UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-QSB
(Mark One)

|X|  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the quarterly period ended           July 31, 2006
                               -------------------------------------------------
                                       OR

|_|  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from                         to
                               -----------------------    ----------------------

                         Commission file number 0-50684
                                                -------

                               SE FINANCIAL CORP.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


Pennsylvania                                             57-1199010
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. employer identification no.)
incorporation or organization)

1901-03 Passyunk Avenue, Philadelphia, Pennsylvania               19148
---------------------------------------------------               -----
(Address of principal executive offices)                        (Zip Code)

Registrant's telephone number, including area code      215-468-1700
                                                        ------------

                                       N/A
--------------------------------------------------------------------------------
              Former name, former address and former fiscal year,
                             if changed since last
report.


          Indicate by check whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the  Exchange  Act  during the  preceding  12
months (or for such shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days. Yes  X     No
          ---       ---

         Indicate by check mark whether the  registrant  is a shell  company (as
defined in Rule 12b-2 of the Exchange Act). Yes       No  X
                                                ---      ---

         State the number of shares  outstanding of each of the issuer's classes
of common equity as of the latest practicable date September 13, 2006:

            Class                                           Outstanding
   ---------------------------                           ----------------
   $.10 par value common stock                           2,286,375 shares


Transitional Small Business Disclosure Format (check one):  Yes       No  X
                                                                ---      ---

<PAGE>

                               SE FINANCIAL CORP.

                                   FORM 1O-QSB

                       FOR THE QUARTER ENDED July 31, 2006


                                      INDEX

<TABLE>
<CAPTION>
                                                                          Page
                                                                          Number
                                                                          ------
<S>                                                                       <C>
PART I - FINANCIAL INFORMATION

        Item 1. Financial Statements (Unaudited)                               1

        Item 2. Management's Discussion and Analysis or Plan of Operation     10

        Item 3. Controls and Procedures                                       15

PART II- OTHER INFORMATION

        Item 1. Legal Proceedings                                             16

        Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   16

        Item 3. Defaults Upon Senior Securities                               16

        Item 4. Submission of Matters to a Vote of Security Holders           16

        Item 5. Other Information                                             16

        Item 6. Exhibits                                                      16

SIGNATURES

EXHIBITS

         31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

         31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

         32   Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

         99.1 Report of Independent Registered Public Accounting Firm
</TABLE>



<PAGE>

                               SE FINANCIAL CORP.
                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                           July 31,        October 31,
                                                                                             2006             2005
                                                                                        -------------    -------------
<S>                                                                                    <C>              <C>
          ASSETS
             Cash and due from banks                                                    $     917,357    $     603,912
             Interest-bearing deposits with other institutions                              2,495,152        1,558,899
                                                                                        -------------    -------------

                  Cash and cash equivalents                                                 3,412,509        2,162,811

             Certificates of deposit in other financial institutions                          197,964          193,793
             Investment securities available for sale                                      45,658,649       50,082,732
             Investment securities held to maturity (estimated market value
                  of $2,187,562 and $2,149,249)                                             2,194,173        2,150,395
             Loans receivable (net of allowance for loan losses
                  of $859,421 and $506,708)                                               108,445,490       84,602,435
             Accrued interest receivable                                                      948,435          754,403
             Federal Home Loan Bank Stock                                                   1,355,800        1,649,900
             Premises and equipment, net                                                    5,112,891        2,142,909
             Real estate owned                                                                 59,034             --
             Bank owned life insurance                                                      3,049,645        2,961,261
             Other assets                                                                   1,528,620          730,108
                                                                                        -------------    -------------
                      TOTAL ASSETS                                                      $ 171,963,210    $ 147,430,747
                                                                                        =============    =============

          LIABILITIES AND STOCKHOLDERS' EQUITY
          Liabilities
             Deposits                                                                   $ 130,542,880    $  87,407,966
             Short-term borrowings                                                          5,000,000       12,800,000
             Federal Home Loan Bank borrowings                                             11,614,121       15,134,917
             Advances by borrowers for taxes and insurance                                    358,613          436,601
             Accrued interest payable                                                         111,215          124,243
             Other liabilities                                                                450,483          464,120
                                                                                        -------------    -------------
                      TOTAL LIABILITIES                                                   148,077,312      116,367,847
                                                                                        -------------    -------------

          Commitments and contingencies                                                             -                -

          Stockholders' Equity
             Preferred stock - no par value; 2,000,000 shares authorized; none issued               -                -
             Common stock - $0.10 par value; 8,000,000 shares authorized;
                  2,578,875 issued                                                            257,888          257,888
             Additional paid-in capital                                                    24,907,828       24,873,013
             Retained earnings - substantially restricted                                   8,657,301        8,968,526
             Stock Compensation Trust 215,000 shares                                       (3,021,300)               -
             Unallocated shares held by Employee Stock Ownership Plan ("ESOP")             (1,731,535)      (1,842,058)
             Treasury stock at cost, 292,500 shares and 42,500 shares respectively         (4,113,325)        (581,125)
             Accumulated other comprehensive loss                                          (1,070,959)        (613,344)
                                                                                        -------------    -------------
                      TOTAL STOCKHOLDERS' EQUITY                                           23,885,898       31,062,900
                                                                                        -------------    -------------
                      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                        $ 171,963,210    $ 147,430,747
                                                                                        =============    =============
</TABLE>

   See accompanying notes to the unaudited consolidated financial statements.

                                       1

<PAGE>
       SE FINANCIAL CORP
           CONSOLIDATED STATEMENT OF INCOME
          (Unaudited)

<TABLE>
<CAPTION>
                                                                        Three Months Ended July 31,  Nine Months Ended July 31,
                                                                        ---------------------------  --------------------------
                                                                            2006           2005          2006          2005
                                                                        -----------    -----------   -----------    -----------
<S>                                                                  <C>            <C>           <C>            <C>
INTEREST AND DIVIDEND INCOME
    Loans receivable                                                    $ 1,921,280    $ 1,293,867   $ 5,065,166    $ 3,634,069
    Investment securities
       Taxable                                                              492,819        455,171     1,477,599      1,321,145
       Exempt from federal income tax                                        60,091         54,459       182,510        126,482
    Interest-bearing deposits with other institutions                        38,732          9,592        97,486         43,999
    Other dividend income                                                    24,225          9,916        49,038         25,208
                                                                        -----------    -----------   -----------    -----------
           Total interest and dividend income                             2,537,147      1,823,005     6,871,799      5,150,903
                                                                        -----------    -----------   -----------    -----------
INTEREST EXPENSE
    Deposits                                                              1,185,084        518,509     2,829,949      1,498,676
    Short-term borrowings                                                    89,712         50,664       304,412        117,834
    Federal Home Loan Bank borrowings                                       115,233        163,782       437,713        352,658
                                                                        -----------    -----------   -----------    -----------
           Total interest expense                                         1,390,028        732,955     3,572,074      1,969,168
                                                                        -----------    -----------   -----------    -----------

