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           April 30, 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  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  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
                                                ---     ---

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock as of the latest practicable date June 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 APRIL 30, 2006


                                      INDEX


                                                                           Page
                                                                          Number
                                                                          ------

PART I - CONSOLIDATED FINANCIAL INFORMATION

    Item 1.    Consolidated Financial Statements (Unaudited)                  1
    Item 2.    Management's Discussion and Analysis of Financial
               Condition and Results of Operations                            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 and Reports on Form 8-K                               16

SIGNATURES                                                                    18

EXHIBITS

    31   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




<PAGE>

                               SE FINANCIAL CORP.
                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                           April 30,      October 31,
                                                                                             2006            2005
                                                                                        -------------    -------------
<S>                                                                                   <C>              <C>
          ASSETS
             Cash and due from banks                                                    $   1,056,257    $     603,912
             Interest-bearing deposits with other institutions                              2,678,439        1,558,899
                                                                                        -------------    -------------

                  Cash and cash equivalents                                                 3,734,696        2,162,811

             Certificates of deposit in other financial institutions                          196,539          193,793
             Investment securities available for sale                                      47,268,146       50,082,732
             Investment securities held to maturity (estimated market value
                  of $2,118,469 and $2,149,249)                                             2,179,243        2,150,395
             Loans receivable (net of allowance for loan losses
                  of $743,356 and $506,708)                                                99,663,720       84,602,435
             Accrued interest receivable                                                      867,356          754,403
             Federal Home Loan Bank Stock                                                   1,583,900        1,649,900
             Premises and equipment, net                                                    5,036,322        2,142,909
             Real estate owned                                                                 59,034             --
             Bank owned life insurance                                                      3,020,260        2,961,261
             Other assets                                                                   1,344,612          730,108
                                                                                        -------------    -------------

                      TOTAL ASSETS                                                      $ 164,953,828    $ 147,430,747
                                                                                        =============    =============



          LIABILITIES AND STOCKHOLDERS' EQUITY
          Liabilities
             Deposits                                                                   $ 119,335,758    $  87,407,966
             Short-term borrowings                                                          6,100,000       12,800,000
             Federal Home Loan Bank borrowings                                             14,785,728       15,134,917
             Advances by borrowers for taxes and insurance                                    231,620          436,601
             Accrued interest payable                                                         172,410          124,243
             Other liabilities                                                                351,664          464,120
                                                                                        -------------    -------------

                      TOTAL LIABILITIES                                                   140,977,180      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                                                    24,897,954       24,873,013
             Retained earnings - substantially restricted                                   8,743,109        8,968,526
             Stock Compensation Trust 215,000 shares                                       (3,021,300)               -
             Unallocated shares held by Employee Stock Ownership Plan ("ESOP")             (1,768,376)      (1,842,058)
             Treasury stock at cost, 292,500 shares and 42,500 shares respectively         (4,113,325)        (581,125)
             Accumulated other comprehensive loss                                          (1,019,302)        (613,344)
                                                                                        -------------    -------------

                      TOTAL STOCKHOLDERS' EQUITY                                           23,976,648       31,062,900
                                                                                        -------------    -------------

                      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                        $ 164,953,828    $ 147,430,747
                                                                                        =============    =============
</TABLE>

See accompanying notes to the unaudited consolidated financialstatements.

                                       1

<PAGE>

                                SE FINANCIAL CORP
                        CONSOLIDATED STATEMENT OF INCOME
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                      Three Months Ended April 30,   Six Months Ended April 30,
                                                      ----------------------------   --------------------------
                                                            2006           2005          2006           2005
                                                        -----------    -----------   -----------    -----------
<S>                                                   <C>            <C>           <C>            <C>
INTEREST AND DIVIDEND INCOME
    Loans receivable                                    $ 1,617,890    $ 1,204,385   $ 3,143,886    $ 2,340,202
    Investment securities
       Taxable                                              481,457        428,328       984,780        865,973
       Exempt from federal income tax                        61,374         35,936       122,419         72,024
    Interest-bearing deposits with other institutions        34,918         16,270        58,754         34,407
    Other dividend income                                    13,503          7,573        24,813         15,292
                                                        -----------    -----------   -----------    -----------

