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EX-4 - EX-4 - Standard AVB Financial Corp.g23737exv4.htm
EX-2 - EX-2 - Standard AVB Financial Corp.g23737exv2.htm
EX-5 - EX-5 - Standard AVB Financial Corp.g23737exv5.htm
EX-21 - EX-21 - Standard AVB Financial Corp.g23737exv21.htm
EX-8.1 - EX-8.1 - Standard AVB Financial Corp.g23737exv8w1.htm
EX-3.1 - EX-3.1 - Standard AVB Financial Corp.g23737exv3w1.htm
EX-1.1 - EX-1.1 - Standard AVB Financial Corp.g23737exv1w1.htm
EX-3.2 - EX-3.2 - Standard AVB Financial Corp.g23737exv3w2.htm
EX-10.3 - EX-10.3 - Standard AVB Financial Corp.g23737exv10w3.htm
EX-10.6 - EX-10.6 - Standard AVB Financial Corp.g23737exv10w6.htm
EX-23.2 - EX-23.2 - Standard AVB Financial Corp.g23737exv23w2.htm
EX-10.9 - EX-10.9 - Standard AVB Financial Corp.g23737exv10w9.htm
EX-99.1 - EX-99.1 - Standard AVB Financial Corp.g23737exv99w1.htm
EX-99.2 - EX-99.2 - Standard AVB Financial Corp.g23737exv99w2.htm
EX-10.1 - EX-10.1 - Standard AVB Financial Corp.g23737exv10w1.htm
EX-10.4 - EX-10.4 - Standard AVB Financial Corp.g23737exv10w4.htm
EX-99.3 - EX-99.3 - Standard AVB Financial Corp.g23737exv99w3.htm
EX-99.7 - EX-99.7 - Standard AVB Financial Corp.g23737exv99w7.htm
EX-10.2 - EX-10.2 - Standard AVB Financial Corp.g23737exv10w2.htm
EX-10.7 - EX-10.7 - Standard AVB Financial Corp.g23737exv10w7.htm
EX-23.3 - EX-23.3 - Standard AVB Financial Corp.g23737exv23w3.htm
EX-10.8 - EX-10.8 - Standard AVB Financial Corp.g23737exv10w8.htm
EX-99.8 - EX-99.8 - Standard AVB Financial Corp.g23737exv99w8.htm
EX-99.6 - EX-99.6 - Standard AVB Financial Corp.g23737exv99w6.htm
EX-10.5 - EX-10.5 - Standard AVB Financial Corp.g23737exv10w5.htm
Table of Contents

As filed with the Securities and Exchange Commission on June 17, 2010
Registration No. 333-________
 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
Standard Financial Corp. and
Standard Bank, PaSB 401(k) Plan Profit Sharing Plan

(Exact Name of Registrant as Specified in Its Charter)
         
Maryland
(State or Other Jurisdiction of
Incorporation or Organization)
  6712
(Primary Standard Industrial
Classification Code Number)
  Being applied for
(I.R.S. Employer
Identification Number)
2640 Monroeville Boulevard
Monroeville, Pennsylvania 15146
(412) 856-0363

(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant’s Principal Executive Offices)
Mr. Timothy K. Zimmerman
President and Chief Executive Officer
2640 Monroeville Boulevard
Monroeville, Pennsylvania 15146
(412) 856-0363

(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Agent for Service)
Copies to:
Kent M. Krudys, Esq.
Marc P. Levy, Esq.
Luse Gorman Pomerenk & Schick, P.C.
5335 Wisconsin Avenue, N.W., Suite 780
Washington, D.C. 20015
(202) 274-2000
Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: x
If this Form is filed to register additional shares for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: o
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
     
Large accelerated filer o
  Accelerated filer o
Non-accelerated filer o
  Smaller reporting company x
(Do not check if a smaller reporting company)]
   
CALCULATION OF REGISTRATION FEE
                             
 
  Title of each class of     Amount to be     Proposed maximum     Proposed maximum     Amount of  
  securities to be registered     registered     offering price per share     aggregate offering price     registration fee  
 
Common Stock, $0.01 par value per share
    3,967,500 shares     $10.00     $39,675,000 (1)     $2,829  
 
Participation interests
    interests (2)                 (2)  
 
(1)   Estimated solely for the purpose of calculating the registration fee.
 
(2)   The securities of Standard Financial Corp. to be purchased by the Standard Bank, PaSB 401(k) Profit Sharing Plan are included in the amount shown for the common stock. Accordingly, no separate fee is required for the participation interests. In accordance with Rule 457(h) of the Securities Act of 1933, as amended, the registration fee has been calculated on the basis of the number of shares of common stock that may be purchased with the current assets of such Plan.
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
 
 

 


Table of Contents

PROSPECTUS
 
STANDARD FINANCIAL CORP.
(Proposed Holding Company for Standard Bank)
Up to 3,450,000 Shares of Common Stock
 
Standard Financial Corp., a Maryland corporation, is offering shares of common stock for sale in connection with the conversion of Standard Mutual Holding Company from the mutual to the stock form of organization. We expect that our common stock will be listed for trading on the Nasdaq Capital Market under the symbol “STND” upon conclusion of the stock offering. There is currently no public market for the shares of our common stock.
 
We are offering up to 3,450,000 shares of common stock for sale on a best efforts basis. We may sell up to 3,967,500 shares of common stock because of demand for the shares in excess of 3,450,000 shares or changes in market conditions that would increase our pro forma market value in excess of $34.5 million (3,450,000 shares multiplied by the $10.00 purchase price per share) without resoliciting subscribers. We must sell a minimum of 2,550,000 shares in order to complete the offering.
 
We are offering the shares of common stock in a “subscription offering” to eligible depositors of Standard Bank, PaSB (“Standard Bank” or the “Bank”). Shares of common stock not purchased in the subscription offering may be offered for sale to the general public in a “community offering.” We also may offer for sale shares of common stock not purchased in the subscription offering or community offering through a “syndicated community offering” managed by Stifel, Nicolaus & Company. In addition, Standard Financial Corp. intends to establish a charitable foundation in connection with the conversion and contribute to it $200,000 in cash and a number of shares of common stock with a value equal to 3.5% of the shares sold in the offering.
 
The minimum number of shares of common stock you may order is 25 shares. The maximum number of shares of common stock that can be ordered by any person in the offering is 20,000 shares, and no person, together with an associate or group of persons acting in concert, may purchase more than 30,000 shares in the offering. The offering is expected to expire at 2:00 p.m., Eastern Time, on [expiration date]. We may extend this expiration date without notice to you until [extension date]. The Pennsylvania Department of Banking and the Board of Governors of the Federal Reserve System may approve a later date which may not conclude beyond [final expiration date]. Once submitted, orders are irrevocable unless the offering is terminated or is extended beyond [extension date], or the number of shares of common stock to be sold is increased to more than 3,967,500 shares or decreased to fewer than 2,550,000 shares. If the offering is extended beyond [extension date], or the number of shares of common stock to be sold is increased to more than 3,967,500 shares or decreased to fewer than 2,550,000 shares, we will resolicit subscribers and all funds delivered to us to purchase shares of common stock will be returned promptly, with interest. You will have the opportunity to maintain, change or cancel your order. Funds received during the offering will be held in a segregated account at Standard Bank and will earn interest calculated at Standard Bank’s statement savings rate, which is currently     % per annum.
 
Stifel, Nicolaus & Company, Incorporated (“Stifel Nicolaus”) will assist us in selling our shares of common stock on a best efforts basis. Stifel, Nicolaus & Company, Incorporated is not required to purchase any shares of the common stock that are being offered for sale.
 
This investment involves a degree of risk, including the possible loss of your investment.
Please read “Risk Factors” beginning on page 16.
 
OFFERING SUMMARY
Price: $10.00 per Share
 
                                 
    Minimum     Midpoint     Maximum     Adjusted Maximum  
 
Number of shares
    2,550,000       3,000,000       3,450,000       3,967,500  
Gross offering proceeds
  $        25,500,000     $        30,000,000     $        34,500,000     $        39,675,000  
Estimated offering expenses (excluding selling agent fees and expenses)
  $ 948,500     $ 948,500     $ 948,500     $ 948,500  
Estimated selling agent fees and expenses(1)(2)
  $ 407,886     $ 449,160     $ 490,434     $ 537,899  
Estimated net proceeds
  $ 24,143,614     $ 28,602,340     $ 33,061,066     $ 38,188,601  
Estimated net proceeds per share
  $ 9.47       9.53     $ 9.58     $ 9.63  
 
(1) Includes: (i) selling commissions payable by us to Stifel, Nicolaus & Company, Incorporated in connection with the subscription and community offerings equal to 1.0% of the aggregate amount of common stock sold in the subscription and community offerings (net of insider purchases and shares purchased by our ESOP), or approximately $347,900, at the adjusted maximum of the offering range; and (ii) other expenses of the offering payable to Stifel, Nicolaus & Company, Incorporated as selling agent estimated to be $75,000. For information regarding compensation to be received by Stifel, Nicolaus & Company, Incorporated and the other broker-dealers that may participate in the syndicated community offering, including the assumptions regarding the number of shares that may be sold in the subscription and community offerings and the syndicated community offering to determine the estimated offering expenses, see “Pro Forma Data” on page 38 and “The Conversion — Marketing and Distribution; Compensation” on page 121.
 
(2) If all shares of common stock are sold in the syndicated community offering, the maximum selling agent commissions and expenses would be $1.3 million at the minimum, $1.5 million at the midpoint, $1.7 million at the maximum, and $2.0 million at the maximum, as adjusted.
 
 
These securities are not deposits or accounts and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
 
None of the Securities and Exchange Commission, the Pennsylvania Department of Banking, the Board of Governors of the Federal Reserve System, nor any state securities regulator has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Stifel, Nicolaus & Company
For assistance, please call the Stock Information Center, toll free, at (877)     -     .
The date of this prospectus is [Prospectus Date].


Table of Contents

 
[MAP SHOWING MARKET AREA APPEARS ON INSIDE FRONT COVER]


 

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 EX-1.1
 EX-2
 EX-3.1
 EX-3.2
 EX-4
 EX-5
 EX-8.1
 EX-10.1
 EX-10.2
 EX-10.3
 EX-10.4
 EX-10.5
 EX-10.6
 EX-10.7
 EX-10.8
 EX-10.9
 EX-21
 EX-23.2
 EX-23.3
 EX-99.1
 EX-99.2
 EX-99.3
 EX-99.6
 EX-99.7
 EX-99.8

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SUMMARY
     The following summary highlights material information in this prospectus. It may not contain all the information that is important to you. For additional information, you should read this entire prospectus carefully, including the Consolidated Financial Statements and the notes to the Consolidated Financial Statements.
     In this prospectus, the terms “we, “our,” and “us” refer to Standard Financial Corp. and Standard Bank unless the context indicates another meaning.
Standard Bank
     Standard Bank is a Pennsylvania chartered savings bank headquartered in Murrysville, Pennsylvania. Standard Bank was organized in 1913, and reorganized into the mutual holding company structure in 1998. Standard Bank is currently the wholly owned subsidiary of Standard Mutual Holding Company, a Pennsylvania mutual holding company. On a consolidated basis, as of March 31, 2010, Standard Mutual Holding Company had total assets of $403.2 million, total loans of $277.1 million, total deposits of $311.2 million and equity of $43.6 million. We provide financial services to individuals, families and businesses through our ten banking offices located in the Pennsylvania counties of Allegheny, Westmoreland and Bedford and Allegany County, Maryland.
     Standard Bank’s business consists primarily of accepting deposits from the general public and investing those deposits, together with funds generated from operations and borrowings, in commercial real estate loans, one- to four-family residential mortgage loans, home equity loans and lines of credit, commercial business loans and investment securities. To a much lesser extent, we also originate construction loans and consumer loans. Standard Bank offers a variety of deposit accounts, including savings accounts, certificates of deposit, money market accounts, commercial and regular checking accounts and individual retirement accounts.
     Standard Bank’s executive offices are located at 2640 Monroeville Boulevard, Monroeville, Pennsylvania 15146. Our telephone number at this address is (412) 856-0363. Our website address is www.standardbankpa.com. Information on our website is not incorporated into this prospectus and should not be considered part of this prospectus.
Standard Financial Corp.
     Standard Financial Corp. is a newly formed Maryland corporation that will own all of the outstanding shares of common stock of Standard Bank upon completion of the mutual-to-stock conversion and the offering. Other than matters of an organizational nature, Standard Financial Corp. has not engaged in any business to date.
     Our executive offices are located at 2640 Monroeville Boulevard, Monroeville, Pennsylvania 15146. Our telephone number at this address is (412) 856-0363.
Our Organizational Structure
     In 1998, Standard Bank reorganized into the mutual holding company form of organization by forming Standard Mutual Holding Company. Standard Mutual Holding Company owns 100% of the outstanding shares of common stock of Standard Bank. Standard Mutual Holding Company is a mutual holding company that has no stockholders and is controlled by the depositors of Standard Bank.

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     Pursuant to the terms of Standard Mutual Holding Company’s plan of conversion, Standard Mutual Holding Company will convert from a mutual holding company to the stock holding company corporate structure. In addition, we intend to contribute cash and shares of common stock to a charitable foundation we will establish in connection with the conversion. Upon the completion of the conversion, Standard Mutual Holding Company will cease to exist, and Standard Bank will be a wholly owned subsidiary of Standard Financial Corp.
Market Area
     We conduct our operations from our ten branch offices (nine of which are full service) located in the Pennsylvania counties of Allegheny, Westmoreland and Bedford and Allegany County, Maryland. Standard Bank considers its primary market area to be eastern Allegheny, Westmoreland, northern Fayette and southern Bedford counties in Pennsylvania and Allegany County, Maryland.
     Our market area did not fully benefit from the national economic expansion. Therefore we are not suffering as much during the current economic recession. The national unemployment rate increased to over 10% and the real estate prices across the country have declined substantially in many markets. Recently, there have been some signs that the economic decline may be near the bottom and even starting to improve. However, we are not insulated from the impact of the economic downturn. While still dramatically higher than a couple of years ago, parts of our market area’s unemployment rates have fared slightly better than Pennsylvania and nationally. The eastern portion of our market area has not fared quite as well with unemployment rates somewhat higher than the respective unemployment rates of Pennsylvania and Maryland.
     Real estate values have remained under pressure throughout our market area. However, in comparison to many areas throughout the country, real estate values in our market have been reasonably steady. Much of the country experienced more extreme increases in real estate values during the past decade than our market area. While real estate values in our market increased as well, they did so at a much more reasonable rate. That combined with a slightly better employment situation within our market area has meant real estate values within our market area have suffered much less over the past year than much of the nation.
     Our market area has a broad range of private employers, and has changed its focus from heavy industry to more specialized industries and service providers, including technology, health care, education and finance. Allegheny County, Pennsylvania is the headquarters for seven Fortune 500 companies, including H.J. Heinz, USX Corporation and Alcoa Inc. Westmoreland County is east of Allegheny County and is part of the Pittsburgh metropolitan area. Allegany County, Maryland is part of the Cumberland, Maryland-West Virginia metropolitan area, equidistant from Pittsburgh and Baltimore, with an economy including information technology, biotechnology, medical services and manufacturing.
     Median household income levels as a percentage change in Standard Mutual Holding Company’s market area have been mixed. Allegheny County, Pennsylvania and Allegany County, Maryland have trailed the median household growth rate of their respective states and the nation during that period over the last several years, while Westmoreland and Fayette Counties have outpaced it. However in dollar terms, the median household income in each of the counties within our market area is substantially less than their respective states and nationally.

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Business Strategy
     Our business strategy is to grow and improve our profitability by:
    Remaining a community-oriented financial institution while continuing to increase our customer base of small and medium-size businesses in our market area;
 
    Increasing commercial real estate lending while maintaining our conservative loan underwriting;
 
    Emphasizing lower cost core deposits by attracting new customers and enhancing existing customer relationships;
 
    Expanding our branch network, primarily through branch purchases and de novo branching; and
 
    To provide additional financial resources to pursue future expansion and acquisition opportunities, although we have no current arrangements or agreements with respect to any such acquisitions.
     A full description of our products and services begins on page 79 of this prospectus under the heading “Business of Standard Bank.”
     These strategies are intended to guide our investment of the net proceeds of the offering. We intend to continue to pursue our business strategy after the conversion and the offering, subject to changes necessitated by future market conditions and other factors. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Strategy” for a further discussion of our business strategy.
Reasons for the Conversion
     Our primary reasons for converting and raising additional capital through the offering are:
    to support our internal growth through lending in communities we serve or may serve in the future;
 
    to provide additional financial resources to pursue future expansion and acquisition opportunities, although we have no current arrangements or agreements with respect to any such acquisitions;
 
    to improve our capital position during a period of significant economic uncertainty;
 
    to provide better capital management tools, including the ability to pay dividends and to repurchase shares of our common stock, subject to market conditions;
 
    to form a charitable foundation to benefit the communities we serve; and
 
    to retain and attract qualified personnel by establishing stock-based benefit plans.