NET INTEREST INCOME                                                       1,147,119      1,090,050     3,299,725      3,181,735
    Provision for loan losses                                               116,065         45,393       368,183         96,393
                                                                        -----------    -----------   -----------    -----------
NET INTEREST INCOME AFTER
         PROVISION FOR LOAN LOSSES                                        1,031,054      1,044,657     2,931,542      3,085,342
                                                                        -----------    -----------   -----------    -----------
NONINTEREST INCOME
    Service fees on deposit accounts                                         76,282         72,886       208,826        210,451
    Earnings on bank-owned life insurance                                    29,385         21,595        88,384         63,263
    Net gain (loss) on sale of investment securities                           --           21,760       (23,667)        32,206
    Other                                                                    15,931         12,210        39,293         35,097
                                                                        -----------    -----------   -----------    -----------
           Total noninterest income                                         121,598        128,451       312,836        341,017
                                                                        -----------    -----------   -----------    -----------
NONINTEREST EXPENSE
    Compensation and employee benefits                                      683,758        442,896     1,897,814      1,321,659
    Occupancy and equipment                                                 156,710         61,952       401,942        163,730
    Federal deposit insurance premiums                                       15,913         16,467        45,333         38,726
    Data processing expense                                                  60,607         68,573       213,702        227,231
    Professional fees                                                        68,784        248,017       310,393        413,685
    Other                                                                   199,106        221,278       610,003        444,776
                                                                        -----------    -----------   -----------    -----------
           Total noninterest expense                                      1,184,878      1,059,183     3,479,187      2,609,807
                                                                        -----------    -----------   -----------    -----------

(LOSS) INCOME BEFORE TAXES                                                  (32,226)       113,925      (234,809)       816,552

INCOME TAX (BENEFIT) EXPENSE                                                 (8,819)        24,717      (120,941)       252,020
                                                                        -----------    -----------   -----------    -----------
NET (LOSS) INCOME                                                       $   (23,407)   $    89,208   $  (113,868)   $   564,532
                                                                        ===========    ===========   ===========    ===========

PER SHARE DATA:
    Earnings (loss) per share - basic and diluted                       $     (0.01)   $      0.04   $      (0.06)  $      0.24
    Weighted average number of shares outstanding - basic and diluted     1,896,994      2,386,086      2,027,592     2,384,036

    Dividends per share                                                        0.03           0.03           0.09          0.07
</TABLE>

   See accompanying notes to the unaudited consolidated financial statements.

                                       2
<PAGE>


                               SE FINANCIAL CORP.
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                               Accumulated
                                            Retained     Stock      Unallocated                 Other          Total
                                Additional  Earnings-    Compen-      shares       Treasury     Compre-        Stock      Compre-
                       Common     paid-in  Substantially sation       held by       Stock       hensive       holders'    hensive
                       Stock      Capital   Restricted    Trust        ESOP         at Cost      Loss          Equity      Loss
                       -------- ----------- ----------  -----------  -----------  -----------  -----------   ----------- ---------
<S>                   <C>      <C>         <C>         <C>          <C>          <C>           <C>         <C>
Balance,
  October 31, 2005     $257,888 $24,873,013 $8,968,526  $         -  $(1,842,058) $  (581,125)  $(613,344)  $31,062,900

Cash dividends paid           -           -   (197,357)           -            -            -           -      (197,357)

ESOP shares committed
  to be released              -      34,815          -            -      110,523            -           -       145,338

Stock Compensation
 Trust purchases              -           -          -   (3,021,300)           -            -           -    (3,021,300)

Treasury Stock
  purchases                   -           -          -            -            -   (3,532,200)          -    (3,532,200)

Net loss                      -           -   (113,868)           -            -            -           -      (113,868) $(113,868)

Other comprehensive loss:
  Unrealized loss
  on available for sale
  securities, net of
  reclassification
  adjustment, net of
  tax benefit of
  $235,715                    -           -          -            -            -            -    (457,615)     (457,615) $(457,615)
                                                                                                                         ---------
Comprehensive loss            -           -          -            -            -            -                            $(571,483)
                       -------- ----------- ----------  -----------  -----------  -----------  -----------   ----------- =========
Balance,
  July 31, 2006        $257,888 $24,907,828 $8,657,301  $(3,021,300) $(1,731,535) $(4,113,325) $(1,070,959)  $23,885,898
                       ======== =========== ==========  ===========  ===========  ===========  ===========   ===========

Components of other comprehensive loss:                                                                    July 31, 2006
  Change in net unrealized loss on                                                                         -------------
   investment securities available for sale                                                                  $  (473,300)
  Realized losses included in net loss net of tax benefit of $8,047                                               15,620
                                                                                                              ----------
Total                                                                                                        $  (457,680)
                                                                                                             ===========
</TABLE>

   See accompanying notes to the unaudited consolidated financial statements.

                                        3

<PAGE>

                               SE FINANCIAL CORP.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                      For the Nine Months Ended July 31,
                                                                            2006            2005
                                                                        ------------    ------------
<S>                                                                    <C>             <C>
      OPERATING ACTIVITIES
         Net income (loss)                                              $   (113,868)   $    564,532
         Adjustments to reconcile net income (loss) to net cash
            provided by (used for) operating activities:
             Provision for loan losses                                       368,183          96,393
             Depreciation, amortization, and accretion                       136,680         161,984
             Earnings on bank-owned life insurance                           (88,384)        (63,263)
             Decrease in principal and interest on loans sold payable        (30,734)        157,265
             Increase in accrued interest receivable                        (194,032)        (31,363)
             Increase (decrease) in accrued interest payable                 (13,028)         46,788
             Net loss (gain) on sale of investment securities                 23,667         (32,206)
             Other, net                                                     (545,700)       (221,441)
                                                                        ------------    ------------
                 Net cash provided by (used for) operating activities       (457,216)        678,689
                                                                        ------------    ------------