           Total interest and dividend income             2,209,142      1,692,492     4,334,652      3,327,898
                                                        -----------    -----------   -----------    -----------

INTEREST EXPENSE
    Deposits                                                927,771        492,571     1,644,865        980,167
    Short-term borrowings                                    89,712         35,622       231,128         67,170
    Federal Home Loan Bank borrowings                       149,557         92,780       306,053        188,876
                                                        -----------    -----------   -----------    -----------

           Total interest expense                         1,167,040        620,973     2,182,046      1,236,213
                                                        -----------    -----------   -----------    -----------

NET INTEREST INCOME                                       1,042,102      1,071,519     2,152,606      2,091,685
    Provision for loan losses                               215,980         34,000       252,118         51,000
                                                        -----------    -----------   -----------    -----------
NET INTEREST INCOME AFTER
         PROVISION FOR LOAN LOSSES                          826,122      1,037,519     1,900,488      2,040,685
                                                        -----------    -----------   -----------    -----------

NONINTEREST INCOME
    Service fees on deposit accounts                         58,591         71,118       132,544        137,565
    Earnings on bank-owned life insurance                    31,003         21,589        58,999         41,668
    Net gain (loss) on sale of investment securities              -         10,446       (23,667)        10,446
    Other                                                    15,491         12,668        23,362         23,313
                                                        -----------    -----------   -----------    -----------

           Total noninterest income                         105,085        115,821       191,238        212,992
                                                        -----------    -----------   -----------    -----------

NONINTEREST EXPENSE
    Compensation and employee benefits                      623,356        486,741     1,214,056        878,763
    Occupancy and equipment                                 148,840         52,189       245,232        101,778
    Federal deposit insurance premiums                       15,192         11,497        29,420         22,259
    Data processing expense                                  63,144         85,701       153,095        158,658
    Professional fees                                        65,992        112,236       241,609        165,668
    Other                                                   198,725        110,268       410,897        223,924
                                                        -----------    -----------   -----------    -----------

           Total noninterest expense                      1,115,249        858,632     2,294,309      1,551,050
                                                        -----------    -----------   -----------    -----------

(LOSS) INCOME BEFORE TAXES                                 (184,042)       294,708      (202,583)       702,627

INCOME TAX (BENEFIT) EXPENSE                                (85,008)        90,270      (112,122)       227,303
                                                        -----------    -----------   -----------    -----------

NET (LOSS) INCOME                                       $   (99,034)   $   204,438   $   (90,461)   $   475,324
                                                        ===========    ===========   ===========    ===========


PER SHARE DATA:
    Earnings (loss) per share - basic and diluted       $     (0.05)   $      0.09   $     (0.04)   $      0.20
    Weighted average number of shares outstanding -
      basic and diluted                                   1,893,338      2,386,115     2,095,850      2,383,005

    Dividends per share                                        0.03           0.02          0.06           0.04
</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
                         -------- ----------- ----------  -----------  ----------- ------------  -----------  ----------- ----------
Balance,
<S>                     <C>      <C>         <C>         <C>          <C>          <C>          <C>          <C>          <C>
   October 31, 2005      $257,888 $24,873,013 $8,968,526  $         -  $(1,842,058) $  (581,125) $  (613,344) $31,062,900

Cash dividends paid             -           -   (134,956)                        -                         -     (134,956)

ESOP shares committed
  to be released                -      24,941          -                    73,682                         -       98,623

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

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

Net loss                        -           -    (90,461)                        -                         -      (90,461)$ (90,461)

Other comprehensive loss:
  Unrealized loss on
    available for sale
    securities, net of
    reclassification
    adjustment, net of
    tax benefit of
    $209,130                                                                                        (405,958)    (405,958)$(405,958)


