SE Financial Corp.
FOR IMMEDIATE RELEASE
Contact: Pamela M. Cyr
President and CEO
(215) 468-1700
SE FINANCIAL CORP.
ANNOUNCES SECOND QUARTER 2007 RESULTS
Philadelphia, Pennsylvania, June 8, 2007 - SE Financial Corp. (OTCBB:
SEFL) (the "Company"), the holding company for St. Edmond's Federal Savings
Bank, announced a net loss of $11.2 thousand for the three months ended April
30, 2007 as compared to a net loss of $99.0 thousand for the same period last
year. For the six months ended April 30, 2007, the Company announced a net loss
of $81.1 thousand compared to a net loss of $90.5 thousand for the same period
last year.
Commenting on the Company's performance for the quarter, President and CEO Pam
Cyr stated:
o Total loans increased $5.9 million, or 21% on an annualized basis.
One-to-four family loans increased $2.8 million, construction loans
increased $2.7 million, and multi-family loans increased $700 thousand.
Loans originated during the quarter totaled $8.0 million with a weighted
average rate of 7.76% while repayments totaled $2.1 million. As a result of
our marketing efforts the pipeline has increased over the quarter despite
fierce competition in the Bank's market area.
o Total deposits increased $8.8 million or 24% on an annualized basis. The
increase was fueled by the opening of the Deptford, New Jersey banking
office in December 2006. This location is off to a strong start with 538
accounts and total deposits of $8.3 million as of June 8th. o This location
is off to a strong start with accounts and total deposits ate of this
release.
o Total borrowings decreased to $8.1 million for the quarter ended April 30,
2007 from $11.3 million for the quarter ended January 31, 2007 due to the
maturity of a $3.0 million Federal Home Loan Bank advance.
o During the quarter $2.4 million in municipal securities and $2.0 million in
agency securities were sold at a net gain of $103.8 thousand. The
securities sold had a weighted average yield of 4.95% and a weighted
average life of 14 years. Proceeds were reinvested into mortgage-backed
securities with a weighted average yield of 5.53% and a weighted average
life of 7 years.
o Despite the continuation during the quarter of a flat to inverted yield
curve, the margin decreased only 3 basis points to 2.77% from 2.80%. The
cost of deposits held at 4.21% versus 4.20% in the previous quarter. The
yield on loans for the current quarter was 7.31% versus 7.48% for the
quarter ended January 31, 2007. The yield on loans for the quarter ended
January 31, 2007 was positively impacted by $36,000 of interest recovered
on a nonaccrual loan. The yield on loans without that recovery would have
been 7.35%.
o Subsequent to quarter end nonperforming loans decreased to $155 thousand
from $1.5 million due to the sale of loan participation interests in three
loans to one borrower discussed in the previous quarter. The provisions for
loan losses that were made in connection with these participation interests
in previous quarters were sufficient to cover the Bank's losses on the sale
of these participation interests.
o We have made significant progress in establishing each of our new
Neighborhood Banking Offices in their respective markets as a result of
limited but targeted advertising, extensive business development and
community involvement from all levels of our organization.
SE FINANCIAL CORP.
UNAUDITED QUARTER HIGHLIGHTS
(Dollars in Thousands)
QTR QTR $ Increase % Increase
4/30/2007 1/31/2007 (Decrease) (Decrease)
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Total Assets 185,557 179,972 5,585 3.10%
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Investment Securities 48,114 49,297 (1,183) -2.40%
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Loans 118,629 112,719 5,910 5.24%
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Deposits 152,503 143,683 8,820 6.14%
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Borrowings 8,088 11,266 (3,178) -28.21%
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Equity 24,201 24,056 145 0.60%
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Interest Income 2,796 2,728 68 2.49%
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Interest Expense 1,633 1,587 46 2.90%
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Net Interest Income 1,163 1,141 22 1.93%
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Provision 31 (32) 63 -196.88%
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Other Income 193 118 75 63.56%
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Non Interest Expense 1,384 1,419 (35) -2.47%
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Net Income (Loss) (11) (69) 58 -84.06%
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Net Interest Margin 2.77% 2.80% -0.03% -1.07%
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Yield on Loans 7.31% 7.48% -0.17% -2.27%
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Yield on Investments 4.85% 4.76% 0.09% 1.89%
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Cost of Deposits 4.21% 4.20% 0.01% 0.24%
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Cost of Borrowings 4.20% 4.63% -0.43% -9.29%
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Comparison of the Results of Operations for the Three Months Ended April 30,
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2007 and April 30, 2006
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For the three months ended April 30, 2007 and 2006, net interest income
after provision for loan losses totaled $1.1 million and $826.1 thousand,
respectively. The average balance of interest-earning assets increased $24.5
million to $171.2 million for the three months ended April 30, 2007 as compared
to $146.7 million for the three months ended April 30, 2006 but was offset by a
decrease in the net interest margin of 13 basis points to 2.77% for the three
months ended April 30, 2007 from 2.90% for the three months ended April 30,
2006. Management anticipates that if the yield curve remains flat to inverted
then the Bank will continue to experience pressure on its net interest margin.