      INVESTING ACTIVITIES
         Investment securities available for sale:
             Proceeds from principal repayments and maturities             4,549,486       5,274,180
             Purchases                                                    (2,991,602)    (12,548,509)
             Proceeds from the sale of investment securities               2,141,519       8,757,326
         Investment securities held to maturity:
             Purchases                                                             -      (2,126,156)
         Increase in loans receivable, net                               (24,136,026)    (12,626,601)
         Proceeds from sales of real estate acquired through
            foreclosure                                                            -          80,000
         Purchase of Federal Home Loan Bank stock                           (132,700)       (556,600)
         Redemption of Federal Home Loan Bank stock                          426,800         255,400
         Purchase of bank-owned life insurance                                     -      (1,000,000)
         Purchase of premises and equipment                               (3,135,836)       (137,372)
                                                                        ------------    ------------
                 Net cash used for investing activities                  (23,278,359)    (14,628,332)
                                                                        ------------    ------------

      FINANCING ACTIVITIES
         Increase in deposits, net                                        43,134,914       5,678,144
         Net decrease in short-term borrowings                            (7,800,000)     (2,400,000)
         Proceeds from Federal Home Loan Bank borrowings                           -       7,400,000
         Repayment of Federal Home Loan Bank borrowings                   (3,520,796)     (1,658,323)
         Decrease in advances by borrowers
            for taxes and insurance, net                                     (77,988)        (68,769)
         Purchase of stock for Stock Compensation Trust                   (3,021,300)              -
         Purchase of treasury stock                                       (3,532,200)              -
         Cash dividends                                                     (197,357)       (166,595)
                                                                        ------------    ------------
                 Net cash provided by financing activities                24,985,273       8,784,457
                                                                        ------------    ------------

                 Increase (decrease) in cash and cash equivalents          1,249,698      (5,165,186)

      CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                     2,162,811       6,180,794
                                                                        ------------    ------------

      CASH AND CASH EQUIVALENTS AT END OF PERIOD                        $  3,412,509    $  1,015,608
                                                                        ============    ============

      SUPPLEMENTAL CASH FLOW DISCLOSURES
         Cash paid:
             Interest                                                   $  3,585,102    $  1,922,380
             Income taxes                                                    173,000         328,128
</TABLE>

      See accompanying notes to the unaudited consolidated financial statements.

                                       4

<PAGE>
                               SE FINANCIAL CORP.
            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION
------------------------------

         The  consolidated  financial  statements  include  the  accounts  of SE
Financial  Corp.  (the  "Company") and St.  Edmond's  Federal  Savings Bank (the
"Bank"). The Bank includes its wholly-owned  subsidiary,  SE Investment Services
Corp.  ("Services Corp."), an inactive investment services and products provider
and SE DEL Corp.,  a  Delaware  investment  subsidiary  which  holds  investment
securities. All intercompany transactions have been eliminated in consolidation.

         The accompanying  unaudited consolidated financial statements have been
prepared in accordance with U. S. generally accepted  accounting  principles for
interim  financial   information  and  the  instructions  for  Form  10-QSB.  In
management's   opinion,   the  financial  statements  include  all  adjustments,
consisting of normal recurring adjustments, that the Company considers necessary
to fairly state the Company's  financial  position and the results of operations
and cash flows.  The balance sheet at October 31, 2005 has been derived from the
audited consolidated  financial statements at that date but does not include all
of the necessary  informational  disclosures  and footnotes as required by U. S.
generally  accepted  accounting   principles.   The  results  of  the  Company's
operations for any interim period are not necessarily  indicative of the results
of the Company's  operations  for any other interim  period or for a full fiscal
year.

NOTE 2 - COMPREHENSIVE INCOME (LOSS)
------------------------------------

         The components of  comprehensive  income (loss) consist  exclusively of
unrealized  gains and  losses on  available  for sale  securities.  For the nine
months  ended  July  31,  2006,   this  activity  is  shown  under  the  heading
Comprehensive  Loss as  presented  in the  Consolidated  Statement of Changes in
Stockholders'  Equity  (Unaudited).  For the nine  months  ended  July 31,  2005
comprehensive income totaled $130,991.  For the three months ended July 31, 2006
and 2005 comprehensive loss totaled $75,063 and $43,152, respectively.

NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS
-----------------------------------------

In February  2006, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial Accounting ("FAS") No. 155, Accounting for Certain Hybrid
Instruments,  as an  amendment of FASB  Statements  No. 133 and 140. FAS No. 155
allows financial  instruments that have embedded derivatives to be accounted for
as a whole  (eliminating  the need to bifurcate the derivative from its host) if
the holder  elects to account for the whole  instrument  on a fair value  basis.
This  statement is effective  for all financial  instruments  acquired or issued
after the beginning of an entity's first fiscal year that begins after September
15,  2006.  The  adoption of this  standard  is not  expected to have a material
effect on the Company's results of operations or financial position.

In March  2006,  the FASB  issued  FAS No.  156,  Accounting  for  Servicing  of
Financial  Assets.  This  Statement,  which is an amendment to FAS No. 140, will
simplify the  accounting  for servicing  assets and  liabilities,  such as those
common  with  mortgage  securitization  activities.  Specifically,  FAS No.  156
addresses the  recognition and  measurement of separately  recognized  servicing
assets and  liabilities  and provides an approach to simplify  efforts to obtain
hedge-like (offset) accounting. FAS No. 156 also clarifies when an obligation to
service financial assets should be separately recognized as a servicing asset or
a servicing liability,  requires that a separately recognized servicing asset or
servicing  liability be initially  measured at fair value, if  practicable,  and
permits an entity with a  separately  recognized  servicing  asset or  servicing
liability  to choose  either  of the  amortization  or fair  value  methods  for
subsequent  measurement.  The  provisions of FAS No. 156 are effective as of the
beginning  of the first fiscal year that begins after  September  15, 2006.  The
adoption  of this  standard  is not  expected  to have a material  effect on the
Company's results of operations or financial position.

In June 2006, the FASB issued FASB Interpretation No. 48 ("FIN 48"),  Accounting
for  Uncertainty in Income Taxes.  FIN 48 is an  interpretation  of FAS No. 109,
Accounting  for Income  Taxes,  and it seeks to reduce the diversity in practice
associated with certain aspects of measurement and recognition in accounting for
income taxes. In addition,  FIN No. 48 requires expanded disclosure with respect
to the  uncertainty in income taxes and is effective for fiscal years  beginning
after  December 15, 2006.  The Company is  currently  evaluating  the impact the
adoption of the standard will have on the Company's results of operations.