Comprehensive loss              -           -          -                         -                         -            - $(496,419)
                         -------- ----------- ----------  -----------  -----------  ------------ -----------  ----------- =========
Balance,
  April 30, 2006         $257,888 $24,897,954 $8,743,109  $(3,021,300) $(1,768,376) $(4,113,325) $(1,019,302) $23,976,648
                         ======== =========== ==========  ===========  ===========  ===========  ===========  ===========

Components of other comprehensive loss:                                                                     April 30, 2006
                                                                                                            --------------
  Change in net unrealized loss on
   investment securities available for sale                                                                    $ (421,578)
  Realized losses included in net loss net of tax benefit of $8,047                                                15,620
                                                                                                               ----------
Total                                                                                                          $ (405,958)
                                                                                                               ==========
</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 Six Months Ended April 30,
                                                                                2006            2005
                                                                            ------------    ------------
<S>                                                                        <C>             <C>
OPERATING ACTIVITIES
   Net income (loss)                                                        $    (90,461)   $    475,324
   Adjustments to reconcile net income to net cash provided by (used for)
      operating activities:
       Provision for loan losses                                                 252,118          51,000
       Depreciation, amortization, and accretion                                  71,117          29,314
       Earnings on bank-owned life insurance                                     (58,999)        (41,668)
       Decrease in principal and interest on loans sold payable                  (36,131)       (146,622)
       Increase in accrued interest receivable                                  (112,953)        (12,104)
       Increase (decrease) in accrued interest payable                            48,167         (13,413)
       Net loss (gain) on sale of investment securities                           23,667         (10,446)
       Other, net                                                               (356,724)         77,525
                                                                            ------------    ------------
           Net cash provided by (used for) operating activities                 (260,199)        408,910
                                                                            ------------    ------------

INVESTING ACTIVITIES
   Investment securities available for sale:
       Proceeds from principal repayments and maturities                       2,895,421       2,571,629
       Purchases                                                              (2,991,602)     (4,050,516)
       Proceeds from the sale of investment securities                         2,141,519       4,099,303
   Increase in loans receivable, net                                         (15,274,251)     (6,772,064)
   Proceeds from sales of real estate acquired through
      foreclosure                                                                      -          80,000
   Purchase of Federal Home Loan Bank stock                                     (132,700)              -
   Redemption of Federal Home Loan Bank stock                                    198,700         136,000
   Purchase of premises and equipment                                         (2,990,169)       (101,254)
                                                                            ------------    ------------
           Net cash used for investing activities                            (16,153,082)     (4,036,902)
                                                                            ------------    ------------

FINANCING ACTIVITIES
   Increase in deposits, net                                                  31,927,792       1,935,754
   Net increase (decrease) in short-term borrowings                           (6,700,000)     (1,500,000)
   Repayment of Federal Home Loan Bank borrowings                               (349,189)        (31,980)
   Decrease in advances by borrowers
      for taxes and insurance, net                                              (204,981)       (184,876)
   Purchase of stock for Stock Compensation Trust                             (3,021,300)              -
   Purchase of treasury stock                                                 (3,532,200)              -
   Cash dividends                                                               (134,956)        (95,196)
                                                                            ------------    ------------
           Net cash provided by financing activities                          17,985,166         123,702
                                                                            ------------    ------------

           Increase (decrease) in cash and cash equivalents                    1,571,885      (3,504,290)

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

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                  $  3,734,696    $  2,676,504
                                                                            ============    ============

SUPPLEMENTAL CASH FLOW DISCLOSURES
   Cash paid:
       Interest                                                             $  2,133,879    $  1,249,626
       Income taxes                                                              173,000         289,000
</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 six months
ended April 30,  2006,  this  activity is shown under the heading  Comprehensive
Loss as presented  in the  Consolidated  Statement  of Changes in  Stockholders'
Equity (Unaudited). For the six months ended April 30, 2005 comprehensive income
totaled   $87,839.   For  the  three  months  ended  April  30,  2006  and  2005
comprehensive loss totaled $529,839 and $112,842, 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.