The provision for loan losses decreased $185.4 thousand to $30.6
thousand for the three months ended April 30, 2007 versus $216.0 thousand for
the three months ended April 30, 2006. For the three months ended April 30, 2006
higher provisions were recorded due mainly to the downgrade of a $1.3 million
construction loan that was subsequently repaid in full.
Non-interest income was $193.1 thousand for the three months ended
April 30, 2007 compared to $105.1 thousand for the three months ended April 30,
2006. The increase of $88.0 thousand was due mainly to gains on the sale of
investment securities totaling $103.8 thousand. During the quarter $2.4 million
in municipal securities and $2.0 million in agency securities were sold at a net
gain and the proceeds were reinvested into mortgage-backed securities with a
shorter average life and a higher yield.
Non-interest expense increased $269.1 thousand to $1.4 million for the
three months ended April 30, 2007 compared to $1.1 million for the three months
ended April 30, 2006. The increase in non-interest expense was due mainly to
increases in compensation and employee benefits and occupancy and equipment
costs. The $163.5 thousand increase in compensation and employee benefits was
due primarily to additions to staff for the Deptford, New Jersey banking office
(opened in December 2006) and additional staff in the lending area and higher
payroll taxes and employee benefits expense. The $48.3 thousand increase in
occupancy and equipment costs was due to an increase in
depreciation, rent expense, utilities and maintenance expense related to the
opening of the new banking office in Deptford, New Jersey.
Comparison of the Results of Operations for the Six Months Ended April 30, 2007
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and April 30, 2006
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For the six months ended April 30, 2007 and 2006, net interest income
after provision for loan losses totaled $2.3 million and $1.9 million,
respectively. The increase of $404.6 thousand was due to an increase in the
average balance of interest-earning assets of $24.4 million to $168.6 million
for the six months ended April 30, 2007 as compared to $144.2 million for the
six months ended April 30, 2006 but was offset by a decrease in the net interest
margin of 24 basis points to 2.88% for the six months ended April 30, 2007 from
3.12% for the six months ended April 30, 2006. Management anticipates that if
the yield curve remains flat to inverted then the Bank will continue to
experience pressure on its net interest margin.
The provision for loan losses decreased $253.5 thousand to a net
recovery of $1.4 thousand for the six months ended April 30, 2007 versus a
provision of $252.1 thousand for the six months ended April 30, 2006. For the
six months ended April 30, 2006 higher provisions were recorded due mainly to
the downgrade of a $1.3 million construction loan that was subsequently repaid
in full.
Non-interest income was $305.4 thousand for the six months ended April
30, 2007 compared to $191.2 thousand for the six months ended April 30, 2006.
The increase of $114.2 thousand was due mainly to gains on the sale of
investment securities. During the quarter ended April 30, 2007 $2.4 million in
municipal securities and $2.0 million in agency securities were sold at a net
gain and the proceeds were used to purchase $4.4 million mortgage-backed
securities with a shorter average life and a higher yield.
Non-interest expense increased $503.6 thousand to $2.8 million for the
six months ended April 30, 2007 compared to $2.3 million for the six months
ended April 30, 2006. The increase in non-interest expense was due mainly to
increases in compensation and employee benefits and occupancy and equipment
costs offset by a decrease in professional fees. The $381.0 thousand increase in
compensation and employee benefits was due primarily to additions to staff for
the newly opened Deptford, New Jersey banking office and additional staff in the
lending area and higher payroll taxes and employee benefits expense. The $131.5
thousand increase in occupancy and equipment costs was due to an increase in
depreciation, rent expense, utilities and maintenance expense related to the
opening of the new banking office in Deptford, New Jersey and costs for a full
six months during the current year period for the Roxborough and Ardmore banking
offices that were opened in December 2005 and February 2006. The decrease in
professional fees was due to nonrecurring legal expenses incurred during the
prior year period.
Comparison of Financial Condition at April 30, 2007 and October 31, 2006
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Total assets increased $9.6 million to $185.6 million at April 30, 2007
as compared to $176.0 million at October 31, 2006. Cash and cash equivalents
increased $3.5 million to $6.4 million at April 30, 2007 from $2.9 million at
October 31, 2006 due to loan repayments and the increase in deposits. Loans
receivable increased $6.3 million to $118.6 million at April 30, 2007 from
$112.4 million at October 31, 2006. Deposits increased $15.3 million to $152.5
million at April 30, 2007 from $137.2 million at October 31, 2006. Borrowed
money decreased $5.9 million to $8.1 million at April 30, 2007 from $13.9
million at October 31, 2006 due to the maturity of a $3.0 million Federal Home
Loan Bank borrowing and net repayments of $2.5 million in overnight borrowings.