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     We believe that the additional capital raised in the offering may enable us to take advantage of business opportunities that may not otherwise be available to us. As of March 31, 2010, Standard Bank was considered “well capitalized” for regulatory purposes and is not subject to a directive or a recommendation from the Pennsylvania Department of Banking, Federal Deposit Insurance Corporation or the Board of Governors of the Federal Reserve System (“Federal Reserve Board”) to raise capital.
     For further information about our reasons for the conversion and stock offering, please see “The Conversion—Reasons for the Conversion.”
Terms of the Conversion and the Offering
     Under Standard Mutual Holding Company’s plan of conversion, our organization will convert to a fully public stock holding company structure. In connection with the conversion, we are offering between 2,550,000 and 3,450,000 shares of common stock to eligible depositors of Standard Bank, to our employee benefit plans and, to the extent shares remain available, to the general public. The number of shares of common stock to be sold may be increased to up to 3,967,500 as a result of demand for the shares or changes in the market for financial institution stocks. Unless the number of shares of common stock to be offered is increased to more than 3,967,500 or decreased to less than 2,550,000, or the offering is extended beyond [extension date], subscribers will not have the opportunity to change or cancel their stock orders.
     The purchase price of each share of common stock to be issued in the offering is $10.00. All investors will pay the same purchase price per share. Investors will not be charged a commission to purchase shares of common stock in the offering. Stifel, Nicolaus & Company, our marketing advisor in the offering, will use its best efforts to assist us in selling shares of our common stock. Stifel, Nicolaus & Company is not obligated to purchase any shares of common stock in the offering.
Persons Who May Order Shares of Common Stock in the Offering
     We are offering the shares of common stock in a “subscription offering” in the following descending order of priority:
    First, to depositors of Standard Bank with aggregate account balances of at least $50 as of the close of business on March 31, 2009.
 
    Second, to Standard Bank’s tax-qualified employee benefit plans (including our employee stock ownership plan and 401(k) plan), which will receive, without payment therefor, nontransferable subscription rights to purchase in the aggregate up to 10% of the shares of common stock sold in the offering and issued to the charitable foundation. We expect our employee stock ownership plan to purchase 8% of the shares of common stock sold in the offering and issued to the charitable foundation.
 
    Third, to depositors of Standard Bank with aggregate account balances of at least $50 as of the close of business on [supplemental eligibility date].
 
    Fourth, to depositors of Standard Bank as of [depositors record date].
     Shares of common stock not purchased in the subscription offering may be offered for sale to the general public in a “community offering,” with a preference given to natural persons and trusts of natural persons residing in the Pennsylvania counties of Allegheny, Westmoreland and Bedford and Allegany

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County, Maryland, and thereafter to cover other members of the general public. The community offering may begin concurrently with, during or promptly after the subscription offering as we may determine at any time. If shares remain available for sale following the subscription offering or community offering, we also may offer for sale shares of common stock through a “syndicated community offering” managed by Stifel, Nicolaus & Company. We have the right to accept or reject, in our sole discretion, orders received in the community offering or syndicated community offering.
     To ensure a proper allocation of stock, each subscriber eligible to purchase stock in the subscription offering must list on his or her stock order form all deposit accounts in which he or she had an ownership interest at the applicable eligibility date. Failure to list all accounts, or providing incorrect information, could result in the loss of all or part of a subscriber’s stock allocation. Our interpretation of the terms and conditions of the plan of conversion and of the acceptability of the order forms will be final.
     If we receive orders for more shares than we are offering, we may not be able to fully or partially fill your order. Shares will be allocated first, in the order of priority to subscribers in the subscription offering before any shares are allocated in the community offering.
     For a detailed description of the offering, including share allocation procedures, please see “The Conversion.”
How We Determined the Offering Range
     The amount of common stock that we are offering is based on an independent appraisal of the estimated market value of Standard Financial Corp., assuming the conversion and the offering are completed and the charitable foundation is funded with a contribution of cash and common stock. RP Financial, LC., our independent appraiser, has estimated that, as of May 28, 2010, this market value, including shares sold in the offering and issued to the foundation, was $31,050,000. By regulation, the market value constitutes the midpoint of a valuation range, with a minimum of $26,392,500, and a maximum of $35,707,500. Based on this market value, and excluding the shares issued to the foundation, the offering ranges from a minimum of $25,500,000 to a maximum of $34,500,000 with a midpoint of $30,000,000. The $10.00 per share price was selected primarily because it is the price most commonly used in mutual-to-stock conversions of financial institutions. If market conditions warrant, the market value, including shares sold in the offering and issued to the foundation, can be increased to $41,063,630, and the offering, excluding shares issued to the foundation can be increased to $39,675,000.
     RP Financial, LC. advised the Board of Directors that the appraisal was prepared in conformance with the regulatory appraisal methodology. That methodology requires a valuation based on an analysis of the trading prices of comparable public companies whose stocks have traded for at least one year prior to the valuation date. RP Financial, LC. selected a group of 10 comparable public companies for this analysis.

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     The appraisal peer group consists of the following companies, with asset size as of March 31, 2010.
                 
Company Name   Ticker Symbol   Exchange   Headquarters   Total Assets
                (in millions)
Citizens Community Bancorp, Inc.
  CZWI   NASDAQ   Eau Claire, WI   $577
Elmira Savings Bank, FSB
  ESBK   NASDAQ   Elmira, NY   $489
First Capital, Inc.
  FCAP   NASDAQ   Corydon, IN   $463
First Savings Financial Group
  FSFG   NASDAQ   Clarksville, IN   $494
Harleysville Savings Financial Corp.
  HARL   NASDAQ   Harleysville, PA   $843
River Valley Bancorp
  RIVR   NASDAQ   Madison, IN   $395
Rome Bancorp, Inc.
  ROME   NASDAQ   Rome, NY   $328
TF Financial Corp.
  THRD   NASDAQ   Newtown, PA   $716
Wayne Savings Bancshares
  WAYN   NASDAQ   Wooster, OH   $406
WVS Financial Corp.
  WVFC   NASDAQ   Pittsburgh, PA   $377
     The following table presents a summary of selected pricing ratios for the peer group companies and Standard (on a pro forma basis). The pricing ratios are based on earnings and other information as of and for the six months ended March 31, 2010, stock price information as of May 28, 2010, as reflected in RP Financial, LC.’s appraisal report, dated May 28, 2010, and the number of shares assumed to be outstanding as described in “Pro Forma Data.” Compared to the average pricing of the peer group, our pro forma pricing ratios at the maximum of the offering range indicated a discount of 38.1% on a price-to-book value basis, a discount of 35.2% on a price-to-tangible book value basis, and a discount of 2.9% on a price-to-earnings basis.
                         
    Price-to-earnings     Price-to-book     Price-to-tangible  
    multiple(1)     value ratio     book value ratio  
Standard (on a pro forma basis, assuming completion of the conversion)
                       
Minimum
    11.01x       40.78 %     47.98 %
Midpoint
    12.94x       45.23 %     52.69 %
Maximum
    14.86x       49.16 %     56.75 %
Maximum, as adjusted
    17.06x       53.22 %     60.86 %
 
                       
Valuation of peer group companies, as of May 28, 2010
                       
Averages
    15.30x       79.38 %     87.62 %
Medians
    12.79x       80.81 %     88.09 %
 
(1)   Information is derived from the RP Financial appraisal report and are based upon reported earnings for the twelve months ended March 31, 2010. These ratios are different from the ratios in “Pro Forma Data.”
     Compared to the median pricing of the peer group, our pro forma pricing ratios at the maximum of the offering range indicated a discount of 39.2% on a price-to-book value basis, a discount of 35.6% on a price-to-tangible book value basis, and a premium of 16.2% on a core price-to-earnings basis.
     Our Board of Directors carefully reviewed the information provided to it by RP Financial, LC. through the appraisal process, but did not make any determination regarding whether prior standard mutual-to-stock conversions have been undervalued. Instead, we engaged RP Financial, LC. to help us understand the regulatory process as it applies to the appraisal and to advise the Board of Directors as to how much capital Standard Financial Corp. would be required to raise under the regulatory appraisal guidelines.

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     The independent appraisal also reflects the contribution of cash and shares of common stock to the charitable foundation we are organizing in connection with the conversion. The contribution of cash and shares of our common stock to the charitable foundation will reduce our estimated pro forma market value. See “Comparison of Valuation and Pro Forma Information With and Without the Charitable Foundation.”
     RP Financial, LC. will update the independent appraisal prior to the completion of the conversion. If the estimated appraised value, including offering shares and excluding shares contributed to the charitable foundation, changes to either below $25.5 million or above $39.7 million, we will resolicit persons who submitted stock orders. See “The Conversion—Share Pricing and Number of Shares to be Issued.”
     The independent appraisal does not indicate per share market value. Do not assume or expect that the valuation of Standard Financial Corp. as indicated above means that, after the conversion and the offering, the shares of common stock will trade at or above the $10.00 offering price. Furthermore, the pricing ratios presented above were utilized by RP Financial, LC. to estimate our market value and not to compare the relative value of shares of our common stock with the value of the capital stock of the peer group. The value of the capital stock of a particular company may be affected by a number of factors such as financial performance, asset size and market location.
     For a more complete discussion of the amount of common stock we are offering for sale and the independent appraisal, including a comparison of selected pro forma pricing ratios compared to pricing ratios of the peer group, see “The Conversion—Share Pricing and Number of Shares to be Issued.”
Limits on How Much Common Stock You May Purchase
     The minimum number of shares of common stock that may be purchased is 25. Generally, no individual may purchase more than 20,000 shares ($200,000) of common stock in the offering. If any of the following persons purchases shares of common stock, their purchases, in all categories of the offering, when combined with your purchases, cannot exceed 30,000 shares ($300,000):
    your spouse or relatives of you or your spouse living in your house;
 
    most companies, trusts or other entities in which you are a trustee, have a substantial beneficial interest or hold a senior management position; or
 
    other persons who may be your associates or persons acting in concert with you.
     See the detailed descriptions of “acting in concert” and “associate” in “The Conversion—Limitations on Common Stock Purchases.”

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How You May Purchase Shares of Common Stock
     In the subscription offering and community offering, you may pay for your shares only by:
    personal check, bank check or money order, made payable to Standard Financial Corp.; or
 
    authorizing us to withdraw funds from the types of Standard Bank deposit accounts permitted on the stock order form.
     Standard Bank is not permitted to knowingly lend funds to anyone for the purpose of purchasing shares of common stock in the offering. Additionally, you may not submit a check drawn on a Standard Bank line of credit, and you may not submit a third-party check to pay for shares of common stock. Please do not submit cash. Wire transfers may not be used to pay for shares of common stock.
     You can subscribe for shares of common stock in the offering by delivering a signed and completed original stock order form, together with full payment or authorization to withdraw from one or more of your Standard Bank deposit accounts, so that it is received (not postmarked) before 2:00 p.m., Eastern Time, on [expiration date], which is the expiration of the offering period. You may submit your stock order form by mail using the order reply envelope provided, by overnight courier to the indicated address on the order form, or by hand delivery to our Stock Information Center, located at                                                             . We will not accept stock order forms at our branch offices.
     You may be able to subscribe for shares of common stock using funds in your individual retirement account (“IRA”) or other retirement account. If you wish to use some or all of the funds in your Standard Bank IRA or other retirement account to purchase our common stock, the applicable funds must first be transferred to a self-directed account maintained by an independent trustee, such as a brokerage firm, and the purchase must be made through that account. Because individual circumstances differ and processing of retirement fund orders takes additional time, we recommend that you contact our Stock Information Center promptly, preferably at least two weeks before the [expiration date] expiration of the offering period, for assistance with purchases using funds from your Standard Bank retirement account or any other retirement account that you may have elsewhere. Whether you may use such funds for the purchase of shares in the stock offering may depend on time constraints and, possibly, limitations imposed by the brokerage firm or institution where your funds are held.
     See “The Conversion—Procedure for Purchasing Shares” for a complete description of how to purchase shares in the stock offering.
Deadline for Orders of Common Stock
     The deadline for purchasing shares of common stock in the offering is 2:00 p.m., Eastern Time, on [expiration date]. Your stock order form, with full payment, must be received (not postmarked) by 2:00 p.m., Eastern Time on [expiration date].
     Although we will make reasonable attempts to provide a prospectus and offering materials to holders of subscription rights, the subscription offering and all subscription rights will expire at 2:00 p.m., Eastern Time, on [expiration date], whether or not we have been able to locate each person entitled to subscription rights.

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     See “The Conversion—Procedure for Purchasing Shares” for a complete description of how to purchase shares in the stock offering.
Delivery of Stock Certificates
     Information regarding shares of common stock sold in the subscription and community offerings will be mailed by regular mail to the persons entitled thereto at the certificate registration address noted on the stock order form, as soon as practicable following completion of the conversion and offering. It is possible that, until this information is delivered, purchasers may not be able to sell the shares of common stock that they ordered, even though the common stock will have begun trading. All shares of Standard Financial Corp. common stock being sold will be in book entry form and paper stock certificates will not be issued.
After-Market Stock Price Performance Provided by Independent Appraiser
     The following table presents stock price performance information for all standard mutual-to-stock conversions completed between January 1, 2009 and May 28, 2010. None of these companies was included in the group of 10 comparable public companies utilized in RP Financial, LC.’s valuation analysis.
Mutual-to-Stock Conversion Offerings with Closing Dates
between January 1, 2009 and May 28, 2010
                                                 
                    Percentage Price Appreciation (Depreciation)
                    From Initial Trading Date
Company Name and                                           Through May 28,
Ticker Symbol   Conversion Date   Exchange   One Day   One Week   One Month   2010
                    %   %   %   %
Harvard Illinois Bancorp, Inc. (HARI)
    4/09/10     OTCBB     0.0       0.0       (1.0 )     (21.5 )
OBA Financial Services, Inc. (OBAF)
    1/22/10     NASDAQ     3.9       1.1       3.0       14.6  
OmniAmerican Bancorp, Inc. (OABC)
    1/21/10     NASDAQ     18.5       13.2       9.9       15.7  
Versailles Financial Corp. (VERF)
    1/13/10     OTCBB     0.0       0.0       0.0       0.0  
Athens Bancshares, Inc. (AFCB)
    1/07/10     NASDAQ     16.0       13.9       10.6       6.0  
Territorial Bancorp, Inc. (TBNK)
    7/15/09     NASDAQ     49.9       47.5       48.7       97.0  
St. Joseph Bancorp, Inc. (SJBA)
    2/02/09     OTCBB     0.0       0.0       0.0       0.0  
Hibernia Hmstd Bncrp, Inc. (HIBE)
    1/28/09     OTCBB     5.0       5.0       5.0       50.0  
 
                                               
Average
                    11.7       10.1       9.5       20.2  
Median
                    4.5       3.1       4.0       10.3  
High
                    49.9       47.5       48.7       97.0  
Low
                    0.0       0.0       (1.0 )     (21.5 )
     Stock price performance is affected by many factors, including, but not limited to: general market and economic conditions; the interest rate environment; the amount of proceeds a company raises in its offering; and numerous factors relating to the specific company, including the experience and ability of management, historical and anticipated operating results, the nature and quality of the company’s assets, and the company’s market area. None of the companies listed in the table above are exactly similar to Standard Financial Corp. The pricing ratios for their stock offerings were in some cases different from the pricing ratios for Standard Financial Corp.’s common stock and the market conditions in which these offerings were completed were, in most cases, different from current market conditions. The performance of these stocks may not be indicative of how our stock will perform.
     There can be no assurance that our stock price will not trade below $10.00 per share, as has been the case for many mutual-to-stock conversions. Before you make an investment decision, we

