SE Financial Corp.
FOR IMMEDIATE RELEASE
Contact: Pamela M. Cyr
President and CEO
(215) 468-1700
SE FINANCIAL CORP.
ANNOUNCES FOURTH QUARTER AND 2005 YEAR END RESULTS
Philadelphia, Pennsylvania, December 8, 2005 - SE Financial Corp.
(OTCBB: SEFL) (the "Company"), the holding company for St. Edmond's Federal
Savings Bank, announced net income of $191.2 thousand, or $.08 per share, for
the three months ended October 31, 2005 compared to $301.9 thousand, or $.13 per
share for the same period last year. For the twelve months ended October 31,
2005, net income was $755.8 thousand, or $.32 per share compared to $742.3
thousand, or $.20 per share for the twelve months ended October 31, 2004.
Commenting on the results for the quarter and the year ended October
31, 2005, Pam Cyr, President and CEO, stated, "We are focused on delivering
increased value to our Shareholders through core deposit and loan growth, the
addition of Neighborhood Banking Offices in high opportunity markets and
effective capital management. During the quarter, we were successful in our key
strategic initiatives as we grew loans and deposits at an annualized rate of 37%
and 31%, respectively, and announced the addition of two new Neighborhood
Banking Offices in Roxborough and Ardmore Pennsylvania. In preparation for the
opening of our two new Neighborhood Banking Offices, we have recruited
experienced teams for each market, with specific knowledge of the area who are
excited about our opportunities for growth. In addition, we have already met
with many community organizations, businesses, and retail customers that are
looking forward to our scheduled openings this month." Additional highlights
include:
o Total loan growth of $7.2 million, or 9.3% for the quarter and $19.8
million, or 30.5% for the year ended.
o 1-4 family and investor loans increased $1.5 million and $8.4 million for
the quarter and for the year ended. Residential and commercial real estate
construction loans increased $4.3 million and $8.5 million for the quarter
and year ended. Home equity loans increased $790,000 and $2.9 million for
the quarter and for year ended.
o Total deposit growth of $6.3 million, or 7.8% for the quarter and $12.0
million, or 15.9% for the year ended.
o Core deposits (checking, savings and money market accounts) increased by
$2.3 million, or 9.3% for the quarter and $4.6 million or 21% for the year
ended.
o Announcement on August 9, 2005 of plans to open a Neighborhood Banking
Office in the Roxborough section of Philadelphia, Pennsylvania.
o Announcement on September 12, 2005 of plans to open a Neighborhood Banking
Office in Ardmore, Pennsylvania.
o Declaration of the Company's 5th consecutive cash dividend, its third
consecutive dividend of $.03 per share.
o Repurchase of 42,500 shares of the Company's stock under our 10% stock
repurchase program. The Company has 215,258 shares remaining to be
repurchased.
LINKED QUARTER HIGHLIGHTS
(Dollars in Thousands)
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Increase % Increase
QTR 10/31/05 QTR 7/31/05 (Decrease) (Decrease)
------------ ----------- ---------- ----------
Total Assets 147,431 133,923 13,508 10.09%
Loans 84,602 77,413 7,189 9.29%
Deposits 87,408 81,063 6,345 7.83%
Stockholders' Equity 31,063 31,714 (651) (2.05%)
Interest Income 1,948 1,823 125 6.86%
Interest Expense 833 733 100 13.64%
Net Interest Income 1,115 1,090 25 2.29%
Provision for loan losses 54 45 9 20.00%
Noninterest Income 105 128 (23) (17.97%)
Noninterest Expense 928 1,059 (131) (12.37%)
Net Income 191 89 102 114.61%
Net Interest Margin 3.46% 3.49% (.03%) (.86%)
Yield on Loans 7.01% 6.87% .14% 2.04%
Yield on Investments 4.42% 4.25% .17% 4.00%
Cost of Deposits 3.02% 2.77% .25% 9.03%
Cost of Borrowings 4.06% 3.88% .18% 4.64%
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Comparison of the Results of Operations for the Three Months and Twelve Months
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Ended October 31, 2005 and October 31, 2004
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For the three months ended October 31, 2005, net interest income after
provision for loan losses totaled $1.1 million compared to $878 thousand for the
three months ended October 31, 2004, an increase of $183.2 thousand, or 20.87%.