Stockholders' equity increased $222.3 thousand to $24.2 million at April 30,
2007 from $24.0 million at October 31, 2006 due mainly to a decrease in the
accumulated other comprehensive loss of $305.0 thousand as a result of an
increase in the market value of the Company's investment portfolio offset by the
net loss for the period and dividends paid.
Company Information
SE Financial Corp. is the holding company for St. Edmond's Federal
Savings Bank, a federally chartered stock savings institution with five
Neighborhood Banking Offices serving South Philadelphia, Roxborough and Ardmore,
Pennsylvania and Deptford and Sewell, New Jersey. SE Financial Corp. is
incorporated under the laws of the Commonwealth of Pennsylvania and its
executive offices are located at 1901-03 East Passyunk Avenue, Philadelphia,
Pennsylvania 19148. As of April 30, 2007, there were issued and outstanding
2,284,095 shares of common stock, par value $0.10 per share of SE Financial
Corp. Registrar and Transfer Company serves as the transfer agent for SE
Financial Corp. and its address is 10 Commerce Drive, Cranford, New Jersey
07016.
Senior Management: Pamela M. Cyr, President and CEO, J. Christopher
Jacobsen, EVP and Chief Operating Officer, and Charles F. Miller, EVP and Chief
Lending and Credit Officer.
Board of Directors: Marcy C. Panzer (Chairman), Samuel Barsky
(Secretary), Charles M. Cahn, Andrew A. Hines, Megan L. Mahoney, J. W. Parker,
Jr., CPA, David M. Rosenberg, William F. Saldutti, III, Susanne Spinell Shuster,
CPA.
Forward-Looking Statements Disclaimer
This news release contains forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995. Any statement
that is not a historical fact is a forward-looking statement. Such
forward-looking statements are subject to risk and uncertainties, which could
cause actual results to differ materially from those currently anticipated due
to a number of factors, 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 April 30, Six Months Ended April 30,
---------------------------- ------------------------------
2007 2006 2007 2006
----------- ----------- ----------- ----------
Interest income $ 2,796 $ 2,209 $ 5,524 $ 4,335
Interest expense 1,633 1,167 3,220 2,182
----------- ----------- ----------- ----------
Net interest income 1,163 1,042 2,304 2,153
Provision for (recovery of) loan losses 31 216 (1) 252
----------- ----------- ----------- ----------
Net interest income after provision for (recovery of) loan losses 1,132 826 2,305 1,901
Noninterest income 193 105 306 191
Noninterest expense 1,384 1,115 2,798 2,294
----------- ----------- ----------- ----------
Loss before taxes (59) (184) (187) (202)
Income tax (benefit) expense (48) (85) (106) (112)
----------- ----------- ----------- ----------
Net loss $ (11) $ (99) $ (81) $ (90)
=========== =========== =========== ==========
Weighted average shares outstanding- basic and diluted (1) 1,903,382 1,893,338 1,907,770 2,294,150
Loss per share - basic and diluted (1) ($0.01) ($0.05) ($0.01) ($0.05)
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Performance Ratios (Unaudited) Three Months Ended April 30, Six Months Ended April 30,
---------------------------- ------------------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
Return on average assets (2) -0.02% -0.25% -0.09% -0.12%
Return on average equity (2) -0.18% -1.63% -0.67% -0.66%
Net interest margin on average interest earning assets (2)(3) 2.77% 3.00% 2.88% 3.12%
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Selected Balance Sheet Data (Unaudited)
(Dollars in thousands except per share data) April 30, October 31,
2007 2006
----------- -----------
Assets $ 185,557 $ 175,984
Loan receivable, net 118,629 112,357
Cash and cash equivalents 6,361 2,887
Investment securities 48,115 48,398
Deposits 152,503 137,241
FHLB borrowings 8,088 13,941
Total stockholders' equity 24,201 23,979
Ending shares outstanding (1) 1,911,645 1,902,206
Book value per share (1) 12.66 12.61
Stockholders' equity to total assets 13.04% 13.63%
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Asset Quality (Unaudited)
(Dollars in thousands) April 30, October 31,
2007 2006
----------- -----------
Non-performing assets (4) $ 1,536 $ 515
Allowance for losses 1,114 1,112
Non-performing assets to total assets 0.83% 0.29%
Allowance for losses to total loans 0.94% 0.99%
Allowance for losses to non-performing assets 72.53% 215.92%
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(1) Shares outstanding does not include unreleased ESOP shares, unearned
nonvested RSP shares, or shares held in the Stock Compensation Trust for
purposes of the weighted average shares outstanding calculation and the
ending shares outstanding calculation.
(2) Annualized for the three and six months ended April 30, 2007 and (2006.)
(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.