residential mortgage loans, home purchase
contracts or similar obligations at the beginning of each year or 5% of FHLB
borrowings. The Bank is in compliance with this requirement. The FHLB imposes
various limitations on borrowings such as limiting the amount of certain types
of real estate related collateral to 30% of a member's capital and limiting
total borrowings to a member.

The FHLBs are required to provide funds for the resolution of troubled
savings institutions and to contribute to affordable housing programs through
direct loans or interest subsidies on borrowings targeted for community
investment and low- and moderate-income housing projects. These contributions
have adversely affected the level of FHLB dividends paid and could continue to
do so in the future.

The USA Patriot Act. In response to the events of September 11, 2001,
the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, or the USA Patriot Act, was signed
into law on October 26, 2001. The USA Patriot Act gives the federal government
new powers to address terrorist threats through enhanced domestic security
measures, expanded surveillance powers, increased information sharing and
broadened anti-money laundering requirements. By way of amendments to the Bank
Secrecy Act, Title III of the USA Patriot Act takes measures intended to
encourage information sharing among bank regulatory agencies and law enforcement
bodies. Further, certain provisions of Title III impose affirmative obligations
on a broad range of financial institutions, including banks, thrifts, brokers,
dealers, credit unions, money transfer agents and parties registered under the
Commodity Exchange Act.

Among other requirements, Title III of the USA Patriot Act imposes the
following requirements with respect to financial institutions:

o Pursuant to Section 352, all financial institutions must establish
anti-money laundering programs that include, at minimum: (i) internal
policies, procedures, and controls; (ii) specific designation of an
anti-money laundering compliance officer; (iii) ongoing employee
training programs; and (iv) an independent audit function to test the
anti-money laundering program.

o Section 326 authorizes the Secretary of the Department of Treasury, in
conjunction with other bank regulators, to issue regulations by October
26, 2002 that provide for minimum standards with respect to customer
identification at the time new accounts are opened.

o Section 312 requires financial institutions that establish, maintain,
administer, or manage private banking accounts or correspondence
accounts in the United States for non-United States persons or their
representatives (including foreign individuals visiting the United
States) to establish appropriate, specific, and, where necessary,
enhanced due diligence policies, procedures, and controls designed to
detect and report money laundering.

o Effective December 25, 2001, financial institutions are prohibited from
establishing, maintaining, administering or managing correspondent
accounts for foreign shell banks (foreign banks that do not have a
physical presence in any country), and will be subject to certain
record keeping obligations with respect to correspondent accounts of
foreign banks.

o Bank regulators are directed to consider a holding company's
effectiveness in combating money laundering when ruling on Federal
Reserve Act and Bank Merger Act applications.

The federal banking agencies have begun to propose and implement
regulations pursuant to the USA Patriot Act. These proposed and interim
regulations would require financial institutions to adopt the policies and
procedures contemplated by the USA Patriot Act.

TAXATION

Federal Taxation

Savings institutions are subject to the Internal Revenue Code of 1986,
as amended (the "Code"), in the same general manner as other corporations.

All thrift institutions are now subject to the same provisions as banks
with respect to deductions for bad debts. Thrift institutions that are treated
as "small banks" (the average adjusted bases for all assets of such institution
equals $500 million or less) under the Code may account for bad debts by using
the experience method for determining additions to their bad debt reserve.
Thrift institutions that are not treated as small banks must now use the
specific charge-off method.

SE Financial Corp. may exclude from its income 100% of dividends
received from St. Edmond's Federal Savings Bank as a member of the same
affiliated group of corporations. A 70% dividends received deduction generally
applies with respect to dividends received from corporations that are not
members of such affiliated group.

St. Edmond's Federal Savings Bank's federal income tax returns for 1998
and 1999 tax years were audited by the IRS in 2002.

State Taxation

Pennsylvania imposes an income tax of approximately 11.5% of net income
as computed under generally accepted accounting principles.

St. Edmond's Federal Savings Bank's state income tax returns have not
been audited during the past five years. For additional information, see Note __
of the notes to the financial statements.

MANAGEMENT

Directors and Officers of the Bank

The Bank's Board of Directors is composed of 11 members each of whom
serves for a term of three years, with approximately one-third of the directors
elected each year. SE Financial Corp.'s articles of incorporation and bylaws
require that directors be divided into four classes, as nearly equal in number
as possible, with approximately one-fourth of the directors elected each year.
All of SE Financial Corp.'s directors are also directors of the Bank. The Bank's
and SE Financial Corp.'s officers are elected annually by the respective Boards
and serve at the Boards' discretion.

The following table sets forth information with respect to the
directors and officers of the Bank, all of whom will continue to serve in the
same capacities at the Bank after the conversion.

Age at Current
October 31, Director Term
2003 Position Since Expires (1)
---------- ------------------------------------- ------------- -----------

Directors:
Marcy C. Panzer(2) 53 Chairman of the Board 1983 2007
Gilbert Barsky 80 Director 1962 2007
Samuel Barsky(2) 49 Director and Secretary 1989 2005
P. Charles DeRita 92 Director 1991 2006
Andrew A. Hines 76 Director 1985 2005
Ben Kovnat 86 Director 1983 2006
Megan L. Mahoney 43 Director 2003 2007
J. William Parker, Jr. 44 Director 2002 2006
Dr. Nicholas M. Renzi 67 Director 1980 2007
William F. Saldutti, III 44 Director 2001 2005
Susanne Spinell Shuster 53 Director 2001 2006

Directors Emeritus:
Mitchell Panzer 86 Director Emeritus N/A N/A

Executive Officers:
Frank S. DePaolo(2) 54 President N/A N/A
Joseph Sidebotham, Sr.(2) 48 Executive Vice President, Chief N/A N/A
Financial Officer and Controller

- ---------------------
(1) The terms for directors of SE Financial Corp. will be the same as those
of the Bank, except for Directors Marcy C. Panzer and Gilbert Barsky
whose terms will expire in 2008.
(2) Such individual will also serve as an officer of SE Financial Corp.

The business experience of each director, director emeritus and
executive officer of the Bank is set forth below. Each has held his or her
present position for at least the past five years, except as otherwise
indicated.

Directors

Marcy C. Panzer has been a director since 1983 and became Chairman of
the Board in May 2002. Ms. Panzer is an attorney admitted to practice in the
Commonwealth of Pennsylvania. She was previously employed as Senior Vice
President and Counsel by American Business Financial Services until 2000. She is
the daughter of Director Emeritus Mitchell Panzer.

Gilbert Barsky has been a director since 1962. Mr. Barsky is retired
and was previously employed by St. Edmond's Savings Bank. Mr. Barsky serves as
the Inspector of Elections for Montgomery County, Pennsylvania and the Treasurer
of Green Hill Condominium Social Club. He also delivers Meals on Wheels. Gilbert
Barsky is the father of Director Samuel Barsky.

Samuel Barsky has been a director since 1989 and Secretary of the Bank
since May 2002. Mr. Barsky is a certified public accountant with the firm of
Gitomer & Berenhulz P.C. Mr. Barsky is a participant in the National Town Watch
and the National Night Out. He is the son of Director Gilbert Barsky.

P. Charles DeRita has been a director since 1991. Mr. DeRita is sole
owner of Hallmark Abstract Co., Inc., a title insurance company located in
Philadelphia, Pennsylvania.

Andrew A. Hines has been a director since 1985. Mr. Hines is retired
from ARCO.

Ben Kovnat has been a director since 1983. Mr. Kovnat is retired from
the Iron Works Company.

Megan L. Mahoney has been a director since 2003. Ms. Mahoney is a
regional sales manager with Platinum Direct Funding and was previously employed
by American Business Financial Services, Inc. as a senior vice president.

J. William Parker, Jr. has been a director since 2002. Mr. Parker is
the sole owner of Signator Financial Network, which provides retirement,
investment and insurance planning services.

Dr. Nicholas M. Renzi has been a director since 1980. Dr. Renzi is a
retired physician.

William F. Saldutti, III has been a director since 2001. Mr. Saldutti
is an attorney and a partner at the law firm of Dembo & Saldutti. Mr. Saldutti
is involved in fund-raising for St. John's School for Handicapped in Westville,
New Jersey.

Susanne Spinell Shuster has been a director since 2001. Ms. Shuster is
a certified public accountant and audit partner with Asher and Company.

Directors Emeritus

Mitchell Panzer served as a director of the Bank from 1946 to 1991. He
became a director emeritus in 1991. Mr. Panzer was counsel to the Bank from 1946
to 1988 and was a partner with the law

firm of Wolf, Block, Schorr and Solis-Cohen. He retired in 1988. Mr. Panzer is
the father of Chairman of the Board, Marcy C. Panzer.

Executive Officers

Frank S. DePaolo has been President of the St. Edmond's Federal Savings
Bank since October 2000. Prior to that, Mr. DePaolo was employed as executive
vice president and chief executive officer of Merchants National Bank of Bangor.
Mr. DePaolo is a member of the Greater Philadelphia Chamber of Commerce and the
Home Builders Association of Bucks and Montgomery Counties and a board member of
the Pennsylvania Association of Community Bankers. Mr. DePaolo has previously
served as Elected Auditor of Plainfield Township, Director of the United Way of
Lehigh and Northampton Counties, Director of the Lung Association of the Lehigh
Valley, and a member of the Executive Committee of the Pennsylvania Banker's
Association.

Joseph Sidebotham, Sr. has been at St. Edmond's Federal Savings Bank as
Executive Vice President, Chief Financial Officer and Controller since February
2001. Prior to that, Mr. Sidebotham was employed at South Jersey Savings and
Loan Association as Senior Vice President, Chief Financial Officer and
Controller.

Meetings and Committees of the Board of Directors of the Bank

The Board of Directors conducts its business through meetings of the
Board and through activities of its committees. During the year ended October
31, 2003, the Board of Directors met 13 times. No director attended fewer than
75% of the total meetings of the Board of Directors and committees on which he
served during the year ended October 31, 2003. The Board has an Audit Committee,
a Loan Committee, a Compliance Committee, a Human Resources Committee, an
REO/Classified Assets Committee, an Asset/Liability Committee, a Business
Development Committee and an Advisory Committee. The Board does not have a
standing nominations committee.

The Audit Committee consists of Directors Susanne Shuster, Samuel
Barsky, Marcy C. Panzer and J. William Parker, Jr. and President Frank S.
DePaolo and Executive Vice President Joseph Sidebotham. This committee meets
quarterly with the internal auditor and independent accountants and periodically
as needed with the Bank's compliance auditors.

The Human Resource Committee consists of Directors Andrew A. Hines, P.
Charles DeRita, Ben Kovnat and Megan L. Mahoney and President Frank S. DePaolo,
Executive Vice President Joe Sidebotham and Vice President Rick Lemcoe. Messrs.
DePaolo, Sidebotham and Lemcoe do not participate in committee decisions
regarding their own compensation. This committee meets at least quarterly.

Director Compensation

Board Fees. Each director is paid an annual retainer of $5,000 paid in
twelve monthly installments. Directors receive $50 per committee meeting
attended and committee chairpersons receive an additional $500 per year. The
total fees paid to the directors for the year ended October 31, 2003 were
approximately $69,200. Director emeriti are paid an annual fee of $2,500.
Committee members who are also full-time Bank employees do not receive
compensation as committee members.

Incentive Retirement Plan. The Bank implemented this incentive
compensation plan, effective January 1, 2004, to reward key management and the
Board of Directors for achieving strategic goals of the Bank, including
long-term growth of net income. Under such plan, units are awarded to plan
participants and the future value of such units will be based upon accumulated
future earnings of the Bank. The aggregate value of such units awarded will
equal up to 10% of the accumulated future earnings of the Bank. Such units are
awarded to the executive officers and directors of the Bank. Sixty percent of
such units have been awarded to the directors of the Bank and 40% of such units
have been awarded to the executive officers, including approximately 24% of such
aggregate units to Frank S. DePaolo, President of the Bank. Such units are
earned and non-forfeitable after participants have completed not less than three
years of service (including prior service) with the Bank. Distributions based
upon the value of such units will be made following termination of service,
death or a change in control of the Bank. Payments are forfeited if the
participant violates a non-compete agreement with the Bank, if any.

Executive Compensation

Summary Compensation Table. The following table sets forth the cash and
non-cash compensation awarded to or earned by the Bank's president for the year
ended October 31, 2003. No other officer received a total annual salary and
bonus in excess of $100,000 during the reporting period.

Annual Compensation
---------------------------------
Fiscal Other Annual
Name and Principal Position Year Salary Bonus Compensation
- --------------------------- ---- ------ ----- ------------
Frank S. DePaolo, President 2003 $116,568 $8,490 $5,828(1)
2002 113,047 4,950 5,668
2001 110,000 117 -

- ------------------------------------
(1) Consists of Bank's contribution under 401(k) Plan.

Executive Life Insurance Program. The Bank has implemented a life
insurance program for President DePaolo and Executive Vice President Sidebotham.
Such plan provides for a death benefit of 250% of salary up to a maximum benefit
of $250,000. Such benefit remains in effect following termination of employment
with not less than three years of service.

Change in Control/Employment Agreements. The Board of Directors may
enter into an employment agreement with the Chairman of the Board and change in
control agreement with the Bank's President and Executive Vice President. It is
anticipated that such agreements, if they are entered into, would provide that
if SE Financial Corp. or St. Edmond's Federal Savings Bank is acquired and the
officer's employment is terminated, he will receive a cash severance payment.
Such severance payment would in no event exceed 2.999 times the terminated
officer's prior five year average taxable compensation. The terms of these
potential agreements have not yet been determined.

Potential Stock Benefit Plans

Employee Stock Ownership Plan. We intend to establish an employee stock
ownership plan for the exclusive benefit of participating employees of the Bank,
to be implemented at the completion of the offering. Participating employees are
employees who have completed one year of service and have attained the age of
21. An application for a letter of determination as to the tax-qualified status
of the employee stock ownership plan will be submitted to the IRS. Although no
assurances can be given, we

expect that the employee stock ownership plan will receive a favorable letter of
determination from the IRS.

The employee stock ownership plan is to be funded by contributions made
by St. Edmond's Federal Savings Bank in cash or common stock. Benefits may be
paid either in shares of the common stock or in cash. The plan will borrow funds
with which to acquire up to 8% of the shares issued in the offering. The
employee stock ownership plan may elect, in whole or in part, to fill its order
through open market purchases subsequent to the closing of the offering, subject
to any required regulatory approval. The employee stock ownership plan intends
to borrow funds from SE Financial Corp. The loan is expected to be for a term of
ten years at an annual interest rate approximately equal to the prime rate as
published in The Wall Street Journal. Presently it is anticipated that the
employee stock ownership plan will purchase up to 8% of the shares issued in the
offering. The loan will be secured by the shares purchased and earnings of
employee stock ownership plan assets. Shares purchased with loan proceeds will
be held in a suspense account for allocation among participants as the loan is
repaid. It is anticipated that all contributions will be tax-deductible. This
loan is expected to be fully repaid in approximately ten years.

Contributions to the employee stock ownership plan and shares released
from the suspense account will be allocated among participants on the basis of
base compensation. All participants must be employed at least 1,000 hours in a
plan year, or have terminated employment following death, disability or
retirement, in order to receive an allocation. Participant benefits become fully
vested in plan allocations following three years of service. Employment before
the adoption of the employee stock ownership plan shall be credited for the
purposes of vesting, and vesting is accelerated in the event of a change of
control. Contributions to the employee stock ownership plan by St. Edmond's
Federal Savings Bank are discretionary and may cause a reduction in other forms
of compensation, including the Bank's 401(k) Plan. As a result, benefits payable
under this plan cannot be estimated.

A committee, consisting of non-employee directors, will administer the
plan and serve as the plan's trustees. The trustees must vote all allocated
shares held in the plan as directed by plan participants. Unallocated shares and
allocated shares for which no timely direction is received will be voted as
directed by the Board of Directors or the plan's committee, subject to the
trustees' fiduciary duties.

Stock Option Plan. We intend to adopt a stock option plan for the
benefit of directors and officers after the offering after the passage of at
least one year from the completion of the offering. We may, however, decide to
adopt the stock option plan sooner than one year following the offering, but in
no event will the plan be adopted sooner than six months subsequent to the
completion of the offering. If the stock option plan is implemented within one
year of the completion of the offering, it will comply with the Office of Thrift
Supervision regulations related to such plans, including limitations on vesting
and allocation of awards. Any plan adopted within one year of the completion of
the offering will be subject to stockholder approval at a meeting of
stockholders held no sooner than six months subsequent to the completion of the
offering. Up to 10% of the number of shares of common stock issued in the
offering will be reserved for issuance under the stock option plan. No
determinations have been made as to the specific terms of, or awards under, the
stock option plan.

The purpose of the stock option plan will be to attract and retain
qualified personnel in key positions, provide officers and directors with a
proprietary interest in SE Financial Corp. as an incentive to contribute to our
success and reward directors and officers for outstanding performance. Although
the terms of the stock option plan have not yet been determined, it is expected
that the stock option plan will

provide for the grant of: (1) options to purchase the common stock intended to
qualify as incentive stock options under the Internal Revenue Code (incentive
stock options); and (2) options that do not so qualify (non-incentive stock
options). Any stock option plan would be in effect for up to ten years from the
earlier of adoption by the Board of Directors or approval by the stockholders.
Options would expire no later than 10 years from the date granted and would
expire earlier if the option committee so determines or in the event of
termination of employment. Options would be granted based upon several factors,
including seniority, job duties and responsibilities and job performance.