                                        5

<PAGE>

NOTE 4 - INVESTMENTS
--------------------


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

<TABLE>
<CAPTION>
                                                                          April 30, 2006
                                      --------------------------------------------------------------------------------------
                                                                  Gross                   Gross                 Estimated
                                       Amortized               Unrealized              Unrealized                 Market
                                         Cost                     Gains                  Losses                   Value
                                      ------------             ------------            ------------            ------------
<S>                                  <C>                      <C>                     <C>                     <C>
Municipal securities                  $ 2,179,243              $       436             $   (61,210)            $ 2,118,469
</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>
                                                                        April 30, 2006
                                         ---------------------------------------------------------------------------
                                                                 Gross               Gross            Estimated
                                            Amortized          Unrealized          Unrealized           Market
                                               Cost              Gains               Losses             Value
                                         -----------------  -----------------   -----------------  -----------------
<S>                                     <C>                <C>                 <C>                <C>
Mortgage-backed securities:
     Fannie Mae                          $     24,122,540   $          1,193    $       (754,107)  $     23,369,626
     Freddie Mac                                6,244,120              1,100            (154,233)         6,090,987
     Government National Mortgage
       Association securities                   1,379,541              1,498             (11,024)         1,370,015
                                         -----------------  -----------------   -----------------  -----------------
     Total mortgage-backed
       securities                              31,746,201              3,791            (919,364)        30,830,628
U.S. Government
  agency securities                             9,846,981                  -            (432,360)         9,414,621
Corporate securities                            3,027,635                  -             (88,005)         2,939,630
Municipal securities                            3,996,897              1,545            (106,308)         3,892,134
                                         -----------------  -----------------   -----------------  -----------------
          Total debt securities                48,617,714              5,336          (1,546,037)        47,077,013
Mutual funds                                      194,806                  -              (3,673)           191,133
                                         -----------------  -----------------   -----------------  -----------------
          Total                          $     48,812,520   $          5,336    $     (1,549,710)  $     47,268,146
                                         =================  =================   =================  =================
</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 April 30,
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                           Estimated
                                                Amortized Cost   Market Value    Amortized Cost      Market Value
                                               ---------------   --------------  ---------------   ---------------
<S>                                              <C>              <C>             <C>               <C>
       Due less than one year                     $         -      $         -     $    348,820      $    344,632
       Due after one year through five years                -                -       12,339,019        11,840,213
       Due after five years through ten years               -                -        3,906,213         3,741,205
       Due after ten years                          2,179,243        2,118,469       32,023,662        31,150,963
           -----                                  -----------      -----------     ------------      ------------

           Total                                  $ 2,179,243      $ 2,118,469     $ 48,617,714      $ 47,077,013
                                                  ===========      ===========     ============      ============
</TABLE>

                                        7

<PAGE>

NOTE 5 - LOANS RECEIVABLE
-------------------------

Loans receivable consist of the following:

<TABLE>
<CAPTION>

                                                                      April 30, 2006                  October 31, 2005
                                                                -----------------------------   ----------------------------
                                                                    Amount           Percent        Amount          Percent
                                                                --------------  -------------   --------------  ------------
<S>                                                            <C>                  <C>        <C>                 <C>
               Type of Loans:
              -------------------
               Mortgage loans:
                  One-to four- family (1)                        $ 61,034,513         60.71%     $ 52,817,766        61.95%
                  Multi-family                                        637,470          0.63%          707,081         0.83%
                  Commercial real estate                            7,079,068          7.04%        5,564,591         6.53%
                  Construction (2)                                 17,471,244         17.37%       13,034,853        15.29%
               Home equity loans and lines of credit               13,753,184         13.68%       12,715,963        14.91%
               Loans on savings accounts                              315,279          0.31%          300,955         0.35%
               Other                                                  263,985          0.26%          118,856         0.14%
                                                                 ------------       --------     ------------      --------
               Total loans                                        100,554,743        100.00%       85,260,065       100.00%
                                                                                    ========                       ========
               Less:
                  Net deferred loan fees and unamortized
                    premiums                                          147,667                         150,922
                  Allowance for loan losses                           743,356                         506,708
                                                                 ------------                    ------------