                                        5
<PAGE>

NOTE 4 - INVESTMENTS


The amortized cost and the estimated market value of investment  securities held
to maturity were as follows:

<TABLE>
<CAPTION>
                                                                        July 31, 2006
                                      -------------------------------------------------------------------------------------
                                                                  Gross                   Gross                 Estimated
                                       Amortized               Unrealized              Unrealized                 Market
                                         Cost                     Gains                  Losses                   Value
                                      -----------              -----------             -----------             ------------
<S>                                  <C>                      <C>                     <C>                     <C>

Municipal securities                  $ 2,194,173              $    24,385             $   (30,996)            $  2,187,562
                                      ===========              ===========             ===========             ============
</TABLE>


<TABLE>
<CAPTION>
                                                                       October 31, 2005
                                      --------------------------------------------------------------------------------------
                                                                  Gross                   Gross                 Estimated
                                       Amortized               Unrealized              Unrealized                 Market
                                         Cost                     Gains                  Losses                   Value
                                      ------------             ------------            ------------            -------------
<S>                                  <C>                      <C>                     <C>                     <C>
Municipal securities                  $ 2,150,395              $    26,342             $   (27,488)            $  2,149,249
                                      ===========              ===========             ===========             ============
</TABLE>


The  amortized  cost  and  the  estimated  market  value  of  available-for-sale
investment securities were as follows:

<TABLE>
<CAPTION>
                                                                        July 31, 2006
                                         ---------------------------------------------------------------------------
                                                                 Gross               Gross            Estimated
                                            Amortized          Unrealized          Unrealized           Market
                                               Cost              Gains               Losses             Value
                                         -----------------  -----------------   -----------------  -----------------
<S>                                     <C>                <C>                 <C>                <C>
Mortgage-backed securities:
     Fannie Mae                          $     22,939,164                 44            (784,104)  $     22,155,104
     Freddie Mac                                6,057,277                705            (186,169)         5,871,813
     Government National Mortgage
       Association securities                   1,315,332                715             (14,339)         1,301,708
                                         ----------------   ----------------    ----------------   ----------------
     Total mortgage-backed
     securities                                30,311,773              1,464            (984,612)        29,328,625
U.S. Government
  agency securities                             9,748,760                  -            (431,679)         9,317,081
Corporate securities                            3,026,833                  -             (97,863)         2,928,970
Municipal securities                            3,996,889              1,277            (107,557)         3,890,609
                                         ----------------   ----------------    ----------------   ----------------
          Total debt securities                47,084,255              2,741          (1,621,711)        45,465,285
Mutual funds                                      197,036                  -              (3,672)           193,364
                                         ----------------   ----------------    ----------------   ----------------
          Total                          $     47,281,291   $          2,741    $     (1,625,383)  $     45,658,649
                                         ================   ================    ================   ================
</TABLE>


                                        6

<PAGE>

<TABLE>
<CAPTION>
                                                                       October 31, 2005
                                         ---------------------------------------------------------------------------
                                                                 Gross               Gross            Estimated
                                            Amortized          Unrealized          Unrealized           Market
                                               Cost              Gains               Losses             Value
                                         -----------------  -----------------   -----------------  -----------------
<S>                                     <C>                <C>                 <C>                <C>
Mortgage-backed securities:
     Fannie Mae                          $     26,739,810   $          1,983    $       (448,608)  $     26,293,185
     Freddie Mac                                4,643,713                495             (81,412)         4,562,796
     Government National Mortgage
       Association securities                   2,193,406              8,576              (8,271)         2,193,711
                                         ----------------   ----------------    ----------------   ----------------
     Total mortgage-backed
     securities                                33,576,928             11,053            (538,291)        33,049,690
U.S. Government
  agency securities                             9,965,943                914            (308,072)         9,658,785
Corporate securities                            3,028,815                  -             (25,100)         3,003,715
Municipal securities                            4,249,487                  -             (66,722)         4,182,765
                                         ----------------   ----------------    ----------------   ----------------
          Total debt securities                50,821,173             11,967            (938,185)        49,894,955
Mutual funds                                      190,870                  -              (3,093)           187,777
                                         ----------------   ----------------    ----------------   ----------------
          Total                          $     51,012,044   $         11,967    $       (941,278)  $     50,082,732
                                         ================   ================    ================   ================
</TABLE>

The  amortized  cost and estimated  market value of debt  securities at July 31,
2006,  by  contractual  maturity,  are shown below.  Mortgage-backed  securities
provide for periodic,  generally monthly, payments of principal and interest and
have  contractual   maturities  ranging  from  one  to  thirty  years.  Expected
maturities will differ from contractual  maturities  because  borrowers may have
the  right to call or  repay  obligations  with or  without  call or  prepayment
penalties.

<TABLE>
<CAPTION>
                                                           Held to Maturity                Available for Sale
                                                           ----------------                ------------------
                                                                       Estimated        Amortized        Estimated
                                                   Amortized Cost    Market Value          Cost         Market Value
                                                   ---------------  ---------------  --------------    ---------------
<S>                                               <C>              <C>              <C>               <C>
Due less than one year                             $            -   $            -   $     250,184     $      246,600
Due after one year through five years                           -                -      12,587,747         12,076,464
Due after five years through ten years                          -                -       3,560,367          3,388,171
Due after ten years                                     2,194,173        2,187,562      30,685,957         29,754,050
                                                   --------------   --------------   -------------     --------------
                                                   $    2,194,173   $    2,187,562   $  47,084,255     $   45,465,285
                                                   ==============   ==============   =============     ==============
</TABLE>


                                        7

<PAGE>

NOTE 5 - LOANS RECEIVABLE

Loans receivable consist of the following:

<TABLE>
<CAPTION>
                                                          July 31, 2006                       October 31, 2005
                                                 -------------------------------     --------------------------------
                                                      Amount          Percent              Amount          Percent
                                                 -----------------  ------------     ------------------  ------------
<S>                                            <C>                     <C>         <C>                      <C>
 Type of Loans:
---------------------
 Mortgage loans:
      One-to four- family (1)                    $     62,661,941        57.22%      $      52,817,766        61.95%
      Multi-family                                      1,114,154         1.02%                707,081         0.83%
      Commercial real estate                            8,732,720         7.97%              5,564,591         6.53%
      Construction (2)                                 21,473,274        19.61%             13,034,853        15.29%
 Home equity loans and lines of credit                 14,930,756        13.63%             12,715,963        14.91%
 Loans on savings accounts                                301,244         0.28%                300,955         0.35%
 Other                                                    298,432         0.27%                118,856         0.14%
                                                 ----------------   ----------       -----------------   ----------
 Total loans                                          109,512,521       100.00%             85,260,065       100.00%
                                                                    ==========                           ==========

 Less:
      Net deferred loan fees and unamortized
        premiums                                          207,610                              150,922
      Allowance for loan losses                           859,421                              506,708
                                                 ----------------                    -----------------
 Total loans, net                                $    108,445,490                    $      84,602,435
                                                 ================                    =================
</TABLE>


(1)  Included in this category are mixed-use loans and investor loans.
(2)  Included in this category are participation  interests in two loans with an
     aggregate  balance of $2.7  million at both July 31,  2006 and  October 31,
     2005.