Restricted Stock Plan. We also intend to establish a restricted stock
plan to provide our officers and directors with a proprietary interest in SE
Financial Corp. We intend to adopt the restricted stock plan after the passage
of at least one year from the completion of the offering. We may, however,
decide to adopt the restricted stock plan sooner than one year following the
offering, but in no event will the plan be adopted sooner than six months
subsequent to the completion of the offering. If the restricted stock plan is
implemented within one year of the completion of the offering, it will comply
with the Office of Thrift Supervision regulations related to such plans,
including limitations on vesting and allocation of awards. Any plan adopted
within one year of the completion of the offering will be subject to stockholder
approval at a meeting of stockholders held no sooner than six months subsequent
to the completion of the offering. The restricted stock plan is expected to
provide for the award of common stock, subject to vesting restrictions, to
eligible officers and directors.

We expect to contribute funds to the restricted stock plan to acquire,
in the aggregate, up to 4.0% of the number of shares of common stock issued in
the offering, provided, however, that, pursuant to the regulations of the Office
of Thrift Supervision, if the plan is adopted within one year of the completion
of the offering, the plan will be limited to up to 3% if St. Edmond's Federal
Savings Bank does not have tangible capital of at least 10% at the time the plan
is established. Shares used to fund the restricted stock plan may be acquired
through open market purchases or provided from authorized but unissued shares.
No determinations have been made as to the specific terms of the restricted
stock plan.

Transactions with Management and Others

No directors, officers or their immediate family members were engaged
in transactions with the Bank or any subsidiary involving more than $60,000
(other than through a loan) during the year ended October 31, 2003. Furthermore,
the Bank had no "interlocking" relationships in which (1) any officer is a
member of the board of directors of another entity with an officer who is a
member of the Bank's Board of Directors, or where (2) any officer is a member of
the compensation committee of another entity, one of whose officers is a member
of the Bank's Board of Directors.

The Bank has followed the policy of offering residential mortgage loans
for the financing of personal residences and consumer loans to its officers,
directors and employees. Loans are made in the ordinary course of business and
are also made on substantially the same terms and conditions, other than a 1%
discount for officers and employees on the interest rate paid while the person
remains employed by the Bank, as those of comparable transactions prevailing at
the time with other persons, and do not include more than the normal risk of
collectibility or present other unfavorable features.

Proposed Stock Purchases by Management

The following table sets forth for each of the directors and executive
officers (including in each case all "associates" of such persons) the number of
shares of common stock which each director and executive officer intends to
purchase, assuming the sale of 1,750,000 shares of common stock at $10.00

per share. The table does not include purchases by the employee stock ownership
plan (8% of the common stock sold in the offering), and does not take into
account any stock benefit plans to be adopted following the conversion. See
Management - Potential Stock Benefit Plans.

Percentage of
Total Total Outstanding
Number of Shares at
Shares to Midpoint of the
Name be Purchased Offering Range
- ----------------------- ------------ --------------
Marcy C. Panzer 20,000 1.1%
Gilbert Barsky 500 *
Samuel Barsky 10,000 *
P. Charles DeRita *
------ *
Andrew A. Hines 3,000 *
Ben Kovnat 7,000 *
Megan L. Mahoney 10,000 *
J. William Parker, Jr. 4,000 *
Dr. Nicholas M. Renzi 10,000 *
William F. Saldutti, III 5,000 *
Susanne Spinell Shuster 5,000 *
Frank S. DePaolo 10,000 *
Joseph Sidebotham, Sr. 10,000 *
------
Total

- ---------------------
* Less than 1%.

If the stockholders of SE Financial Corp. approve the stock benefit
plans as discussed in this prospectus (including 4.0% of the shares issued in
the offering for the restricted stock plan and 10.0% of the shares issued in the
offering for the stock option plan), and assuming that all of the shares of
common stock available for award under the restricted stock plan are awarded and
all of the options available under the stock option plan are awarded and
exercised, the aggregate ownership of directors and executive officers would
increase to ___% at the midpoint of the offering range, assuming that the plans
are funded with newly issued shares instead of shares acquired in open market
purchases and assuming that no awards are made to non-executive officers. See
Management - Potential Stock Benefit Plans on page __.

Purchases of common stock in the offering by directors and executive
officers will be counted toward the minimum of 1,487,500 shares required to be
sold to complete the offering. Management may, but is not required to, purchase
additional shares in the offering to satisfy the minimum, subject to the
limitation on the individual maximum share purchase limitations and the
requirement that directors, executive officers and their associates may not
purchase, in the aggregate, more than 34% of the shares sold in the offering.

Shares of common stock purchased by directors and executive officers
cannot be sold for a period of one year following the offering, and stock
certificates issued to directors and executive officers will bear a legend
restricting their sale. See The Stock Offering - Restrictions on Transferability
by Directors and Executive Officers on page ___.

THE CONVERSION

The Board of Directors of St. Edmond's Federal Savings Bank adopted the
plan authorizing the conversion and the offering on January 15, 2004, subject to
the approval of the Office of Thrift Supervision and of the members of the Bank
and the satisfaction of certain other conditions. The Office of Thrift
Supervision gave authorization to conduct the conversion on March __, 2004.
Office of Thrift Supervision approval does not constitute a recommendation or
endorsement of the plan by the Office of Thrift Supervision.

General

On January 15, 2004, the Board of Directors of St. Edmond's Federal
Savings Bank adopted the plan of conversion and stock issuance, pursuant to
which the Bank proposes to reorganize from a federally chartered mutual savings
institution to a federally chartered stock savings institution. The Bank will
become a wholly-owned subsidiary of SE Financial Corp. Concurrently with the
conversion, SE Financial Corp. will sell its common stock in the offering to the
Bank's members and, if necessary, the general public. The Board of Directors
unanimously adopted the Plan after consideration of the advantages and the
disadvantages of the conversion and offering. After we receive all the required
approvals from the government agencies that regulate us, the approval of the
plan by the Bank's members and the satisfaction of all other conditions
precedent to the conversion, the Bank will effect the conversion by exchanging
its federal mutual savings institution charter for a federal stock savings
institution charter and becoming a wholly owned subsidiary of SE Financial
Corp., and having the depositors of the Bank receive liquidation interests in
the federal stock savings institution as they have in the Bank before the
conversion. See The Conversion - Description of the Conversion. On the effective
date, SE Financial Corp. will commence business as SE Financial Corp., a savings
and loan holding company, and the Bank will commence business as a federally
chartered stock savings bank. The conversion will be accomplished in accordance
with the procedures set forth in the plan, the requirements of applicable laws
and regulations, and the policies of the Office of Thrift Supervision.

For additional information concerning the offering, see The Offering.

Purposes of the Conversion

The Board of Directors of St. Edmond's Federal Savings Bank has
determined that the conversion is in the best interest of the Bank and has
several business purposes for the conversion.

The conversion will structure the Bank in the stock form, which is used
by commercial banks, most major business corporations and an increasing number
of savings institutions. Formation of the Bank as a capital stock savings
institution subsidiary of SE Financial Corp. will permit SE Financial Corp. to
issue stock, which is a source of capital not available to mutual savings
institutions. The holding company form of organization is expected to provide
additional flexibility to diversify the Bank's business activities through
existing or newly formed subsidiaries, or through acquisitions of or mergers
with other financial institutions, as well as other companies. Although the Bank
has no current arrangements, understandings or agreements regarding any
opportunities, SE Financial Corp. will be in a position after the conversion and
offering, subject to regulatory limitations and SE Financial Corp.'s financial
position, to take advantage of any acquisition, merger or diversification
opportunities that may arise.

SE Financial Corp. is offering for sale its common stock in the
offering at an aggregate price based on an independent appraisal. The proceeds
from the sale of common stock of SE Financial Corp.

will provide the Bank with new equity capital, which will support future deposit
growth and expanded operations. The ability of SE Financial Corp. to sell stock
also will enable SE Financial Corp. and the Bank to increase capital in response
to the changing capital requirements of the Office of Thrift Supervision. While
the Bank currently meets or exceeds all regulatory capital requirements, the
sale of stock in connection with the conversion, coupled with the accumulation
of earnings, less dividends or other reductions in capital, from year to year,
represents a means for the orderly preservation and expansion of the Bank's
capital base, and allows flexibility to respond to sudden and unanticipated
capital needs. After the conversion and offering, SE Financial Corp. may
repurchase shares of its common stock. The investment of the net proceeds of the
offering also will provide additional income to enhance further the Bank's
future capital position.

The ability of SE Financial Corp. to issue stock will enable it in the
future to establish stock benefit plans for management and employees of SE
Financial Corp. and the Bank, including incentive stock option plans, stock
award plans, and employee stock ownership plans.

SE Financial Corp. will also be able to borrow funds, on a secured and
unsecured basis, and to issue debt to the public or in a private placement. The
proceeds of any borrowings or debt issuance may be contributed to the Bank as
core capital for regulatory capital purposes. SE Financial Corp. has not made a
determination to borrow funds or issue debt at the present time.

Description of the Conversion

After receiving all of the required approvals from the government
agencies that regulate us and the ratification of the plan of conversion by the
Bank's members, the conversion will be completed. After the conversion, the
legal existence of the Bank will not terminate, the converted stock bank will be
a continuation of the Bank and all property of the Bank, including its right,
title, and interest in and to all property of any kind and nature, interest and
asset of every conceivable value or benefit then existing or pertaining to the
Bank, or which would inure to the Bank immediately by operation of law and
without the necessity of any conveyance or transfer and without any further act
or deed, will continue to be owned by the Bank. The Bank will possess and hold
the same in its right and fully and to the same extent as the same was possessed
and held by the Bank. The Bank will continue to have, succeed to, and be
responsible for all the rights, liabilities, and obligations of the Bank and
will maintain its headquarters operations at the Bank's present location.

The foregoing description of the conversion is qualified in its
entirety by reference to the plan and the charter and bylaws of the Bank and SE
Financial Corp. to be effective after the conversion.

Effects of the Conversion

General. The conversion will not have any effect on the Bank's present
business of accepting deposits and investing its funds in loans and other
investments permitted by law. The conversion will not result in any change in
the existing services provided to depositors and borrowers, or in existing
offices, management, and staff. After the conversion, the Bank will continue to
be subject to regulation, supervision, and examination by the Office of Thrift
Supervision and the Federal Deposit Insurance Corporation.

Deposits and Loans. Each holder of a deposit account in the Bank at the
time of the conversion will continue as an account holder in the Bank after the
conversion, and the conversion will not affect the deposit balance, interest
rate, or other terms. Each deposit account will be insured by the Federal
Deposit

Insurance Corporation to the same extent as before the conversion. Depositors
will continue to hold their existing certificates, savings records, checkbooks,
and other evidence of their accounts. The conversion will not affect the loans
of any borrower from the Bank. The amount, interest rate, maturity, security
for, and obligations under each loan will remain contractually fixed as they
existed prior to the conversion. See The Conversion - Effects of the Conversion
- - Voting Rights and - Liquidation Rights below for a discussion of the effects
of the conversion on the voting and liquidation rights of the depositors of the
Bank.

Voting Rights. As a federally chartered mutual savings institution, the
Bank has no authority to issue capital stock and thus, no stockholders. Control
of the Bank in its mutual form is vested in the Board of Directors of the Bank.
The Directors are elected by the Bank's members. Holders of qualifying deposits
in the Bank are members of the Bank. In the consideration of all questions
requiring action by members of the Bank, each holder of a qualifying deposit is
permitted to cast one vote for each $100, or fraction thereof, of the withdrawal
value of the voting depositor's account. Each borrower as of September 29, 1995
has one vote for the period of time that such borrowing is in existence. No
member may cast more than 1,000 votes.

After the conversion, all voting rights will be held solely by
stockholders. A stockholder will be entitled to one vote for each share of
common stock owned.

Tax Effects. We have received an opinion from our counsel, Malizia
Spidi & Fisch, PC, on the federal tax consequences of the conversion. The
opinion has been filed as an exhibit to the registration statement of which this
prospectus is a part and covers those federal tax matters that are material to
the transaction. The opinion provides that:

o the conversion will qualify as a reorganization under Section
368(a)(1)(F) of the Code, and no gain or loss will be recognized by
the Bank by reason of the proposed conversion;

o no gain or loss will be recognized by the Bank upon the receipt of
money from SE Financial Corp. for the Bank's stock, and no gain or
loss will be recognized by SE Financial Corp. upon the receipt of
money for the shares;

o no gain or loss will be recognized by the Eligible Account Holders,
Supplemental Eligible Account Holders, and Other Members upon the
issuance to them of withdrawable savings accounts in the Bank in the
stock form in the same dollar amount as their savings accounts in the
Bank in the mutual form plus an interest in the liquidation account of
the Bank in the stock form in exchange for their savings accounts in
the Bank in the mutual form;

o the part of the taxable year of the Bank before the conversion and the
part of the taxable year of the Bank after the conversion will
constitute a single taxable year of the Bank. Consequently, the Bank
will not be required to file a federal income tax return for any
portion of such taxable year;

o the Bank after the conversion will succeed to and take into account
the earnings and profits or deficit in earnings and profits of the
Bank as of the date or dates of transfer; and

o no gain or loss will be recognized by Eligible Account Holders,
Supplemental Eligible Account Holders and Other Members upon the
distribution to them of the non- transferable subscription rights to
purchase shares of stock.

The opinion in the last bullet above is predicated on representations
from the Bank that no person shall receive any payment, whether in money or
property, in lieu of the issuance of subscription rights. The opinion in the
last bullet above is based on the position that the subscription rights to
purchase shares of common stock received by Eligible Account Holders,
Supplemental Eligible Account Holders and Other Members have a fair market value
of zero. In reaching their opinion stated in the last bullet above, Malizia
Spidi & Fisch, PC has noted that the subscription rights will be granted at no
cost to the recipients, will be legally non-transferable and of short duration,
and will provide the recipients with the right only to purchase shares of common
stock at the same price to be paid by members of the general public in any
community offering. Malizia Spidi & Fisch, PC believes that it is more likely
than not that the fair market value of the subscription rights to purchase
common stock is zero.

If the non-transferable subscription rights to purchase common stock
are subsequently found to have a fair market value, income may be recognized by
various recipients of the subscription rights (in certain cases, whether or not
the rights are exercised), and we may be taxed on the distribution of the
subscription rights.

We are also subject to Pennsylvania income taxes and have received an
opinion from Malizia Spidi & Fisch, PC that the conversion will be treated for
Pennsylvania state tax purposes similar to the treatment of the conversion for
federal tax purposes.

Unlike a private letter ruling from the IRS, the opinions of Malizia
Spidi & Fisch, PC have no binding effect or official status, and no assurance
can be given that the conclusions reached in any of those opinions would be
sustained by a court if contested by the IRS or the Pennsylvania tax
authorities. Eligible Account Holders, Supplemental Eligible Account Holders,
and Other Members are encouraged to consult with their own tax advisers as to
the tax consequences in the event the subscription rights are determined to have
any market value.

Liquidation Account. In the unlikely event of the Bank's complete
liquidation in the Bank's present mutual form, each depositor is entitled to
share in a distribution of the Bank's assets, remaining after payment of claims
of all creditors (including the claims of all depositors to the withdrawal value
of their accounts). Each depositor's pro rata share of the remaining assets
would be in the same proportion as the value of his deposit accounts was to the
total value of all deposit accounts in the Bank at the time of liquidation.

Upon a complete liquidation after the conversion, each depositor would
have a claim, as a creditor, of the same general priority as the claims of all
other general creditors of the Bank. Except as described below, a depositor's
claim would be solely in the amount of the balance in his deposit account plus
accrued interest. A depositor would not have an interest in the residual value
of the Bank's assets above that amount, if any.

The Bank's plan of conversion provides for the establishment, upon the
completion of the conversion, of a special "liquidation account" for the benefit
of Eligible Account Holders and Supplemental Eligible Account Holders. The
liquidation account will be maintained as a separate account at St. Edmond's
Federal Savings Bank.

Each Eligible Account Holder and Supplemental Eligible Account Holder,
if he continues to maintain his deposit account with the Bank, would be entitled
on a complete liquidation of the Bank after conversion, to an interest in the
liquidation account prior to any payment to stockholders. Each Eligible Account
Holder would have an initial interest in the liquidation account for each
deposit account held in the Bank on the qualifying date, December 31, 2002. Each
Supplemental Eligible Account Holder would have a similar interest as of the
qualifying date, December 31, 2003. The interest as to each deposit account
would be in the same proportion of the total liquidation account as the balance
of the deposit account on the qualifying dates was to the aggregate balance in
all the deposit accounts of Eligible Account Holders and Supplemental Eligible
Account Holders on the qualifying dates. However, if the amount in the deposit
account on any annual closing date of the Bank (October 31) is less than the
amount in the liquidation account on the respective qualifying dates, then the
interest in this special liquidation account would be reduced from time to time
by an amount proportionate to any reduction, and the interest would cease to
exist if the deposit account were closed. Decreases in deposit accounts on any
annual closing date will be reflected by a corresponding decrease in the amount
held in the liquidation account. An individual's interest in and the total
amount held in the liquidation account will never be increased despite any
increase in deposit accounts after the respective qualifying dates.

The Bank's plan of conversion requires the liquidation account to be
established in an amount equal to its net worth as of the latest practicable
date prior to conversion (i.e., the net worth disclosed in the consolidated
financial statements included in this prospectus).

No merger, consolidation, purchase of bulk assets with assumptions of
savings accounts and other liabilities, or similar transactions with another
insured institution in which the Bank, in its converted form, is not the
surviving institution, shall be considered a complete liquidation. In these
transactions, the liquidation account shall be assumed by the surviving
institution.

Conditions to the Conversion

Before we can complete the conversion, we must receive all the required
approvals or non- objections from the Office of Thrift Supervision. The receipt
of these approvals or non-objections from the Office of Thrift Supervision does
not constitute a recommendation or endorsement of the plan or conversion by the
Office of Thrift Supervision. Completion of the conversion also is subject to
ratification of the plan by a majority of the total votes of depositors at a
special meeting called for the purpose of approving the plan. The Board of
Directors may decide to complete the conversion without forming a holding
company.