This increase is attributable to an increase of $15.9 million in the average
balance of interest-earning assets to $131.4 million for the three months ended
October 31, 2005 compared to $115.5 million for the three months ended October
31, 2004 as well as an increase in the net interest margin of 11 basis points to
3.46% for the three months ended October 31 2005 from 3.35% for the three months
ended October 31, 2004. Management anticipates that the Company may experience
margin compression in the future as the current rate environment could result in
interest-bearing liabilities, primarily certificates of deposit, repricing
faster than interest-earning assets, primarily long term mortgage loans.
Non-interest income was $105.2 thousand for the three months ended October 31,
2005 compared to $106.5 thousand for the three months ended October 31, 2004.
Non-interest expense was $927.7 million for the three months ended October 31,
2005 compared to $657.1 thousand for the three months ended October 31, 2004.
The increase in non-interest expense was due to increases in compensation and
employee benefits, professional fees, and other expense of $166.5 thousand,
$30.5 thousand and $59.8 thousand, respectively. The increase in compensation
and employee benefits was due primarily to additions to staff (including staff
recruited in anticipation of the opening of two new banking offices), normal
salary increases and employee stock ownership plan expense. The increases in
professional fees were due mainly to costs incurred for strategic planning and
external loan review that were not incurred in the prior year. The increase in
other expense was due mainly to increased advertising costs, telecommunications
enhancement expense, supplies expense, and insurance expense.
For the twelve months ended October 31, 2005, net interest income after
provision for loan losses totaled $4.1 million compared to $3.1 million for the
twelve months ended October 31, 2004, an increase of $1.1 million, or 34.75%.
This increase is attributable to an increase of $23.8 million in the average
balance of interest-earning assets to $124.4 million for the twelve months ended
October 31, 2005 compared to $100.6 million for the twelve months ended October
31, 2004 as well as an increase in the net interest margin of 31 basis points to
3.53% for the twelve months ended October 31, 2005 from 3.22% for the twelve
months ended October 31, 2004. Management anticipates that the Company may
experience margin compression in the future as the current rate environment
could result in interest-
bearing liabilities, primarily certificates of deposit, repricing faster than
interest-earning assets, primarily long term mortgage loans. Non-interest income
was $446.3 thousand for the twelve months ended October 31, 2005 compared to
$377.2 thousand for the twelve months ended October 31, 2004 due mainly to gains
on the sale of securities of $32.2 thousand, an increase of $4.3 thousand in
service fees on deposit accounts and an increase of $25.5 thousand from earnings
on bank-owned life insurance. Non-interest expense was $3.5 million for the
twelve months ended October 31, 2005 compared to $2.4 million for the twelve
months ended October 31, 2004 due to increases in compensation and employee
benefits, professional fees, and other expense of $530.4 thousand, $327.2
thousand, and $215.4 thousand, respectively. Compensation and employee benefits
increased primarily due to additions to staff, a severance payment to the former
President, normal salary increases, implementation of an employee stock
ownership plan in 2004, and increased medical insurance costs. Professional fees
increased due mainly to costs associated with the Company's annual meeting and
legal expenses incurred to defend against the actions of a dissident
shareholder, accounting, auditing and legal fees that resulted from becoming a
public reporting company, including SOX compliance expenses, strategic planning
costs and external loan review costs. Other expense increased due mainly to
increased advertising costs, telecommunications enhancement expense, supplies
expense, costs related to the production of the annual report and proxy and
costs associated with becoming a public company.