NOTE 6 - FEDERAL HOME LOAN BANK BORROWINGS


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

<TABLE>
<CAPTION>
                                                    Weighted-         Stated
                                                     average      interest rate
                             Maturity range       interest rate       range           At July 31,   At October 31,
Description                from          to                      from       to           2006           2005
-----------             -----------  -----------   -----------  --------  --------   -------------  -------------
<S>                    <C>          <C>            <C>          <C>       <C>         <C>           <C>
Short Term Borrowings    04/11/07     04/11/07       5.44%        5.44%     5.44%       5,000,000     12,800,000
Convertible              02/18/10     02/18/10       5.91%        5.91%     5.91%       1,000,000      1,000,000
Mid Term Repo Fixed      04/30/07     05/11/15       3.93%        3.30%     4.84%       7,800,000     10,800,000
Fixed Rate               08/20/08     08/20/08       6.24%        6.24%     6.24%       1,500,000      1,500,000
Fixed Rate amortizing    05/23/08     05/23/08       4.14%        4.14%     4.14%       1,314,121      1,834,917
                                                                                     ------------   ------------
             Total                                                                     16,614,121     27,934,917
                                                                                     ============   ============
</TABLE>

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.  The fixed rate amortizing  borrowing requires monthly payments
of principal and interest of $62,131 through May 2008.

                                       8

<PAGE>

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 encumbrances.


Maturities of FHLB borrowings at July 31, 2006 are summarized as follows:

    Year Ending                                             Weighted-
    October 31,                          Amount            Average Rate
---------------------                 -------------        ------------
     2006                             $  5,173,390             5.40%
     2007                                5,511,753             3.64%
     2008                                2,928,978             5.12%
     2010                                1,000,000             5.91%
     2015                                2,000,000             4.84%
                                      ------------
            Total                     $ 16,614,121             4.73%
                                      ============

NOTE 7 - EARNINGS PER SHARE
---------------------------

The Company currently  maintains a simple capital structure;  thus, there are no
dilutive  effects  on  earnings  per  share.  As such,  earnings  per  share are
calculated using the weighted-average number of shares outstanding, less average
unallocated  shares  held by the ESOP,  shares  held in the  Stock  Compensation
Trust, and in Treasury stock for the period.

<TABLE>
<CAPTION>
                                         For the Three Months Ended  For the Nine Months Ended
                                                  July 31,                    July 31,
                                          ------------------------    ------------------------
                                             2006          2005          2006          2005
                                          ----------    ----------    ----------    ----------
<S>                                      <C>           <C>           <C>           <C>
Weighted-average common shares
   outstanding                             2,578,875     2,578,875     2,578,875     2,578,875

Average treasury stock shares               (292,500)            -      (217,591)            -

Average unallocated shares held by ESOP     (174,381)     (192,789)     (180,102)     (194,839)

Average Stock CompensationTrust shares      (215,000)            -      (153,590)            -
                                          ----------    ----------    ----------    ----------
Weighted-average common shares and
   common stock equivalents used to
   calculate basic earnings per share      1,896,994     2,386,086     2,027,592     2,384,036
                                           =========     =========     =========     =========
</TABLE>

                                        9
<PAGE>

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

General

         This document contains forward-looking statements, including 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.  Many of the
risks and uncertainties are beyond our control.  Forward-looking  statements are
based on our  beliefs,  plans,  objectives,  goals,  assumptions,  expectations,
estimates,  and intentions as of the date the  statements are made.  There is no
assurance   that  these  beliefs,   plans,   objectives,   goals,   assumptions,
expectations, estimates, and intentions will be realized.


Comparison of the Results of Operations for the Three Months Ended July 31, 2006
and July 31, 2005

         The Company  recorded a net loss of $23.4 thousand for the three months
ended July 31, 2006, versus net income of $89.2 thousand over the same period in
2005. The decrease in net income is due to increases in non-interest expense and
the provision for loan losses.

         Net Interest  Income.  Net  interest  income for the three months ended
July 31,  2006  increased  $57.0  thousand  to $1.1  million  as a result  of an
increase in total  interest  income which was more than offset by an increase in
interest expense.  The net interest margin decreased by 43 basis points to 3.06%
for the three  months  ended July 31, 2006 from 3.49% for the three months ended
July 31, 2005.  Interest income for the three months ended July 31, 2006 totaled
$2.5  million as compared to $1.8  million for the three  months  ended July 31,
2005. This increase of $714.1 thousand was  attributable to an increase of $30.4
million in the average balance of interest-earning  assets to $157.7 million for
the three  months  ended July 31, 2006 from $127.2  million for the three months
ended July 31, 2005.  This increase was also  attributable to an increase in the
average  yield on  interest-earning  assets of 69 basis  points to 6.46% for the
three  months ended July 31, 2006 from 5.77% for the three months ended July 31,
2005.  The average  balance of loans  receivable for the three months ended July
31,  2006 as  compared  to the same  period of the prior  year  increased  $29.8
million.  Loans receivable grew due to increased loan demand and the addition of
new lending officers.  The average yield on loans receivable  increased 42 basis
points to 7.29% for the three  months  ended  July 31,  2006 from  6.87% for the
three months ended July 31, 2005.

         Interest  expense  increased  $657.1  thousand to $1.4  million for the
three months ended July 31, 2006 from $733.0 thousand for the three months ended
July 31, 2005. The increase was  attributable to an increase of $44.7 million in
the average  balance of  interest-bearing  liabilities to $140.9 million for the
three months  ended July 31, 2006 from $96.2  million for the three months ended
July 31, 2005 as well as an  increase  in the average  cost of funds of 89 basis
points to 3.91% for the three  months  ended  July 31,  2006 from  3.02% for the
three months ended July 31, 2005. The average  balance of deposits for the three
months  ended July 31,  2006 as  compared  to the same  period of the prior year
increased $49.3 million. The increase in deposits was due mainly to increases in
certificates  of deposits,  money market  accounts and interest  bearing  demand
deposits of $23.3 million,  $23.3 million and $5.4 million,  respectively offset
by a decrease in savings accounts of $2.7 million.  Deposit growth resulted from
the  Bank's  two new  branch  banking  offices,  focused  marketing  and  market
sensitive  pricing.  The average cost of deposits  increased 101 basis points to
3.80% for the three  months  ended July 31, 2006 from 2.79% for the three months
ended July 31,  2005.  The average  balance of  borrowings  for the three months
ended July 31, 2006 as  compared to the same period of the prior year  decreased
$4.6 million.  The average cost of borrowings increased 83 basis points to 4.71%
for the three  months  ended July 31, 2006 from 3.88% for the three months ended
July 31, 2005.