Amendment or Termination of the Plan of Conversion

If determined to be necessary or desirable by the Board of Directors of
the Bank, the plan may be amended by a two-thirds vote of the Bank's Board of
Directors, with the concurrence of the Office of Thrift Supervision, at any time
prior to or after submission of the plan to members of the Bank for
ratification. The plan may be terminated by the Board of Directors of the Bank
at any time prior to or after ratification by the members, by a two-thirds vote
with the concurrence of the Office of Thrift Supervision.

THE OFFERING

General

Concurrently with the conversion, we are offering between a minimum of
1,487,500 shares and a maximum of 2,012,500 shares of common stock in the
offering (subject to adjustment to up to 2,314,375 shares if our estimated pro
forma market value has increased at the conclusion of the offering). The
offering will expire at __:__ _.m., eastern time, on _______________, 2004
unless extended. The minimum purchase is 25 shares of common stock (minimum
investment of $250). Our common stock is being offered at a fixed price of
$10.00 per share in the offering.

In accordance with Rule 15c2-4 of the Securities Exchange Act of 1934,
pending completion or termination of the conversion and offering, subscription
funds received by St. Edmond's Federal Savings Bank will be invested only in
investments permissible under Rule 15c2-4.

Conduct of the Offering

Subject to the limitations of the plan, shares of common stock are
being offered in descending order of priority in the subscription offering to:

o Eligible Account Holders (depositors at the close of business on December
31, 2002 with deposits of at least $50.00);

o the employee stock ownership plan;

o Supplemental Eligible Account Holders (depositors at the close of business
on December 31, 2003 with deposits of at least $50.00); and

o Other Members: depositors as of February __, 2004 and borrowers as of
September 29, 1995 who continue as borrowers as of the close of business on
February__, 2004.

To the extent that shares remain available and depending on market
conditions at or near the completion of the subscription offering, we may
conduct a community offering and possibly a syndicated community offering. The
community offering, if any, may commence simultaneously with, during or
subsequent to the completion of the subscription offering. A syndicated
community offering, if we conducted one, would commence just prior to, or as
soon as practicable after, the termination of the subscription offering. In any
community offering or syndicated community offering, we must first fill orders
for our common stock up to a maximum of 2% of the shares issued in the
conversion in a manner that will achieve a wide distribution of the stock, and
thereafter any remaining shares will be allocated in on equal number of shares
per order basis, until all orders have been filled or the shares have been
exhausted. If an oversubscription occurs in the offering by Eligible Account
Holders, the employee stock ownership plan may, in whole or in part, fill its
order through open market purchases subsequent to the closing of the offering,
subject to any required regulatory approval.

Subscription Offering

Subscription Rights. Non-transferable subscription rights to subscribe
for the purchase of common stock have been granted under the plan of conversion
to the following persons:

Priority 1: Eligible Account Holders. Each Eligible Account Holder
shall be given the opportunity to purchase, subject to the overall limitations
described under The Stock Offering - Limitations on Purchases of Stock, up to
the greater of (i) the maximum purchase limitation in the community offering
(i.e., 10,000 shares or $100,000), (ii) one-tenth of 1% of the total offering of
shares of common stock offered in the subscription offering, and (iii) 15 times
the product (rounded down to the next whole number) obtained by multiplying the
total number of shares of common stock offered in the subscription offering by a
fraction, of which the numerator is the amount of the qualifying deposits of the
Eligible Account Holder and the denominator is the total amount of all
qualifying deposits of all Eligible Account Holders. If there are insufficient
shares available to satisfy all subscriptions of Eligible Account Holders,
shares will be allocated to Eligible Account Holders so as to permit each
subscribing Eligible Account Holder to purchase a number of shares sufficient to
make his total allocation equal to the lesser of 100 shares or the number of
shares ordered. Thereafter, unallocated shares will be allocated to remaining
subscribing Eligible Account Holders whose subscriptions remain unfilled in the
same proportion that each subscriber's qualifying deposit bears to the total
amount of qualifying deposits of all subscribing Eligible Account Holders, in
each case on December 31, 2002, whose subscriptions remain unfilled.
Subscription rights received by persons who were officers and directors one year
prior to the eligibility record date, based on their increased deposits in St.
Edmond's Federal Savings Bank in the one year preceding the eligibility record
date will be subordinated to the subscription rights of other eligible account
holders. To ensure proper allocation of stock, each Eligible Account Holder must
list on his order form all accounts in which he had an ownership interest as of
the Eligibility Record Date.

Priority 2: The Employee Plans. The tax qualified employee plans may be
given the opportunity to purchase in the aggregate up to 10% of the common stock
issued in the subscription offering. It is expected that the employee stock
ownership plan will purchase up to 8% of the common stock issued in the
offering. If an oversubscription occurs in the offering by Eligible Account
Holders, the employee stock ownership plan may, in whole or in part, fill its
order through open market purchases subsequent to the closing of the offering,
subject to any required regulatory approval.

Priority 3: Supplemental Eligible Account Holders. If there are
sufficient shares remaining after satisfaction of subscriptions by Eligible
Account Holders and the employee stock ownership plan and other tax-qualified
employee stock benefit plans, each Supplemental Eligible Account Holder shall
have the opportunity to purchase, subject to the overall limitations described
under The Stock Offering - Limitations on Purchases of Stock, up to the greater
of (i) the maximum purchase limitation in the community offering (i.e., 10,000
shares or $100,000), (ii) one-tenth of 1% of the total offering of shares of
common stock offered in the subscription offering, and (iii) 15 times the
product (rounded down to the next whole number) obtained by multiplying the
total number of shares of common stock offered in the subscription offering by a
fraction, of which the numerator is the amount of the qualifying deposits of the
Eligible Account Holder and the denominator is the total amount of all
qualifying deposits of all Eligible Account Holders. If Supplemental Eligible
Account Holders subscribe for a number of shares which, when added to the shares
subscribed for by Eligible Account Holders and the employee stock ownership plan
and other tax-qualified employee stock benefit plans, if any, is in excess of
the total number of shares offered in the offering, the shares of common stock
will be allocated among subscribing Supplemental Eligible Account Holders first
so as to permit each subscribing Supplemental Eligible Account Holder to
purchase a number of shares sufficient to make his total allocation equal to the
lesser of 100 shares or the number of shares ordered. Thereafter, unallocated
shares will be allocated to each subscribing Supplemental Eligible Account
Holder whose subscription remains unfilled in the same proportion that each
subscriber's qualifying deposits bear to the total amount of qualifying deposits
of all subscribing Supplemental Eligible Account Holders, in each case on
December 31, 2002, whose subscriptions remain unfilled. To ensure proper
allocation of stock each Supplemental Eligible Account Holder must list on

his order form all accounts in which he had an ownership interest as of the
Supplemental Eligibility Record Date.

Priority 4: Other Members. If there are sufficient shares remaining
after satisfaction of all subscriptions by the Eligible Account Holders, the
tax-qualified employee stock benefit plans, and Supplemental Eligible Account
Holders, each Other Member (depositors as of February __, 2004 and borrowers as
of September 29, 1995 who continue as borrowers as of the close of business on
February __, 2004) who is not an Eligible or Supplemental Eligible Account
Holder shall have the opportunity to purchase up to the greater of 10,000 shares
of common stock or one-tenth of 1% of the total offering of shares of common
stock offered in the subscription offering, subject to the overall purchase
limitations described under - Limitations on Purchases of Common Stock. If Other
Members subscribe for a number of shares which, when added to the shares
subscribed for by Eligible Account Holders, the tax-qualified employee stock
benefit plans and Supplemental Eligible Account Holder, is in excess of the
total number of shares offered in the offering, the subscriptions of Other
Members will be allocated among subscribing Other Members to permit each
subscribing Other Member to purchase a number of shares sufficient to make his
total allocation of common stock equal to the lesser of 100 shares or the number
of shares subscribed for by Other Members. Any shares remaining will be
allocated among the subscribing Other Members whose subscriptions remain
unsatisfied on a 100 shares (or whatever lesser amount is available) per order
basis until all orders have been filled or the remaining shares have been
allocated.

State Securities Laws. We, in our sole discretion, will make reasonable
efforts to comply with the securities laws of any state in the United States in
which St. Edmond's Federal Savings Bank members reside, and will only offer and
sell the common stock in states in which the offers and sales comply with state
securities laws. However, no person will be offered or allowed to purchase any
common stock under the plan if he resides in a foreign country or in a state of
the United States with respect to which:

o a small number of persons otherwise eligible to purchase shares under the
plan reside in that state or foreign country; or

o the offer or sale of shares of common stock to these persons would require
us or St. Edmond's Federal Savings Bank or our employees to register, under
the securities laws of that state or foreign country, as a broker or dealer
or to register or otherwise qualify its securities for sale in that state
or foreign country; or

o registration or qualification would be impracticable for reasons of cost or
otherwise.

Restrictions on Transfer of Subscription Rights and Shares. The plan
prohibits any person with subscription rights, including Eligible Account
Holders, Supplemental Eligible Account Holders, and Other Members, from
transferring or entering into any agreement or understanding to transfer the
legal or beneficial ownership of the subscription rights issued under the plan
or the shares of common stock to be issued when they are exercised. Subscription
rights may be exercised only by the person to whom they are granted and only for
his or her account. Adding or deleting a name or otherwise altering the form of
beneficial ownership of a qualifying account will result in a loss of
subscription rights. Each person subscribing for shares will be required to
certify that he or she is purchasing shares solely for his or her own account
and that he or she has no agreement or understanding regarding the sale or
transfer of the shares. The regulations also prohibit any person from offering
or making an announcement of an offer or intent to make an offer to purchase
subscription rights or shares of common stock before the completion of the
offering.

SE Financial Corp. and St. Edmond's Federal Savings Bank will pursue
any and all legal and equitable remedies in the event we become aware of the
transfer of subscription rights and will not honor orders which we determine
involve the transfer of subscription rights.

Deadlines for Purchasing Stock

The subscription offering will terminate at 12:00 noon, eastern time,
on _____________, 2004. We may extend this expiration date without notice to you
for up to 45 days, until _____________, 2004. Once submitted, your order is
irrevocable unless the offering is extended beyond _____________, 2004. We may
request permission from the Office of Thrift Supervision to extend the offering
beyond _____________, 2004, and the Office of Thrift Supervision may grant one
or more extensions of the offering of up to 90 days per extension, but in no
event may the offering be extended beyond _____________, 2006. If the offering
is extended beyond _____________, 2004, we will be required to notify each
subscriber and resolicit subscriptions. During any extension period, subscribers
will have the right to modify or rescind their subscriptions, and, unless an
affirmative response is received, a subscriber's funds will be returned with
interest at St. Edmond's Federal Savings Bank's regular savings account rate. A
community offering and a syndicated community offering, if such offerings are
conducted, may terminate at any time without notice but no later than
_____________, 2004.

Community Offering and Syndicated Community Offering

Community Offering. If less than the total number of shares of common
stock to be subscribed for in the offering are sold in the subscription offering
and depending on market conditions at or near the completion of the subscription
offering, shares remaining unsubscribed may be made available for purchase in
the community offering to certain members of the general public. The maximum
amount of common stock that any person (or persons though a single account) may
purchase in the community offering is 10,000 shares, or $100,000. In the
community offering, if any, shares will be available for purchase by the general
public with preference given first to natural persons residing in Philadelphia
County, Pennsylvania and Gloucester County, New Jersey. We will attempt to issue
the shares in a manner that would promote a wide distribution of common stock.

If purchasers in the community offering, whose orders would otherwise
be accepted, subscribe for more shares than are available for purchase, the
shares available to them will be allocated among persons submitting orders in
the community offering in an equitable manner we determine.

The community offering, if any, may commence simultaneously with,
during or subsequent to the completion of the subscription offering. The
community offering, if any, must be completed within 45 days after the
completion of the subscription offering unless otherwise extended by the Office
of Thrift Supervision.

We, in our absolute discretion, reserve the right to reject any or all
orders in whole or in part which are received in the community offering, at the
time of receipt or as soon as practicable following the completion of the
community offering.

Syndicated Community Offering. If shares remain available after the
subscription offering, and depending on market conditions at or near the
completion of the subscription offering, we may offer shares to selected persons
through a syndicated community offering on a best-efforts basis conducted
through Sandler O'Neill in accordance with such terms, conditions and procedures
as may be determined by the Boards of Directors of SE Financial Corp. and St.
Edmond's Federal Savings Bank. A syndicate of broker-dealers (selected dealers)
may be formed to assist in the syndicated community offering. A syndicated
community offering, if we conducted one, would commence just prior to, or as
soon as practicable after, the termination of the subscription offering.

Orders received in connection with the syndicated community offering,
if any, will receive a lower priority than orders received in the subscription
offering and community offering. Common stock sold in the syndicated community
offering will be sold at the same price as all other shares in the subscription
offering. A syndicated community offering would be open to the general public
beyond the local community, however, we have the right to reject orders, in
whole or in part, in our sole discretion in the syndicated community offering.
No person (or persons through a single account) will be permitted to purchase
more than 10,000 shares, or $100,000, of common stock in the syndicated
community offering.

The date by which orders must be received in the syndicated community
offering will be set by us at the time the syndicated community offering
commences; but if the syndicated community offering is extended beyond
_______________, 2004, each purchaser will have the opportunity to maintain,
modify, or rescind his order. In that event, all funds received in the
syndicated community offering will be promptly returned with interest to each
purchaser unless he requests otherwise.

Limitations on Purchases of Stock

The following additional limitations have been imposed on purchases of
shares of common stock:

1. The maximum number of shares which may be purchased in the
offering by any individual (or individuals through a single
account) shall not exceed 10,000 shares, or $100,000. This limits
applies to stock purchases in total in the subscription,
community and public offerings.

2. The maximum number of shares that may be purchased by any
individual (or individuals through a single account) together
with any associate or group of persons acting in concert is
20,000 shares, or $200,000. This limit applies to stock purchases
in total in the subscription, community and public offerings.
This limit does not apply to the Bank's employee stock benefit
plans, which in the aggregate may subscribe for up to 10% of the
common stock issued in the offering.

3. The maximum number of shares which may be purchased in all
categories in the offering by officers and directors of St.
Edmond's Federal Savings Bank and their associates in the
aggregate shall not exceed 34% of the total number of shares
issued in the offering.

4. The minimum order is 25 shares.

5. If the number of shares otherwise allocable to any person or that
person's associates would be in excess of the maximum number of
shares permitted as set forth above, the number of shares
allocated to that person shall be reduced to the lowest
limitation

applicable to that person, and then the number of shares
allocated to each group consisting of a person and that person's
associates shall be reduced so that the aggregate allocation to
that person and his associates complies with the above maximums,
and the maximum number of shares shall be reallocated among that
person and his associates in proportion to the shares subscribed
by each (after first applying the maximums applicable to each
person, separately).

6. Depending on market or financial conditions, the Board of
Directors of St. Edmond's Federal Savings Bank, without further
approval of the depositors, may decrease or increase the purchase
limitations in the plan, provided that the maximum purchase
limitations may not be increased to a percentage in excess of 5%
of the offering. If SE Financial Corp. increases the maximum
purchase limitations, SE Financial Corp. is only required to
resolicit persons who subscribed for the maximum purchase amount
and may, in the sole discretion of SE Financial Corp., resolicit
certain other large subscribers.

7. If the total number of shares offered increases in the offering
due to an increase in the maximum of the estimated valuation
range of up to 15% (the adjusted maximum) the additional shares
will be used in the following order of priority: (a) to fill the
Employee Stock Ownership Plan's subscription up to 8% of the
adjusted maximum (unless the employee stock ownership plan elects
to purchase stock subsequent to the offering in the open market);
(b) if there is an oversubscription at the Eligible Account
Holder level, to fill unfilled subscriptions of Eligible Account
Holders exclusive of the adjusted maximum; (c) if there is an
oversubscription at the Supplemental Eligible Account Holder
level, to fill unfilled subscriptions of Supplemental Eligible
Account Holders exclusive of the adjusted maximum; (d) if there
is an oversubscription at the other member level, to fill
unfilled subscriptions of other members exclusive of the adjusted
maximum; (e) to fill orders received in a community offering
exclusive of the adjusted maximum, with preference given to
persons who live in the local community; and (f) to fill orders
received in the syndicated community offering exclusive of the
adjusted maximum.

8. No person will be allowed to purchase any stock if that purchase
would be illegal under any federal law or state law or regulation
or would violate regulations or policies of the NASD,
particularly those regarding free riding and withholding. SE
Financial Corp. or St. Edmond's Federal Savings Bank and/or its
agents may ask for an acceptable legal opinion from any purchaser
regarding the legality of the purchase and may refuse to honor
any purchase order if that opinion is not timely furnished.

9. The Board of Directors has the right to reject any order
submitted by a person whose representations it believes are
untrue or who it believes is violating, circumventing, or intends
to violate, evade, or circumvent the terms and conditions of the
plan, either alone or acting in concert with others.

10. The above restrictions also apply to purchases by persons acting
in concert under applicable regulations of the Office of Thrift
Supervision. Under regulations of the Office of Thrift
Supervision, directors of St. Edmond's Federal Savings Bank are
not considered to be affiliates or a group acting in concert with
other directors solely as a result of membership on the Board.

11. In addition, in any community offering or syndicated community
offering, we must first fill orders for our common stock up to
a maximum of 2% of the shares issued in the conversion in a
manner that will achieve a wide distribution of the stock, and
thereafter any remaining shares will be allocated in on equal
number of shares per order basis, until all orders have been
filled or the shares have been exhausted.