               Total loans, net                                  $ 99,663,720                    $ 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 $2.3  million at both April 30,  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
                                                  average        Stated interest        At             At
                           Maturity range         interest         rate range       January 31,    October 31,
Description              from           to          rate        from        to          2006           2005
                      ------------  -----------  -----------  -------------------  -------------  -------------
<S>                   <C>           <C>           <C>          <C>        <C>     <C>            <C>
Short Term Borrowings  04/11/06      05/23/06      4.62%        3.73%      5.09%   $  6,100,000   $ 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    05/01/06      05/11/15      3.57%        2.63%      4.84%     10,800,000     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%      1,485,728      1,834,917
                                                                                   -------------  -------------
           Total                                                                   $ 20,885,728   $ 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 April 30, 2006 are summarized as follows:


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

        2006                         $  9,444,997               3.97%
        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                    $ 20,885,728               4.22%
                                     ============


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 Six Months Ended
                                                           April 30,                           April 30,
                                               ---------------------------------- ---------------------------------
                                                      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)                 -         (179,516)               -
     Average unallocated shares held by ESOP         (178,037)          (192,760)        (181,133)        (195,870)
     Average Stock CompensationTrust shares          (215,000)                 -         (122,376)               -
                                               ---------------   ---------------- ----------------  ---------------

     Weighted-average common shares and
        common stock equivalents used to
        calculate basic earnings per share          1,893,338          2,386,115        2,095,850        2,383,005
                                               ===============   ================ =================================
</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 April 30,
2006 and April 30, 2005

         The Company  recorded a net loss of $99.0 thousand for the three months
ended April 30, 2006,  versus net income of $204.4 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
April 30, 2006  decreased  $29.4  thousand to $1.0 million from $1.1 million for
the same  period in 2005 as a result of an increase  in total  interest  expense
which more than offset an increase in interest  income.  The net interest margin
decreased  by 63 basis points to 3.00% for the three months ended April 30, 2006
from 3.63% for the three months ended April 30,  2005.  Interest  income for the
three  months  ended April 30,  2006  totaled  $2.2  million as compared to $1.7
million for the three  months  ended  April 30,  2005.  This  increase of $516.7
thousand was attributable to an increase of $26.8 million in the average balance
of  interest-earning  assets to $146.7  million for the three months ended April
30, 2006 from $120.0  million for the three months  ended April 30,  2005.  This
increase  was  also  attributable  to  an  increase  in  the  average  yield  on
interest-earning  assets of 36 basis  points to 6.06% for the three months ended
April 30, 2006 from 5.70% for the three months ended April 30, 2005. The average
balances of loans  receivable  and  investment  securities  for the three months
ended April 30, 2006 as compared to the same period of the prior year  increased
$21.3  million and $3.9  million,  respectively.  Loans  receivable  grew due to
increased  loan demand and the  addition of new  lending  officers.  The average
yield on loans  receivable  increased  17 basis  points  to 6.97%  for the three
months  ended  April 30,  2006 from 6.80% for the three  months  ended April 30,
2005.  The average yield on investment  securities  increased 36 basis points to
4.56% for the three  months ended April 30, 2006 from 4.20% for the three months
ended April 30, 2005.

         Interest  expense  increased to $1.2 million for the three months ended
April 30, 2006 from $621.0  thousand  for the three months ended April 30, 2005.
The increase  was  attributable  to an increase of $40.0  million in the average
balance of  interest-bearing  liabilities to $128.6 million for the three months
ended April 30, 2006 from $88.7  million  for the three  months  ended April 30,
2005 as well as an increase in the average  cost of funds of 80 basis  points to
3.60% for the three months ended April 30, 2006 from 2.80 % for the three months
ended April 30, 2005. The average balances of deposits and FHLB advances for the
three  months  ended  April 30, 2006 as compared to the same period of the prior
year  increased  $32.0 million and $8.0 million,  respectively.  The increase in
deposits was due mainly to an increase in certificates of deposit,  money market
accounts and interest bearing demand deposits. The average balance of borrowings
increased  as funds  were used to  support  loan  growth.  The  average  cost of
deposits increased 83 basis points to 3.49% for the three months ended April 30,
2006 from 2.66% for the three months  ended April 30, 2005.  The average cost of
borrowings  increased  72 basis points to 4.12% for the three months ended April
30, 2006 from 3.40% for the three months ended April 30, 2005.