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urge you to carefully read this prospectus, including, but not limited to, the section entitled “Risk Factors” beginning on page 16.
Steps We May Take If We Do Not Receive Orders for the Minimum Number of Shares
     If we do not receive orders for at least 2,550,000 shares of common stock, we may take the following steps to issue the minimum number of shares of common stock in the offering range:
    increase the maximum purchase limitations; and/or
 
    seek the approval of the Pennsylvania Department of Banking and the Federal Reserve Board to extend the offering beyond [extension date], so long as we resolicit subscriptions that we have previously received in the offering.
     If one or more purchase limitations are increased, subscribers in the subscription offering who ordered the maximum amount and indicated on their stock order forms a desire to be resolicited, will be given the opportunity to increase their subscription up to the then-applicable limit.
Possible Change in the Offering Range
     RP Financial, LC. will update its appraisal before we complete the offering. If, as a result of demand for the shares or changes in market conditions, RP Financial, LC. determines that our pro forma market value has increased, we may sell up to 3,967,500 shares in the offering without further notice to you. If our pro forma market value at that time is either below 26.4 million or above $41.1 million (including the value of shares issued to the foundation), then, after consulting with the Pennsylvania Department of Banking and the Federal Reserve Board, we may:
    terminate the stock offering and promptly return all funds;
 
    set a new offering range; or
 
    take such other actions as may be permitted by the Pennsylvania Department of Banking and the Federal Reserve Board and the Securities and Exchange Commission.
     If we set a new offering range, we will be required to resolicit subscribers and we will promptly return your subscription funds, with interest at ___%, and cancel any authorization to withdraw funds from your deposit accounts for the purchase of shares of common stock.
Possible Termination of the Offering
     We may terminate the offering at any time and for any reason prior to the special meeting of depositors of Standard Bank that is being called to vote upon the conversion, and at any time after depositor approval with the approval of the Pennsylvania Department of Banking and the Federal Reserve Board. If we terminate the offering, we will promptly return your funds with interest calculated at Standard Bank’s statement savings rate, and we will cancel deposit account withdrawal authorizations.
How We Intend to Use the Proceeds From the Offering
     We intend to invest 50% of the net proceeds from the offering in Standard Bank, loan funds to our employee stock ownership plan to fund its purchase of our shares of common stock, contribute

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$200,000 in cash and a number of shares of common stock with a value equal to 3.5% of the shares sold in the offering to the charitable foundation and retain the remainder of the net proceeds from the offering. Therefore, assuming we sell 3,000,000 shares of common stock in the stock offering, and we have net proceeds of $28.6 million, we intend to invest $14.3 million in Standard Bank, loan $2.5 million to our employee stock ownership plan to fund its purchase of our shares of common stock, contribute $200,000 to Standard Charitable Foundation, and retain the remaining $11.6 million of the net proceeds.
     We may use the funds we retain for investments, to pay cash dividends, to repurchase shares of common stock and for other general corporate purposes. Standard Bank may use the proceeds it receives from us to support increased lending and other products and services, and to repay borrowings.
     Please see the section of this prospectus entitled “How We Intend to Use the Proceeds from the Offering” for more information on the proposed use of the proceeds from the offering.
You May Not Sell or Transfer Your Subscription Rights
     Regulations issued by the Office of Thrift Supervision or Federal Deposit Insurance Corporation regulations, as implemented by the Pennsylvania Department of Banking and Federal Reserve Board, prohibit you from transferring your subscription rights. If you order shares of common stock in the subscription offering, you will be required to state that you are purchasing the shares of common stock for yourself and that you have no agreement or understanding to sell or transfer your subscription rights. We intend to take legal action, including reporting persons to federal or state regulatory agencies, against anyone who we believe has sold or given away his or her subscription rights. We will not accept your order if we have reason to believe that you have sold or transferred your subscription rights. When completing your stock order form, you should not add the name(s) of persons who do not have subscription rights or who qualify in a lower subscription priority than you do. In addition, the stock order form requires that you list all deposit accounts, giving all names on each account and the account number at the applicable eligibility record date. Your failure to provide this information, or providing incomplete or incorrect information, may result in a loss of part or all of your share allocation, if there is an oversubscription.
Purchases by Officers and Directors
     We expect our directors and executive officers, together with their associates, to subscribe for 160,000 shares ($1.6 million) of common stock in the offering, or 6.3% of the shares to be sold at the minimum of the offering range. The purchase price paid by our directors and executive officers for their shares will be the same $10.00 per share price paid by all other persons who purchase shares of common stock in the offering.
     See “Subscriptions by Directors and Executive Officers” for more information on the proposed purchases of our shares of common stock by our directors and executive officers.
Benefits to Management and Potential Dilution to Stockholders Following the Conversion
     We expect our employee stock ownership plan, which is a tax-qualified retirement plan for the benefit of all our employees, to purchase 8% of the total number of shares of common stock that we sell in the offering and issued to the charitable foundation. Purchases by the employee stock ownership plan will be included in determining whether the required minimum number of shares has been sold in the offering. We reserve the right to purchase shares of common stock in the open market following the stock offering in order to fund all or a portion of the employee stock ownership plan.

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     Our current intention is to adopt one or more stock-based benefit plans no earlier than twelve months after completion of the conversion. Stockholder approval of these plans will be required, and the stock-based benefit plans cannot be implemented until at least six months after the completion of the conversion pursuant to regulations as implemented by the Pennsylvania Department of Banking and the Federal Reserve Board. If adopted within 12 months following the completion of the conversion, the stock-based benefit plan will reserve a number of shares of common stock equal to not more than 4% of the shares sold in the offering and issued to the charitable foundation (reduced by amounts purchased in the stock offering by our 401(k) plan using its purchase priority in the stock offering), for restricted stock awards to key employees and directors, at no cost to the recipients, and will also reserve a number of stock options equal to not more than 10% of the shares of common stock sold in the offering and issued to the charitable foundation for key employees and directors. If the stock-based benefit plans are adopted after one year from the date of the completion of the conversion, the 4% and 10% limitations described above will no longer apply, and we may adopt stock-based benefit plans encompassing more than 14% of our shares of common stock. We have not yet determined whether we will present these plans for stockholder approval within 12 months following the completion of the conversion or more than 12 months after the completion of the conversion, and we have not yet determined the number of shares that would be reserved for issuance under these plans.
     The following table summarizes the number of shares of common stock and aggregate dollar value of grants (valuing each share granted at the offering price of $10.00) that would be available under one or more stock-based benefit plans if such plans reserve a number of shares of common stock equal to not more than 4% and 10% of the shares sold in the offering and issued to the charitable foundation for restricted stock awards and stock options, respectively. The table shows the dilution to stockholders if all of these shares are issued from authorized but unissued shares, instead of shares purchased in the open market. The table also sets forth the number of shares of common stock to be acquired by the employee stock ownership plan for allocation to all eligible employees.
                                                 
    Number of Shares to be Granted or Purchased     Dilution     Value of Grants (1)  
                            Resulting             At  
            At     As a     From     At     Adjusted  
    At     Adjusted     Percentage     Issuance of     Minimum     Maximum  
    Minimum     Maximum     of Common     Shares for     of     of  
    of Offering     of Offering     Stock to be     Stock Benefit     Offering     Offering  
    Range     Range     Issued (2)     Plans     Range     Range  
                                    (Dollars in thousands)  
Employee stock ownership plan
    211,140       328,509       8.00 %         $ 2,111     $ 3,285  
Stock awards
    105,570       164,255       4.00       3.85 %     1,056       1,643  
Stock options
    263,925       410,636       10.00       9.09 %     784       1,220  
 
                                     
Total
    580,635       903,400       22.00 %     12.28 %   $ 3,951     $ 6,147  
 
                                     
 
(1)   The actual value of restricted stock grants will be determined based on their fair value as of the date grants are made. For purposes of this table, fair value is assumed to be the same as the offering price of $10.00 per share. The fair value of stock options has been estimated at $2.97 per option using the Black-Scholes option pricing model, based upon assumptions described in “Pro Forma Data.” The actual expense of stock options granted under a stock-based benefit plan will be determined by the grant-date fair value of the options, which will depend on a number of factors, including the valuation assumptions used in the option pricing model ultimately adopted, which may or may not be the Black-Scholes model.
 
(2)   The stock-based benefit plans may award a greater number of options and shares and issued to the charitable foundation, respectively, if the plans are adopted more than 12 months after the completion of the conversion.

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     In addition to the stock-based benefit plans that we may adopt, we intend to enter into employment agreements and change of control agreements with certain of our executive and other officers. See “Management of Standard Financial Corp.—Executive Officer Compensation” for a further discussion of these agreements, including their terms and potential costs, as well as a description of other benefits arrangements. In addition, for further information with respect to the expenses related to the stock-based benefit plans, see “Risk Factors—Our stock-based benefit plans will increase our costs, which will reduce our income” and “Management of Standard Financial Corp.—Benefits to be Considered Following Completion of the Stock Offering.”
Market for Common Stock
     We expect that our common stock will be listed for trading on the Nasdaq Capital Market under the symbol “STND.” Stifel, Nicolaus & Company currently intends to make a market in the shares of our common stock, but is under no obligation to do so. See “Market for the Common Stock.”
Our Issuance of Shares of Common Stock and Cash to the Charitable Foundation
     To further our commitment to the communities we serve and may serve in the future, we intend, subject to our depositor’s approval, to establish and fund a new charitable foundation as part of the conversion. Standard Financial Corp. intends to contribute to the charitable foundation $200,000 in cash and shares of common stock with an aggregate value of stock equal to 3.5% of the shares sold in the stock offering. These shares and cash will have a value of $1.1 million at the minimum of the valuation range and $1.4 million at the maximum of the valuation range, subject to adjustment to $1.6 million. As a result of the issuance of shares to the charitable foundation and the cash contribution, we expect to record an after-tax expense of approximately $700,000 at the minimum of the valuation range and approximately $1.0 million at the adjusted maximum of the valuation range, during the quarter in which the conversion is completed.
     Under the Internal Revenue Code, a corporate entity is generally permitted to deduct up to 10% of its taxable income (taxable income before the charitable contributions deduction) in any one year for charitable contributions. Any contribution in excess of the 10% limit may generally be deducted for federal income tax purposes over the five years following the year in which the charitable contribution was made. Accordingly, a charitable contribution by a corporate entity to a charitable foundation could, if necessary, be deducted for federal income tax purposes over a six-year period. Our overall charitable contribution deduction could be limited if our future taxable income is insufficient to allow for the full deduction within the 10% of taxable income limitation, which would result in an increase to income tax expense.
     The new charitable foundation will be governed by a Board of Directors, initially consisting of the current members of the Company’s Board of Directors (except for Timothy K. Zimmerman, our President, Chief Executive Officer and a director), and one individual who is not affiliated with us. None of these individuals will receive compensation for their service as a director of the charitable foundation. In addition, some of our employees will serve as executive officers of the charitable foundation. None of these individuals will receive compensation for their service as an executive officer of the charitable foundation.
     The new charitable foundation will be dedicated to supporting charitable causes and community development activities in the communities in which we operate or may operate in the future. In addition to traditional community contributions and community reinvestment initiatives, the charitable foundation

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is expected to emphasize grants or donations to support housing assistance, local education and other types of organizations or civic-minded projects.
    Issuing shares of common stock to the charitable foundation will:
    dilute the ownership interests of purchasers of shares of our common stock in the stock offering;
 
    dilute the voting interests of purchasers of shares of our common stock in the stock offering; and
 
    result in an expense, and a reduction in our earnings during the quarter in which the contribution is made, equal to the full amount of the contribution to the charitable foundation, offset in part by a corresponding tax benefit equal to 34.2% of such contribution.
     The establishment and funding of the charitable foundation has been approved by the Board of Trustees of Standard Mutual Holding Company, and must be approved by the depositors of Standard Bank at its special meeting being held to consider and vote upon the plan of conversion. If depositors do not approve the establishment and funding of the charitable foundation, we will proceed with the conversion and offering without the foundation and subscribers for common stock will not be resolicited (unless required by the Federal Reserve Board or the Pennsylvania Department of Banking). Without the charitable foundation, RP Financial, LC. estimates that our pro forma valuation would be greater and, as a result, a greater number of shares of common stock would be issued in the offering. See “Comparison of Valuation and Pro Forma Information With and Without the Charitable Foundation.”
     RP Financial, LC. will update its appraisal of our estimated pro forma market value at the conclusion of the offering. The pro forma market value reflected in that updated appraisal will be based on the facts and circumstances existing at that time, including, among other things, market and economic conditions, as well as whether the charitable foundation is formed and funded with shares of our common stock.
     See “Risk Factors—The contribution of shares to the charitable foundation will dilute your ownership interests and adversely affect net income,” “Risk Factors—Our contribution to the charitable foundation may not be tax deductible, which could reduce our profits,” “Comparison of Valuation and Pro Forma Information With and Without the Charitable Foundation” and “Standard Charitable Foundation.”
Our Policy Regarding Dividends
     Following completion of the stock offering, our Board of Directors will have the authority to declare dividends on our common stock, subject to statutory and regulatory requirements. However, no decision has been made with respect to the amount, if any, and timing of any dividend payments. The payment and amount of any dividend payments will depend upon a number of factors.
    For further information, see “Our Policy Regarding Dividends.”
Tax Consequences
     As a general matter, the conversion will not be a taxable transaction for federal or state income tax purposes to Standard Mutual Holding Company, Standard Bank, Standard Financial Corp., or persons

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eligible to subscribe in the subscription offering. See “The Conversion—Material Income Tax Consequences” for additional information.
Conditions to Completion of the Conversion and the Offering
     We cannot complete the conversion and the offering unless:
    the plan of conversion is approved by at least a majority of votes eligible to be cast by depositors of Standard Bank. A special meeting of depositors to consider and vote upon the plan of conversion has been set for [depositor meeting date];
 
    we have received and accepted orders to purchase at least the minimum number of shares of common stock offered; and
 
    we receive final approval of the Pennsylvania Department of Banking and the Federal Reserve Board to complete the conversion and the offering.
How You Can Obtain Additional Information
     Our branch office personnel may not, by law, assist with investment-related questions about the offering. If you have any questions regarding the conversion or the offering, please call our Stock Information Center, toll free, at (877) ___-                    , Monday through Friday between 9:00 a.m. and 4:00 p.m., Eastern Time, or visit the Stock Information Center located at                                         , Monday through Friday between 9:00 a.m. and 4:00 p.m., Eastern Time. The Stock Information Center will be closed on weekends and bank holidays.
TO ENSURE THAT EACH PERSON RECEIVES A PROSPECTUS AT LEAST 48 HOURS PRIOR TO THE EXPIRATION DATE OF [EXPIRATION DATE] IN ACCORDANCE WITH FEDERAL LAW, NO PROSPECTUS WILL BE MAILED OR HAND-DELIVERED ANY LATER THAN FIVE DAYS OR TWO DAYS, RESPECTIVELY, PRIOR TO [EXPIRATION DATE].

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RISK FACTORS
You should consider carefully the following risk factors in evaluating an investment in our shares of common stock.
Risks Related to Our Business
Because we intend to continue to emphasize commercial real estate loan originations, our credit risk will increase and continued downturns in the local real estate market or economy could adversely affect our earnings.
     We intend to continue our emphasis on originating commercial real estate loans. Commercial real estate loans generally have more risk than the one- to four-family residential real estate loans we originate. Because the repayment of commercial real estate loans depends on the successful management and operation of the borrower’s properties or related businesses, repayment of such loans can be affected by adverse conditions in the local real estate market or economy. Commercial real estate loans may also involve relatively large loan balances to individual borrowers or groups of related borrowers. A downturn in the real estate market or the local economy could adversely affect the value of properties securing the loan or the revenues from the borrower’s business, thereby increasing the risk of nonperforming loans. As our commercial real estate portfolio increases, the corresponding risks and potential for losses from these loans may also increase.
If our allowance for loan losses is not sufficient to cover actual loan losses, our earnings will decrease.
     We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans. In determining the amount of the allowance for loan losses, we review our loans and our loss and delinquency experience, and we evaluate economic conditions. If our assumptions are incorrect, our allowance for loan losses may not be sufficient to cover probable incurred losses in our loan portfolio, resulting in additions to our allowance. Material additions to our allowance could materially decrease our net income.
     In addition, bank regulators periodically review our allowance for loan losses and may require us to increase our allowance for loan losses or recognize further loan charge-offs. Any increase in our allowance for loan losses or loan charge-offs as required by these regulatory authorities might have a material adverse effect on our financial condition and results of operations.
Future changes in interest rates could reduce our profits.
     Our ability to make a profit largely depends on our net interest income, which could be negatively affected by changes in interest rates. Net interest income is the difference between:
    the interest income we earn on our interest-earning assets, such as loans and securities; and
 
    the interest expense we pay on our interest-bearing liabilities, such as deposits and borrowings.