The term "associate" of a person is defined in the plan to mean:

(1) any corporation or organization of which a person is an
officer or partner or is, directly or indirectly, the
beneficial owner of 10% or more of any class of equity
securities;

(2) any trust or other estate in which a person has a substantial
beneficial interest or as to which a person serves as trustee
or in a similar fiduciary capacity; or

(3) any relative or spouse of a person or any relative of a
spouse, who has the same home as that person or who is a
director or officer of St. Edmond's Federal Savings Bank, or
any of its parents or subsidiaries.

For example, a corporation for which a person serves as an officer
would be an associate of that person and all shares purchased by that
corporation would be included with the number of shares which that person
individually could purchase under the above limitations.

The term "acting in concert" means:

(1) knowing participation in a joint activity or interdependent
conscious parallel action towards a common goal whether or not
pursuant to an express agreement; or

(2) a combination or pooling of voting or other interests in the
securities of an issuer for a common purpose pursuant to any
contract, understanding, relationship, agreement or other
arrangement, whether written or otherwise.

A person or company which acts in concert with another person or
company ("other party") shall also be deemed to be acting in concert with any
person or company who is also acting in concert with that other party, except
that any tax-qualified employee stock benefit plan will not be deemed to be
acting in concert with its trustee or a person who serves in a similar capacity
solely for the purpose of determining whether stock held by the trustee and
stock held by the plan will be aggregated. We will presume that certain persons
are acting in concert based upon various facts, including the fact that persons
have joint account relationships or the fact that such persons have filed joint
Schedules 13D with the Securities and Exchange Commission with respect to other
companies. We reserve the right to make an independent investigation of any
facts or circumstances brought to its attention that indicate that one or more
persons acting independently or as a group acting in concert may be attempting
to violate or circumvent the regulatory prohibition on the transferability of
subscription rights.

We have the right, in our sole discretion, to determine whether
prospective purchasers are "associates" or "acting in concert." These
determinations are in our sole discretion and may be based on whatever evidence
we believe to be relevant, including joint account relationships or shared
addresses on the Bank's records.

Each person purchasing shares of the common stock in the offering will
be considered to have confirmed that his or her purchase does not conflict with
the maximum purchase limitation. If the purchase limitation is violated by any
person or any associate or group of persons affiliated or otherwise acting in
concert with that person, we will have the right to purchase from that person at
the $10.00 purchase price per share all shares acquired by that person in excess
of that purchase limitation or, if the excess shares have been sold by that
person, to receive the difference between the purchase price per share paid for
the excess shares and the price at which the excess shares were sold by that
person. Our right to purchase the excess shares will be assignable.

Common stock purchased pursuant to the offering will be freely
transferable, except for shares purchased by directors and officers of St.
Edmond's Federal Savings Bank. For certain restrictions on the common stock
purchased by directors and officers, see The Offering - Restrictions on
Transferability by Directors and Officers. In addition, under guidelines of the
NASD, members of the NASD and their associates are subject to certain
restrictions on the transfer of securities purchased in accordance with
subscription rights and to certain reporting requirements after the purchase.

Ordering and Receiving Common Stock

Use of Order Forms. Rights to subscribe may only be exercised by
completion of an order form. Any person receiving an order form who desires to
subscribe for shares of common stock must do so prior to the applicable
expiration date by delivering by mail or in person to St. Edmond's Federal
Savings Bank a properly executed and completed order form, together with full
payment of the purchase price for all shares for which subscription is made;
provided, however, that if the employee plans subscribe for shares during the
subscription offering, the employee plans will not be required to pay for the
shares at the time they subscribe but rather may pay for the shares upon
completion of the conversion. All subscription rights under the plan will expire
on the expiration date, whether or not St. Edmond's Federal Savings Bank has
been able to locate each person entitled to subscription rights. Once tendered,
subscription orders cannot be revoked without the consent of St. Edmond's
Federal Savings Bank.

If a stock order form:

o is not delivered and is returned to St. Edmond's Federal Savings Bank by
the United States Postal Service or St. Edmond's Federal Savings Bank is
unable to locate the addressee;

o is not received or is received after the applicable expiration date; o is
not completed correctly or executed; or

o is not accompanied by the full required payment for the shares subscribed
for including instances where a savings account or certificate balance from
which withdrawal is authorized is insufficient to fund the required
payment, but excluding subscriptions by the employee plans;

then the subscription rights for that person will lapse as though that person
failed to return the completed order form within the time period specified.

However, we may, but will not be required to, waive any irregularity on
any order form or require the submission of corrected order forms or the
remittance of full payment for subscribed shares by a date that we may specify.
The waiver of an irregularity on an order form in no way obligates us to waive
any other irregularity on any other order form. Waivers will be considered on a
case by case basis. We will not accept orders received on photocopies or
facsimile order forms, or for which payment is to

be made by wire transfer or payment from private third parties. Our
interpretation of the terms and conditions of the plan and of the acceptability
of the order forms will be final, subject to the authority of the Office of
Thrift Supervision.

To ensure that each purchaser receives a prospectus at least 48 hours
before the applicable expiration date, in accordance with Rule 15c2-8 of the
Securities Exchange Act of 1934, no prospectus will be mailed any later than
five days prior to the expiration date or hand delivered any later than two days
prior to the expiration date. Execution of the order form will confirm receipt
or delivery in accordance with Rule 15c2-8. Order forms will only be distributed
with a prospectus.

Payment for Shares. For subscriptions to be valid, payment for all
subscribed shares will be required to accompany all properly completed order
forms, on or prior to the expiration date specified on the order form unless we
extend the date. Employee plans subscribing for shares during the subscription
offering may pay for those shares upon completion of the conversion. Payment for
shares of common stock may be made

o in cash, if delivered in person;
o by check or money order made payable to St. Edmond's Federal Savings Bank;
or
o for shares subscribed for in the subscription offering, by authorization of
withdrawal from savings accounts maintained with St. Edmond's Federal
Savings Bank.

In accordance with Rule 15c2-4 of the Securities Exchange Act of 1934,
subscribers' checks must be made payable to St. Edmond's Federal Savings Bank,
and checks received by Sandler O'Neill will be transmitted by noon of the
following business day directly to the segregated deposit account at St.
Edmond's Federal Savings Bank established to hold funds received as payment for
shares.

Appropriate means by which account withdrawals may be authorized are
provided on the order form. Once a withdrawal has been authorized, none of the
designated withdrawal amount may be used by a subscriber for any purpose other
than to purchase the common stock for which a subscription has been made until
the offering has been completed or terminated. In the case of payments
authorized to be made through withdrawal from savings accounts, all sums
authorized for withdrawal will continue to earn interest at the contract rate
until the offering has been completed or terminated. Interest penalties for
early withdrawal applicable to certificate accounts will not apply to
withdrawals authorized for the purchase of shares, however, if a partial
withdrawal results in a certificate account with a balance less than the
applicable minimum balance requirement, the certificate shall be canceled at the
time of withdrawal, without penalty, and the remaining balance will earn
interest at the regular savings account rate subsequent to the withdrawal. In
the case of payments made in cash or by check or money order, funds will be
placed in a segregated account and interest will be paid by St. Edmond's Federal
Savings Bank at the regular savings account rate from the date payment is
received until the offering is completed or terminated. An executed order form,
once we receive it, may not be modified, amended, or rescinded without our
consent, unless the offering is not completed within 45 days after the
conclusion of the subscription offering, in which event subscribers may be given
the opportunity to increase, decrease, or rescind their subscription for a
specified period of time. If the offering is not completed for any reason, all
funds submitted pursuant to the offerings will be promptly refunded with
interest as described above.

Owners of self-directed IRAs may use the assets of their IRAs to
purchase shares of common stock in the offerings, provided that their IRAs are
not maintained on deposit at St. Edmond's Federal Savings Bank. Persons with
IRAs maintained at St. Edmond's Federal Savings Bank must have their accounts
transferred to an unaffiliated institution or broker to purchase shares of
common stock in the

offerings. There is no early withdrawal or IRS interest penalties for these
transfers. Instructions on how to transfer self-directed IRAs maintained at St.
Edmond's Federal Savings Bank can be obtained from the stock information center.
Depositors interested in using funds in a St. Edmond's Federal Savings Bank IRA
to purchase common stock should contact the stock information center as soon as
possible so that the necessary forms may be forwarded, executed and returned
prior to the expiration date.

Federal regulations prohibit St. Edmond's Federal Savings Bank from
lending funds or extending credit to any person to purchase the common stock in
the conversion.

Conversion Center. The conversion center is located at 1901-03 East
Passyunk Avenue, Philadelphia, Pennsylvania 19148. Its phone number is (215)
___-____.

Delivery of Stock Certificates. Certificates representing common stock
issued in the offering will be mailed to the persons entitled thereto at the
address noted on the order form, as soon as practicable following completion of
the offering. Any certificates returned as undeliverable will be held until
claimed by persons legally entitled thereto or otherwise disposed of in
accordance with applicable law. Until certificates for the common stock are
available and delivered to subscribers, subscribers may not be able to sell the
shares of stock for which they subscribed.

Restrictions on Repurchase of Shares

Generally, during the first year following the conversion, SE Financial
Corp. may not repurchase its shares unless it can show extraordinary
circumstances. If extraordinary circumstances exist and if SE Financial Corp.
can show a compelling and valid business purpose for the repurchase, the Office
of Thrift Supervision may approve repurchases of up to 5% of the outstanding
stock during the first year after conversion. After the first year following the
conversion, we can repurchase any amount of stock so long as the repurchase
would not cause the Bank to become undercapitalized. In addition, Securities and
Exchange Commission rules also govern the method, time, price, and number of
shares of common stock that may be repurchased by SE Financial Corp. and
affiliated purchasers. If, in the future, the rules and regulations regarding
the repurchase of stock are liberalized, SE Financial Corp. may utilize the
rules and regulations then in effect.

Stock Pricing and the Number of Shares to be Offered

FinPro, which is experienced in the valuation and appraisal of business
entities, including savings institutions, has been retained to prepare an
appraisal of the estimated pro forma market value of the common stock (the
"Independent Valuation"). This independent valuation will express our pro forma
market value in terms of an aggregate dollar amount. The appraisal is an
independent appraisal reviewed but not approved by the Board of Directors.
FinPro will receive fees of $14,000 for its appraisal services, including the
final appraisal, and assistance in preparation of our business plan, and $6,500
for any appraisal updates, plus reimbursement for reasonable out-of-pocket
expenses incurred in connection with the independent valuation and business
plan. St. Edmond's Federal Savings Bank has agreed to indemnify FinPro under
certain circumstances against liabilities and expenses arising out of or based
on any misstatement or untrue statement of a material fact contained in the
information supplied by St. Edmond's Federal Savings Bank to FinPro, except
where FinPro is determined to have been negligent or failed to exercise due
diligence in the preparation of the independent valuation.

The number of shares of common stock to be offered in the offering will
be based on the estimated pro forma market value of the common stock and the
purchase price of $10.00 per share.

FinPro has determined that as of January 20, 2004, our estimated aggregate pro
forma market value was $17,500,000. Pursuant to regulations, this estimate must
be included within a range with a minimum of $14,875,000 and a maximum of
$20,125,000. We have determined to offer shares of common stock in the offering
at a price of $10.00 per share. The appraisal contains an analysis of a number
of factors, including but not limited to the Bank's financial condition and
results of operations as of October 31, 2003, the Bank's operating trends, the
competitive environment in which it operates, operating trends of certain
savings institutions and savings and loan holding companies, relevant economic
conditions both nationally and in Pennsylvania which affect the operations of
savings institutions, stock market values of certain institutions, and stock
market conditions for publicly traded savings institutions and savings and loan
holding companies. In addition, FinPro considered the effect of the additional
capital raised by the sale of the common stock on the estimated pro forma market
value.

We are offering a maximum of 2,012,500 shares in the offering, subject
to adjustment. The actual number of shares to be sold in the offering may be
increased or decreased before completion of the offering, subject to approval
and conditions that may be imposed by the Office of Thrift Supervision, to
reflect any change in our estimated pro forma market value.

Depending on market and financial conditions at the time of the
completion of the offering, St. Edmond's Federal Savings Bank may increase or
decrease the number of shares to be issued in the conversion and offering. No
resolicitation of purchasers will be made and purchasers will not be permitted
to modify or cancel their purchase orders unless the change in the number of
shares to be issued in the offering results in fewer than 1,487,500 shares or
more than 2,314,375 shares being sold in the offering at the purchase price of
$10.00, in which event St. Edmond's Federal Savings Bank may also elect to
terminate the offering. If St. Edmond's Federal Savings Bank terminates the
offering, purchasers will receive a prompt refund of their purchase orders,
together with interest earned thereon from the date of receipt to the date of
termination of the offering. Furthermore, any account withdrawal authorizations
will be terminated. If we receive orders for less than 1,487,500 shares, at the
discretion of the Board of Directors and subject to approval of the Office of
Thrift Supervision, we may establish a new offering range and resolicit
purchasers. If we resolicit, purchasers will be allowed to modify or cancel
their purchase orders. Any adjustments in our pro forma market value as a result
of market and financial conditions or a resolicitation of prospective purchasers
must be approved by the Office of Thrift Supervision.

The independent valuation will be updated at the time of the completion
of the offering, and the number of shares to be issued may increase or decrease
to reflect the changes in market conditions, the results of the offering, or the
estimated pro forma market value of St. Edmond's Federal Savings Bank. If the
updated independent valuation increases, SE Financial Corp. may increase the
number of shares sold in the offering to up to 2,314,375 shares. Subscribers
will not be given the opportunity to change or withdraw their orders unless more
than 2,314,375 shares or fewer than 1,487,500 shares are sold in the offering.
Any adjustment of shares of common stock sold will have a corresponding effect
on the estimated net proceeds of the offering and the pro forma capitalization
and per share data of St. Edmond's Federal Savings Bank. An increase in the
total number of shares to be issued in the conversion would decrease a
subscriber's percentage ownership interest and pro forma net worth (book value)
per share and increase the pro forma net income and net worth (book value) on an
aggregate basis. In the event of a reduction in the valuation, SE Financial
Corp. may decrease the number of shares to be issued to reflect the reduced
valuation. A decrease in the number of shares to be issued in the conversion
would increase a subscriber's percentage ownership interest and the pro forma
net worth (book value) per share and decrease the pro forma net income and net
worth on an aggregate basis. For a presentation of the possible effects of an
increase or decrease in the number of shares to be issued, see Pro Forma Data.

The independent valuation is not intended, and must not be construed,
as a recommendation of any kind as to the advisability of purchasing the common
stock. In preparing the independent valuation, FinPro has relied on and assumed
the accuracy and completeness of financial and statistical information provided
by St. Edmond's Federal Savings Bank. FinPro did not independently verify the
consolidated financial statements and other information provided by St. Edmond's
Federal Savings Bank, nor did FinPro value independently the assets and
liabilities of St. Edmond's Federal Savings Bank. The independent valuation
considers St. Edmond's Federal Savings Bank only as a going concern and should
not be considered as a indication of the liquidation value of St. Edmond's
Federal Savings Bank. Moreover, because the independent valuation is based on
estimates and projections on a number of matters, all of which are subject to
change from time to time, no assurance can be given that persons purchasing the
common stock will be able to sell their shares at a price equal to or greater
than the purchase price. In addition, the Board of Directors of SE Financial
Corp. does not make any recommendation as to whether or not the stock will be a
good investment for you.

No sale of shares of common stock may be completed unless FinPro
confirms that, to the best of its knowledge, nothing of a material nature has
occurred that, taking into account all relevant factors, would cause FinPro to
conclude that the independent valuation is incompatible with its estimate of our
pro forma market value at the conclusion of the offering. Any change that would
result in an aggregate value that is below 14,875,000 or above $23,143,750 would
be subject to Office of Thrift Supervision approval. If confirmation from FinPro
is not received, St. Edmond's Federal Savings Bank may extend the offering,
reopen or commence a new offering, request a new Independent Valuation,
establish a new offering range and commence a resolicitation of all purchasers
with the approval of the Office of Thrift Supervision, or take other action as
permitted by the Office of Thrift Supervision in order to complete the offering.

Plan of Distribution/Marketing Arrangements

Offering materials have been initially distributed to certain persons
by mail, with additional copies made available through our conversion center and
Sandler O'Neill. All prospective purchasers are to send payment directly to St.
Edmond's Federal Savings Bank, where such funds will be held in a separate
escrow account earning interest at the regular savings account rate and not
released until the offering is completed or terminated.

We have engaged Sandler O'Neill, a broker-dealer registered with the
NASD, as a financial and marketing advisor in connection with the offering of
our common stock. In its role as financial and marketing advisor, Sandler
O'Neill will assist us in the offering as follows: (i) consulting as to the
securities marketing implications of any aspect of the plan of conversion or
related corporate documents; (ii) reviewing with our Board of Directors the
financial implications of the independent appraiser's appraisal of the common
stock; (iii) reviewing all offering documents, including the prospectus, stock
order forms and related offering materials (we are responsible for the
preparation and filing of such documents); (iv) assisting in the design and
implementation of a marketing strategy for the offering; (v) assisting us in
preparing for meetings with potential investors and broker-dealers; and (vi)
providing such other general advice and assistance regarding financial and
marketing aspects of the conversion. For these services, Sandler O'Neill will
receive a fee of 1% of the total amount of stock sold in the subscription and
direct community offerings if the conversion is consummated. We have made an
advance payment of $25,000 to Sandler O'Neill.

To the extent any shares of the common stock remain available after the
subscription and direct community offering, Sandler O'Neill, at our request, may
seek to form a syndicate of registered

broker-dealers to assist in the solicitation of orders of the common stock in a
syndicated community offering, subject to the terms and conditions to be set
forth in a selected dealer's agreement. Sandler O'Neill has agreed to use its
best efforts to assist us with the solicitation of subscriptions and orders for
shares of our common stock in the syndicated community offering. Sandler O'Neill
is not obligated to take or purchase any shares of our common stock in the
offering. Sandler O'Neill has expressed no opinion as to the prices at which the
common stock may trade nor has Sandler O'Neill provided any written report or
opinion to us as to the fairness of the conversion. If there is a syndicated
community offering, the total fees payable to Sandler O'Neill and other NASD
member firms in the syndicated community offering shall not exceed 7% of the
aggregate dollar amount of the common stock sold in the syndicated community
offering.