         Loan Loss Provision.  The provision for loan losses was $116.1 thousand
for the three  months  ended July 31, 2006  compared to $45.4  thousand  for the
three months ended July 31, 2005.  The increase was  primarily  attributable  to
loan growth. The loan loss provision is based upon management's  assessment of a
variety of  factors,  including  levels of,  and  trends in,  delinquencies  and
nonaccruals,  trends in volume  and terms of loans,  effects  of any  changes in
lending policies, historical loss experience,  realizability of collateral value
and  collectibility  of guarantee,

                                       10

<PAGE>

pending legal action for  collection of loans and related  guarantees,  national
and economic trends and conditions and  concentrations of credit.  The allowance
represents  management's  best estimate of known and inherent losses in the loan
portfolio at the balance  sheet date that are both  probable and  reasonable  to
estimate.  However,  actual loan losses  could exceed the amounts that have been
charged to operations.

         Non-interest  Income.  Non-interest  income was $121.6 thousand for the
three  months  ended July 31,  2006  compared to $128.5  thousand  for the three
months  ended July 31, 2005.  Gains on the sale of  investment  securities  were
$21.8 thousand for the three months ended July 31, 2005.  There were no gains on
the sale of  investment  securities  for the three  months  ended July 31, 2006.
Earnings on  bank-owned  life  insurance  increased  $8.0 thousand for the three
months  ended July 31,  2006  versus the same period of the prior year due to an
additional purchase of $1.0 million.

         Non-interest Expense. Non-interest expense increased $125.7 thousand to
$1.2 million for the three  months ended July 31, 2006  compared to $1.1 million
for the three months ended July 31, 2005. The increase in  non-interest  expense
was due to increases in  compensation  and employee  benefits and  occupancy and
equipment costs of $240.9 thousand and $94.8 thousand, respectively, offset by a
decrease in  professional  fees and other  expense of $179.2  thousand and $22.2
thousand.  The increase in compensation and employee  benefits was due primarily
to  additions  to staff  including  staff for the newly  opened  Roxborough  and
Ardmore,  Pennsylvania  banking  offices and  additions  to staff in the lending
area,  as well as related  increases  in  payroll  taxes and  employee  benefits
expense. The 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 two new banking  offices.  The decrease in professional  fees was
due mainly to non-recurring legal expenses.

         Income Taxes. Income tax benefit was $8.8 thousand for the three months
ended July 31,  2006 as compared  to an expense of $24.7  thousand  for the same
period in 2005 due mainly to a decrease  in pre-tax  income  aggregated  with an
increase in non taxable income.

Comparison of the Results of Operations  for the Nine Months Ended July 31, 2006
and July 31, 2005

         The Company  recorded a net loss of $113.9 thousand for the nine months
ended July 31, 2006,  versus net income of $564.5  thousand over the same period
in  2005.  The  decrease  in net  income  is  primarily  due to an  increase  in
non-interest expense and the provision for loan losses.

         Net Interest Income. Net interest income for the nine months ended July
31, 2006  increased  $118.0  thousand to $3.3  million from $3.2 million for the
same  period in 2005 as a result of an increase  in  interest  income  which was
partially  offset by an increase in interest  expense.  The net interest  margin
decreased  by 50 basis  points to 3.04% for the nine months  ended July 31, 2006
from 3.54% for the nine months ended July 31, 2005. Interest income for the nine
months  ended July 31, 2006 totaled $6.9 million as compared to $5.2 million for
the  nine  months  ended  July 31,  2005.  This  increase  of $1.7  million  was
attributable  to an  increase  of  $26.5  million  in  the  average  balance  of
interest-earning  assets to $148.7  million for the nine  months  ended July 31,
2006 from $122.2 million for the nine months ended July 31, 2005.  This increase
was also  attributable  to an increase in the average yield on  interest-earning
assets of 57 basis  points to 6.26% for the nine months ended July 31, 2006 from
5.69% for the nine months  ended July 31,  2005.  The  average  balance of loans
receivable  for the nine  months  ended July 31,  2006 as  compared  to the same
period of the prior year  increased  $23.6  million to $94.5  million from $70.9
million.  Loans receivable grew due to increased loan demand and the addition of
new lending officers.  The average yield on loans receivable  increased 34 basis
points to 7.17% for the nine months  ended July 31, 2006 from 6.83% for the nine
months ended July 31, 2005.

         Interest  expense  increased  to $1.6 million for the nine months ended
July 31, 2006 to $3.6 million from $2.0 million for the same period in 2005. The
increase  was  primarily  attributable  to an increase  of $37.3  million in the
average balance of  interest-bearing  liabilities to $128.1 million for the nine
months ended July 31, 2006 from $90.8 million for the nine months ended July 31,
2005 as well as an increase in the average  cost of funds of 84 basis  points to
3.73% for the nine  months  ended July 31,  2006 from 2.89% for the nine  months
ended July 31, 2005. The average  balances of deposits and FHLB advances for the
nine months ended July 31, 2006 as compared to the same period of the prior year
increased  $31.9 million and $5.4 million to $105.4  million and $22.7  million,
respectively.  The  increase  in  deposits  was  mainly  due to an  increase  in
certificates  of deposit,  money market  accounts and  interest  bearing  demand
deposits of $15.8 million, $14.0 million and $4.5 million, respectively,  offset
by a decrease in savings accounts of $2.5 million.  The average cost of deposits
increased  86 basis points to 3.59% for the nine months ended July 31, 2006 from
2.73% for the nine months  ended July 31, 2005.  The average cost of  borrowings

                                       11

<PAGE>
increased  75 basis points to 4.36% for the nine months ended July 31, 2006 from
3.61% for the nine months ended July 31, 2005.

         Loan Loss Provision.  The provision for loan losses was $368.2 thousand
for the nine months ended July 31, 2006 compared to $96.4  thousand for the nine
months ended July 31, 2005.  The  increase  was  attributable  to an increase in
classified assets, as well as loan growth. The increase in classified assets was
primarily  due to the  downgrade to  substandard  of a $1.3 million loan for the
construction  of four  residential  condominium  units located in  Philadelphia.
There can be no assurance  that future  additional  provisions  relating to this
loan will not be necessary.  The loan loss provision is based upon  management's
assessment  of a variety  of  factors,  including  levels  of,  and  trends  in,
delinquencies and nonaccruals,  trends in volume and terms of loans,  effects of
any changes in lending  policies,  historical loss experience,  realizability of
collateral  value and  collectibility  of  guarantee,  pending  legal action for
collection  of loans and related  guarantees,  national and economic  trends and
conditions and concentrations of credit. The allowance  represents  management's
best estimate of known and inherent  losses in the loan portfolio at the balance
sheet date that are both probable and  reasonable to estimate.  However,  actual
loan losses could exceed the amounts that have been charged to operations.