         Loan Loss Provision.  The provision for loan losses was $216.0 thousand
for the three  months  ended April 30, 2006  compared to $34.0  thousand for the
three months ended April 30, 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

                                       10

<PAGE>

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. Total non-interest income decreased $10.7 thousand
to $105.1  thousand for the three months ended April 30, 2006 compared to $115.8
thousand  for the three months ended April 30, 2005 due mainly to a reduction in
service charges related to check printing charges in connection with new product
offerings targeting business and retail core deposit growth which include a free
first order of checks.

         Non-interest Expense. Non-interest expense increased $256.5 thousand to
$1.1 million for the three months ended April 30, 2006 from $858.6  thousand for
the three months ended April 30, 2005. The increase in non-interest  expense was
due to increases in compensation and employee benefits,  occupancy and equipment
costs, and other expense of $136.6 thousand,  $96.7 thousand and $88.3 thousand,
respectively,  offset by a decrease  in  professional  fees and data  processing
expense of $46.2  thousand  and $22.6  thousand,  respectively.  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 payroll
taxes,  employee  benefits expense and performance based salary increases offset
by the  severance  package  paid to the former  President  in the  corresponding
period in the prior year. 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  discussed  above.  The
increase in other expense was due mainly to increased  advertising and marketing
costs, telephone and information technology expense, and stationery and supplies
expense. The decrease in professional fees was due mainly to non-recurring legal
expenses and accounting fees related to work performed for implementing  Section
404 of the Sarbanes Oxley Act of 2002. The decrease in data  processing  expense
was due to favorable contract negotiations resulting in a short term decrease in
monthly processing fees.

         Income  Taxes.  Income tax  benefit  was $85.0  thousand  for the three
months ended April 30, 2006 as compared to an expense of $90.3  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 Six Months Ended April 30, 2006
and April 30, 2005

         The Company  recorded a net loss of $90.5  thousand  for the six months
ended April 30, 2006,  versus net income of $475.3 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 six months ended April
30, 2006 increased $60.9 thousand to $2.2 million from $2.1 million for the same
period in 2005 as a result of an increase in interest income which was offset by
an increase in interest  expense.  The net interest margin decreased by 44 basis
points to 3.12% for the six months  ended  April 30, 2006 from 3.56% for the six
months ended April 30, 2005.  Interest income for the six months ended April 30,
2006  totaled  $4.3 million as compared to $3.3 million for the six months ended
April 30, 2005. This increase of $1.0 million was attributable to an increase of
$24.7  million  in the  average  balance  of  interest-earning  assets to $144.2
million for the six months ended April 30, 2006 from $119.5  million for the six
months ended April 30, 2005. This increase was also  attributable to an increase
in the average yield on interest-earning  assets of 47 basis points to 6.10% for
the six months  ended April 30,  2006 from 5.63% for the six months  ended April
30, 2005. The average balances of loans receivable and investment securities for
the six months  ended April 30, 2006 as compared to the same period of the prior
year  increased  $20.5  million  and $3.6  million,  to $89.4  million and $50.5
million respectively. Loans receivable grew due to increased loan demand and the
addition  of new  lending  officers.  The  average  yield  on  loans  receivable
increased  25 basis points to 7.04% for the six months ended April 30, 2006 from
6.79% for the six months ended April 30, 2005.  The average  yield on investment
securities increased 47 basis points to 4.63% for the six months ended April 30,
2006 from 4.16% for the six months ended April 30, 2005.