In addition, we have engaged Sandler O'Neill to act as conversion agent
in connection with the offering. In its role as conversion agent, Sandler
O'Neill will assist us in the offering as follows: (i) consolidation of accounts
and development of a central file; (ii) preparation of proxy, order and/or
request forms; (iii) organization and supervision of the conversion center; (iv)
proxy solicitation and special meeting services; and (v) subscription services.
For these services, Sandler O'Neill will receive a fee of $10,000 and
reimbursement for its reasonable out-of-pocket expenses. For these services, we
have made an advance payment of $5,000 to Sandler O'Neill.

We also will reimburse Sandler O'Neill for its reasonable out-of-pocket
expenses associated with its marketing effort, up to a maximum of $50,000
(including legal fees and expenses). If the plan of conversion is terminated or
if Sandler O'Neill terminates its agreement with us in accordance with the
provisions of the agreement, Sandler O'Neill will only receive reimbursement of
its reasonable out-of-pocket expenses. We will indemnify Sandler O'Neill against
liabilities and expenses (including legal fees) incurred in connection with
certain claims or litigation arising out of or based upon untrue statements or
omissions contained in the offering material for the common stock, including
liabilities under the Securities Act of 1933.

Our directors and executive officers will not participate in the
solicitation of offers to purchase common stock. Other trained employees may
participate in the offering in ministerial capacities, providing clerical work
in effecting a sales transaction or answering questions of a ministerial nature.
Other questions of prospective purchasers will be directed to registered
representatives of Sandler O'Neill. No officer, director, or employee will be
compensated for his participation by the payment of commissions or other
remuneration based either directly or indirectly on the transactions in the
common stock.

The offering will comply with the requirements of Rule 10b-9
promulgated under the Securities Exchange Act of 1934.

Restrictions on Transferability by Directors and Officers

Shares of the common stock purchased by directors or officers of SE
Financial Corp. cannot be sold for a period of one year following completion of
the conversion, except for a disposition of shares after the death of a
stockholder. To ensure this restriction is upheld, shares of the common stock
issued to directors and officers will bear a legend restricting their sale. Any
shares issued to directors and officers as a stock dividend, stock split, or
otherwise with respect to restricted stock will be subject to the same
restriction.

For a period of three years following the conversion, no director or
officer of SE Financial Corp. or their associates may, without the prior
approval of the Office of Thrift Supervision, purchase our

common stock except from a broker or dealer registered with the Securities and
Exchange Commission. This prohibition does not apply to negotiated transactions
including more than 1% of our common stock or purchases made for tax qualified
or non-tax qualified employee stock benefit plans which may be attributable to
individual officers or directors.

Restrictions on Agreements or Understandings Regarding Transfer of Common Stock
to be Purchased in the Offering

Before the completion of the conversion and offering, no depositor may
transfer or enter into an agreement or understanding to transfer any
subscription rights or the legal or beneficial ownership of the shares of common
stock to be purchased in the offering. Depositors who submit an order form will
be required to certify that their purchase of common stock is solely for their
own account and there is no agreement or understanding regarding the sale or
transfer of their shares. We intend to pursue any and all legal and equitable
remedies after we become aware of any agreement or understanding, and will not
honor orders we reasonably believe to involve an agreement or understanding
regarding the sale or transfer of shares.

RESTRICTIONS ON ACQUISITION OF SE FINANCIAL CORP.

General

The principal federal regulatory restrictions that affect the ability
of any person, firm or entity to acquire SE Financial Corp., St. Edmond's
Federal Savings Bank or their respective capital stock are described below. Also
discussed are certain provisions in SE Financial Corp.'s articles of
incorporation and bylaws which may be deemed to affect the ability of a person,
firm or entity to acquire SE Financial Corp.

Statutory and Regulatory Restrictions on Acquisition

The Change in Bank Control Act provides that no person, acting directly
or indirectly or through or in concert with one or more other persons, may
acquire control of a savings institution unless the Office of Thrift Supervision
has been given 60 days prior written notice. The Home Owners' Loan Act provides
that no company may acquire "control" of a savings institution without the prior
approval of the Office of Thrift Supervision. Any company that acquires such
control becomes a savings and loan holding company subject to registration,
examination and regulation by the Office of Thrift Supervision. Pursuant to
federal regulations, control of a savings institution is conclusively deemed to
have been acquired by, among other things, the acquisition of more than 25% of
any class of voting stock of the institution or the ability to control the
election of a majority of the directors of an institution. Moreover, control is
presumed to have been acquired, subject to rebuttal, upon the acquisition of
more than 10% of any class of voting stock, or of more than 25% of any class of
stock of a savings institution, where certain enumerated "control factors" are
also present in the acquisition.

The Office of Thrift Supervision may prohibit an acquisition of control
if:

o it would result in a monopoly or substantially lessen competition;

o the financial condition of the acquiring person might jeopardize the
financial stability of the institution; or

o the competence, experience or integrity of the acquiring person
indicates that it would not be in the interest of the depositors or of
the public to permit the acquisition of control by such person.

These restrictions do not apply to the acquisition of a savings
institution's capital stock by one or more tax-qualified employee stock benefit
plans, provided that the plans do not have beneficial ownership of more than 25%
of any class of equity security of the savings institution.

For a period of three years following completion of the conversion,
Office of Thrift Supervision regulations generally prohibit any person from
acquiring or making an offer to acquire beneficial ownership of more than 10% of
the stock of SE Financial Corp. or St. Edmond's Federal Savings Bank without
Office of Thrift Supervision approval.

Articles of Incorporation and Bylaws of SE Financial Corp.

The following discussion is a summary of certain provisions of the
articles of incorporation and bylaws of SE Financial Corp. that relate to
corporate governance. The description is necessarily general and qualified by
reference to the articles of incorporation and bylaws and refers to the
newly-formed Pennsylvania incorporated company.

Classified Board of Directors. The Board of Directors of SE Financial
Corp. is required by the articles of incorporation to be divided into four
staggered classes which are as equal in size as is possible. One class is
required to be elected annually for four-year terms, and classes are elected in
series. A classified board promotes continuity and stability of management of SE
Financial Corp., but makes it more difficult for stockholders to change a
majority of the directors because it generally takes at least two annual
elections of directors for this to occur.

Director Qualification Provisions. SE Financial Corp.'s bylaws provide
several qualification provisions applicable to members of its Board of Directors
that serve to ensure the loyalty and professional integrity of each individual
director. In particular, the bylaws provide that each director must, at all
times, reside within 50 miles of the home office or branch office location of
the Company's wholly-owned subsidiary, St. Edmond's Federal Savings Bank. In
addition, the bylaws provide that each director be a shareholder of SE Financial
Corp. and, at all times, hold a minimum of 500 shares of its stock.

SE Financial Corp.'s bylaws also prohibit persons from serving as
director if that individual is currently serving as a management official of
another depository institution or depository holding company, as those terms are
defined by the regulations of the Office of Thrift Supervision. Further, to
ensure the integrity and good character of SE Financial Corp.'s directors, the
bylaws prohibit a person from serving as a director if he: (1) is under
indictment for, or has ever been convicted of, a criminal offense, involving
dishonesty or breach of trust and the penalty for such offense could be
imprisonment for more than one year; (2) is a person against whom a federal or
state bank regulatory agency has, within the past ten years, issued a cease and
desist order for conduct involving dishonesty or breach of trust and that order
is final and not subject to appeal; (3) has been found either by any federal or
state regulatory agency whose decision is final and not subject to appeal, or by
a court to have (a) committed a wilful violation of any law, rule or regulation
governing banking, securities, commodities or insurance, or any final cease and
desist order issued by a banking, securities, commodities or insurance
regulatory agency; or (b) breached a fiduciary duty involving personal profit;
or (4) has been nominated by a person who would be disqualified from serving as
a director under (1), (2) or (3).

In addition to discouraging a takeover attempt which a majority of our
public stockholders might determine to be in their best interest or in which our
stockholders might receive a premium over the current market prices for their
shares, the effect of these provisions may render the removal of our management
more difficult.

Authorized but Unissued Shares of Capital Stock. Following the stock
offering, SE Financial Corp. will have authorized but unissued shares of
preferred stock and common stock. See Description of Capital Stock on page ___.
These shares could be used by the Board of Directors to make it more difficult
or to discourage an attempt to obtain control of SE Financial Corp. through a
merger, tender offer, proxy contest or otherwise.

Special Meetings of Stockholders. SE Financial Corp.'s articles of
incorporation provide that special meetings of stockholders may be called only
by SE Financial Corp.'s President or by its Board of Directors, except as
provided by Pennsylvania law.

Prohibition on Cumulative Voting. SE Financial Corp.'s articles of
incorporation provide that there will not be cumulative voting by stockholders
for the election of SE Financial Corp.'s directors. This could prevent minority
stockholder representation on SE Financial Corp.'s Board of Directors.

Restrictions on Acquisition of Shares and Vote Sterilization. SE
Financial Corp.'s articles of incorporation provide that for a period of five
years from the date of completion of the conversion, no person may offer to
acquire or acquire the beneficial ownership of more than 10% of any class of
equity security of SE Financial Corp. In addition, following the expiration of
the five year prohibition on acquisition of shares, all shares owned over the
10% limit may not be voted in any matter submitted to stockholders for a vote.
This vote sterilization provision does not have an expiration date.

Procedures for Stockholder Nominations. SE Financial Corp.'s bylaws
provide that any stockholder wanting to make a nomination for the election of
directors or a proposal for new business at a meeting of stockholders must send
written notice to the Secretary of SE Financial Corp. at least 60 days before
the anniversary date of the prior year's annual meeting. The bylaws further
provide that the Board of Directors may reject any nominations or proposals for
new business that do not follow the prescribed procedures. Management believes
that it is in the best interests of SE Financial Corp. and its stockholders to
provide enough time for management to disclose to stockholders information about
a dissident slate of nominations for directors. This advance notice requirement
may also give management time to solicit its own proxies in an attempt to defeat
any dissident slate of nominations if management thinks it is in the best
interest of stockholders generally. Similarly, adequate advance notice of
stockholder proposals will give management time to study such proposals and to
determine whether to recommend to the stockholders that such proposals be
adopted.

Procedures for Business Combinations. Our articles of incorporation
prohibit any merger, consolidation, sale, liquidation, or dissolution (each, a
business combination) of SE Financial Corp. with any "interested stockholder"
for a period of five years following the interested stockholder's stock
acquisition date unless the business combination is approved by a two-thirds
vote of the Board prior to the stock acquisition date. An interested stockholder
is any person who, directly or indirectly, has the right to vote or to sell 10%
or more of the outstanding shares. Affiliates and associates of an interested
shareholder are also considered to be interested shareholders.

In addition, our articles of incorporation require that at least one of
the following conditions be met to engage in a business combination with an
interested stockholder: (i) approval by a vote of

two-thirds of the Board prior to the interested stockholder's stock acquisition
date and thereafter approved by stockholders; (ii) approval by the affirmative
vote of the holders of at least 80% of the voting shares not beneficially owned
by that interested stockholder at a meeting called for such purpose; or (iii)
satisfaction of certain minimum price conditions, as set forth in our articles
of incorporation.

In addition to the interested shareholder restrictions, our articles of
incorporation also require the affirmative vote of at least 80% of the
outstanding shares in order for us to enter into any merger, consolidation,
sale, liquidation, or dissolution of us, unless the transaction is approved by
two-thirds of our Board of Directors.

Amendment to Articles of Incorporation and Bylaws. Amendments to our
articles of incorporation must be approved by our Board of Directors and also by
the holders of a majority of the shares. Approval by at least 80% of the shares
is required to amend provisions relating to preemptive rights; stockholder
meetings; cumulative voting; proxies; stockholder proposals and nominations;
directors; removal of directors; restrictions on the acquisition and voting of
more than 10% of the common stock; approval of business combinations with
interested stockholders; directors' and officers' liability; and indemnification
of officers and directors; amendment of the bylaws; and amendment of the
articles of incorporation.

Our bylaws may be amended by a two-thirds vote of our Board of
Directors or by the holders of at least 80% of the shares.

DESCRIPTION OF CAPITAL STOCK

SE Financial Corp. is authorized to issue 8,000,000 shares of common
stock, par value $0.10 per share and 2,000,000 shares of serial preferred stock,
no par value. Upon payment of the purchase price shares of common stock issued
in the offering will be fully paid and non-assessable. Each share of common
stock will have the same relative rights as, and will be identical in all
respects with, each other share of common stock. The common stock will represent
non-withdrawable capital, will not be an account of insurable type and will not
be insured by the Federal Deposit Insurance Corporation or any other
governmental agency. The Board of Directors can, without stockholder approval,
issue additional shares of common stock.

Common Stock

Distributions. SE Financial Corp. can pay dividends if, as and when
declared by its Board of Directors, subject to compliance with limitations that
are imposed by law. See Dividend Policy on page __. The holders of common stock
of SE Financial Corp. will be entitled to receive and share equally in such
dividends as may be declared by the Board of Directors of SE Financial Corp. out
of funds legally available therefor. If SE Financial Corp. issues preferred
stock, the holders thereof may have a priority over the holders of the common
stock with respect to dividends.

Voting Rights. The holders of common stock will possess exclusive
voting rights in SE Financial Corp. The holder of shares of common stock will be
entitled to one vote for each share held on all matters subject to stockholder
vote and will not have any right to cumulate votes in the election of directors.

Liquidation Rights. In the event of any liquidation, dissolution, or
winding-up of SE Financial Corp., the holders of the common stock generally
would be entitled to receive, after payment of all debts

and liabilities of SE Financial Corp. (including all debts and liabilities of
St. Edmond's Federal Savings Bank and distribution of the balance in the special
liquidation account of St. Edmond's Federal Savings Bank to eligible account
holders and supplemental eligible account holders), all assets of SE Financial
Corp. available for distribution. If preferred stock is issued, the holders
thereof may have a priority over the holders of the common stock in the event of
liquidation or dissolution.

Preemptive Rights; Redemption. Because the holders of the common stock
do not have any preemptive rights with respect to any shares SE Financial Corp.
may issue, the Board of Directors may sell shares of capital stock of SE
Financial Corp. without first offering such shares to existing stockholders. The
common stock will not be subject to any redemption provisions.

Preferred Stock

We are authorized to issue up to 2,000,000 shares of serial preferred
stock and to fix and state voting powers, designations, preferences, or other
special rights of preferred stock and the qualifications, limitations and
restrictions of those shares as the Board of Directors may determine in its
discretion. Preferred stock may be issued in distinctly designated series, may
be convertible into common stock and may rank prior to the common stock as to
dividend rights, liquidation preferences, or both, and may have full or limited
voting rights. The issuance of preferred stock could adversely affect the voting
and other rights of holders of common stock.

The authorized but unissued shares of preferred stock and the
authorized but unissued and unreserved shares of common stock will be available
for issuance in future mergers or acquisitions, in future public offerings or
private placements. Except as otherwise required to approve the transaction in
which the additional authorized shares of preferred stock would be issued, no
stockholder approval generally would be required for the issuance of these
shares.

LEGAL AND TAX OPINIONS

The legality of the issuance of the common stock being offered and
certain matters relating to the conversion and federal and state taxation will
be passed upon for us by Malizia Spidi & Fisch, PC, Washington, D.C. Certain
legal matters will be passed upon for Sandler O'Neill & Partners, L.P. by Luse
Gorman Pomerenk & Schick, P.C., Washington, D.C.

EXPERTS

The consolidated financial statements of St. Edmond's Federal Savings
Bank at October 31, 2003 and 2002 and for each of the years in the two year
period ended October 31, 2003 have been included in this prospectus in reliance
upon the report of S.R. Snodgrass, A.C., Wexford, Pennsylvania, appearing
elsewhere in this prospectus, and upon the authority of said firm as experts in
accounting and auditing.

FinPro, Inc. has consented to the publication in this document of a
summary of its letter to St. Edmond's Federal Savings Bank setting forth its
conclusion as to the estimated pro forma market value of the Bank and has also
consented to the use of its name and statements with respect to it appearing in
this document.

REGISTRATION REQUIREMENTS

Our common stock will be registered pursuant to Section 12(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). We will be
subject to the information, proxy solicitation, insider trading restrictions,
tender offer rules, periodic reporting and other requirements of the Securities
and Exchange Commission under the Exchange Act. We may not deregister the common
stock under the Exchange Act for a period of at least three years following the
conversion.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We are subject to the informational requirements of the Exchange Act
and must file reports and other information with the Securities and Exchange
Commission.

We have filed with the Securities and Exchange Commission a
registration statement on Form SB-2 under the Securities Act of 1933, as
amended, with respect to the common stock offered in this document. As permitted
by the rules and regulations of the Securities and Exchange Commission, this
document does not contain all the information set forth in the registration
statement. This information can be examined without charge at the public
reference facilities of the Securities and Exchange Commission located at 450
Fifth Street, N.W., Washington, D.C. 20549, and copies of the registration
materials can be obtained from the Securities and Exchange Commission at
prescribed rates. You may obtain information on the operation of the Public
Reference Room by calling 1-800-SEC-0330. The Securities and Exchange Commission
also maintains an internet address ("Web site") that contains reports, proxy and
information statements and other information regarding registrants, including SE
Financial Corp., that file electronically with the Securities and Exchange
Commission. The address for this Web site is "http://www.sec.gov." The
statements contained in this document as to the contents of any contract or
other document filed as an exhibit to the Form SB-2 are, of necessity, brief
descriptions, and each statement is qualified by reference to the complete
contract or document.