         Non-interest  Income.  Non-interest  income decreased $28.2 thousand to
$312.8  thousand  for the nine  months  ended July 31,  2006  compared to $341.0
thousand  for the nine  months  ended July 31,  2005 due mainly to a loss on the
sale of investment securities available for sale of $23.7 thousand versus a gain
on the sale of investment securities of $32.2 thousand in the same period of the
prior year  offset by an increase  of $25.1  thousand in earnings on  bank-owned
life insurance.

         Non-interest Expense. Non-interest expense increased $869.4 thousand to
$3.5  million for the nine months  ended July 31, 2006  compared to $2.6 million
for the nine months ended July 31, 2005.  The increase in  non-interest  expense
was due to  increases  in  compensation  and employee  benefits,  occupancy  and
equipment  costs,  and other  expense of $576.1  thousand,  $238.2  thousand and
$165.2 thousand, respectively offset somewhat by a decrease in professional fees
of $103.3 thousand.  The increase in compensation and employee  benefits was due
primarily to additions to staff including staff for the newly opened  Roxborough
and  Ardmore,   Pennsylvania  banking  offices  and  additions  to  the  lending
department,  as well as related increases in payroll taxes and employee benefits
expense. The 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 two new banking  offices.  The increase in other  expense was due
mainly  to  increased  advertising  costs and  marketing  costs,  telephone  and
information  technology  expense,  and  stationery  and  supplies  expense.  The
decrease in  professional  fees was due to a decrease in accounting fees related
to work performed for Sarbanes Oxley compliance and a decrease in legal fees due
to non-recurring legal expenses.

         Income  Taxes.  Income tax  benefit  was $120.9  thousand  for the nine
months ended July 31, 2006 as compared to an expense of $252.0  thousand for the
same period in 2005 due mainly to a decrease in pre-tax income  aggregated  with
an increase in non taxable income.

Comparison of Financial Condition at July 31, 2006 and October 31, 2005

         Assets and  Liabilities.  The Company's total assets increased by $24.5
million to $172.0  million at July 31, 2006 from  $147.4  million at October 31,
2005.

         Total investment securities decreased by $4.4 million, to $47.9 million
at July 31,  2006 from  $52.2  million at  October  31,  2005 due mainly to $6.7
million in sales, maturities and repayments offset by $3.0 million in purchases.

         Net loans  receivable  increased  $23.8  million,  or 28.2%,  to $108.4
million at July 31, 2006 from $84.6 million at October 31, 2005. The increase in
net  loans  receivable  was  primarily  the  result  of  increases  in  one-  to
four-family  residential  mortgages (which includes owner and non-owner occupied
properties),  construction  financing,  commercial  real estate loans,  and home
equity loans in the amount of $9.8 million,  $8.4 million, $3.2 million and $2.2
million,  respectively.  The increase in loans receivable is attributable to the
opening of two new banking  offices in Roxborough  and Ardmore  Pennsylvania  as
well as the addition of two new commercial lending officers.

         The allowance for loan losses  increased to $859.4 thousand at July 31,
2006 from $506.7 thousand at October 31, 2005 and represented  .78% of the gross
loan  portfolio at July 31,  2006.  The Company had  nonaccrual

                                       12
<PAGE>

loans of $197.2  thousand  and $69.4  thousand  at July 31, 2006 and October 31,
2005,  respectively.  Classified  loans totaled $5.5 million at July 31, 2006 as
compared to $3.2 million at October 31, 2005.  The increase was due primarily to
the downgrade to  substandard  of a $1.3 million loan to build four  residential
condominium units located in Philadelphia.

         Premises and  equipment,  net increased $3.0 million to $5.1 million at
July 31, 2006 from $2.1 million at October 31, 2005.  The increase was primarily
due to costs  associated  with the new Roxborough and Ardmore Banking Offices as
well as the acquisition of a future banking office site in Deptford, New Jersey.

         Total  deposits  increased  $43.1 million to $130.5 million at July 31,
2006 from $87.4 million at October 31, 2005. The increase was primarily a result
of an increase in certificates of deposit, money market and checking accounts of
$18.7  million,  $21.2  million  and $4.5  million,  respectively,  offset  by a
decrease  in  savings  accounts  of $1.2  million.  The  increase  is  primarily
attributable to the opening of two new banking offices in Roxborough and Ardmore
Pennsylvania.

         Stockholders'  Equity.  Stockholders'  equity decreased $7.2 million to
$23.9 million at July 31, 2006 from $31.1 million at October 31, 2005 due mainly
to the  completion of the 10% stock  repurchase  plan announced in July 2005 and
the 10% stock  repurchase  plan  announced  in January  2006. A total of 465,000
shares of common stock were  repurchased at an average price of $14.04 excluding
brokerage commissions.  The decrease was also attributable to an increase in the
accumulated  other  comprehensive  loss of  $457.7  thousand  as a  result  of a
decrease in the market value of the Company's investment portfolio due to rising
market  interest  rates,  the  year to date  net  loss of  $113.9  thousand  and
dividends paid of $197.4 thousand.

Liquidity and Capital Resources

         Liquidity.  Liquidity  management  for  the  Company  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 Company.  Both short- and long-term  liquidity needs are
addressed by maturities and sales of investment  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  Company'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 Company's operating, investing, and financing activities during
any  given  period.  At  July  31,  2006,  cash  and  cash  equivalents  totaled
approximately $3.4 million, or 2.0% of total assets, while investment securities
classified as available for sale and  certificates of deposit in other financial
institutions  totaled  approximately  $45.9  million,  or 26.7% of total assets.
Management believes that the liquidity needs of the Company are satisfied by the
current  balance  of cash and cash  equivalents,  readily  available  access  to
traditional  funding sources,  FHLB advances,  and the portion of the investment
and loan portfolios that mature within one year.

         Operating activities used net cash of approximately $457.2 thousand for
the nine months ended July 31, 2006 and provided net cash of $678.7 thousand for
the nine months  ended July 31,  2005.  Net cash used for the nine months  ended
July 31, 2006 was due mainly to other operating activities and the provision for
loan  losses.  Net cash  provided  for the nine  months  ended July 31, 2005 was
generated from net income of $564.5 thousand.