         Interest  expense  increased  to $2.2  million for the six months ended
April 30, 2006 from $1.2 million for the six months  ended April 30,  2005.  The
increase  was  primarily  attributable  to an increase  of $33.8  million in the
average  balance of  interest-bearing  liabilities to $121.9 million for the six
months  ended April 30, 2006 from $88.1

                                       11

<PAGE>

million  for the six months  ended  April 30, 2005 as well as an increase in the
average cost of funds of 77 basis points to 3.58% for the six months ended April
30,  2006 from  2.81% for the six  months  ended  April 30,  2005.  The  average
balances of deposits  and FHLB  advances for the six months ended April 30, 2006
as  compared to the same period of the prior year  increased  $23.4  million and
$10.5 to $96.4 million and $25.5 million, respectively. The increase in deposits
was mainly due to an increase in certificates of deposit,  money market accounts
and  interest  bearing  demand  deposits.  The  average  balance  of  borrowings
increased  as funds  were used to  support  loan  growth.  The  average  cost of
deposits  increased  74 basis points to 3.44% for the six months ended April 30,
2006 from 2.70% for the six months  ended April 30,  2005.  The average  cost of
borrowings increased 81 basis points to 4.21% for the six months ended April 30,
2006 from 3.40% for the six months ended April 30, 2005.

         Loan Loss Provision.  The provision for loan losses was $252.1 thousand
for the six months  ended April 30, 2006  compared to $51  thousand  for the six
months ended April 30, 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. Total non-interest income decreased $21.8 thousand
to $191.2  thousand for the six months  ended April 30, 2006  compared to $213.0
thousand  for the six months  ended  April 30,  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 $10.4 thousand in the same period of the
prior year  offset by an increase  of $17.3  thousand in earnings on  bank-owned
life insurance.

         Non-interest Expense. Non-interest expense increased $743.3 thousand to
$2.3  million for the six months  ended April 30, 2006 from $1.6 million for the
six months ended April 30, 2005. The increase in non-interest expense was due to
increases in compensation and employee benefits,  occupancy and equipment costs,
professional fees and other expense of $335.3 thousand,  $143.5 thousand,  $75.9
thousand and $187.0  thousand,  respectively.  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 department as well as payroll taxes,  employee
benefits expense and performance  based salary increases offset by the severance
package paid to the former  President in the  corresponding  period in the prior
year.  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 professional  fees was
due mainly to costs  incurred in connection  with  non-recurring  legal expenses
related to the Company's  annual meeting of stockholders  that were not resolved
until the first quarter of 2006. The increase in other expense was due mainly to
increased advertising and marketing costs,  telephone and information technology
expense, and stationery and supplies expense.

         Income Taxes. Income tax benefit was $112.1 thousand for the six months
ended April 30, 2006 as compared to an expense of $227.3  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 April 30, 2006 and October 31, 2005

         Assets and  Liabilities.  The Company's total assets increased by $17.6
million to $165.0  million at April 30, 2006 from $147.4  million at October 31,
2005.

         Total investment securities decreased by $2.8 million, to $49.4 million
at April 30,  2006 from $52.2  million at  October  31,  2005 due mainly to $5.2
million in sales, maturities and repayments offset by $3.0 million in purchases.

         Net loans  receivable  increased  $15.1  million,  or  17.8%,  to $99.7
million at April 30, 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 $8.2 million,  $4.4 million, $1.5

                                       12

<PAGE>
million and $1.0  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 $743.4 thousand at April 30,
2006 from $506.7 thousand at October 31, 2005 and represented  .74% of the gross
loan  portfolio at April 30, 2006.  The Company had  nonaccrual  loans of $103.4
thousand   and  $69.4   thousand  at  April  30,  2006  and  October  31,  2005,
respectively.  Classified  loans  totaled  $4.9  million  at April  30,  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 $2.9 million to $5.0 million at
April 30, 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 to $119.3 million at April 30, 2006 from $87.4
million at October  31,  2005.  This was  primarily  a result of an  increase in
certificates  of deposit,  money market and checking  accounts of $12.9 million,
$14.9  million and $4.7 million,  respectively,  offset by a decrease in savings
accounts of $532.8 thousand.