The Bank has filed an application for conversion with the Office of
Thrift Supervision. This prospectus omits certain information contained in that
application. That information can be examined without charge at the public
reference facilities of the Office of Thrift Supervision located at 1700 G
Street, N.W., Washington, D.C. 20552.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

ST. EDMOND'S FEDERAL SAVINGS BANK

Independent Auditor's Report F-1

Consolidated Balance Sheet F-2

Consolidated Statement of Income F-3

Consolidated Statement of Changes in Retained Earnings F-4

Consolidated Statement of Cash Flows F-5

Notes to the Consolidated Financial Statements F-6

Other schedules are omitted as they are not required or are not
applicable or the required information is shown in the consolidated financial
statements or related notes.

Separate financial statements for SE Financial Corp. have not been
included in this prospectus because SE Financial Corp., which has engaged in
only organizational activities to date, has no significant assets, contingent or
other liabilities, revenues, expenses or earnings per share.

REPORT OF INDEPENDENT AUDITORS
------------------------------

Board of Directors
St. Edmond's Federal Savings Bank

We have audited the accompanying consolidated balance sheet of St. Edmond's
Federal Savings Bank and Subsidiary as of October 31, 2003 and 2002, and the
related consolidated statements of income, changes in retained earnings, and
cash flows for the years then ended. These financial statements are the
responsibility of the Bank'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 consolidated financial position of St. Edmond's
Federal Savings Bank and Subsidiary as of October 31, 2003 and 2002, and the
results of their operations and their cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.

/s/ S.R. Snodgrass, A.C.

Wexford, PA
December 12, 2003

F-1

ST. EDMOND'S FEDERAL SAVINGS BANK AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET

October 31,
2003 2002
------------ ------------

ASSETS
Cash and due from banks $ 675,001 $ 4,343,329
Interest-bearing deposits with other institutions 5,628,890 2,957,378
------------ ------------

Cash and cash equivalents 6,303,891 7,300,707

Certificates of deposit in other financial institutions 183,483 178,744
Investment securities available for sale 27,337,238 23,491,988
Loans receivable (net of allowance for loan losses
of $262,561 and $266,700) 50,729,660 51,689,179
Accrued interest receivable 482,538 495,369
Federal Home Loan Bank stock 735,000 642,100
Real estate owned 38,881 25,000
Premises and equipment, net 1,148,993 1,124,397
Other assets 407,622 313,669
------------ ------------

TOTAL ASSETS $ 87,367,306 $ 85,261,153
============ ============

LIABILITIES AND RETAINED EARNINGS
Deposits $ 72,272,834 $ 70,015,110
Federal Home Loan Bank borrowings 6,637,204 6,694,342
Advances by borrowers for taxes and insurance 477,386 565,950
Accrued interest payable 49,703 74,126
Other liabilities 258,521 524,734
------------ ------------

TOTAL LIABILITIES 79,695,648 77,874,262
------------ ------------

Commitments and contingencies (Note 9)

Retained earnings - substantially restricted 7,755,558 7,199,733
Accumulated other comprehensive income (loss) (83,900) 187,158
------------ ------------

TOTAL RETAINED EARNINGS 7,671,658 7,386,891
------------ ------------

TOTAL LIABILITIES AND RETAINED EARNINGS $ 87,367,306 $ 85,261,153
============ ============

See accompanying notes to the consolidated financial statements.

F-2

ST. EDMOND'S FEDERAL SAVINGS BANK AND SUBSIDIARY
CONSOLIDATED STATEMENT OF INCOME

Year Ended October 31,
2003 2002
----------- -----------

INTEREST AND DIVIDEND INCOME
Loans receivable $ 3,934,009 $ 4,649,646
Investment securities:
Taxable 1,034,380 1,075,990
Exempt from federal income tax 76,690 18,502
Interest-bearing deposits with other institutions 57,321 67,672
Other dividend income 17,589 25,678
----------- -----------
Total interest and dividend income 5,119,989 5,837,488
----------- -----------

INTEREST EXPENSE
Deposits 2,227,809 2,705,330
Federal Home Loan Bank borrowings 221,872 294,229
----------- -----------
Total interest expense 2,449,681 2,999,559
----------- -----------

NET INTEREST INCOME 2,670,308 2,837,929
Provision for loan losses 33,000 25,000
----------- -----------

NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 2,637,308 2,812,929
----------- -----------

NONINTEREST INCOME
Service fees on deposit accounts 319,052 302,872
Other 66,780 62,479
----------- -----------
Total noninterest income 385,832 365,351
----------- -----------

NONINTEREST EXPENSE
Compensation and employee benefits 1,094,923 1,164,884
Occupancy and equipment 271,647 387,215
Real estate operations, net 15,377 (59,119)
Federal deposit insurance premiums 44,859 74,234
Data processing expense 296,342 289,646
Professional fees 96,465 76,934
Other 357,717 351,703
----------- -----------
Total noninterest expense 2,177,330 2,285,497
----------- -----------

Income before income taxes 845,810 892,783
Income taxes 289,985 363,999
----------- -----------

NET INCOME $ 555,825 $ 528,784
=========== ===========

See accompanying notes to the consolidated financial statements.

F-3

ST. EDMOND'S FEDERAL SAVINGS BANK AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN RETAINED EARNINGS

Retained Accumulated
Earnings - Other Total
Substantially Comprehensive Retained Comprehensive
Restricted Income (Loss) Earnings Income
------------------ ----------------- ----------------- -----------------

Balance, October 31, 2001 $ 6,670,949 $ 185,310 $ 6,856,259

Net income 528,784 528,784 $ 528,784
Other comprehensive income:
Unrealized gain on available
for sale securities
net of taxes of $1,267 1,848 1,848 1,848
-----------------
Comprehensive income $ 530,632
------------------ ----------------- ----------------- =================

Balance, October 31, 2002 7,199,733 187,158 7,386,891

Net income 55,825 555,825 $ 555,825
Other comprehensive income:
Unrealized loss on available
for sale securities
net of tax benefit of $163,887 (271,058) (271,058) (271,058)
-----------------
Comprehensive income $ 284,767
------------------ ----------------- ----------------- =================

Balance, October 31, 2003 $ 7,755,558 $ (83,900) $ 7,671,658
================== ================= =================

See accompanying notes to the consolidated financial statements.

F-4

ST. EDMOND'S FEDERAL SAVINGS BANK AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS

Year Ended October 31,
2003 2002
------------ ------------

OPERATING ACTIVITIES
Net income $ 555,825 $ 528,784
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for loan losses 33,000 25,000
Depreciation, amortization, and accretion 167,784 172,683
Deferred federal income taxes 77,339 25,571
Decrease in accrued interest receivable 12,831 24,069
Decrease in accrued interest payable (24,423) (43,296)
Other, net (218,021) (200,475)
------------ ------------
Net cash provided by operating activities 604,335 532,336
------------ ------------

INVESTING ACTIVITIES
Investment securities available for sale:
Proceeds from principal repayments and maturities 15,076,499 8,751,548
Purchases (19,541,205) (15,372,142)
Decrease in loans receivable, net 746,406 7,303,725
Proceeds from sales of real estate acquired through
foreclosure 260,235 953,097
Redemption (purchase) of Federal Home Loan Bank stock (92,900) 58,700
Purchase of premises and equipment (162,208) (46,393)
------------ ------------
Net cash provided by (used for) investing activities (3,713,173) 1,648,535
------------ ------------

FINANCING ACTIVITIES
Increase in deposits, net 2,257,724 1,098,726
Repayment of Federal Home Loan Bank borrowings (57,138) (1,151,020)
Decrease in advances by borrowers
for taxes and insurance, net (88,564) (152,038)
------------ ------------
Net cash provided by (used for) financing activities 2,112,022 (204,332)
------------ ------------

Increase (decrease) in cash and cash equivalents (996,816) 1,976,539

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 7,300,707 5,324,168
------------ ------------

CASH AND CASH EQUIVALENTS AT END OF YEAR $ 6,303,891 $ 7,300,707
============ ============

SUPPLEMENTAL CASH FLOW DISCLOSURES
Cash paid:
Interest $ 2,474,104 $ 3,042,855
Income taxes 317,717 405,160
Noncash transactions:
Transfers from loans to real estate acquired through foreclosure 312,813 660,169

See accompanying notes to the consolidated financial statements.

F-5

ST. EDMOND'S FEDERAL SAVINGS BANK AND SUBSIDIARY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of significant accounting and reporting policies applied in the
presentation of the accompanying consolidated financial statements follows:

Nature of Operations and Basis of Presentation
- ----------------------------------------------

St. Edmond's Federal Savings Bank (the "Bank") is a federally-chartered savings
bank located in Philadelphia, Pennsylvania. The Bank's principal sources of
revenue emanate from its investment securities portfolio, its portfolio of
residential real estate, commercial, and consumer loans as well as a variety of
deposit services offered to its customers through two offices located in
Philadelphia County, Pennsylvania, and Gloucester County, New Jersey. The Bank
is subject to regulation and supervision by the Office of Thrift Supervision.

The consolidated financial statements include the accounts of the Bank and its
wholly-owned subsidiary, SE Investment Services Corp. ("Services Corp."). All
intercompany transactions have been eliminated in consoli-dation. The investment
in subsidiary on the Bank's financial statements is carried at the Bank's equity
in the underlying net assets of the Services Corp.

The accounting principles followed by the Bank and the Services Corp. and the
methods of applying these principles conform with accounting principles
generally accepted in the United States of America and to general practice
within the banking industry. In preparing the consolidated financial statements,
management is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities as of the balance sheet date and
related revenues and expenses for the period. Actual results could differ
significantly from those estimates.

Investment Securities
- ---------------------

The Bank has classified investment securities, including mortgage-backed
securities, as available for sale to serve principally as a source of liquidity.
Unrealized holding gains and losses for securities available for sale are
reported as a separate component of retained earnings, net of tax, until
realized. Realized securities gains and losses are computed using the specific
identification method. Interest and dividends on investment securities are
recognized as income when earned.

Common stock of the Federal Home Loan Bank ("FHLB") represents ownership in an
institution that is wholly-owned by other financial institutions. This equity
security is accounted for at cost and classified separately on the Consolidated
Balance Sheet.

Loans Receivable
- ----------------

Loans are stated at the principal amount outstanding less the allowance for loan
losses and net of deferred loan origination fees and costs. Interest on loans is
recognized as income when earned on the accrual method.

Loans on which the accrual of interest has been discontinued are designated as
nonaccrual loans. Accrual of interest on loans is generally discontinued when it
is determined that a reasonable doubt exists as to the collectibility of
principal, interest, or both. Loans are returned to accrual status when past due
interest is collected and the collection of principal is probable.

Loan origination fees and certain direct loan origination costs are being
deferred and the net amount amortized as an adjustment of the related loan's
yield. The Bank is amortizing these amounts over the contractual life of the
related loans.

F-6

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Allowance for Loan Losses
- -------------------------

The allowance for loan losses represents the amount which management estimates
is adequate to provide for probable losses inherent in its loan portfolio. The
allowance method is used in providing for loan losses. Accordingly, all loan
losses are charged to the allowance, and all recoveries are credited to it. The
allowance is established through a provision which is charged to operations. The
provision is based on management's evaluation of the adequacy of the allowance
for loan losses which encompasses the overall risk characteristics of the
various portfolio segments, past experience with losses, the impact of economic
conditions on borrowers, and other relevant factors. The estimates used in
determining the adequacy of the allowance, including the amounts and timing of
future cash flows expected on impaired loans, are particularly susceptible to
significant changes in the near term.

A commercial real estate loan is considered impaired when it is probable the
borrower will not repay the loan according to the original contractual terms of
the loan agreement. Management has determined that first mortgage loans on
one-to-four family properties and all consumer loans represent large groups of
smaller-balance homo-geneous loans that are to be collectively evaluated. Loans
that experience insignificant payment delays, which are defined as 90 days or
less, generally are not classified as impaired. A loan is not impaired during a
period of delay in payment if the Bank expects to collect all amounts due
including interest accrued at the contractual interest rate for the period of
delay. All loans identified as impaired are evaluated independently by
management. The Bank estimates credit losses on impaired loans based on the
present value of expected cash flows or the fair value of the underlying
collateral if the loan repayment is expected to come from the sale or operation
of such collateral. Impaired loans, or portions thereof, are charged off when it
is determined that a realized loss has occurred. Until such time, an allowance
is maintained for estimated losses. Cash receipts on impaired loans are applied
first to accrued interest receivable unless otherwise required by the loan
terms, except when an impaired loan is also a nonaccrual loan, in which case the
portion of the receipts related to interest is recognized as income.

Mortgage loans on one-to-four family properties and all consumer loans are large
groups of smaller-balance homogeneous loans and are measured for impairment
collectively. Loans that experience insignificant payment delays, which are
defined as 90 days or less, generally are not classified as impaired. Management
determines the significance of payment delays on a case-by-case basis taking
into consideration all of the circumstances surrounding the loan and the
borrower including the length of the delay, the borrower's prior payment record,
and the amount of shortfall in relation to the principal and interest owed.

Premises and Equipment
- ----------------------

Premises, leasehold improvements, and equipment are stated at cost less
accumulated depreciation and amortization. Depreciation and amortization are
calculated using the straight-line method over the useful lives of the related
assets, which range from two to ten years for furniture, fixtures, and equipment
and 30 to 31.5 years for building premises. Leasehold improvements are amortized
over the shorter of their estimated useful lives or their respective lease
terms, which range from three to five years. Expenditures for maintenance and
repairs are charged to operations as incurred. Costs of major additions and
improvements are capitalized.

Real Estate Owned
- -----------------

Real estate owned acquired in settlement of foreclosed loans is carried at the
lower of cost or fair value minus estimated costs to sell. Valuation allowances
for estimated losses are provided when the carrying value of the real estate
acquired exceeds fair value minus estimated costs to sell. Operating expenses of
such properties, net of related income, are expensed in the period incurred.

F-7

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Federal Income Taxes
- --------------------

The Bank and subsidiary file a consolidated Federal income tax return. Deferred
tax assets and liabilities are reflected based on the differences between the
financial statement and the income tax basis of assets and liabilities using the
enacted marginal tax rates. Deferred income tax expense and benefit are based on
the changes in the deferred tax assets or liabilities from period to period.

Cash and Cash Equivalents
- -------------------------

The Bank has defined cash and cash equivalents as cash and due from banks and
interest-bearing deposits with other institutions that have original maturities
of less than 90 days.

Comprehensive Income
- --------------------

The Bank is required to present comprehensive income and its components in a
full set of general-purpose financial statements for all periods presented.
Other comprehensive income is comprised exclusively of net unrealized holding
gains (losses) on its available-for-sale securities portfolio. The Bank has
elected to report the effects of other comprehensive income as part of the
Consolidated Statement of Changes in Retained Earnings.

Recent Accounting Pronouncements
- --------------------------------

In August 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("FAS") No. 143, Accounting for
Asset Retirement Obligations, which requires that the fair value of a liability
be recognized when incurred for the retirement of a long-lived asset and the
value of the asset be increased by that amount. The statement also requires that
the liability be maintained at its present value in subsequent periods and
outlines certain disclosures for such obligations. The adoption of this
statement, which was effective November 1, 2002, did not have a material effect
on the Bank's financial position or results of operations.

In July 2002, the FASB issued FAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities, which requires companies to recognize costs
associated with exit or disposal activities when they are incurred rather than
at the date of a commitment to an exit or disposal plan. This statement replaces
EITF Issue No. 94-3, Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (Including Certain Costs Incurred
in a Restructuring). The new statement is effective for exit or disposal
activities initiated after December 31, 2002. The adoption of this statement did
not have a material effect on the Bank's financial position or results of
operations.

On December 31, 2002, the FASB issued FAS No. 148, Accounting for Stock-Based
Compensation - Transition and Disclosure, which amends FAS No. 123, Accounting
for Stock-Based Compensation. FAS No. 148 amends the disclosure requirements of
FAS No. 123 to require more prominent and more frequent disclosures in financial
statements about the effects of stock-based compensation. Under the provisions
of FAS No. 123, companies that adopted the preferable, fair value based method
were required to apply that method prospectively for new stock option awards.
This contributed to a "ramp-up" effect on stock-based compensation expense in
the first few years following adoption, which caused concern for companies and
investors because of the lack of consistency in reported results. To address
that concern, FAS No. 148 provides two additional methods of transition that
reflect an entity's full complement of stock-based compensation expense
immediately upon adoption, thereby eliminating the ramp-up effect. FAS No. 148
also improves the clarity and prominence of disclosures about the pro forma
effects of using the fair value based method of accounting for stock-based
compensation for all companies -- regardless of the accounting method used -- by
requiring that the data be presented more prominently and in a

F-8

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements (Continued)
- --------------------------------------------

more user-friendly format in the footnotes to the financial statements. In
addition, the statement improves the timeliness of those disclosures by
requiring that this information be included in interim as well as annual
financial statements. The transition guidance and annual disclosure provisions
of FAS No. 148 are effective for fiscal years ending after December 15, 2002,
with earlier application permitted in certain circumstances. The interim
disclosure provisions are effective for financial reports containing financial
statements for interim periods beginning after December 15, 2002. The adoption
of this statement did not have a material effect on the Bank's financial
position or results of operations.