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     As a result of our historical focus on one- to four-family residential real estate loans, the majority of our loans have fixed interest rates. Additionally, many of our securities investments have fixed interest rates. Like many savings institutions, our focus on deposit accounts as a source of funds, which have no stated maturity date or shorter contractual maturities, results in our liabilities having a shorter duration than our assets. For example, as of March 31, 2010, 42.3% of our loans had maturities of 15 years or longer, while 28.3% of our certificates of deposit had maturities of one year or less. This imbalance can create significant earnings volatility, because market interest rates change over time. In a period of rising interest rates, the interest income earned on our assets, such as loans and investments, may not increase as rapidly as the interest paid on our liabilities, such as deposits. In a period of declining interest rates, the interest income earned on our assets may decrease more rapidly than the interest paid on our liabilities, as borrowers prepay mortgage loans, and mortgage-backed securities and callable investment securities are called or prepaid, thereby requiring us to reinvest these cash flows at lower interest rates. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Management of Market Risk.”
     Changes in interest rates creates reinvestment risk, which is the risk that we may not be able to reinvest prepayments at rates that are comparable to the rates we earned on the prepaid loans or securities in a declining interest rate environment. Additionally, increases in interest rates may decrease loan demand and/or make it more difficult for borrowers to repay adjustable-rate loans. Changes in interest rates also affect the current fair value of our interest-earning securities portfolio. Generally, the value of securities moves inversely with changes in interest rates.
     At March 31, 2010, the “rate shock” analysis indicated that our net portfolio value (the difference between the present value of our assets and the present value of our liabilities) would decrease by $2.6 million, or 4.9%, if there was an instantaneous 200 basis point increase in market interest rates. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Management of Market Risk.”
Concentration of loans in our primary market area, which has recently experienced an economic downturn, may increase the risk of increased nonperforming assets.
     Our success depends primarily on the general economic conditions in the Pennsylvania counties of Allegheny, Westmoreland and Bedford and Allegany County, Maryland, as nearly all of our loans are to customers in these markets. Accordingly, the local economic conditions in these markets (and the Pittsburgh market area in general) have a significant impact on the ability of borrowers to repay loans as well as our ability to originate new loans. As such, a continuation of the decline in real estate values in these markets would also lower the value of the collateral securing loans on properties in these markets. In addition, a continued weakening in general economic conditions such as inflation, recession, unemployment or other factors beyond our control could negatively affect our financial results.
     According to the National Association of Realtors statistics, the median sales price for existing single family homes in the Pittsburgh, Pennsylvania metropolitan area decreased from $120,700 in 2007 to $118,900 in 2009. The median sales price for existing homes in the United States also decreased from $217,900 in 2007 to $172,100 in 2009. As can be seen from the above data, home prices in the Pittsburgh metropolitan area have been and continue to be below the national averages which makes home ownership more affordable for customers in our market area.
     The slowing local economy has also resulted in a rise in delinquency and foreclosure rates. For the Commonwealth of Pennsylvania, foreclosure activity rose to 44,732 filings in 2009, a 20% increase

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from the level reported for 2008. For the State of Maryland, foreclosure activity rose to 43,248 filings in 2009, a 33.7% increase from the level reported for 2008.
Continued and sustained deterioration in the housing sector and related markets and prolonged elevated unemployment levels may adversely affect our business and financial results.
     During 2009 and the beginning of 2010, general economic conditions continued to worsen nationally as well as in our market area. While we did not invest in sub-prime mortgages and related investments, our lending business is tied, in large part, to the housing market. Declines in home prices, increases in foreclosures and unemployment have adversely impacted the credit performance of real estate related loans, resulting in the write-down of asset values. The continuing housing slump has resulted in reduced demand for the construction of new housing, further declines in home prices, and increased delinquencies on construction, residential and commercial mortgage loans. The ongoing concern about the stability of the financial markets in general has caused many lenders to reduce or cease providing funding to borrowers. These conditions may also cause a further reduction in loan demand, and increases in our non-performing assets, net charge-offs and provisions for loan losses. A worsening of these negative economic conditions could adversely impact our prospects for growth, asset and goodwill valuations and could result in a decrease in our interest income and a material increase in our provision for loan losses.
If our investment in the common stock of the Federal Home Loan Bank of Pittsburgh is classified as other-than-temporarily impaired or as permanently impaired, our earnings and stockholders’ equity could decrease.
     We own common stock of the Federal Home Loan Bank of Pittsburgh. We hold this stock to qualify for membership in the Federal Home Loan Bank System and to be eligible to borrow funds under the Federal Home Loan Bank of Pittsburgh’s advance program. The aggregate cost and fair value of our Federal Home Loan Bank of Pittsburgh common stock as of March 31, 2010 was $3.4 million based on its par value. There is no market for our Federal Home Loan Bank of Pittsburgh common stock.
     Published reports indicate that certain member banks of the Federal Home Loan Bank System may be subject to accounting rules and asset quality risks that could result in materially lower regulatory capital levels. In an extreme situation, it is possible that the capital of a Federal Home Loan Bank, including the Federal Home Loan Bank of Pittsburgh, could be substantially diminished or reduced to zero. Consequently, we believe that there is a risk that our investment in Federal Home Loan Bank of Pittsburgh common stock could be impaired at some time in the future, and if this occurs, it would cause our earnings and stockholders’ equity to decrease by the after-tax amount of the impairment charge.
Continued or further declines in the value of certain investment securities could require write-downs, which would reduce our earnings.
     Our securities portfolio includes securities that have declined in value due to negative perceptions about the health of the financial sector in general and the lack of liquidity for securities that are real estate related. A prolonged decline in the value of these or other securities could result in an other-than-temporary impairment write-down which would reduce our earnings.

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The requirement to account for certain assets at estimated fair value, and a proposal to account for additional financial assets and liabilities at estimated fair value, may adversely affect our results of operations.
     We report certain assets, including securities, at fair value, and a recent proposal would require us to report nearly all of our financial assets and liabilities at fair value. Generally, for assets that are reported at fair value, we use quoted market prices or valuation models that utilize observable market inputs to estimate fair value. Because we carry these assets on our books at their estimated fair value, we may incur losses even if the asset in question presents minimal credit risk. Under current accounting requirements, elevated delinquencies, defaults, and estimated losses from the disposition of collateral in our private-label mortgage-backed security may require us to recognize additional other-than-temporary impairments in future periods with respect to our securities portfolio. The amount and timing of any impairment recognized will depend on the severity and duration of the decline in the estimated fair value of the asset and our estimate of the anticipated recovery period. Under proposed accounting requirements, we may be required to record reductions in the fair value of nearly all of our financial assets and liabilities (including loans) either through a charge to net income or through a reduction to accumulated other comprehensive income. Accordingly, we could be required to record charges on assets such as loans where we have no intention to sell the loan and expect to receive repayment in full on the loan. This could result in a decrease in net income, or a decrease in our stockholders’ equity, or both.
Government responses to economic conditions may adversely affect our operations, financial condition and earnings.
     New federal legislation has been introduced in Congress that would change the bank regulatory framework, as well as lending and funding practices and liquidity standards for banks. Bank regulatory agencies also have been responding aggressively to concerns and adverse trends identified in examinations. Ongoing uncertainty and adverse developments in the financial services industry and the domestic and international credit markets, and the effect of new legislation and regulatory actions in response to these conditions, may adversely affect our operations by restricting our business operations, including our ability to originate or sell loans, modify loan terms, or foreclose on property securing loans. These events may have a significant adverse effect on our financial performance and operating flexibility. In addition, these risks could affect the performance and value of our loan and investment securities portfolios, which also would negatively affect our financial performance.
     Furthermore, the Board of Governors of the Federal Reserve System, in an attempt to help the overall economy, has, among other things, kept interest rates low through its targeted federal funds rate and the purchase of mortgage-backed securities. If the Federal Reserve increases the federal funds rate, overall interest rates will likely rise, which may negatively impact the housing markets and the U.S. economic recovery. In addition, deflationary pressures, while possibly lowering our operating costs, could have a significant negative effect on our borrowers, especially our business borrowers, and the values of underlying collateral securing loans, which could negatively affect our financial performance.
Legislation has been introduced that would, among other things, tighten capital standards, create a new Consumer Financial Protection Bureau, give stockholders greater influence over Board elections and compensation, and generally increase our costs.
     Legislation has been introduced in Congress that would implement sweeping changes to the current bank regulatory structure. The Senate bill requires the bank regulators to set minimum capital levels for holding companies that are as strong as those required for the insured depository subsidiaries, but the components of capital would be restricted to capital allowed for insured depository institutions.

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This would effectively eliminate the ability of bank holding companies to include trust preferred securities or subordinated debt as part of capital.
     The proposed legislation would also create a new Consumer Financial Protection Bureau with broad powers to supervise and enforce consumer protection laws. The Consumer Financial Protection Bureau would have broad rule-making authority for a wide range of consumer protection laws that would apply to all banks, including the authority to prohibit “unfair, deceptive or abusive” acts and practices. The Consumer Financial Protection Bureau would have examination and enforcement authority over all banks and credit unions with more than $10 billion in assets. Banks and credit unions with $10 billion or less in assets would be examined by their applicable bank regulators. The new legislation would also weaken the federal preemption available for national banks and federal savings associations, and would give state attorneys general the ability to enforce applicable consumer laws. The proposed legislation also could severely limit our ability to charge fees for overdraft protection. This would have a material effect on our net income.
     The proposed legislation would also broaden the base for Federal Deposit Insurance Corporation insurance assessments to be the average consolidated total assets less tangible equity capital of a financial institution, and restrict bank proprietary trading in securities. Lastly, the proposed legislation would significantly increase stockholder influence over Boards of Directors by requiring companies to give stockholders a non-binding vote on executive compensation, and allow stockholders to nominate their own candidates using a company’s proxy ballots. Public companies would also be required to adopt majority voting for the election of directors, and the Federal Reserve Board would be directed to promulgate rules prohibiting excessive compensation paid to bank holding company executives, regardless of whether the company is publicly traded or not.
     If adopted, the proposed legislation and its implementing regulations would significantly increase our operating costs, make it more difficult for bank holding companies to attract and retain management talent, and adversely affect the ability of our Board and management team to implement our business strategy without undue interference from stockholders.
We are subject to extensive regulatory oversight.
     We and our subsidiaries are subject to extensive regulation and supervision. Regulators have intensified their focus on bank lending criteria and controls, and on the USA PATRIOT Act’s anti-money laundering and Bank Secrecy Act compliance requirements. There also is increased scrutiny of our compliance practices generally and particularly with the rules enforced by the Office of Foreign Assets Control. It is possible that we are not in full compliance with these requirements. Our failure to comply with these and other regulatory requirements could lead to, among other remedies, administrative enforcement actions and legal proceedings. In addition, proposed future legislation and regulations are likely to have a significant effect on the financial services industry. Regulatory or legislative changes could make regulatory compliance more difficult or expensive for us, and could cause us to change or limit some of our products and services, or the way we operate our business.
Strong competition within our market areas may limit our growth and profitability.
     Competition in the banking and financial services industry is intense. In our market areas, we compete with commercial banks, savings institutions, mortgage brokerage firms, credit unions, finance companies, mutual funds, insurance companies, and brokerage and investment banking firms operating locally and elsewhere. Some of our competitors have greater name recognition and market presence that benefit them in attracting business, and offer certain services that we do not or cannot provide. In

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addition, larger competitors may be able to price loans and deposits more aggressively than we do, which could affect our ability to grow and remain profitable on a long-term basis. Our profitability depends upon our continued ability to successfully compete in our market areas. If we must raise interest rates paid on deposits or lower interest rates charged on our loans, our net interest margin and profitability could be adversely affected. For additional information see “Business of Standard Bank—Competition.”
Legislative or regulatory responses to perceived financial and market problems could impair our rights against borrowers.
     Current and future proposals made by members of Congress would reduce the amount distressed borrowers are otherwise contractually obligated to pay under their mortgage loans, and may limit the ability of lenders to foreclose on mortgage collateral. If proposals such as these, or other proposals limiting Standard Bank’s rights as a creditor, were to be implemented, we could experience increased credit losses on our loans and mortgage-backed securities, or increased expense in pursuing our remedies as a creditor.
Recent health care legislation could increase our expenses or require us to pass further costs on to our employees, which could adversely affect our operations, financial condition and earnings.
     Legislation enacted in 2010 requires companies to provide expanded health care coverage to their employees, such as affordable coverage to part-time employees and coverage to dependent adult children of employees. Companies will also be required to enroll new employees automatically into their health plans. Compliance with these and other new requirements of the health care legislation will increase our employee benefits expense, and may require us to pass these costs on to our employees, which could give us a competitive disadvantage in hiring and retaining qualified employees.
Any future Federal Deposit Insurance Corporation insurance premium increases will adversely affect our earnings. The Federal Deposit Insurance Corporation has adopted a rule that required us to prepay insurance premiums.
     In May 2009, the Federal Deposit Insurance Corporation adopted a final rule levying a five basis point special assessment on each insured depository institution’s assets minus Tier 1 capital as of June 30, 2009. We recorded an expense of $177,000 during the quarter ended June 30, 2009, to reflect the special assessment. Any further special assessments that the Federal Deposit Insurance Corporation levy will be recorded as an expense during the appropriate period. In addition, the Federal Deposit Insurance Corporation increased the general assessment rate and our prior credits for federal deposit insurance were fully utilized during the quarter ended June 30, 2009. Therefore, our Federal Deposit Insurance Corporation general insurance premium expense will increase compared to prior periods.
     The Federal Deposit Insurance Corporation also issued a final rule pursuant to which all insured depository institutions were required to prepay on December 30, 2009 their estimated assessments for the fourth quarter of 2009, and for all of 2010, 2011 and 2012. We prepaid $1.5 million of our assessments on December 30, 2009, based on our deposits and assessment rate as of September 30, 2009.

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Risks Related to this Stock Offering
The future price of the shares of common stock may be less than the purchase price in the stock offering.
     If you purchase shares of common stock in the stock offering, you may not be able to sell them at or above the purchase price in the stock offering. The aggregate purchase price of the shares of common stock sold in the offering and issued to the charitable foundation is determined by an independent, third-party appraisal, pursuant to federal banking regulations and subject to review and approval by the Pennsylvania Department of Banking and the Federal Reserve Board. The appraisal is not intended, and should not be construed, as a recommendation of any kind as to the advisability of purchasing shares of common stock. Following the completion of the stock offering, our aggregate pro forma market value will be based on the market trading price of the shares, and not the final, approved independent appraisal, which may result in our stock trading below the initial offering price of $10.00 per share.
Our return on equity will be low following the stock offering. This could negatively affect the trading price of our shares of common stock.
     Net income divided by average equity, known as “return on equity,” is a ratio many investors use to compare the performance of a financial institution to its peers. Following the stock offering, we expect our consolidated equity to be between $64.7 million at the minimum of the offering range and $77.2 million at the adjusted maximum of the offering range. Based upon our pro forma net income for the six months ended March 31, 2010, and these pro forma equity levels, our annualized return on equity would be 4.75% and 4.00% at the minimum and adjusted maximum of the offering range, respectively. We expect our return on equity to remain low until we are able to leverage the additional capital we receive from the stock offering. Although we will be able to increase net interest income using proceeds of the stock offering, our return on equity will be negatively affected by higher expenses from the costs of being a public company and added expenses associated with our employee stock ownership plan and the stock-based benefit plan we intend to adopt. Until we can increase our net interest income and noninterest income and leverage the capital raised in the stock offering, we expect our return on equity to remain low, which may reduce the value of our shares of common stock.
Our stock-based benefit plans will increase our costs, which will reduce our income.
     We anticipate that our employee stock ownership plan will purchase 8% of the total shares of common stock sold in the stock offering and issued to the charitable foundation, with funds borrowed from Standard Financial Corp. We will record annual employee stock ownership plan expense in an amount equal to the fair value of shares of common stock committed to be released to employees. Assuming the employee stock ownership plan purchases 328,509 shares in the offering at the adjusted maximum of the offering range, we will recognize additional annual pre-tax compensation expense of $164,000 over a 20-year period, assuming the shares of common stock have a fair market value of $10.00 per share for the full 20-year period. If shares of common stock appreciate in value over time, compensation expense relating to the employee stock ownership plan will increase.
     Our current intention is to adopt one or more stock-based benefit plans after the stock offering that would award participants shares of our common stock (at no cost to them) and/or options to purchase shares of our common stock. The number of shares of restricted stock or stock options reserved for issuance under any initial stock-based benefit plan may not exceed 4% and 10%, respectively, of our total outstanding shares, including shares issued to the charitable foundation, if these plans are adopted within 12 months after the completion of the conversion. We may grant shares of common stock and stock