Comparison of Financial Condition at October 31, 2005 and October 31, 2004
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Total assets at October 31, 2005 were $147.4 million compared to $124.8
million at October 31, 2004. Cash and cash equivalents decreased to $2.2 million
at October 31, 2005 from $6.2 million at October 31, 2004. Net loans increased
$19.8 million, or 30.5%, to $84.6 million at October 31, 2005 from $64.8 million
at October 31, 2004. Deposits increased $12.0 million, or 15.9%, to $87.4
million at October 31, 2005 from $75.4 million at October 31, 2004. Borrowed
money increased $11.4 million, or 68.5%, to $27.9 million at October 31, 2005
from $16.6 million at October 31, 2004.
SE Financial Corp. is the holding company for St. Edmond's Federal
Savings Bank, a federally chartered stock savings institution with two offices
located in Philadelphia, Pennsylvania and Sewell, New Jersey.
Statements contained in this news release, which are not historical
facts, contain forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are
ubject to risk and uncertainties, which could cause actual results to differ
materially from those currently anticipated due to a number of factors, which
include, but are not limited to, factors discussed in documents filed by the
Company with the Securities and Exchange Commission from time to time.
SE FINANCIAL CORP.
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Selected Income Statement Data (Unaudited)
(Dollars in thousands except per share data) Three Months Ended October 31, Twelve Months Ended October 31,
------------------------------------ -------------------------------
2005 2004 2005 2004
----------------- ----------------- --------------- -------------
Interest income $ 1,948 $ 1,520 $ 7,099 $ 5,326
Interest expense 833 572 2,802 2,152
----------------- ----------------- --------------- --------------
Net interest income 1,115 948 4,297 3,174
Provision for loan losses 54 70 150 97
----------------- ----------------- --------------- --------------
Net interest income after provision for loan losses 1,061 878 4,147 3,077
Noninterest income 105 106 446 377
Noninterest expense 928 657 3,538 2,444
----------------- ----------------- --------------- --------------
Income before taxes 238 327 1,055 1,010
Income tax expense 47 25 299 268
----------------- ----------------- --------------- --------------
Net income $ 191 $ 302 $ 756 $ 742
================= ================= =============== ==============
Weighted average shares outstanding (1) 2,370,425 2,377,193 2,379,700 2,375,849
Earnings per share (1) $ 0.08 $ 0.13 $ 0.32 $ 0.20
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Performance Ratios (Unaudited) Three Months Ended October 31, Twelve Months Ended October 31,
------------------ ----------------- -------------------------------
2005 2004 2005 2004
------------------ ----------------- ----------------- ------------
Return on average assets (2) 0.55% 1.00% 0.58% 0.71%
Return on average equity (2) 2.42% 3.87% 2.39% 4.14%
Net yield on average interest earning assets (2)(3) 3.46% 3.35% 3.53% 3.22%
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Selected Balance Sheet Data (Unaudited)
(Dollars in thousands except per share data) October 31, October 31,
2005 2004
----------------------------------
Assets $ 147,431 $ 124,779
Loan receivable, net 84,602 64,810
Cash and cash equivalents 2,163 6,181
Investment securities 52,233 48,437
Deposits 87,408 75,385
FHLB borrowings 27,935 16,576
Total stockholders' equity 31,063 31,603
Ending shares outstanding (1) 2,352,169 2,378,125
Book value per share (1) 13.21 13.29
Stockholders' equity to total assets 21.07% 25.33%
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Asset Quality (Unaudited)
(Dollars in thousands) October 31, October 31,
2005 2004
----------------------------------
Non-performing assets (4) $ 69 $ 126
Allowance for losses 507 343
Non-performing assets to total assets 0.05% 0.10%
Allowance for losses to total loans 0.60% 0.53%
Allowance for losses to non-performing assets 734.78% 272.22%
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(1) Shares outstanding does not include unreleased ESOP shares for purposes of
the weighted average shares outstanding calculation or for the ending
shares outstanding calculation. 2004 Earnings per share figures reflect
earnings since becoming a public company.
(2) Annualized for the three months ended October 31, 2005 and 2004.
(3) The yield on municipal securities has been adjusted to a tax-equivalent
basis.
(4) Non-performing assets include non-accrual loans and real estate owned.