In April, 2003, the FASB issued FAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities. This statement amends and
clarifies accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities under FAS
No. 133. The amendments set forth in FAS No. 149 improve financial reporting by
requiring that contracts with comparable characteristics be accounted for
similarly. In particular, this statement clarifies under what circumstances a
contract with an initial net investment meets the characteristic of a derivative
as discussed in FAS No. 133. In addition, it clarifies when a derivative
contains a financing component that warrants special reporting in the statement
of cash flows. FAS No.149 amends certain other existing pronouncements. Those
changes will result in more consistent reporting of contracts that are
derivatives in their entirety or that contain embedded derivatives that warrant
separate accounting. This statement is effective for contracts entered into or
modified after September 30, 2003, except as stated below and for hedging
relationships designated after September 30, 2003. The guidance should be
applied prospectively. The provisions of this statement that relate to FAS No.
133 Implementation Issues that have been effective for fiscal quarters that
began prior to September 15, 2003, should continue to be applied in accordance
with their respective effective dates. In addition, certain provisions relating
to forward purchases or sales of when-issued securities or other securities that
do not yet exist, should be applied to existing contracts as well as new
contracts entered into after September 30, 2003. The adoption of this statement
did not have a material effect on the Bank's financial position or results of
operations.

In May 2003, the FASB issued FAS 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). Such instruments may have
been previously classified as equity. 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 instrument of nonpublic
entities. These financial instrument are subject to the provisions of this
Statement for the first fiscal period beginning after December 15, 2003. The
adoption of this statement has not and is not expected to have a material effect
on the Bank's reported equity.

In November 2002, the FASB issued Interpretation No. 45, Guarantor's Accounting
and Disclosure requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others. This interpretation elaborates on the disclosures to be
made by a guarantor in its interim and annual financial statements about its
obligations under certain guarantees that it has issued. This interpretation
clarifies that a guarantor is required to disclose (a) the nature of the
guarantee, including the approximate term of the guarantee, how the guarantee
arose, and the events or circumstances that would require the guarantor to
perform under the guarantee; (b) the maximum potential amount of future payments
under the guarantee; (c) the carrying amount of the liability, if any, for the
guarantor's obligations under the guarantee; and (d) the nature and extent of
any recourse provisions or available collateral that would enable the guarantor
to recover the amounts paid under the guarantee. This interpretation also
clarifies that a guarantor is required to recognize, at the inception of a
guarantee, a liability for the obligations it has undertaken in issuing the
guarantee, including its ongoing obligation to stand ready to perform over the
term of the guarantee in the event that the specified triggering events or
conditions occur. The objective of the initial measurement of

F-9

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements (Continued)
- --------------------------------------------

that liability is the fair value of the guarantee at its inception. The initial
recognition and initial measurement provisions of this interpretation are
applicable on a prospective basis to guarantees issued or modified after
December 31, 2002, irrespective of the guarantor's fiscal year-end. The
disclosure requirements in this interpretation are effective for financial
statements of interim or annual periods ending after December 15, 2002. The
adoption of this interpretation did not have a material effect on the Bank's
financial position or results of operations.

In January, 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities, in an effort to expand upon and strengthen existing
accounting guidance that addresses when a company should include in its
financial statements the assets, liabilities and activities of another entity.
The objective of this interpretation is not to restrict the use of variable
interest entities but to improve financial reporting by companies involved with
variable interest entities. Until now, one company generally has included
another entity in its consolidated financial statements only if it controlled
the entity through voting interests. This interpretation changes that by
requiring a variable interest entity to be consolidated by a company if that
company is subject to a majority of the risk of loss from the variable interest
entity's activities or entitled to receive a majority of the entity's residual
returns or both. The consolidation requirements of this interpretation apply
immediately to variable interest entities created after January 31, 2003. The
consolidation requirements apply to older entities in the first fiscal year or
interim period beginning after June 15, 2003. Certain of the disclosure
requirements apply in all financial statements issued after January 31, 2003,
regardless of when the variable interest entity was established. In October,
2003, the FASB decided to defer to the fourth quarter from the third quarter the
implementation date for Interpretation No. 46. This deferral only applies to
variable interest entities that existed prior to February 1, 2003. The adoption
of this interpretation has not and is not expected to have a material effect on
the Bank's financial position or results of operations.

Reclassification of Comparative Amounts
- ---------------------------------------

Certain items previously reported have been reclassified to conform to the
current year's reporting format. Such reclassifications did not affect net
income or retained earnings.

2. INVESTMENT SECURITIES

The amortized cost and estimated market value of investment securities
available for sale are summarized as follows:

2003
---------------------------------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
----------------- ----------------- ----------------- -----------------

Mortgage-backed securities $ 10,841,467 $ 121,714 $ (29,771) $ 10,933,410
U.S. Government
agency securities 13,721,409 40,534 (279,773) 13,482,170
Municipal securities 2,728,283 32,596 (20,369) 2,740,510
----------------- ----------------- ----------------- -----------------
Total debt securities 27,291,159 194,844 (329,913) 27,156,090
Mutual funds 180,706 442 - 181,148
----------------- ----------------- ----------------- -----------------
Total $ 27,471,865 $ 195,286 $ (329,913) $ 27,337,238
================= ================= ================= =================

F-10

2. INVESTMENT SECURITIES (Continued)

2002
---------------------------------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
----------------- ----------------- ----------------- -----------------

Mortgage-backed securities $ 17,324,424 $ 235,835 $ (37,679) $ 17,522,580
U.S. Government
agency securities 4,694,769 85,635 (1,383) 4,779,021
Municipal securities 978,905 37,991 (4,880) 1,012,016
----------------- ----------------- ----------------- -----------------
Total debt securities 22,998,098 359,461 (43,942) 23,313,617
Mutual funds 178,371 - - 178,371
----------------- ----------------- ----------------- -----------------
Total $ 23,176,469 $ 359,461 $ (43,942) $ 23,491,988
================= ================= ================= =================

The amortized cost and estimated market value of debt securities at October 31,
2003, by contractual maturity, are shown below. Mortgaged-backed securities
provide for periodic, generally monthly, payments of principal and interest and
have contractual maturities ranging from five to thirty years. Expected
maturities will differ from contractual maturities because borrowers may have
the right to call or prepay obligations with or without call or prepayment
penalties.

Estimated
Amortized Market
Cost Value
----------------- -----------------

Due within one year $ 9,004,443 $ 8,832,416
Due after one year through five years 6,261,724 6,194,592
Due after five years through ten years 1,250,000 1,260,792
Due after ten years 10,774,992 10,868,290
----------------- -----------------

Total $ 27,291,159 $ 27,156,090
================= =================

Investment securities with amortized cost and estimated market values of
$6,639,705 and $6,737,536 at October 31, 2003 and $7,812,955 and $7,957,073 at
October 31, 2002, were pledged to secure deposits and other purposes required by
law.

3. LOANS RECEIVABLE

Loans receivable consist of the following:

2003 2002
----------------- -----------------

Mortgage loans:
One-to-four family $ 36,149,150 $ 37,809,477
Multi-family 466,356 1,288,988
Commercial 4,005,520 4,333,878
Construction 1,416,030 150,701
----------------- -----------------
42,037,056 43,583,044

Home equity loans 8,409,279 7,793,997
Loans on savings accounts 473,141 425,452
Other 151,234 343,029
----------------- -----------------
51,070,710 52,145,522
Less:
Net deferred loan fees and unamortized premiums 78,489 189,643
Allowance for loan losses 262,561 266,700
----------------- -----------------

Total $ 50,729,660 $ 51,689,179
================= =================

F-11

3. LOANS RECEIVABLE (Continued)

Mortgage loans serviced by the Bank for others amounted to $5,886,718 and
$10,176,477 at October 31, 2003 and 2002, respectively.

The Bank's primary business activity is with customers located within its local
trade area. Commercial, residential, and personal loans are granted.
Approximately $10.9 million or 21.3 percent, and $12.7 million or 24.6 percent,
of the loan portfolio at October 31, 2003 and 2002, respectively, was comprised
of non owner-occupied rental property loan arrangements. In general, a
substantial portion of the Bank's loan customers' abilities to honor their loan
agreements is dependent upon the economic stability of the immediate trade area.

Activity in the allowance for loan losses for the years ended October 31 is
summarized as follows:

2003 2002
----------------- -----------------

Balance, beginning of period $ 266,700 $ 424,453
Add:
Provision charged to operations 33,000 25,000
Loan recoveries 10,124 14,899
----------------- -----------------
309,824 464,352
Less:
Charge-offs 47,263 197,652
----------------- -----------------

Balance, end of period $ 262,561 $ 266,700
================= =================

The Bank had nonaccrual loans of $155,168 and $385,782 at October 31, 2003 and
2002, respectively, which in management's opinion did not meet the definition of
impaired. Interest income on loans would have been increased by approximately
$15,000 and $23,000, respectively, if these loans had performed in accordance
with their original terms.

At October 31, 2003 and 2002, respectively, the recorded investment in loans
which were considered to be impaired was $214,672 and $157,301, of which all
were nonaccrual. In addition, $16,453 and $41,517, for 2003 and 2002,
respectively, of the related allowance for loan losses was allocated for
impaired loans. The average recorded investment in impaired loans during the
years ended October 31, 2003 and 2002, respectively, was $109,746 and $159,364.
For the years ended October 31, 2003 and 2002, the Bank recognized interest
income on impaired loans of $34,471 and $11,227, respectively.

In the normal course of business, loans are extended to officers, directors, and
corporations in which they are beneficially interested as stockholders,
officers, or directors. A summary of loan activity for those officers and
directors with aggregate loan balances in excess of $60,000 for the year ended
October 31, 2003, is as follows:

Amounts
2002 Additions Collected 2003
---------- ---------------- ----------- -----------

$ 540,230 $ - $ 81,073 $ 459,157

4. FEDERAL HOME LOAN BANK STOCK

The Bank is a member of the Federal Home Loan Bank System. As a member, the Bank
maintains an investment in the capital stock of the FHLB of Pittsburgh in an
amount not less than 70 basis points of the outstanding unused FHLB borrowing
capacity and one twentieth of its outstanding FHLB borrowings, as calculated
throughout the year.

F-12

5. PREMISES AND EQUIPMENT

Premises and equipment consist of the following:

2003 2002
--------------- -----------------

Land $ 150,000 $ 150,000
Buildings and leasehold improvements 1,309,924 1,295,555
Furniture, fixtures, and equipment 1,502,128 1,354,476
--------------- -----------------
2,962,052 2,800,031
Less accumulated depreciation 1,813,059 1,675,634
--------------- -----------------

Total $ 1,148,993 $ 1,124,397
=============== =================

Depreciation expense amounted to $137,612 and $207,795 for the years ended
October 31, 2003 and 2002, respectively.

6. DEPOSITS

Deposit accounts are summarized at October 31, as follows:

2003 2002
----------------------- -----------------------
Amount % Amount %
-------------- ------- -------------- -------

Non interest-bearing demand $ 2,889,656 4.0 % $ 2,478,535 3.5 %
NOW accounts 3,232,298 4.5 2,362,208 3.4
Money market deposit 4,612,594 6.5 3,885,936 5.6
Savings 9,683,297 13.4 8,569,198 12.2
-------------- ------- -------------- -------
20,417,845 28.4 17,295,877 24.7
-------------- ------- -------------- -------

Time certificates of deposit:
0.90 - 2.00% 13,400,400 18.5 100,578 0.1
2.01 - 4.00% 18,534,202 25.6 26,451,371 37.8
4.01 - 6.00% 18,953,245 26.2 24,926,897 35.6
6.01 - 8.00% 967,142 1.3 1,240,387 1.8
-------------- ------- -------------- -------
51,854,989 71.6 52,719,233 75.3
-------------- ------- -------------- -------

Total $ 72,272,834 100.0 % $ 70,015,110 100.0 %
============== ======= ============== =======

The schedule maturities of time certificates of deposit as of October 31, 2003
are as follows:

Within one year $ 21,716,551
Beyond one year but within two years 6,186,512
Beyond two years but within three years 6,476,535
Beyond three years but within four years 6,562,823
Beyond four years but within five years 10,912,568
--------------

$ 51,854,989
==============

Time deposits include certificates of deposit in denominations of $100,000 or
more. Such deposits aggregated $9,083,688 and $8,992,436 at October 31, 2003 and
2002, respectively.

F-13

6. DEPOSITS (Continued)

The scheduled maturities of time certificates of deposit in denominations of
$100,000 or more at October 31, 2003, are as follows:

Within three months 1,579,498
Three through six months 777,973
Six through twelve months 1,395,465
Over twelve months 5,330,752
--------------

9,083,688
==============

Interest expense by deposit category is as follows:

2003 2002
-------------- -------------

NOW $ 36,174 $ 38,586
Money market 80,146 97,340
Savings 146,084 177,980
Time certificates of deposit 1,965,405 2,391,424
-------------- -------------

Total $ 2,227,809 $ 2,705,330
============== =============

7. FEDERAL HOME LOAN BANK BORROWINGS

The following tables set forth information concerning advances with the FHLB:

Weighted Stated
Maturity average interest At December 31,
Description Date interest rate rate 2003 2002
--------------------- ----------- --------------- --------- ------------- --------------

Convertible 2/18/2010 5.91 % 5.91 % $ 1,000,000 $ 1,000,000
Fixed rate 8/20/2008 6.24 6.24 1,500,000 1,500,000
Fixed rate amortizing 11/3/2005 6.47 6.47 137,204 194,342
Line 4/5/2004 1.31 1.31 4,000,000 4,000,000
------------ --------------

$ 6,637,204 $ 6,694,342
=========== ===========

Maturities of other borrowings at December 31, are summarized as follows:

2003 2002
------------------------------- -----------------------------
Year Ending Weighted- Weighted-
October 31, Amount average Rate Amount average Rate
--------------- ------------ ----------------- ------------ ---------------

2003 $ - - $ 57,138 2.04%
2004 4,060,946 1.38% 4,060,946 6.47%
2005 65,009 6.47% 65,009 6.47%
2006 11,249 6.47% 11,249 6.47%
2008 1,500,000 6.24% 1,500,000 6.24%
2010 1,000,000 5.91% 1,000,000 5.91%
----------- -----------
$ 6,637,204 3.22% $ 6,694,342 3.65%
=========== ===========

F-14

7. FEDERAL HOME LOAN BANK BORROWINGS (Continued)

FHLB "RepoPlus" advances are short-term borrowings that mature within one year,
bear a variable rate of interest that adjusts daily, and are not subject to
prepayment penalties. The Bank has a maximum borrowing capacity of $58.8 million
with the FHLB at October 31, 2003.

The Bank entered into a ten-year "Convertible Select" fixed commitment advance
arrangement for $1,000,000 with the FHLB. Rates may be reset at the FHLB's
discretion on a quarterly basis based on the three-month LIBOR rate. At each
rate change the Bank may exercise a put option and satisfy the obligation
without penalty.

All borrowings from the FHLB are secured by a blanket lien on qualified
collateral, defined principally as investment securities and mortgage loans
which are owned by the Bank free and clear of any liens or encum-brances.

8. INCOME TAXES

The provision for income taxes consists of:

2003 2002
---------------- ---------------
Federal tax expense:
Current $ 151,955 $ 263,429
Deferred 77,339 25,571
---------------- ---------------
229,294 289,000
State and local
Current 60,691 74,999
---------------- ---------------

Total $ 289,985 $ 363,999
================ ===============

The tax effects of deductible and taxable temporary differences that gave rise
to significant portions of the deferred tax assets and deferred tax liabilities,
respectively, at October 31 are as follows:

2003 2002
-------------- ---------------
Deferred tax assets:
Allowance for loan losses $ 84,674 $ 79,728
Allowance for REO losses 6,100 23,710
Premises and equipment - 26,362
Nonaccrual interest 6,627 16,630
Net unrealized loss on securities 50,727 -
-------------- ---------------
Total gross deferred tax assets 148,128 146,430
-------------- ---------------

Deferred tax liabilities:
Premises and equipment 28,310 -
Net unrealized gain on securities - 128,361
-------------- ---------------
Total gross deferred tax liabilities 28,310 128,361
-------------- ---------------

Net deferred tax assets $ 119,818 $ 18,069
============== ===============

No valuation allowance was established at October 31, 2003 and 2002, in view of
the Bank's ability to carryback to taxes paid in previous years and certain tax
strategies coupled with the anticipated future taxable income as evidenced by
the Bank's earnings potential.

F-15

8. INCOME TAXES (Continued)

The reconciliation of the federal statutory rate and the Bank's effective income
tax rate are as follows:

2003 2002
------------------------ --------------------
% of % of
Pre-tax Pre-tax
Amount Income Amount Income
--------- ------------ --------- --------

Provision of statutory rate $287,524 34.0 % $303,546 34.0 %
State tax expense,
net of federal tax 40,056 4.7 49,499 5.5
Tax-exempt (22,322) (2.7) (5,415) (0.6)
Other, net (15,273) (1.8) 16,369 1.8
--------- ---------- --------- --------
Actual tax expense and
effective rate $289,985 34.2 % $363,999 40.7 %
========= ========== ========= ========

The Bank is subject to the Pennsylvania Mutual Thrift Institutions Tax that is
calculated at 11.5 percent of earnings based on accounting principles generally
accepted in the United States of America with certain adjustments.

9. COMMITMENTS AND CONTINGENT LIABILITIES

Commitments
- -----------

In the normal course of business, management makes various commitments which are
not reflected in the accom-panying financial statements. These commitments
involve, to varying degrees, elements of credit and interest rate risk in excess
of the amount recognized in the balance sheet. The Bank's exposure to credit
loss in the event of nonperformance by the other parties to the financial
instruments is represented by the contractual amounts as disclosed. The Bank
minimizes its exposure to credit loss under these commitments by subjecting them
to credit approval and review procedures and collateral requirements, as deemed
necessary, in compliance with lending policy guidelines. Generally, collateral,
usually in the form of real estate, is required to support financial instruments
with credit risk.

The off-balance sheet commitments were comprised of the following:

2003 2002
----------------- -----------------

Commitments to extend credit $ 3,272,732 $ 1,575,734

The commitments outstanding at October 31, 2003, contractually mature in less
than one year.