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options in excess of these amounts provided the stock-based benefit plan is adopted more than one year following the stock offering. Assuming a $10.00 per option exercise price and an estimated grant-date fair value of the options utilizing a Black-Scholes option pricing analysis of $2.97 per option granted, with the value amortized over a five-year vesting period, the corresponding annual pre-tax expense associated with the stock options would be $244,000 at the adjusted maximum of the offering range. In addition, assuming that all shares of restricted stock are awarded at a price of $10.00 per share, and that the awards vest over a five-year period, the corresponding annual pre-tax expense associated with restricted stock awarded under a stock-based benefit plan would be $329,000 at the adjusted maximum. However, if we grant shares of common stock or options in excess of these amounts, such grants would increase our costs further. The shares of restricted stock granted under a stock-based benefit plan will be expensed by us over their vesting period at the fair market value of the shares on the date they are awarded.
The implementation of stock-based benefit plans may dilute your ownership interest. Historically, stockholders have approved these stock-based benefit plans.
     We intend to adopt one or more stock-based benefit plans, which will allow participants to be awarded shares of common stock (at no cost to them) or options to purchase shares of our common stock, following the stock offering. These stock-based benefit plans will be funded through either open market purchases of shares of common stock or from the issuance of authorized but unissued shares of common stock. Our ability to repurchase shares of common stock to fund these plans will be subject to many factors, including, but not limited to, applicable regulatory restrictions on stock repurchases, the availability of stock in the market, the trading price of the stock, our capital levels, alternative uses for our capital and our financial performance. Although our current intention is to fund these plans with stock repurchases, we may not be able to conduct such repurchases. If we do not repurchase shares of common stock to fund these plans, then stockholders would experience a reduction in their ownership interest, which would total 3.85% in the event newly issued shares are used to fund stock options or awards of shares of common stock under these plans in an amount equal to 10% or 4%, respectively, of the shares issued in the stock offering and issued to the charitable foundation. We may grant shares of common stock and stock options in excess of these amounts provided the stock-based benefit plan is adopted more than one year following the stock offering.
     Although the implementation of the stock-based benefit plan will be subject to stockholder approval, historically, the overwhelming majority of stock-based benefit plans adopted by savings institutions and their holding companies following mutual-to-stock conversions have been approved by stockholders.
We have not determined whether we will adopt stock-based benefit plans more than one year following the stock offering. Stock-based benefit plans adopted more than one year following the stock offering may exceed regulatory restrictions on the size of stock-based benefit plans adopted within one year, which would further increase our costs.
     If we adopt stock-based benefit plans more than one year following the completion of the stock offering, then grants of shares of common stock or stock options under our stock-based benefit plans may exceed 4% and 10%, respectively, of our total outstanding shares. Stock-based benefit plans that provide for awards in excess of these amounts would increase our costs beyond the amounts estimated in “—Our stock-based benefit plans will increase our costs, which will reduce our income.” Stock-based benefit plans that provide for awards in excess of these amounts could also result in dilution to stockholders in excess of that described in “—The implementation of stock-based benefit plans will dilute your ownership interest.” Although the implementation of the stock-based benefit plan will be subject to

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stockholder approval, the determination as to the timing of the implementation of such a plan will be at the discretion of our Board of Directors. Our current intention is to adopt one or more stock-based benefit plans no earlier than twelve months after completion of the conversion.
The contribution of shares to the charitable foundation will dilute your ownership interests and adversely affect net income.
     Subject to depositor approval, we intend to establish a charitable foundation in connection with the conversion. We will make a contribution to the charitable foundation in the form of $200,000 in cash and a number of shares of common stock with a value equal to 3.5% of the shares sold in the offering. The contribution of cash and shares of common stock will total $1.1 million at the minimum of the offering range, and up to $1.6 million at the adjusted maximum of the offering range. The aggregate contribution will have an adverse effect on our net income for the quarter and year in which we make the contribution to the charitable foundation. The after-tax expense of the contribution will reduce net income by approximately $1.0 million at the adjusted maximum of the offering range. We had net income of $1.5 million for the six months ended March 31, 2010 and $2.1 million for the year ended September 30, 2009, respectively. Persons purchasing shares in the stock offering will have their ownership and voting interests diluted by up to 3.4% due to the issuance of shares of common stock to the charitable foundation.
We intend to enter into employment agreements and change in control agreements with certain of our officers, all of which may increase our compensation costs or increase the cost of acquiring us.
     We intend to enter into employment agreements with Timothy K. Zimmerman, our President and Chief Executive Officer, Colleen M. Brown, our Senior Vice President and Chief Financial Officer and Paul A. Knapp, our Senior Vice President and Chief Commercial Lending Officer. We also intend to enter into three change in control agreements with certain of our other officers. In the event of termination of employment of Mr. Zimmerman, Ms. Brown and Mr. Knapp other than for cause, or in the event of certain types of termination following a change in control, as set forth in the employment agreements, and assuming the agreements were in effect, the employment agreements provide for cash severance benefits that would cost up to approximately $1.5 million in the aggregate based on the compensation information included in “Management of Standard Financial Corp.—Executive Officer Compensation.”
Our contribution to the charitable foundation may not be tax deductible, which could reduce our profits.
     The Internal Revenue Service may not grant tax-exempt status to the charitable foundation. If the contribution is not deductible, we would not receive any tax benefit from the contribution. The total value of the contribution would be $1.6 million at the adjusted maximum of the offering range, which would result in after-tax expense of approximately $1.0 million. In the event that the Internal Revenue Service does not grant tax-exempt status to the charitable foundation or the contribution to the charitable foundation is otherwise not tax deductible, we would recognize after-tax expense up to the value of the entire contribution, or $1.6 million at the adjusted maximum of the offering range.
     In addition, even if the contribution is tax deductible, we may not have sufficient taxable income to be able to use the deduction fully. Under the Internal Revenue Code, a corporate entity is generally permitted to deduct charitable contributions in an amount of up to 10% of its taxable income (taxable income before the charitable contributions deduction) in any one year for charitable contributions. Any contribution in excess of the 10% limit may be deducted for federal income tax purposes over the five

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years following the year in which the charitable contribution was made. Accordingly, a charitable contribution by a corporate entity could, if necessary, be deducted for federal income tax purposes over a six-year period. Our taxable income over this period may not be sufficient to fully use this deduction.
We have broad discretion in using the proceeds of the stock offering. Our failure to effectively use such proceeds could reduce our profits.
     Standard Financial Corp. will use a portion of the net proceeds to finance the purchase of shares of common stock in the stock offering by the employee stock ownership plan, and may use the remaining net proceeds to pay dividends to stockholders, repurchase shares of common stock, purchase investment securities, deposit funds in Standard Bank, acquire other financial services companies or branch offices or for other general corporate purposes. Standard Bank may use the proceeds it receives to fund new loans, establish or acquire new branches, purchase investment securities, reduce a portion of our borrowings, or for general corporate purposes. We have not identified specific amounts of proceeds for any of these purposes and we will have significant flexibility in determining the amount of net proceeds we apply to different uses and the timing of such applications. Our failure to utilize these funds effectively could reduce our profitability. We have not established a timetable for the effective deployment of the proceeds and we cannot predict how long we will require to effectively deploy the proceeds.
Our stock value may be negatively affected by regulations that restrict takeovers.
     For three years following the stock offering, federal regulations as applied by the Pennsylvania Department of Banking and the Federal Reserve Board will prohibit any person from acquiring or offering to acquire more than 10% of our common stock without the prior written approval of the Federal Deposit Insurance Corporation, the Pennsylvania Department of Banking and the Federal Reserve Board. See “Restrictions on Acquisition of Standard Financial Corp.” for a discussion of applicable regulations regarding acquisitions.
The corporate governance provisions in our articles of incorporation and bylaws, Standard Bank’s stock charter and the corporate governance provisions under relevant state law, may prevent or impede the holders of our common stock from obtaining representation on our Board of Directors and may impede takeovers of the company.
     Provisions in our articles of incorporation and bylaws, as well as the stock charter of Standard Bank, may prevent or impede holders of our common stock from obtaining representation on our Board of Directors and may make takeovers of Standard Financial Corp. more difficult. For example, our Board of Directors is divided into three staggered classes. A classified Board makes it more difficult for stockholders to change a majority of the directors because it generally takes at least two annual elections of directors for this to occur. In addition, our articles of incorporation include a provision that no person will be entitled to vote any shares of our common stock in excess of 10% of our outstanding shares of common stock. This limitation does not apply to the purchase of shares by a tax-qualified employee stock benefit plan established by us. Standard Bank’s stock charter will contain a provision that for a period of five years from the closing of the conversion, no person other than Standard Financial Corp. may offer directly or indirectly to acquire the beneficial ownership of more than 10% of any class of equity security of Standard Bank. This limitation does not apply to the purchase of shares by a tax-qualified employee stock benefit plan established by us, as well as other acquisitions specified in the stock charter. In addition, our articles of incorporation and bylaws restrict who may call special meetings of stockholders and how directors may be removed from office. Additionally, in certain instances, the Maryland General Corporation Law requires a supermajority vote of our stockholders to approve a merger or other business

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combination with a large stockholder, if the proposed transaction is not approved by a majority of our directors. See “Restrictions on Acquisition of Standard Financial Corp.”
We will need to implement additional finance and accounting systems, procedures and controls in order to satisfy our new public company reporting requirements, which will increase our operating costs.
     Upon completion of the stock offering, we will become a public reporting company. The federal securities laws and regulations of the Securities and Exchange Commission require that we file annual, quarterly and current reports, and that we maintain effective disclosure controls and procedures and internal controls over financial reporting. We expect that the obligations of being a public company, including substantial public reporting obligations, will require significant expenditures and place additional demands on our management team. These obligations will increase our operating expenses and could divert management’s attention from our banking operations.
     Compliance with the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the Securities and Exchange Commission will require us to certify the adequacy of our internal controls and procedures, which could require us to upgrade our systems, and/or hire additional staff, which will increase our operating costs.
We have never issued common stock and there is no guarantee that a liquid market will develop.
     We have never issued capital stock and there is no established market for our common stock. We expect that our common stock will be listed for trading on the Nasdaq Capital Market under the symbol “STND,” subject to completion of the offering and compliance with certain conditions, including the presence of at least three registered and active market makers. Stifel, Nicolaus & Company has advised us that it intends to make a market in shares of our common stock following the offering, but it is under no obligation to do so or to continue to do so once it begins. While we will attempt before completion of the offering to obtain commitments from at least two other broker-dealers to make a market in shares of our common stock, we may not be able to obtain such commitments. This would result in our common stock not being listed for trading on the Nasdaq Capital Market, which could reduce the liquidity of our common stock.
We may take other actions to meet the minimum required sales of shares if we cannot find enough purchasers in the subscription and community offerings. Such actions may reduce the net proceeds from the stock offering.
     If we do not sell enough shares to reach the minimum of the offering range through the subscription and community offerings, shares may be offered for sale to the general public in a syndicated community offering to be managed by Stifel, Nicolaus & Company, acting as our agent. The fee to be paid in connection with such an offering would be higher than the fee paid in the subscription and community offerings, which would increase the expenses associated with the stock offering and reduce the net proceeds. Specifically, Stifel, Nicolaus & Company will receive a fee of 1.0% of the aggregate dollar amount of the common stock sold in the subscription and community offerings, less shares acquired by our directors and executive officers, and our ESOP as well as the shares of common stock issued to the charitable foundation. If there is a syndicated community offering, Stifel, Nicolaus & Company will receive a fee not to exceed 6.0% of the aggregate dollar amount of the common stock sold in the syndicated community offering, less the amount of common stock already sold in the subscription and community offerings.

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SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
     The summary financial information presented below is derived in part from the consolidated financial statements of Standard Mutual Holding Company and subsidiaries. The following is only a summary and you should read it in conjunction with the consolidated financial statements and notes beginning on page F-1. The information at September 30, 2009 and 2008 and for the years ended September 30, 2009 and 2008 is derived in part from the audited consolidated financial statements of Standard Mutual Holding Company that appear in this prospectus. The operating data for the six months ended March 31, 2010 and 2009 and the financial condition data at March 31, 2010 were not audited. However, in the opinion of management of Standard Mutual Holding Company, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results of operations for the unaudited periods have been made. No adjustments were made other than normal recurring entries. The results of operations for the six months ended March 31, 2010 are not necessarily indicative of the results of operations that may be expected for the entire year.
                                                 
    At March 31,     At September 30,  
    2010     2009     2008     2007     2006     2005  
    (unaudited)     (In thousands)  
Selected Financial Condition Data:
                                               
 
                                               
Total assets
  $ 403,209     $ 382,415     $ 353,971     $ 342,938     $ 328,989     $ 269,016  
Cash and cash equivalents
    25,130       12,420       18,817       18,143       21,485       14,695  
Securities available for sale
    70,023       69,244       28,949       26,240       40,361       77,363  
Securities held to maturity
                19,518       27,710       34,289       42,157  
Loans receivable, net
    277,148       270,769       257,551       243,742       205,653       119,288  
Bank owned life insurance
    9,244       9,080       8,756       8,424       8,106       7,805  
Federal Home Loan Bank stock, at cost
    3,416       3,416       3,335       2,488       1,939       2,271  
Deposits
    311,196       286,934       254,632       263,977       262,999       199,267  
Federal Home Loan Bank advances
    42,078       46,618       50,948       32,809       20,727       31,274  
Securities sold under agreements to repurchase
    2,905       3,866       3,537       3,990       4,655       232  
Total net worth
    43,561       42,168       38,695       39,444       37,844       36,374  
                                                         
    Six Months Ended        
    March 31,     Years Ended September 30,  
    2010     2009     2009     2008     2007     2006     2005  
    (unaudited)     (In thousands)  
Selected Operating Data:
                                                       
 
                                                       
Interest and dividend income
  $ 9,160     $ 9,197     $ 18,236     $ 18,679     $ 18,191     $ 15,527     $ 11,652  
Interest expense
    3,373       4,225       8,091       9,237       10,075       8,394       6,252  
 
                                         
Net interest income
    5,787       4,972       10,145       9,442       8,116       7,133       5,400  
Provision for loan losses
    429       547       1,100       316                    
 
                                         
Net interest and dividend income after provision for loan losses
    5,358       4,425       9,045       9,126       8,116       7,133       5,400  
Noninterest income
    1,151       1,075       1,798       959       2,587       2,231       1,286  
Noninterest expense
    4,169       4,471       8,698       8,169       8,036       7,670       5,930  
 
                                         
Income before income tax expense (benefit)
    2,340       1,029       2,145       1,916       2,667       1,694       756  
Income tax expense (benefit)
    801       (254 )     1       776       607       264       (101 )
 
                                         
Net income
  $ 1,539     $ 1,283     $ 2,144     $ 1,140     $ 2,060     $ 1,430     $ 857  
 
                                         

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    At or For the Six Months        
    Ended March 31,     At or For the Years Ended September 30,  
    2010     2009     2009     2008     2007     2006     2005  
Selected Financial Ratios and Other Data (1):
                                                       
 
                                                       
Performance Ratios:
                                                       
Return on average assets (ratio of net income to average total assets)
    0.79 %     0.72 %     0.58 %     0.33 %     0.62 %     0.46 %     0.33 %
Return on average equity (ratio of net income to average equity)
    7.14 %     6.43 %     5.27 %     2.86 %     5.33 %     3.89 %     2.34 %
Interest rate spread (2)
    3.11 %     2.92 %     2.88 %     2.83 %     2.50 %     2.40 %     1.98 %
Net interest margin (3)
    3.20 %     3.03 %     2.99 %     2.98 %     2.66 %     2.54 %     2.22 %
Efficiency ratio (4)
    60.09 %     73.94 %     72.83 %     78.54 %     75.08 %     81.91 %     88.69 %
Noninterest expense to average total assets
    2.13 %     2.50 %     2.36 %     2.37 %     2.43 %     2.47 %     2.28 %
Average interest-earning assets to average interest-bearing liabilities
    104.70 %     104.38 %     104.45 %     104.94 %     104.94 %     104.75 %     109.65 %
 
                                                       
Asset Quality Ratios:
                                                       
Non-performing assets to total assets
    0.41 %     0.46 %     0.61 %     0.51 %     0.26 %     0.21 %     0.13 %
Non-performing loans to total loans
    0.60 %     0.66 %     0.86 %     0.71 %     0.36 %     0.34 %     0.30 %
Allowance for loan losses to non-performing loans
    627.67 %     152.28 %     233.08 %     150.17 %     294.65 %     355.81 %     435.84 %
Allowance for loan losses to total loans
    1.23 %     0.99 %     1.12 %     0.93 %     0.97 %     1.16 %     1.31 %
Net charge-offs to average loans
    0.02 %     0.14 %     0.17 %     0.10 %     0.02 %     0.08 %     0.02 %
 
                                                       
Capital Ratios:
                                                       
Total capital (to risk-weighted assets)
    14.68 %     14.54 %     14.30 %     14.59 %     14.60 %     15.20 %     26.90 %
Tier I capital (to risk-weighted assets)
    13.43 %     13.40 %     13.05 %     13.48 %     13.10 %     13.50 %     25.00 %
Tier I capital (to average assets)
    8.37 %     8.41 %     8.47 %     8.61 %     8.50 %     7.90 %     12.70 %
Equity to assets
    10.80 %     10.77 %     11.03 %     10.93 %     11.50 %     11.50 %     13.52 %
Tangible equity to tangible assets
    8.60 %     8.38 %     8.69 %     8.35 %     8.81 %     8.62 %     13.47 %
 
                                                       
Other Data:
                                                       
Number of offices
    10       10       10       10       10       11       7  
Full time equivalent employees
    89       86       89       89       93       91       67  
 
(1)   Ratios for the six months ended March 31, 2010 and 2009 are annualized.
 
(2)   The interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities for the year.
 
(3)   The net interest margin represents net interest income as a percent of average interest-earning assets for the year.
 
