BEL AIR, Md., Nov. 14 /PRNewswire-FirstCall/ -- SFSB, Inc. (OTC Bulletin Board: SFBI) today announced that in connection with the preparation of its financial statements for the quarter ended September 30, 2008, the Company made a decision to take a non-cash pre-tax charge to earnings of $1,678,000, as a result of an other-than-temporary impairment (OTTI) in the value of the AMF Ultra Short Mortgage Fund it holds in its investment portfolio. This loss resulted in a net loss of $1,574,000 in the quarter ended September 30, 2008 as compared to net income of $27,000 for the quarter ended September 30, 2007. For the nine months ended September 30, 2008, net loss was $1,390,000 as compared to a net loss of $21,000 for the nine months ended September 30, 2007.

President, Chairman and CEO, Phil Logan, stated: "We believe this impairment is related to the continuing uncertainty in spreads in the bond market for mortgage related securities. This uncertainty has negatively impacted the market value of the securities in the fund and thus the net asset value of the fund itself. While the majority of the underlying securities in the fund continue to carry investment grades and acceptable market yields, current accounting rules and related SEC guidance resulted in our determination that the impairment was other-than-temporary.

Without the write-down of the AMF Ultra Short Mortgage Fund, SFSB, Inc. would have reported net income of $104,000 for the quarter ended September 30, 2008 and net income of $288,000 for the nine months ended September 30, 2008.

"As you can see, we continue to improve earnings with regard to our operating results," said Logan. "The stability of our core banking operations and being well-capitalized, has enabled SFSB, Inc. to withstand the lower values recorded in our investment portfolio without having a material impact on the health of our Bank. In the current environment, our top priority is to maintain the strength of our balance sheet. We were successful in this regard during the third quarter as both loans and deposits increased over the prior period, while our capital levels remained healthy."

As of September 30, 2008, SFSB, Inc. had risk weighted capital of 14.82%, while the OTS requires a 10% ratio to be considered "well capitalized".



    SFSB, Inc., headquartered in Bel Air, Maryland is the holding company of
Slavie Federal Savings Bank.  The bank is a 108 year old federally chartered,
FDIC-insured thrift serving the Baltimore Metropolitan area and surrounding
counties in Maryland.  The bank offers a wide variety of financial services
and products throughout its market area.  The bank maintains a website at
www.slavie.com.



                                  SFSB, INC.
                   UNAUDITED CONDENSED STATEMENTS OF INCOME
                     (In thousands except per share data)

                                     Three Months Ended   Nine Months Ended
                                         September 30        September 30
                                        2008      2007     2008       2007

    Interest income                   $2,466    $2,367   $7,347     $6,992
    Interest expense                   1,407     1,550    4,361      4,594
    Net interest income                1,059       817    2,986      2,398
    Provision for loan losses             56        26      130        208
    Net interest income after
     provision for loan losses         1,003       791    2,856      2,190
    Non-interest income               (1,554)      105   (1,341)       277
    Non-interest expenses                948       848    2,698      2,482
    Income (Loss) before income tax
     provision                        (1,499)       48   (1,183)       (15)
    Income tax provision (benefit)        75        21      207          6
    Net income (loss)                 (1,574)       27   (1,390)       (21)
    Basic earnings (loss) per share    (0.59)     0.01    (0.51)     (0.01)
    Diluted earnings (loss) per
     share                             (0.59)     0.01    (0.51)     (0.01)



                                  SFSB, INC.
                      UNAUDITED SELECTED FINANCIAL DATA
                                (In thousands)

                                      September 30             December 31
                                            2008                    2007

    Total assets                         $175,855                $172,244
    Cash and cash equivalents               2,154                   1,277
    Investment securities                   7,808                  11,942
    Loans receivable-net                  155,309                 147,744
    Deposits                              123,819                 114,098
    Total borrowings                       30,500                  34,000
    Total stockholders' equity             20,162                  21,769




                                  SFSB, INC.
                RECONCILIATION of NON-GAAP FINANCIAL MEASURES
                                (In thousands)

                                    For the Quarter          For the Nine
                                          ended              Months ended
                                  September 30, 2008      September 30, 2008

    Net Loss                              $(1,574)               $(1,390)
    Adjustment for loss on investment       1,678                  1,678

    Income after adjustment                   104                    288

SOURCE SFSB, Inc.