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the loan agreement. These
commitments are comprised primarily of available commercial and personal lines
of credit and loans approved but not yet funded. Commitments generally have
fixed expiration dates or other termination clauses and may require payment of a
fee.

Contingent Liabilities
- ----------------------

The Bank is involved in various legal actions from the normal course of business
activities. Management believes the liability, if any, arising from such actions
will not have a material adverse effect on the Bank's financial position.

F-16

10. EMPLOYEE BENEFITS

The Bank currently sponsors a 401(k) savings plan for substantially all
employees and officers of the Bank. Under the terms of the plan, the Bank may
match eligible employee contributions at the discretion of the Board of
Directors not to exceed amounts allowable by law. All employees with at least
one year of service who work over 1,000 hours per year are eligible to
participate in the plan. The Bank contributes 100 percent of the first 4 percent
of an employee's contribution and 50 percent of the next 2 percent, for a
maximum match of 5 percent. Such matching contributions vest over a three-year
period. The Bank made contributions of approximately $39,000 and $31,000 for the
years ended October 31, 2003 and 2002, respectively.

11. REGULATORY RESTRICTIONS

Regulatory Capital Requirements
- -------------------------------

Federal regulations require the Bank to maintain minimum amounts of capital.
Specifically, each is required to maintain certain minimum dollar amounts and
ratios of Total and Tier I capital to risk-weighted assets and of Core capital
to average total assets.

In addition to the capital requirements, the Federal Deposit Insurance
Corporation Improvement Act ("FDICIA") established five capital categories
ranging from "well capitalized" to "critically undercapitalized." Should any
institution fail to meet the requirements to be considered "adequately
capitalized," it would become subject to a series of increasingly restrictive
regulatory actions.

As of October 31, 2003 and 2002, the Office of Thrift Supervision categorized
the Bank as well capitalized under the regulatory framework for prompt
corrective action. To be classified as a well capitalized financial institution,
Total risk-based, Tier 1 risk-based, Core capital, and Tangible equity capital
ratios must be at least 10.0 percent, 6.0 percent, 5.0 percent, and 1.5 percent,
respectively.

The Bank's actual capital ratios are presented in the following tables, which
show that the Bank met all regulatory capital requirements.

The following table reconciles the Bank's capital under accounting principles
generally accepted in the United States of America to regulatory capital.

2003 2002
------------- -----------

Total retained earnings $7,671,658 $7,386,891
Accumulated other comprehensive (income) loss 83,900 (187,158)
----------- -----------

Tier I, core, and tangible capital 7,755,558 7,199,733

Allowance for loan losses 262,561 266,700
----------- -----------

Total risk-based capital $8,018,119 $7,466,433
=========== ===========

F-17

11. REGULATORY RESTRICTIONS (Continued)

Regulatory Capital Requirements
- -------------------------------

The Bank's actual capital ratios are presented in the following table:

2003 2002
--------------------------- --------------------------
Amount Ratio Amount Ratio
-------------- ----------- ------------- ----------

Total Capital
(to Risk-weighted Assets)
-------------------------

Actual $ 8,018,119 21.0 % $ 7,466,433 20.7 %
For Capital Adequacy Purposes 3,049,680 8.0 2,878,000 8.0
To Be Well Capitalized 3,812,100 10.0 3,597,500 10.0

Tier I Capital
(to Risk-weighted Assets)
-------------------------

Actual $ 7,755,558 20.3 % $ 7,199,733 20.0 %
For Capital Adequacy Purposes 1,524,840 4.0 1,439,000 4.0
To Be Well Capitalized 2,287,260 6.0 2,158,500 6.0

Core Capital
(to Adjusted Assets)
--------------------

Actual $ 7,755,558 8.9 % $ 7,199,733 8.4 %
For Capital Adequacy Purposes 3,500,132 4.0 3,423,067 4.0
To Be Well Capitalized 4,375,165 5.0 4,278,834 5.0

Tangible Capital
(to Adjusted Assets)
--------------------

Actual $ 7,755,558 8.9 % $ 7,199,733 8.4 %
For Capital Adequacy Purposes 1,312,550 1.5 1,283,650 1.5
To Be Well Capitalized N/A N/A N/A N/A

F-18

12. FAIR VALUE DISCLOSURE

The estimated fair values of the Bank's financial instruments are as follows:

2003 2002
---------------------------- -----------------------------
Carrying Fair Carrying Fair
Value Value Value Value
------------- ------------- -------------- ------------

Financial assets:
Cash and cash equivalents $ 6,303,891 6,303,891 $ 7,300,707 7,300,707
Cerfiticates of deposit in other
financial institutions 183,483 184,000 178,744 179,000
Investment Securities
Available for sale 27,337,238 27,337,238 23,491,988 23,491,988
Net loans receivable 50,729,660 53,767,557 51,689,179 54,832,889
Accrued interest receivable 482,538 482,538 495,369 495,369
Federal Home Loan Bank stock 735,000 735,000 642,100 642,100

Financial liabilities:
Deposits 72,272,834 73,962,039 70,015,110 72,923,517
Federal Home Loan Bank borrowings 6,637,204 6,977,845 6,694,342 6,978,145
Accrued interest payable 49,703 49,703 74,126 74,126

Financial instruments are defined as cash, evidence of ownership interest in an
entity, or a contract which creates an obligation or right to receive or deliver
cash or another financial instrument from/to a second entity on potentially
favorable or unfavorable terms.

Fair value is defined as the amount at which a financial instrument could be
exchanged in a current transaction between willing parties other than in a
forced or liquidation sale. If a quoted market price is available for a
financial instrument, the estimated fair value would be calculated based upon
the market price per trading unit of the instrument.

If no readily available market exists, the fair value estimates for financial
instruments should be based upon management's judgment regarding current
economic conditions, interest rate risk, expected cash flows, future estimated
losses, and other factors as determined through various option pricing formulas
or simulation modeling. As many of these assumptions result from judgments made
by management based upon estimates which are inherently uncertain, the resulting
estimated fair values may not be indicative of the amount realizable in the sale
of a particular financial instrument. In addition, changes in assumptions on
which the estimated fair values are based may have a significant impact on the
resulting estimated fair values.

As certain assets such as deferred tax assets and premises and equipment are not
considered financial instruments, the estimated fair value of financial
instruments would not represent the full value of the Bank.

The Bank employed simulation modeling in determining the estimated fair value of
financial instruments for which quoted market prices were not available based
upon the following assumptions:

Cash and Cash Equivalents, Accrued Interest Receivable, Federal Home Loan Bank
- --------------------------------------------------------------------------------
Stock, and Accrued Interest Payable
- -----------------------------------

The fair value is equal to the current carrying value.

Investment Securities Available for Sale
- ----------------------------------------

The fair value of investment securities available for sale is equal to the
available quoted market price. If no quoted market price is available, fair
value is estimated using the quoted market price for similar securities.

F-19

12. FAIR VALUE DISCLOSURE (Continued)

Loans Receivable, Certificates of Deposit in other Financial Institutions,
Deposits, and Federal Home Loan Bank Borrowings

The fair value for loans is estimated by discounting contractual cash flows and
adjusting for prepayment estimates. Discount rates are based upon rates
generally charged for such loans with similar characteristics. Demand, savings,
and money market deposit accounts are valued at the amount payable on demand as
of year-end. Fair values for certificates of deposit in other financial
institutions, time deposits, and Federal Home Loan Bank borrowings are estimated
using a discounted cash flow calculation that applies contractual costs
currently being offered in the existing portfolio to current market rates being
offered for products of similar remaining maturities.

Commitments to Extend Credit
- ----------------------------

These financial instruments are generally not subject to sale, and estimated
fair values are not readily available. The carrying value, represented by the
net deferred fee arising from the unrecognized commitment, and the fair value,
determined by discounting the remaining contractual fee over the term of the
commitment using fees currently charged to enter into similar agreements with
similar credit risk, are not considered material for disclosure. The contractual
amounts of unfunded commitments are presented in Note 9.

14. PLAN OF CONVERSION

On January 15, 2004, the Board of Directors of the Bank, subject to regulatory
approval, ratified a Plan of Conversion (the "Plan") to convert from a federally
chartered mutual savings institituion to a federally chartered stock savings
institution. The Bank will become a wholly-owned subsidiary of a concurrently
formed holding company. The plan provides that the holding company will offer
nontransferable subscription rights to purchase common stock of the holding
company. The rights will be offered first to eligible account holders, the
tax-qualified employee stock benefit plans, supplemental eligible account
holders and other members. Any shares remaining may then be offered to the
general public.

The Plan provides for the establishment, upon completion of the conversion, of a
special "liquidation account" in an amount equal to the Bank's net worth as of
the latest practicable date prior to the conversion. This account is for the
benefit of eligible account holders and supplemental eligible account holders in
the event of liquidation of the Bank. The interest as to each deposit account
will be in the same proportion of the total liquidation account as the balance
of the deposit account on the qualifying dates was to the aggregate balance of
all deposit account of eligible account holders and supplemental account holders
on the qualifying dates. The liquidation account will be reduced in a
proportionate amount if the amount in any deposit account on any annual closing
date is less that it was on the respective qualifying dates. The liquidation
account will not be increased despite any increase in a deposit account after
the respective qualifying dates.

The regulations of the OTS prohibit the Bank from declaring or paying a cash
dividend if the effect thereof would cause the Bank's regulatory capital to be
reduced below either the amount required for the liquidation account or the
federal regulatory capital requirement in section 567.2 of the Rules and
Regulations of the OTS.

Costs associated with the conversion will be deferred and deducted from the
proceeds of the stock offering. If, for any reason, the offering is not
successful, the deferred costs will be charged to operations. As of October 31,
2003, there were no costs associated with the conversion that have been deferred
and presented as other assets.

F-20

You should rely only on the information contained in this document or to that to
which we have referred you. We have not authorized anyone to provide you with
information that is different. This document does not constitute an offer to
sell, or the solicitation of an offer to buy, any of the securities offered
hereby to any person in any jurisdiction in which such offer or solicitation
would be unlawful. The affairs of SE Financial Corp. and its subsidiaries may
change after the date of this prospectus. Delivery of this document and the
sales of shares made hereunder does not mean otherwise.

(SE Financial Corp. logo)

SE Financial Corp.
(Proposed Holding Company for St. Edmond's Federal Savings Bank)

Up to 2,012,500 Shares of Common Stock
(Subject to Increase to up to 2,314,375 Shares)

----------

PROSPECTUS

----------

Sandler O'Neill & Partners, L.P.

March __, 2004

Until the later of _____________, 2004, or 90 days after commencement of the
offering, all dealers effecting transactions in these securities, whether or not
participating in this distribution, may be required to deliver a prospectus.
This is in addition to the obligation of the dealers to deliver a prospectus
when acting as underwriters and with respect to their unsold allotments or
subscriptions.

PART II: INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemnification of Officers and Directors.

Article 10 of the Articles of Incorporation of SE Financial Corp. sets
forth circumstances under which directors, officers, employees and agents of SE
Financial Corp. may be insured or indemnified against liability which they incur
in their capacities as such.

Item 25. Other Expenses of Issuance and Conversion

Special counsel legal fees.............................. $ 75,000
* Printing and postage.................................... 25,000
* Appraisal/Business Plan................................. 30,000
* Accounting fees......................................... 35,000
* Data processing/Conversion agent........................ 10,000
* SEC Registration Fee.................................... 2,000
* OTS Filing Fees......................................... 12,000
* SEC EDGAR Filings....................................... 10,000
* Blue Sky legal and filing fees.......................... 10,000
* Underwriting fees, including expenses and legal fees.... 281,000
* Stock Certificates...................................... 2,000
* Transfer Agent.......................................... 6,000
* Reimbursable and other expenses......................... 15,000
--------
TOTAL.............................................. $513,000
========
- -----------------
* Estimated, at supermax.

Item 26. Recent Sales of Unregistered Securities.

Not Applicable

Item 27. Exhibits:

The exhibits filed as part of this Registration Statement are
as follows:

II-1

23.2 Consent of S.R. Snodgrass, A.C.
23.3 Consent of FinPro, Inc.
24 Power of Attorney (reference is made to the signature page)
99.1 Stock Order Form*
99.2 Marketing Materials*
99.3 Opinion of FinPro, Inc. as to the value of subscription rights
99.4 Conversion Valuation Appraisal Report prepared by FinPro, Inc.*

- ----------------
* To be filed.

Item 28. Undertakings

The undersigned registrant hereby undertakes:

(1) To file, during any period in which it offers or sells securities,
a post-effective amendment to this registration statement to:

(i) Include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933 ("Securities Act");

(ii) Reflect in the prospectus any facts or events which
individually or together, represent a fundamental change in the information in
the registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more
than a 20 percent change in the maximum offering price set forth in the
"Calculation of Registration Fee" table in the effective registration statement.

(iii) Include any additional or changed material information
on the plan of distribution.

(2) For determining liability under the Securities Act, the undersigned
registrant shall treat each post-effective amendment as a new registration
statement of the securities offered, and the offering of the securities at that
time to be the initial bona fide offering.

(3) The undersigned registrant shall file a post-effective amendment to
remove from registration any of the securities that remain unsold at the end of
the offering.

(4) The undersigned registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting agreement, certificates
in such denominations and registered in such names as required by the
underwriter to permit prompt delivery to each purchaser.

(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the small business issuer pursuant to the foregoing provisions, or otherwise,
the small business issuer has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act, and is therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other

II-2

than the payment by the small business issuer of expenses incurred or paid by a
director, officer or controlling person of the small business issuer in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the small business issuer will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

II-3

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in Philadelphia,
Pennsylvania, on January 23, 2004.

SE FINANCIAL CORP.

By: /s/ Frank S. DePaolo
--------------------------------------
Frank S. DePaolo
President and Chief Executive Officer
(Duly Authorized Representative)

We the undersigned directors and officers of SE Financial Corp. do
hereby severally constitute and appoint Frank DePaolo our true and lawful
attorney and agent, to do any and all things and acts in our names in the
capacities indicated below and to execute all instruments for us and in our
names in the capacities indicated below which said Frank DePaolo may deem
necessary or advisable to enable SE Financial Corp. to comply with the
Securities Act of 1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission, in connection with the registration
statement on Form SB-2 relating to the offering of SE Financial Corp. common
stock, including specifically but not limited to, power and authority to sign
for us or any of us, in our names in the capacities indicated below, the
registration statement and any and all amendments (including post-effective
amendments) thereto; and we hereby ratify and confirm all that Frank DePaolo
shall do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated as of January 23, 2004.

/s/ Frank S. DePaolo /s/ Marcy C. Panzer
- ------------------------------------- ----------------------------------------
Frank S. DePaolo Marcy C. Panzer
President and Chief Executive Officer Chairman of the Board
(Principal Executive Officer)

/s/ Gilbert Barsky /s/ Samuel Barsky
- ------------------------------------- ----------------------------------------
Gilbert Barsky Samuel Barsky
Director Director

/s/ Andrew A. Hines
- ------------------------------------- ----------------------------------------
P. Charles DeRita Andrew A. Hines
Director Director

II-4

/s/ Megan L. Mahoney
- ------------------------------------- -----------------------------------
Ben Kovnat Megan L. Mahoney
Director Director

/s/ J. William Parker, Jr.
- ------------------------------------- -----------------------------------
J. William Parker, Jr. Nicholas M. Renzi
Director Director

/s/ William F. Saldutti, III
- ------------------------------------- -----------------------------------
William F. Saldutti, III Susanne Spinell Shuster
Director Director

/s/ Joseph Sidebotham, Sr.
- -------------------------------------
Joseph Sidebotham, Sr.
Executive Vice President, Chief Financial Officer and Controller
(Principal Accounting and Financial Officer)

II-5

As filed with the Securities and Exchange Commission on January 23, 2004
Registration No. 333-

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

EXHIBITS TO
FORM SB-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

SE Financial Corp.
--------------------------------------------------------------------
(Exact name of Small Business Issuer as specified in charter)

Please send copies of all communications to:
Samuel J. Malizia, Esq. Kent Krudys, Esq.
Tiffany A. Hasselman, Esq. LUSE GORMAN POMERENK & SCHICK, P.C.
MALIZIA SPIDI & FISCH, PC 5335 Wisconsin Avenue, NW
1100 New York Ave., N.W. Suite 400
Suite 340 West Washington, DC 20015-2005
Washington, D.C. 20005 (202) 274-2000
(202) 434-4660

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this registration statement becomes effective.

INDEX TO EXHIBITS TO FORM SB-2

Exhibit
-------

1 Form of Agency Agreement with Sandler O'Neill & Partners, L.P.*
2 Plan of Conversion of SE Financial Corp.
3(i) Articles of Incorporation of SE Financial Corp.
3(ii) Bylaws of SE Financial Corp.
4 Specimen Stock Certificate of SE Financial Corp.
5 Opinion of Malizia Spidi & Fisch, PC regarding legality of securities registered
8.1 Federal Tax Opinion of Malizia Spidi & Fisch, PC
8.2 State Tax Opinion of Malizia Spidi & Fisch, PC
10.1 Executive Life Insurance Plan*
10.2 Incentive Retirement Plan*
21 Subsidiaries
23.1 Consent of Malizia Spidi & Fisch, PC (contained in its opinions filed as Exhibits
5, 8.1 and 8.2)
23.2 Consent of S.R. Snodgrass, A.C.
23.3 Consent of FinPro, Inc.
24 Power of Attorney (reference is made to the signature page)
99.1 Stock Order Form*
99.2 Marketing Materials*
99.3 Opinion of FinPro, Inc. as to the value of subscription rights
99.4 Conversion Valuation Appraisal Report prepared by FinPro, Inc.*

- ----------------
* To be filed.