(4)   The efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
     This prospectus contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” “will,” “may” and words of similar meaning. These forward-looking statements include, but are not limited to:
    statements of our goals, intentions and expectations;
 
    statements regarding our business plans, prospects, growth and operating strategies;
 
    statements regarding the asset quality of our loan and investment portfolios; and
 
    estimates of our risks and future costs and benefits.
     These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this prospectus.
     The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:
    general economic conditions, either nationally or in our market areas, that are worse than expected;
 
    competition among depository and other financial institutions;
 
    inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments;
 
    adverse changes in the securities markets;
 
    changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements;
 
    our ability to enter new markets successfully and capitalize on growth opportunities;
 
    our ability to successfully integrate acquired entities, if any;
 
    changes in consumer spending, borrowing and savings habits;
 
    changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board;
 
    changes in our organization, compensation and benefit plans;

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    changes in our financial condition or results of operations that reduce capital available to pay dividends; and
 
    changes in the financial condition or future prospects of issuers of securities that we own.
     Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. Please see “Risk Factors” beginning on page 16.

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HOW WE INTEND TO USE THE PROCEEDS FROM THE OFFERING
     Although we cannot determine what the actual net proceeds from the sale of the shares of common stock in the offering will be until the offering is completed, we anticipate that the net proceeds will be between $24.1 million and $33.1 million, or $38.2 million if the offering range is increased by 15%.
     We intend to distribute the net proceeds from the stock offering as follows:
                                                                 
    Based Upon the Sale at $10.00 Per Share of  
    2,550,000 Shares     3,000,000 Shares     3,450,000 Shares     3,967,500 Shares (1)  
            Percent             Percent             Percent             Percent  
            of Net             of Net             of Net             of Net  
    Amount     Proceeds     Amount     Proceeds     Amount     Proceeds     Amount     Proceeds  
    (Dollars in thousands)  
Stock offering proceeds
  $ 25,500             $ 30,000             $ 34,500             $ 39,675          
 
                                                               
Less offering expenses
    1,356               1,398               1,439               1,486          
 
                                                       
Net offering proceeds (2)
  $ 24,144       100.0 %   $ 28,602       100.0 %   $ 33,061       100.0 %   $ 38,189       100.0 %
 
                                                       
 
                                                               
Use of net proceeds:
                                                               
To Standard Bank
  $ 12,072       50.0 %   $ 14,301       50.0 %   $ 16,531       50.0 %   $ 19,095       50.0 %
Cash contributed to foundation
  $ 200       0.8 %   $ 200       0.7 %   $ 200       0.6 %   $ 200       0.5 %
To fund loan to employee stock ownership plan
  $ 2,111       8.7 %   $ 2,484       8.6 %   $ 2,857       8.6 %   $ 3,285       8.6 %
Retained by Standard
  $ 9,761       40.5 %   $ 11,617       40.7 %   $ 13,474       40.8 %   $ 15,610       40.9 %
 
(1)   As adjusted to give effect to an increase in the number of shares, which could occur due to a 15% increase in the offering range to reflect demand for the shares or changes in market conditions following the commencement of the offering.
 
(2)   Assumes all shares of common stock are sold in the subscription offering.
     Payments for shares of common stock made through withdrawals from existing deposit accounts will not result in the receipt of new funds for investment but will result in a reduction of Standard Bank’s deposits. The net proceeds may vary because the total expenses relating to the offering may be more or less than our estimates. For example, our expenses would increase if a syndicated community offering were used to sell shares of common stock not purchased in the subscription and community offerings.
     Standard Financial Corp. may use the proceeds it retains from the offering:
    to invest in securities issued by the U.S. Government, U.S. Government agencies and/or U.S. Government sponsored enterprises, mortgage-backed securities and equities, collateralized mortgage obligations and municipal securities;
 
    to finance the acquisition of financial institutions or other financial service companies;
 
    to pay cash dividends to stockholders;
 
    to repurchase shares of our common stock; and
 
    for other general corporate purposes.
     With the exception of the funding of the loan to the employee stock ownership plan, Standard Financial Corp. has not quantified its plans for use of the offering proceeds for each of the foregoing

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purposes. Initially, we intend to invest a substantial portion of the net proceeds in short-term investments, investment-grade debt obligations and mortgage-backed securities.
     Standard Financial Corp. also intends to contribute $200,000 in cash and a number of shares of common stock with a value equal to 3.5% of the shares sold in the offering . Initially, a substantial portion of the net proceeds will be invested in short-term investments, investment-grade debt obligations and mortgage-backed securities.
     Under current regulations as implemented by the Pennsylvania Department of Banking and the Federal Reserve Board regulations, we may not repurchase shares of our common stock during the first year following the conversion, except to fund equity benefit plans other than stock options or except when extraordinary circumstances exist and with prior regulatory approval.
     Standard Bank may use the net proceeds it receives from the offering:
    to expand its banking franchise by establishing or acquiring new branches, or by acquiring other financial institutions or other financial services companies;
 
    to fund new loans;
 
    to repay borrowings;
 
    to invest in mortgage-backed securities and collateralized mortgage obligations, and debt securities issued by the U.S. Government, U.S. Government agencies and/or U.S. Government sponsored enterprises; and
 
    for other general corporate purposes.
     Standard Bank has not quantified its plans for use of the offering proceeds for each of the foregoing purposes. Our short-term and long-term growth plans anticipate that, upon completion of the offering, we will experience growth through increased lending and investment activities and, possibly, acquisitions. We currently have no understandings or agreements to acquire other banks, thrifts, or other financial services companies. There can be no assurance that we will be able to consummate any acquisition.
     Initially, the net proceeds we retain will be invested in short-term investments, investment-grade debt obligations and mortgage-backed securities.

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OUR POLICY REGARDING DIVIDENDS
     Following completion of the stock offering, our Board of Directors will have the authority to declare dividends on our shares of common stock, subject to statutory and regulatory requirements. However, no decision has been made with respect to the payment of dividends. In determining whether to pay a cash dividend and the amount of such cash dividend, the Board of Directors is expected to take into account a number of factors, including capital requirements, our consolidated financial condition and results of operations, tax considerations, statutory and regulatory limitations and general economic conditions. No assurances can be given that any dividends will be paid or that, if paid, will not be reduced or eliminated in the future. Special cash dividends, stock dividends or returns of capital, to the extent permitted by Pennsylvania Department of Banking policy and regulations, may be paid in addition to, or in lieu of, regular cash dividends. We will file a consolidated tax return with Standard Bank. Accordingly, it is anticipated that any cash distributions made by us to our stockholders would be treated as cash dividends and not as a non-taxable return of capital for federal and state tax purposes. Additionally, pursuant to Pennsylvania Department of Banking regulations, during the three-year period following the stock offering, we will not take any action to declare an extraordinary dividend to stockholders that would be treated by recipients as a tax-free return of capital for federal income tax purposes.
     Pursuant to our Certificate of Incorporation, we are authorized to issue preferred stock. If we issue preferred stock, the holders thereof may have a priority over the holders of our shares of common stock with respect to the payment of dividends. For a further discussion concerning the payment of dividends on our shares of common stock, see “Description of Capital Stock—Common Stock.” Initially, dividends we can declare and pay will depend upon the proceeds retained from the stock offering and the earnings received from the investment of those proceeds. In the future, dividends will depend in large part upon receipt of dividends from Standard Bank, because we expect to have limited sources of income other than dividends from Standard Bank and interest payments received in connection with the loan to the employee stock ownership plan. A regulation of the Pennsylvania Department of Banking imposes limitations on “capital distributions” by savings institutions. See “Supervision and Regulation—Banking Regulation—Capital Distributions.”
     Any payment of dividends by Standard Bank to us that would be deemed to be drawn out of Standard Bank’s bad debt reserves, if any, would require a payment of taxes at the then-current tax rate by Standard Bank on the amount of earnings deemed to be removed from the reserves for such distribution. Standard Bank does not intend to make any distribution to us that would create such a federal tax liability. See “Taxation—Federal Taxation” and “—State Taxation.”
MARKET FOR THE COMMON STOCK
     We have never issued capital stock and there is no established market for our shares of common stock. We expect that our shares of common stock will be listed for trading on the Nasdaq Capital Market under the symbol “STND,” subject to completion of the offering and compliance with certain conditions, including the presence of at least three registered and active market makers. Stifel, Nicolaus & Company has advised us that it intends to make a market in shares of our common stock following the offering, but it is under no obligation to do so or to continue to do so once it begins. While we will attempt before completion of the offering to obtain commitments from at least two other broker-dealers to make a market in shares of our common stock, there can be no assurance that we will be successful in obtaining such commitments.

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     The development and maintenance of a public market, having the desirable characteristics of depth, liquidity and orderliness, depends on the existence of willing buyers and sellers, the presence of which is not within our control or that of any market maker. The number of active buyers and sellers of shares of our common stock at any particular time may be limited, which may have an adverse effect on the price at which shares of our common stock can be sold. There can be no assurance that persons purchasing the shares of common stock will be able to sell their shares at or above the $10.00 offering purchase price per share. You should have a long-term investment intent if you purchase shares of our common stock and you should recognize that there may be a limited trading market in the shares of common stock.

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HISTORICAL AND PRO FORMA REGULATORY CAPITAL COMPLIANCE
     At March 31, 2010, Standard Bank exceeded all of the applicable regulatory capital requirements. The table below sets forth the historical equity capital and regulatory capital of Standard Bank at March 31, 2010, and the pro forma regulatory capital of Standard Bank, after giving effect to the sale of shares of common stock at a $10.00 per share purchase price. The table assumes the receipt by Standard Bank of 50% of the net offering proceeds. See “How We Intend to Use the Proceeds from the Offering.”
                                                                                 
    Standard Bank        
    Historical at March     Pro Forma at March 31, 2010, Based Upon the Sale in the Offering of (1)  
    31, 2010     2,550,000 Shares     3,000,000 Shares     3,450,000 Shares     3,967,500 Shares (2)  
            Percent of             Percent of             Percent of             Percent of             Percent of  
    Amount     Assets (3)     Amount     Assets (3)     Amount     Assets (3)     Amount     Assets (3)     Amount     Assets (3)  
    (Dollars in thousands)  
Equity (1)
  $ 43,013       10.67 %   $ 51,918       12.51 %   $ 53,588       12.84 %   $ 55,259       13.17 %   $ 57,180       13.55 %
 
                                                                               
Tier 1 leverage capital
  $ 32,365       8.44 %   $ 41,270       10.43 %   $ 42,940       10.79 %   $ 44,611       11.15 %   $ 46,532       11.56 %
Tier 1 leverage requirement (4)
    19,175       5.00       19,778       5.00       19,890       5.00       20,001       5.00       20,129       5.00  
 
                                                           
Excess
  $ 13,190       3.44 %   $ 21,492       5.43 %   $ 23,050       5.79 %   $ 24,610       6.15 %   $ 26,403       6.56 %
 
                                                           
 
                                                                               
Tier 1 risk-based capital (5)
  $ 32,365       13.23 %   $ 41,270       16.70 %   $ 42,940       17.35 %   $ 44,611       17.99 %   $ 46,532       18.72 %
Risk-based requirement
    14,682       6.00       14,826       6.00       14,853       6.00       14,880       6.00       14,911       6.00  
 
                                                           
Excess
  $ 17,683       7.23 %   $ 26,444       10.70 %   $ 28,087       11.35 %   $ 29,731       11.99 %   $ 31,621       12.72 %
 
                                                           
 
                                                                               
Total risk-based capital (5)
  $ 35,431       14.48 %   $ 44,336       17.94 %   $ 46,006       18.58 %   $ 47,677       19.22 %   $ 49,598       19.96 %
Risk-based requirement
    24,469       10.00       24,711       10.00       24,755       10.00       24,800       10.00       24,851       10.00  
 
                                                           
Excess
  $ 10,962       4.48 %   $ 19,625       7.94 %   $ 21,251       8.58 %   $ 22,877       9.22 %   $ 24,747       9.96 %
 
                                                           
 
                                                                               
Reconciliation of capital infused into Standard Bank:                                                                
Net proceeds   $ 12,072             $ 14,301             $ 16,531             $ 19,094          
Less: Common stock acquired by employee stock ownership plan
    (2,111 )             (2,484 )             (2,857 )             (3,285 )        
Less: Common stock acquired by the stock-based incentive plan
    (1,056 )             (1,242 )             (1,428 )             (1,643 )        
 
                                                           
Pro forma increase   $ 8,905             $ 10,575             $ 12,246             $ 14,166          
 
                                                           
 
(1)   Pro forma capital levels assume that the employee stock ownership plan purchases 8% of the shares of common stock to be outstanding immediately following the stock offering and issued to the charitable foundation with funds we lend. Pro forma Generally Accepted Accounting Principles (“GAAP”) and regulatory capital have been reduced by the amount required to fund this plan. See “Management of Standard Financial Corp.” for a discussion of the employee stock ownership plan.
 
(2)   As adjusted to give effect to an increase in the number of shares which could occur due to a 15% increase in the offering range to reflect demand for the shares or changes in market conditions following the commencement of the offering.
 
(3)   Tier 1 leverage levels are shown as a percentage of average adjusted assets. Risk-based capital levels are shown as a percentage of risk-weighted assets.
 
(4)   Required capital ratio reflects “well capitalized” under prompt corrective action regulations. The current Pennsylvania Department of Banking capital requirement for financial institutions is 3% of total adjusted assets for financial institutions that receive the highest supervisory rating for safety and soundness and a 4% to 5% core capital ratio requirement for all other financial institutions.
 
(5)   Required capital ratio reflects “well capitalized” under prompt corrective action regulations. Pro forma amounts and percentages assume net proceeds are invested in assets that carry a 50% risk weighting.

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CAPITALIZATION
     The following table presents the historical consolidated capitalization of Standard Mutual Holding Company at March 31, 2010 and the pro forma consolidated capitalization of Standard Financial Corp., after giving effect to the conversion and the offering, based upon the assumptions set forth in the “Pro Forma Data” section.
                                         
    Standard        
    Mutual Holding     Standard Financial Corp. Pro Forma,  
    Company     Based Upon the Sale in the Offering at $10.00 per Share of  
    Historical at     2,550,000     3,000,000     3,450,000     3,967,500  
    March 31, 2010     Shares     Shares     Shares     Shares (1)  
    (Dollars in thousands)  
Deposits (2)
  $ 311,196     $ 311,196     $ 311,196     $ 311,196     $ 311,196  
Borrowings
    44,983       44,983       44,983       44,983       44,983  
 
                             
Total deposits and borrowed funds
  $ 356,179     $ 356,179     $ 356,179     $ 356,179     $ 356,179  
 
                             
 
                                       
Stockholders’ equity:
                                       
Preferred stock $0.01 par value, 10,000,000 shares authorized; none issued or outstanding
  $     $     $     $     $  
Common stock $0.01 par value, 40,000,000 shares authorized; assuming shares outstanding as shown (3)(4)
          26       31       36       41  
Additional paid-in capital (4)
          25,010       29,621       34,233       39,536  
Retained earnings (5)
    42,675       42,675       42,675       42,675       42,675  
 
                                       
Less:
                                       
Accumulated other comprehensive income
    886       886       886       886       886  
After-tax expense of contribution to charitable foundation (6)
          (719 )     (823 )     (926 )     (1,045 )
Common stock to be acquired by employee stock ownership plan (7)
          (2,111 )     (2,484 )     (2,857 )     (3,285 )
Common stock to be acquired by stock-based benefit plans (8)
          (1,056 )     (1,242 )     (1,428 )     (1,643 )
 
                             
Total stockholders’ equity
  $ 43,561     $ 64,711     $ 68,665     $ 72,619     $ 77,165  
 
                             
Pro forma shares outstanding:
                                       
Shares issued to charitable foundation
          89,250       105,000       120,750       138,863  
Shares offered for sale
          2,550,000       3,000,000       3,450,000       3,967,500  
 
                             
Total shares outstanding
          2,639,250       3,105,000       3,570,750       4,106,363  
 
                             
Total stockholders’ equity as a percentage of total assets (2)
    10.80 %     15.25 %     16.03 %     16.80 %     17.67 %
Tangible equity as a percent of assets
    8.40 %     12.96 %     13.76 %     14.55 %     15.44 %
 
(1)   As adjusted to give effect to an increase in the number of shares of common stock that could occur due to a 15% increase in the offering range to reflect demand for shares or changes in market conditions following the commencement of the subscription and community offerings.
 
(2)   Does not reflect withdrawals from deposit accounts for the purchase of shares of common stock in the conversion and offering. These withdrawals would reduce pro forma deposits and assets by the amount of the withdrawals.
 
