For the quarter ended December 31, 2010, non-interest expense increased $310,000 compared to the same period in 2009. The most significant component of the increase in the period related to a loss of $135,000 recognized on the previously disclosed sale of a $1.2 million real estate owned property during the quarter ended December 31, 2010.

The Company recognized income tax expense for the quarter ended December 31, 2010 of $416,000 compared to income tax expense of $622,000 for the three months ended December 31, 2009. The decrease in income tax expense was primarily attributable to the lower level of taxable net income before taxes during the three months ended December 31, 2010 as compared to the comparable period in 2009. Partially offsetting the decrease was a $297,000 increase in the valuation allowance related to the $3.5 million deferred tax asset related to the capital loss carryforward created in connection with the June 2008 redemption in kind referenced above.   As a result, the Company's effective tax rate exceeded 100% for the 2010 period.

Prudential Bancorp, Inc. of Pennsylvania is the "mid-tier" holding company for Prudential Savings Bank. Prudential Savings Bank is a Pennsylvania-chartered, FDIC-insured savings bank that was originally organized in 1886. The Bank conducts business from its headquarters and main office in Philadelphia, Pennsylvania as well as six additional full-service branch offices, five of which are in Philadelphia and one of which is in Drexel Hill in Delaware County, Pennsylvania.

The Prudential Bancorp, Inc. logo is available at

This news release contains certain forward-looking statements, including statements about the financial condition, results of operations and earnings outlook for Prudential Bancorp, Inc. of Pennsylvania. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as "believe," "expect," "anticipate," "estimate" and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may." Forward-looking statements, by their nature, are subject to risks and uncertainties. A number of factors, many of which are beyond the Company's control, could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. The Company's reports filed from time-to-time with the Securities and Exchange Commission, describe some of these factors, including general economic conditions, changes in interest rates, deposit flows, the cost of funds, changes in credit quality and interest rate risks associated with the Company's business and operations. Other factors described include changes in our loan portfolio, changes in competition, fiscal and monetary policies and legislation and regulatory changes. Investors are encouraged to review the Company's periodic reports filed with the Securities and Exchange Commission for financial and business information regarding the Company at under the Investor Relations menu. We undertake no obligation to update any forward-looking statements.
  At December 31, At September 30,
  2010 2010
  (Dollars in Thousands)
Selected Consolidated Financial and Other Data (Unaudited):    
Total assets $526,621 $529,080
Cash and cash equivalents 50,304 66,524
Investment and mortgage-backed securities:    
Held-to-maturity 125,230 112,673
Available-for-sale 74,445 72,425
Loans receivable, net 252,719 255,091
Deposits 464,034 464,455
FHLB advances 604 615
Stockholders' equity 55,942 56,999
Full service offices 7 7
  Three Months Ended December 31,
  2010 2009
  (Dollars in Thousands Except Per Share Amounts)
Selected Operating Data (Unaudited):    
Total interest income $5,653 $6,466
Total interest expense 2,022 2,489
Net interest income 3,631 3,977
Provision for loan losses 580 135
Net interest income after provision for loan losses 3,051 3,842
Total non-interest income 134 19
Total non-interest expense 2,863 2,553
Income before income taxes 322 1,308
Income taxes 416 622
Net (loss) income (94) 686
Basic (loss) earnings per share (0.01) 0.07
Diluted (loss) earnings per share (0.01) 0.07
Selected Operating Ratios (1):    
Average yield earned on interest-earning assets 4.47% 5.36%
Average rate paid on interest-bearing liabilities 1.75% 2.25%
Average interest rate spread (2) 2.72% 3.11%
Net interest margin (2) 2.87% 3.30%
Average interest-earning assets to average interest-bearing liabilities 109.56% 109.09%
Net interest income after provision for loan losses to non-interest expense 106.57%  150.49%
Total non-interest expense to average assets 2.17% 2.01%
Efficiency ratio (3) 76.04% 63.89%
Return on average assets (0.07)% 0.54%
Return on average equity (0.67)% 4.91%
Average equity to average assets 10.70% 10.99%
   At or For the Three Months Ended December 31,
  2010 2009
Asset Quality Ratios (4)    
Non-performing loans as a percent of loans receivable, net (5) 2.94% 1.08%
Non-performing assets as a percent of total assets (5) 1.81% 1.35%
Allowance for loan losses as a percent of total loans 1.43% 1.08%
Allowance for loan losses as a percent of non-performing loans 50.21% 103.35%
Net charge-offs to average loans receivable 0.00% 0.00%
Capital Ratio (4)    
Tier 1 leverage ratio    
Company 10.41% 11.14%
Bank 9.48% 10.15%
Tier 1 risk-based capital ratio    
Company 23.15% 24.68%
Bank 21.09% 22.49%
Total risk-based capital ratio    
Company 24.41% 25.93%
Bank 22.35% 23.74%
(1) With the exception of end of period ratios, all ratios are based on average monthly balances during the indicated periods and are annualized where appropriate.
(2) Average interest rate spread represents the difference between the average yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities, and net interest margin represents net interest income as a percentage of average interest-earning assets.
(3) The efficiency ratio represents the ratio of non-interest expense divided by the sum of net interest income and non-interest income (charges).
(4) Asset quality ratios and capital ratios are end of period ratios, except for net charge-offs to average loans receivable.
(5) Non-performing assets generally consist of all loans in non-accrual status, loans which are 90 days or more past due and real estate acquired through foreclosure or acceptance of a deed in-lieu of foreclosure. It is the Company's policy to cease accruing interest on all loans, other than single-family residential mortgage loans, which are 90 days or more past due as to interest or principal.
CONTACT: Thomas A. Vento - President         Joseph R. Corrato - Executive Vice President         (215) 755-1500

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