         Stockholders'  Equity.  Total  stockholders'  equity decreased to $24.0
million at April 30, 2006 from $31.1  million at October 31, 2005.  The decrease
was due mainly to the completion of the 10% stock repurchase plan announced July
29, 2005 and the 10% stock  repurchase plan announced  January 17, 2006. A total
of 465,000 shares of common stock were repurchased at an average price of $14.04
excluding  brokerage  commissions.  The Stock  Compensation  Trust,  which holds
215,000 shares, was funded through these repurchase programs. In addition, there
was an increase in the overall comprehensive loss of $405.9 thousand as a result
of a decrease in the market value of the Company's  investment  portfolio due to
rising market interest rates.


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  April  30,  2006,  cash and  cash  equivalents  totaled
approximately $3.7 million, or 2.3% of total assets, while investment securities
classified as available for sale and  certificates of deposit in other financial
institutions  totaled  approximately  $47.5  million,  or 28.8% 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 $260.2 thousand for
the six months ended April 30, 2006 and provided net cash of $408.9 thousand for
the six months  ended  April 30,  2005.  Net cash used for the six months  ended
April 30, 2006 was due mainly to other operating  activities.  Net cash provided
for the six months ended April 30, 2005 was generated  from net income of $475.3
thousand.

             Investing  activities  consist  primarily of loan  originations and
repayments, investment purchases, sales and maturities and purchases of premises
and  equipment.  For the six  months  ended  April  30,  2006 net cash  used for
investing  activities  totaled  $16.2  million  and  primarily  consisted  of an
increase in net loans  receivable  of $15.3  million,  purchases  of  investment
securities  of $3.0  million and  purchases  of premises  and  equipment of $3.0
million in connection  with the opening of two new banking offices in Roxborough
and Ardmore PA. Partially

                                       13
<PAGE>

offsetting  the usage of investing  activities  is $2.1 million of proceeds from
investment security sales and $3.0 million in maturities and repayments. For the
same period ended April 30, 2005, cash usages totaled $4.0 million and primarily
consisted of an increase in net loans  receivable of $6.8 million and investment
security purchase of $4.0 million.  Partially  offsetting the usage of investing
activities  is $6.7 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 six
months ended April 30, 2006, net cash provided by financing  activities  totaled
$18.0 million and was principally  from an increase in deposits of $31.9 million
offset by a decrease in FHLB borrowings of $6.7 million and by the repurchase of
the Company's Stock in the total amount of $ 6.5 million,  $3.5 million of stock
to Treasury and $3.0 million of stock for the  Compensation  Trust. For the same
period in 2005,  net cash  provided  for  financing  activities  totaled  $123.7
thousand and was principally from the repayment of short-term  borrowings in the
amount of $1.5 million offset by an increase in deposits of $2.0 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 April 30, 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 her 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 and financial  officer has 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

          None.


ITEM 5. OTHER INFORMATION

          The Company's  2005 Annual  Meeting of  Stockholders  was held June 6,
          2005. The Company's  2006 Annual Meeting is currently  scheduled to be
          held on August 15, 2006. At the Annual  Meeting,  only such  proposals
          shall be acted upon as shall have been brought  before the meeting (i)
          by or at the  direction  of the  Board  of  Directors  or  (ii) by any
          stockholder  of the Company who  complies  with all  requirements  set
          forth in Article  11.C of the  Company's  Articles  of  Incorporation.
          Pursuant to Article 11.C., for stockholder  proposals to be considered
          at an annual meeting of stockholders,  the stockholder's  notice shall
          be delivered  to, or mailed and received at, the  principal  executive
          offices  of  the  Company  not  less  than  sixty  days  prior  to the
          anniversary  date  of the  immediately  preceding  annual  meeting  of
          stockholders of the Company. Accordingly, the deadline for stockholder
          proposals for the 2006 Annual  Meeting was April 23, 2006,  sixty days
          prior to the June 6th anniversary of the immediately  preceding annual
          meeting.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

          (a) Exhibits

<TABLE>
<CAPTION>
             <S>    <C>
               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 *

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

               31    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>

                                       16

<PAGE>

             *    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: June 14, 2006     /s/Pamela M. Cyr
                        --------------------------------------------------------
                        Pamela M. Cyr
                        President and CEO
                        (Principal Executive and Financial & Accounting Officer)

                                       18