(3)   No effect has been given to the issuance of additional shares of Standard Financial Corp. common stock pursuant to one or more stock-based benefit plans. If these plans are implemented within 12 months following the completion of the stock offering, an amount up to 10% and 4% of the shares of Standard Financial Corp. common stock sold in the offering and issued to the charitable foundation will be reserved for issuance upon the exercise of stock options and for issuance as restricted stock awards, respectively. See “Management of Standard Financial Corp.”
 
(4)   The sum of the par value of the total shares outstanding and additional paid-in capital equals the net stock offering proceeds at the offering price of $10.00 per share.
 
(5)   The retained earnings of Standard Bank will be substantially restricted after the conversion. See “Our Policy Regarding Dividends,” “The Conversion—Liquidation Rights” and “Supervision and Regulation.”
(footnotes continue on next page)

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(footnotes continued from previous page)
 
(6)   Represents the expense of the contribution to the charitable foundation based on a 34.2% tax rate. The realization of the deferred tax benefit is limited annually to a maximum deduction for charitable foundations equal to 10% of our annual taxable income, subject to our ability to carry forward for federal or state purposes any unused portion of the deduction for the five years following the year in which the contribution is made.
 
(7)   Assumes that 8% of the shares sold in the offering and issued to the charitable foundation will be acquired by the employee stock ownership plan financed by a loan from Standard Financial Corp. The loan will be repaid principally from Standard Bank’s contributions to the employee stock ownership plan. Since Standard Financial Corp. will finance the employee stock ownership plan debt, this debt will be eliminated through consolidation and no asset or liability will be reflected on Standard Financial Corp.’s consolidated financial statements. Accordingly, the amount of shares of common stock acquired by the employee stock ownership plan is shown in this table as a reduction of total stockholders’ equity.
 
(8)   Assumes a number of shares of common stock equal to 4% of the shares of common stock to be sold in the offering and issued to the charitable foundation will be purchased for grant by one or more stock-based benefit plans in open market purchases. The dollar amount of common stock to be purchased is based on the $10.00 per share subscription price in the offering and represents unearned compensation. This amount does not reflect possible increases or decreases in the value of common stock relative to the subscription price in the offering. As Standard Financial Corp. accrues compensation expense to reflect the vesting of shares pursuant to the stock-based benefit plans, the credit to equity will be offset by a charge to noninterest expense. Implementation of the stock stock-based benefit plans will require stockholder approval. The funds to be used by the stock-based benefit plans will be provided by Standard Financial Corp.

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PRO FORMA DATA
     The following tables summarize historical data of Standard Mutual Holding Company and pro forma data of Standard Financial Corp. at and for the six months ended March 31, 2010 and at and for the fiscal year ended September 30, 2009. This information is based on assumptions set forth below and in the table, and should not be used as a basis for projections of market value of the shares of common stock following the conversion and offering.
     The net proceeds in the tables are based upon the following assumptions:
    all shares of common stock will be sold in the subscription offering;
 
    160,000 shares of common stock will be purchased by our executive officers and directors, and their associates;
 
    our employee stock ownership plan will purchase 8% of the shares of common stock sold in the stock offering and contributed to the charitable foundation with a loan from Standard Financial Corp. The loan will be repaid in substantially equal payments of principal and interest (at the prime rate of interest, adjusted annually) over a period of 20 years. Interest income that Standard Financial Corp. will earn on the loan will offset the interest paid on the loan by Standard Bank;
 
    Stifel, Nicolaus & Company will receive a fee equal to 1.0% of the dollar amount of the shares of common stock sold in the subscription offering. Shares purchased by our employee benefit plans or by our officers, directors and employees, and their immediate families and shares issued to our charitable foundation will not be included in calculating the shares of common stock sold for this purpose; and
 
    expenses of the stock offering, other than fees and expenses to be paid to Stifel, Nicolaus & Company, will be $948,500.
     We calculated pro forma consolidated net income for the six months ended March 31, 2010 and the fiscal year ended September 30, 2009 as if the estimated net proceeds we received had been invested at an assumed interest rate of 2.55% (1.68% on an after-tax basis). This represents the yield on the five-year U.S. Treasury Note as of March 31, 2010, which, in light of current market interest rates, we consider to more accurately reflect the pro forma reinvestment rate than the arithmetic average of the weighted average yield earned on our interest earning assets and the weighted average rate paid on our deposits, which is the reinvestment rate generally utilized by Pennsylvania Department of Banking and the Federal Reserve Board regulations.
     We calculated historical and pro forma per share amounts by dividing historical and pro forma amounts of consolidated net income and stockholders’ equity by the indicated number of shares of common stock. We adjusted these figures to give effect to the shares of common stock purchased by the employee stock ownership plan. We computed per share amounts for each period as if the shares of common stock were outstanding at the beginning of each period, but we did not adjust per share historical or pro forma stockholders’ equity to reflect the earnings on the estimated net proceeds.
     The pro forma tables give effect to the implementation of one or more stock-based benefit plans. Subject to the receipt of stockholder approval, we have assumed that the stock-based benefit plans will acquire for restricted stock awards a number of shares of common stock equal to 4% of our outstanding

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shares of common stock at the same price for which they were sold in the stock offering. We assume that shares of common stock are granted under the plans in awards that vest over a five-year period.
     We have also assumed that the stock-based benefit plans will grant options to acquire shares of common stock equal to 10% of our outstanding shares of common stock sold in the stock offering and issued to the charitable foundation. In preparing the tables below, we assumed that stockholder approval was obtained, that the exercise price of the stock options and the market price of the stock at the date of grant were $10.00 per share and that the stock options had a term of ten years and vested over five years. We applied the Black-Scholes option pricing model to estimate a grant-date fair value of $2.97 for each option. In addition to the terms of the options described above, the Black-Scholes option pricing model assumed an estimated volatility rate of 23.90% for the shares of common stock, a dividend yield of 2.0%, an expected option life of 10 years and a risk-free interest rate of 3.84%. Because there is currently no market for our shares of common stock, the assumed expected volatility is based on the SNL Securities index for all publicly-traded thrift institutions and their holding companies. The dividend yield reflects the average dividend yield for publicly traded thrifts.
     We may grant options and award shares of common stock under one or more stock-based benefit plans in excess of 10% and 4%, respectively, of our total outstanding shares if the stock-based benefit plans are adopted more than one year following the stock offering. In addition, we may grant options and award shares that vest sooner than over a five-year period if the stock-based benefit plans are adopted more than one year following the stock offering.
     As discussed under “How We Intend to Use the Proceeds from the Stock Offering,” we intend to contribute at least 50% of the net proceeds from the stock offering to Standard Bank, and we will retain the remainder of the net proceeds from the stock offering. We will use a portion of the proceeds we retain for the purpose of making a loan to the employee stock ownership plan and retain the rest of the proceeds for future use.
     The pro forma table does not give effect to:
    withdrawals from deposit accounts for the purpose of purchasing shares of common stock in the stock offering;
 
    our results of operations after the stock offering; or
 
    changes in the market price of the shares of common stock after the stock offering.
     The following pro forma information may not represent the financial effects of the stock offering at the date on which the stock offering actually occurs and you should not use the table to indicate future results of operations. Pro forma stockholders’ equity represents the difference between the stated amount of our assets and liabilities, computed in accordance with GAAP. We did not increase or decrease stockholders’ equity to reflect the difference between the carrying value of loans and other assets and their market value. Pro forma stockholders’ equity is not intended to represent the fair market value of the shares of common stock and may be different than the amounts that would be available for distribution to stockholders if we liquidated. Pro forma stockholders’ equity does not give effect to the impact of intangible assets, the liquidation account we will establish in the conversion or tax bad debt reserves in the unlikely event we are liquidated.

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    At or For the Six Months Ended March 31, 2010  
    Based Upon the Sale at $10.00 Per Share of  
    2,550,000     3,000,000     3,450,000     3,967,500  
    Shares     Shares     Shares     Shares (1)  
    (Dollars in thousands, except per share amounts)  
Gross proceeds of stock offering
  $ 25,500     $ 30,000     $ 34,500     $ 39,675  
Market value of shares issued to charitable foundation
    893       1,050       1,208       1,389  
 
                       
Pro forma market capitalization
  $ 26,393     $ 31,050     $ 35,708     $ 41,064  
 
                       
 
                               
Gross proceeds of stock offering
  $ 25,500     $ 30,000     $ 34,500     $ 39,675  
Less: expenses
    1,356       1,398       1,439       1,486  
 
                       
Estimated net proceeds
    24,144       28,602       33,061       38,189  
Less: Common stock purchased by ESOP (2)
    (2,111 )     (2,484 )     (2,857 )     (3,285 )
Less: Cash contribution to charitable foundation
    (200 )     (200 )     (200 )     (200 )
Less: Common stock awarded under stock-based benefit plans (3)
    (1,056 )     (1,242 )     (1,428 )     (1,643 )
 
                       
Estimated net cash proceeds
  $ 20,777     $ 24,676     $ 28,576     $ 33,061  
 
                       
 
                               
For the Six Months Ended March 31, 2010
                               
Consolidated net income:
                               
Historical
  $ 1,539     $ 1,539     $ 1,539     $ 1,539  
Pro forma income on net proceeds
    175       208       240       277  
Pro forma ESOP adjustment(2)
    (35 )     (41 )     (47 )     (54 )
Pro forma stock award adjustment (3)
    (70 )     (82 )     (94 )     (108 )
Pro forma stock option adjustment (4)
    (72 )     (84 )     (97 )     (112 )
 
                       
Pro forma net income
  $ 1,537     $ 1,540     $ 1,541     $ 1,542  
 
                       
 
                               
Per share net income:
                               
Historical
  $ 0.63     $ 0.54     $ 0.47     $ 0.41  
Pro forma income on net proceeds
    0.07       0.07       0.07       0.07  
Pro forma ESOP adjustment (2)
    (0.01 )     (0.01 )     (0.01 )     (0.01 )
Pro forma stock award adjustment (3)
    (0.03 )     (0.03 )     (0.03 )     (0.03 )
Pro forma stock option adjustment (4)
    (0.03 )     (0.03 )     (0.03 )     (0.03 )
 
                       
Pro forma net income per share (5)
  $ 0.63     $ 0.54     $ 0.47     $ 0.41  
 
                       
 
                               
Stock price as a multiple of pro forma net income per share
    7.94 x     9.26 x     10.64 x     12.20 x
Number of shares outstanding for pro forma net net income per share calculations (5)
    2,433,389       2,862,810       3,292,232       3,786,066  
 
                               
At March 31, 2010
                               
Stockholders’ equity:
                               
Historical
  $ 43,561     $ 43,561     $ 43,561     $ 43,561  
Estimated net proceeds
    24,144       28,602       33,061       38,189  
Stock contribution to charitable foundation
    893       1,050       1,208       1,389  
Tax benefit of contribution of charitable foundation
    374       428       481       543  
Less: Common stock acquired by ESOP (2)
    (2,111 )     (2,484 )     (2,857 )     (3,285 )
Less: Common stock awarded under stock-based benefit plans (3) (4)
    (1,056 )     (1,242 )     (1,428 )     (1,643 )
Less: After-tax effect of contribution to charitable foundation
    (1,093 )     (1,250 )     (1,408 )     (1,589 )
 
                       
Pro forma stockholders’ equity (6)
    64,711       68,665       72,619       77,165  
Intangible assets
    (9,708 )     (9,708 )     (9,708 )     (9,708 )
 
                       
Pro form tangible stockholders equity
  $ 55,003     $ 58,957     $ 62,911     $ 67,457  
 
                       
 
                               
Stockholders’ equity per share:
                               
Historical
  $ 16.50     $ 14.02     $ 12.20     $ 10.61  
Estimated net proceeds
    9.15       9.21       9.26       9.30  
Stock contribution to charitable foundation
    0.34       0.34       0.34       0.34  
Tax benefit of contribution to charitable foundation
    0.14       0.14       0.13       0.13  
Less: Common stock acquired by ESOP (2)
    (0.80 )     (0.80 )     (0.80 )     (0.80 )
Less: Common stock awarded under stock-based benefit plans (3) (4)
    (0.40 )     (0.40 )     (0.40 )     (0.40 )
Less: After-tax effect of contribution to charitable foundation
    (0.41 )     (0.40 )     (0.39 )     (0.39 )
 
                       
Pro forma stockholders’ equity per share (6)
    24.52       22.11       20.34       18.79  
Intangible assets
    (3.68 )     (3.13 )     (2.72 )     (2.36 )
 
                       
Pro forma tangible stockholders equity
  $ 20.84     $ 18.98     $ 17.62     $ 16.43  
 
                       
 
                               
Offering price as percentage of equity per share
    40.78 %     45.23 %     49.16 %     53.22 %
Offering price as percentage of tangible equity per share
    47.98 %     52.69 %     56.75 %     60.86 %
Number of shares outstanding for pro forma book value per share calculations (7)
    2,639,250       3,105,000       3,570,750       4,106,363  
(footnotes begin on following page)

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(Footnotes from previous page)
 
(1)   As adjusted to give effect to an increase in the number of shares which could occur due to a 15% increase in the offering range to reflect demand for the shares or changes in market conditions following the commencement of the offering.
 
(2)   Assumes that 8% of shares of common stock sold in the offering and issued to the charitable foundation will be purchased by the employee stock ownership plan. For purposes of this table, the funds used to acquire these shares are assumed to have been borrowed by the employee stock ownership plan from Standard Financial Corp. Standard Bank intends to make annual contributions to the employee stock ownership plan in an amount at least equal to the required principal and interest payments on the debt. Standard Bank’s total annual payments on the employee stock ownership plan debt are based upon 20 equal annual installments of principal and interest. (Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 718-40 requires that an employer record compensation expense in an amount equal to the fair value of the shares committed to be released to employees.) The pro forma adjustments assume that the employee stock ownership plan shares are allocated in equal annual installments based on the number of loan repayment installments assumed to be paid by Standard Bank, the fair value of the common stock remains equal to the subscription price and the employee stock ownership plan expense reflects an effective combined federal and state tax rate of 34.2%. The unallocated employee stock ownership plan shares are reflected as a reduction of stockholders’ equity. No reinvestment is assumed on proceeds contributed to fund the employee stock ownership plan. The pro forma net income further assumes that 5,279, 6,210, 7,142 and 8,213 shares were committed to be released during the six month period. At the minimum, midpoint, maximum, and adjusted maximum of the offering range, respectively, and in accordance with ASC 718-40, only the employee stock ownership plan shares committed to be released during the period were considered outstanding for purposes of income per share calculations.
 
(3)   If approved by Standard Financial Corp.’s stockholders, one or more stock-based benefit plans plan may purchase an aggregate number of shares of common stock equal to 4% of the shares to be sold in the offering and issued to the charitable foundation (or possibly a greater number of shares if the plan is implemented more than one year after completion of the conversion). Stockholder approval of the stock-based benefit plans, and purchases by the plan may not occur earlier than six months after the completion of the conversion. The shares may be acquired directly from Standard Financial Corp. or through open market purchases. The funds to be used by the stock-based benefit plans to purchase the shares will be provided by Standard Financial Corp. The table assumes that (i) the stock-based benefit plans acquire the shares through open market purchases at $10.00 per share, (ii) 10% of the amount contributed to the stock-based benefit plans is amortized as an expense during the six month period and (iii) the stock-based benefit plans expense reflects an effective combined federal and state tax rate of 34.2%. Assuming stockholder approval of the stock-based benefit plans and that shares of common stock (equal to 4% of the shares sold in the offering and issued to the charitable foundation) are awarded through the use of authorized but unissued shares of common stock, stockholders would have their ownership and voting interests diluted by approximately 3.85%.
 
(4)   If approved by Standard Financial Corp.’s stockholders, one or more stock-based benefit plans may grant options to acquire an aggregate number of shares of common stock equal to 10% of the shares to be sold in the offering and issued to the charitable foundation (or possibly a greater number of shares if the plan is implemented more than one year after completion of the conversion). Stockholder approval of the stock-based benefit plans may not occur earlier than six months after the completion of the conversion. In calculating the pro forma effect of the stock options to be granted under stock-based benefit plans, it is assumed that the exercise price of the stock options and the trading price of the common stock at the date of grant were $10.00 per share, the estimated grant-date fair value determined using the Black-Scholes option pricing model was $2.97 for each option, the aggregate grant-date fair value of the stock options was amortized to expense on a straight-line basis over a five-year vesting period of the options with 25% of option expense deductible for tax purposes. The actual expense of the stock options to be granted under the stock-based benefit plans will be determined by the grant-date fair value of the options, which will depend on a number of factors, including the valuation assumptions used in the option pricing model ultimately adopted. Under the above assumptions, the adoption of the stock-based benefit plans will result in no additional shares under the treasury stock method for purposes of calculating net income per share. There can be no assurance that the actual exercise price of the stock options will be equal to the $10.00 price per share. If a portion of the shares to satisfy the exercise of options under the stock-based benefit plans is obtained from the issuance of authorized but unissued shares, our net income per share and stockholders’ equity per share would decrease. Assuming shares of common stock used to fund stock options (equal to 10% of the shares sold in the offering and issued to the charitable foundation) are awarded through the use of authorized but unissued shares of common stock, stockholders would have their ownership and voting interests diluted by approximately 9.09%.
 