             Investing  activities  consist  primarily of loan  originations and
repayments, investment purchases, sales and maturities and purchases of premises
and  equipment.  For the  nine  months  ended  July 31,  2006 net cash  used for
investing  activities  totaled  $23.3  million  and  primarily  consisted  of an
increase in net loans  receivable  of $24.1  million,  purchases  of  investment
securities  of $3.0  million and  purchases  of premises  and  equipment of $3.1
million in connection  with the opening of two new banking offices in Roxborough
and Ardmore PA. Partially  offsetting the usage of investing activities was $2.1
million  of  proceeds  from  investment  security  sales  and  $4.6  million  in
maturities and repayments.  For the same period ended July 31, 2005, cash usages
totaled  $14.6  million  and  primarily  consisted  of an  increase in net loans
receivable  of $12.6  million and  purchases of  investment  securities of $14.7
million.  Partially  offsetting  the  usage of  investing  activities  was $14.0
million of proceeds from investment security maturities, sales and repayments.

         Financing  activities  consist of the  solicitation  and  repayment  of
customer  deposits,  borrowings and repayments,  advances by borrowers for taxes
and insurance, stock repurchases and the payment of cash dividends. For the nine
months ended July 31, 2006,  net cash provided by financing  activities  totaled
$25.0 million and was

                                       13

<PAGE>

principally  from an increase in deposits of $43.1 million  offset by a decrease
in short-term  borrowings of $7.8 million, a decrease in FHLB borrowings of $3.5
million and by the repurchase of the Company's stock in the total amount of $6.5
million,  $3.5 million to Treasury and $3.0 million for the Compensation  Trust.
For the same period in 2005, net cash provided for financing  activities totaled
$8.8  million and was  principally  from an increase in deposits of $5.7 million
and an increase in FHLB  borrowings  of $7.4 million  offset by the repayment of
short-term  borrowings  in the amount of $2.4 million and the  repayment of FHLB
borrowings of $1.7 million.

         Liquidity  may be adversely  affected by unexpected  deposit  outflows,
interest rates paid by competitors,  and similar  matters.  Management  monitors
projected  liquidity needs and determines the level desirable,  based in part on
the Company's  commitment to make loans, as well as  management's  assessment of
the Company's  ability to generate funds. The Bank anticipates that it will have
sufficient liquidity to satisfy expected short-term and long-term funding needs.

         Capital.  The  Company's  primary  source of capital has been  retained
earnings.  Historically,  the Bank has generated net retained  income to support
normal growth and  expansion.  The proceeds of the stock  offering in connection
with  the  Company's  mutual-to-stock  conversion  significantly  increased  the
Company's capital resources.

            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 July 31, 2006, the Bank exceeded the minimum capital
ratio requirements.

                                       14

<PAGE>

ITEM 3.  CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.  Based on their evaluation
of the  Company's  disclosure  controls  and  procedures  (as  defined  in  Rule
13a-15(e) under the Securities  Exchange Act of 1934 (the "Exchange Act")),  the
Company's  principal  executive  officer and the Company's  principal  financial
officer  have  concluded  that  as of the  end of the  period  covered  by  this
Quarterly  Report on Form 10-QSB such  disclosure  controls and  procedures  are
effective.

(b) Changes in internal  control over  financial  reporting.  During the quarter
under  report,  there was no  change  in the  Company's  internal  control  over
financial  reporting that has materially  affected,  or is reasonably  likely to
materially affect, the Company's internal control over financial reporting.

                                       15

<PAGE>

                                     PART II


ITEM 1.         LEGAL PROCEEDINGS

                     Not applicable.

ITEM 2.         UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

   :                 None.

ITEM 3.         DEFAULTS UPON SENIOR SECURITIES

                     Not applicable.

ITEM 4.         SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         The Registrant  held its Annual Meeting of  Stockholders  on August 15,
2006. At the Annual Meeting,  stockholders voted on the following proposals: (i)
the election of 2 directors,  (ii) the  ratification  of the SE Financial  Corp.
2006 Stock Option  Plan,  (iii) the  ratification  of the St.  Edmond's  Federal
Savings  Bank 2006  Restricted  Stock  Plan,  and (iv) the  ratification  of the
appointment of S. R. Snodgrass, A.C. as the Registrant's independent auditor for
the fiscal year ending  October  31,  2006.  The results of voting at the Annual
Meeting were as follows:

    Election of Directors
    ---------------------
    J. William Parker, Jr.        2,047,368 For             187,081 Withheld
    Susanne Spinell Shuster       2,045,368 For             189,081 Withheld

    Option Plan
    -----------
    963,687 For                   414,306 Against            10,033 Abstain

    Restricted Stock Plan
    ---------------------
    944,037 For                   423,306 Against            20,683 Abstain

    Ratification of Auditors
    ------------------------
    2,199,556 For                 32,743  Against            2,150  Abstain



ITEM 5.         OTHER INFORMATION

ITEM 6.         EXHIBITS AND REPORTS ON FORM 8-K

               (a)  Exhibits

               3(i) Articles of Incorporation of SE Financial Corp.*

               3(ii) Bylaws of SE Financial Corp. *

               4    Specimen Stock Certificate of SE Financial Corp. *

               10.1 Executive Life Insurance Plan *

               10.2 Form of Director Incentive Retirement Plan *

               10.3 Form of Executive Officer Incentive Retirement Plan *

                                       16

<PAGE>

               10.4 Form  of  Management  Severance  Agreements  with  Marcy  C.
                    Panzer, Pamela M. Cyr, J. Christopher Jacobsen,  and Charles
                    F. Miller **

               31.1 Certification  pursuant to Section 302 of the Sarbanes-Oxley
                    Act of 2002

               31.2 Certification  pursuant to Section 302 of the Sarbanes-Oxley
                    Act of 2002

               32   Certifications pursuant to Section 906 of the Sarbanes-Oxley
                    Act of 2002

               99.1 Report of Independent Registered Public Accounting Firm



*    Incorporated by reference to the Company's  registration  statement on Form
     SB-2 (SEC File No. 333-112153).

**   Incorporated  by reference to the Company's  Form 8-K filed with the SEC on
     September 2, 2005 (SEC File No. 000-50684).

                                       17

<PAGE>

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  Report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.


                                    SE FINANCIAL CORP.



Date: September 14, 2006            /s/Pamela M. Cyr
                                    --------------------------------------------
                                    Pamela M. Cyr
                                    President and CEO
                                    (Principal Executive  Officer)





Date: September 14, 2006            /s/Douglas R. Moore
                                    --------------------------------------------
                                    Douglas R. Moore
                                    Chief Financial Officer
                                    (Principal Financial and Accounting Officer)


                                       18