(5)   Net income per share computations are determined by taking the number of shares assumed to be sold in the offering and issued to the charitable foundation and, in accordance with ASC 718-40, subtracting the employee stock ownership plan shares that have not been committed for release during the period and subtracting non-vested stock awards granted under one or more stock-based benefit plans. See note 2, above.
 
(6)   The retained earnings of Standard Bank will be substantially restricted after the conversion. See “Our Policy Regarding Dividends,” “The Conversion—Liquidation Rights” and “Supervision and Regulation.”
 
(7)   The number of shares used to calculate pro forma stockholders’ equity per share is equal to the total number of shares to be outstanding upon completion of the offering.

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    At or For the Fiscal Year Ended September 30, 2009  
    Based Upon the Sale at $10.00 Per Share of  
    2,550,000     3,000,000     3,450,000     3,967,500  
    Shares     Shares     Shares     Shares (1)  
    (Dollars in thousands, except per share amounts)  
Gross proceeds of stock offering
  $ 25,500     $ 30,000     $ 34,500     $ 39,675  
Market value of shares issued to charitable foundation
    893       1,050       1,208       1,389  
 
                       
Pro forma market capitalization
  $ 26,393     $ 31,050     $ 35,708     $ 41,064  
 
                       
 
                               
Gross proceeds of stock offering
  $ 25,500     $ 30,000     $ 34,500     $ 39,675  
Less: expenses
    (1,356 )     (1,398 )     (1,439 )     (1,486 )
 
                       
Estimated net proceeds
    24,144       28,602       33,061       38,189  
Less: Common stock purchased by ESOP (2)
    (2,111 )     (2,484 )     (2,857 )     (3,285 )
Less: Cash contribution to charitable foundation
    (200 )     (200 )     (200 )     (200 )
Less: Common stock awarded under stock-based benefit plans (3)
    (1,056 )     (1,242 )     (1,428 )     (1,643 )
 
                       
Estimated net cash proceeds
  $ 20,777     $ 24,676     $ 28,576     $ 33,061  
 
                       
 
                               
For the Fiscal Year Ended September 30, 2009
                               
Consolidated net income:
                               
Historical
  $ 2,144     $ 2,144     $ 2,144     $ 2,144  
Pro forma income on net proceeds
    349       414       480       555  
Pro forma ESOP adjustment(2)
    (70 )     (82 )     (94 )     (108 )
Pro forma stock award adjustment (3)
    (139 )     (163 )     (188 )     (216 )
Pro forma stock option adjustment (4)
    (143 )     (169 )     (194 )     (223 )
 
                       
Pro forma net income
  $ 2,141     $ 2,144     $ 2,148     $ 2,151  
 
                       
 
                               
Per share net income:
                               
Historical
  $ 0.89     $ 0.76     $ 0.65     $ 0.57  
Pro forma income on net proceeds
    0.14       0.14       0.15       0.15  
Pro forma ESOP adjustment (2)
    (0.03 )     (0.03 )     (0.03 )     (0.03 )
Pro forma stock award adjustment (3)
    (0.06 )     (0.06 )     (0.06 )     (0.06 )
Pro forma stock option adjustment (4)
    (0.06 )     (0.06 )     (0.06 )     (0.06 )
 
                       
Pro forma net income per share (5)
  $ 0.88     $ 0.75     $ 0.65     $ 0.57  
 
                       
 
                               
Stock price as a multiple of pro forma net income per share
    11.36     13.33 x     15.38 x     17.54 x
Number of shares outstanding for pro forma net income per share calculations (5)
    2,438,667       2,869,020       3,299,373       3,794,279  
 
                               
At September 30, 2009
                               
Stockholders’ equity:
                               
Historical
  $ 42,168     $ 42,168     $ 42,168     $ 42,168  
Estimated net proceeds
    24,144       28,602       33,061       38,189  
Stock contribution to charitable foundation
    893       1,050       1,208       1,389  
Tax benefit of contribution of charitable foundation
    374       428       481       543  
Less: Common stock acquired by ESOP (2)
    (2,111 )     (2,484 )     (2,857 )     (3,285 )
Less: Common stock awarded under stock-based benefit plans (3) (4)
    (1,056 )     (1,242 )     (1,428 )     (1,643 )
Less: After-tax effect of contribution to charitable foundation
    (1,093 )     (1,250 )     (1,408 )     (1,589 )
 
                       
Pro forma stockholders’ equity (6)
    63,318       67,272       71,226       75,772  
Intangible assets
    (9,791 )     (9,791 )     (9,791 )     (9,791 )
 
                       
Pro form tangible stockholders equity
  $ 53,527     $ 57,481     $ 61,435     $ 65,981  
 
                       
 
                               
Stockholders’ equity per share:
                               
Historical
  $ 15.97     $ 13.58     $ 11.81     $ 10.27  
Estimated net proceeds
    9.15       9.21       9.26       9.30  
Stock contribution to charitable foundation
    0.34       0.34       0.34       0.34  
Tax benefit of contribution to charitable foundation
    0.14       0.14       0.13       0.13  
Less: Common stock acquired by ESOP (2)
    (0.80 )     (0.80 )     (0.80 )     (0.80 )
Less: Common stock awarded under stock-based benefit plans (3) (4)
    (0.40 )     (0.40 )     (0.40 )     (0.40 )
Less: After-tax effect of contribution to charitable foundation
    (0.41 )     (0.41 )     (0.39 )     (0.39 )
 
                       
Pro forma stockholders’ equity per share (6)
    23.99       21.67       19.95       18.45  
Intangible assets
    (3.71 )     (3.15 )     (2.74 )     (2.38 )
 
                       
Pro forma tangible stockholders equity
  $ 20.28     $ 18.52     $ 17.21     $ 16.07  
 
                       
 
                               
Offering price as percentage of equity per share
    41.68 %     46.15 %     50.13 %     54.20 %
Offering price as percentage of tangible equity per share
    49.31 %     54.00 %     58.11 %     62.23 %
Number of shares outstanding for pro forma book value per share calculations (7)
    2,639,250       3,105,000       3,570,750       4,106,363  
(footnotes begin on following page)

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(Footnotes from previous page)
 
(1)   As adjusted to give effect to an increase in the number of shares which could occur due to a 15% increase in the offering range to reflect demand for the shares or changes in market conditions following the commencement of the offering.
 
(2)   Assumes that 8% of shares of common stock sold in the offering and issued to the charitable foundation will be purchased by the employee stock ownership plan. For purposes of this table, the funds used to acquire these shares are assumed to have been borrowed by the employee stock ownership plan from Standard Financial Corp. Standard Bank intends to make annual contributions to the employee stock ownership plan in an amount at least equal to the required principal and interest payments on the debt. Standard Bank’s total annual payments on the employee stock ownership plan debt are based upon 20 equal annual installments of principal and interest. ASC 718-40 requires that an employer record compensation expense in an amount equal to the fair value of the shares committed to be released to employees. The pro forma adjustments assume that the employee stock ownership plan shares are allocated in equal annual installments based on the number of loan repayment installments assumed to be paid by Standard Bank, the fair value of the common stock remains equal to the subscription price and the employee stock ownership plan expense reflects an effective combined federal and state tax rate of 34.2%. The unallocated employee stock ownership plan shares are reflected as a reduction of stockholders’ equity. No reinvestment is assumed on proceeds contributed to fund the employee stock ownership plan. The pro forma net income further assumes that 10,557, 12,420, 14,283 and 16,425 shares were committed to be released during the fiscal year at the minimum, midpoint, maximum, and adjusted maximum of the offering range, respectively, and in accordance with ASC 718-40, only the employee stock ownership plan shares committed to be released during the period were considered outstanding for purposes of income per share calculations.
 
(3)   If approved by Standard Financial Corp.’s stockholders, one or more stock-based benefit plans plan may purchase an aggregate number of shares of common stock equal to 4% of the shares to be sold in the offering and issued to the charitable foundation (or possibly a greater number of shares if the plan is implemented more than one year after completion of the conversion). Stockholder approval of the stock-based benefit plans, and purchases by the plan may not occur earlier than six months after the completion of the conversion. The shares may be acquired directly from Standard Financial Corp. or through open market purchases. The funds to be used by the stock-based benefit plans to purchase the shares will be provided by Standard Financial Corp. The table assumes that (i) the stock-based benefit plans acquire the shares through open market purchases at $10.00 per share, (ii) 10% of the amount contributed to the stock-based benefit plans is amortized as an expense during the fiscal year end and (iii) the stock-based benefit plans expense reflects an effective combined federal and state tax rate of 34.2%. Assuming stockholder approval of the stock-based benefit plans and that shares of common stock (equal to 4% of the shares sold in the offering and issued to the charitable foundation) are awarded through the use of authorized but unissued shares of common stock, stockholders would have their ownership and voting interests diluted by approximately 3.85%.
 
(4)   If approved by Standard Financial Corp.’s stockholders, one or more stock-based benefit plans may grant options to acquire an aggregate number of shares of common stock equal to 10% of the shares to be sold in the offering and issued to the charitable foundation (or possibly a greater number of shares if the plan is implemented more than one year after completion of the conversion). Stockholder approval of the stock-based benefit plans may not occur earlier than six months after the completion of the conversion. In calculating the pro forma effect of the stock options to be granted under stock-based benefit plans, it is assumed that the exercise price of the stock options and the trading price of the common stock at the date of grant were $10.00 per share, the estimated grant-date fair value determined using the Black-Scholes option pricing model was $2.97 for each option, the aggregate grant-date fair value of the stock options was amortized to expense on a straight-line basis over a five-year vesting period of the options with 25% of option expense deductible for tax purposes. The actual expense of the stock options to be granted under the stock-based benefit plans will be determined by the grant-date fair value of the options, which will depend on a number of factors, including the valuation assumptions used in the option pricing model ultimately adopted. Under the above assumptions, the adoption of the stock-based benefit plans will result in no additional shares under the treasury stock method for purposes of calculating net income per share. There can be no assurance that the actual exercise price of the stock options will be equal to the $10.00 price per share. If a portion of the shares to satisfy the exercise of options under the stock-based benefit plans is obtained from the issuance of authorized but unissued shares, our net income per share and stockholders’ equity per share would decrease. Assuming shares of common stock used to fund stock options (equal to 10% of the shares sold in the offering and issued to the charitable foundation) are awarded through the use of authorized but unissued shares of common stock, stockholders would have their ownership and voting interests diluted by approximately 9.09%.
 
(5)   Net income per share computations are determined by taking the number of shares assumed to be sold in the offering and issued to the charitable foundation and, in accordance with ASC 718-40, subtracting the employee stock ownership plan shares that have not been committed for release during the period and subtracting non-vested stock awards granted under one or more stock-based benefit plans. See note 2, above.
 
(6)   The retained earnings of Standard Bank will be substantially restricted after the conversion. See “Our Policy Regarding Dividends,” “The Conversion—Liquidation Rights” and “Supervision and Regulation.”
 
(7)   The number of shares used to calculate pro forma stockholders’ equity per share is equal to the total number of shares to be outstanding upon completion of the offering.

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COMPARISON OF VALUATION AND PRO FORMA INFORMATION WITH AND WITHOUT THE CHARITABLE FOUNDATION
     As reflected in the table below, if the charitable foundation is not established and funded as part of the stock offering, RP Financial, LC. estimates that our pro forma valuation would be greater and, as a result, a greater number of shares of common stock would be issued in the stock offering. At the minimum, midpoint, maximum and adjusted maximum of the valuation range, our pro forma stock offering is $25.5 million, $30.0 million, $34.5 million and $39.7 million with the charitable foundation, as compared to $27.1 million, $31.9 million, $36.6 million and $42.1 million, respectively, without the charitable foundation. There is no assurance that in the event the charitable foundation were not formed, the appraisal prepared at that time would conclude that our pro forma market value would be the same as that estimated in the table below. Any appraisal prepared at that time would be based on the facts and circumstances existing at that time, including, among other things, market and economic conditions.
     For comparative purposes only, set forth below are certain pricing ratios and financial data and ratios at and for the six months ended March 31, 2010 at the minimum, midpoint, maximum and adjusted maximum of the offering range, assuming the stock offering was completed at the beginning of the six-month period, with and without the charitable foundation.
                                                                 
                                                     
                                                    Adjusted Maximum of  
    Minimum of Offering Range     Midpoint of Offering Range     Maximum of Offering Range     Offering Range  
    With Foundation     Without Foundation     With Foundation     Without Foundation     With Foundation     Without Foundation     With Foundation     Without Foundation  
                            (Dollars in thousands, except per share amounts)                          
Estimated stock offering amount
  $ 25,500     $ 27,073     $ 30,000     $ 31,850     $ 34,500     $ 36,628     $ 39,675     $ 42,122  
Estimated full value
    26,393       27,073       31,050       31,850       35,708       36,628       41,064       42,122  
Total assets
    424,359       425,661       428,313       429,822       432,267       433,982       436,813       438,766  
Total liabilities
    359,648       359,648       359,648       359,648       359,648       359,648       359,648       359,648  
Pro forma stockholders’ equity
    64,711       66,013       68,665       70,174       72,619       74,334       77,165       79,118  
Pro forma tangible stockholders’ equity
    55,003       56,305       58,957       60,466       62,911       64,626       67,457       69,410  
Pro forma net income
    1,537       1,547       1,539       1,550       1,541       1,553       1,543       1,557  
Pro forma stockholders’ equity per share
    24.52       24.38       22.11       22.03       20.34       20.29       18.79       18.78  
Pro forma tangible stockholders’ equity per share
    20.84       20.79       18.98       18.98       17.62       17.64       16.43       16.48  
Pro forma net income per share
    0.63       0.62       0.54       0.53       0.47       0.46       0.41       0.40  
Pro forma pricing ratios:
                                                               
Offering price as a percentage of pro forma stockholders’ equity per share
    40.78 %     41.02 %     45.23 %     45.39 %     49.16 %     49.29 %     53.22 %     53.25 %
Offering price as a percentage of pro forma tangible stockholders’ equity per share
    47.98 %     48.10 %     52.69 %     52.69 %     56.75 %     56.69 %     60.86 %     60.68 %
Offering price to pro forma net income per share
    7.94 x     8.06 x     9.26 x     9.43 x     10.64 x     10.87 x     12.20 x     12.50 x
Pro forma financial ratios:
                                                               
Return on assets (annualized)
    0.72 %     0.73 %     0.72 %     0.72 %     0.71 %     0.72 %     0.71 %     0.71 %
Return on equity (annualized)
    4.75 %     4.69 %     4.48 %     4.42 %     4.24 %     4.18 %     4.00 %     3.93 %
Equity to assets
    15.25 %     15.51 %     16.03 %     16.33 %     16.80 %     17.13 %     17.67 %     18.03 %
Tangible equity ratio
    12.96 %     13.23 %     13.76 %     14.07 %     14.55 %     14.89 %     15.44 %     15.82 %

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
     This section is intended to help potential investors understand our financial performance through a discussion of the factors affecting our financial condition at March 31, 2010 and 2009, and our consolidated results of operations for the fiscal years ended September 30, 2009 and 2008. This section should be read in conjunction with the Consolidated Financial Statements and notes to the consolidated financial statements that appear elsewhere in this prospectus.
Overview
     Historically, we have operated as a traditional community savings bank. At March 31, 2010, $139.0 million, or 49.1% of our loan portfolio, consisted of longer-term, one- to four-family residential real estate loans, of which $98.9 million, or 71.1%, were fixed rate loans and $40.1 million, or 28.9% were adjustable rate loans. This resulted in our being particularly vulnerable to increases in interest rates, as our interest-bearing liabilities mature or reprice more quickly than our interest-earning assets. However, in recent years, we have increased our focus on the origination of commercial real estate loans, which generally provide higher returns than one- to four-family residential mortgage loans, have shorter durations and are usually originated with adjustable interest rates.
     Our emphasis on conservative loan underwriting has resulted in comparatively low levels of non-performing assets at a time when many financial institutions are experiencing significant asset quality issues. Our non-performing assets totaled $1.7 million, or 0.41%, of total assets at March 31, 2010, compared to $2.3 million or 0.61% of total assets at September 30, 2009. We had $1.7 million of loans delinquent 60 days or greater at March 31, 2010, compared to $2.6 million of such delinquencies at September 30, 2009. In addition, we provided $429,000 for loan losses during the six months ended March 31, 2010 and $1.1 million during the fiscal year ended September 30, 2009, reflecting an increase in nonperforming loans, as well as a higher percentage of commercial real estate loans relative to one- to four-family residential real estate loans, and worsening economic conditions.
     Other than our loans for the construction of one- to four-family residential properties and the draw portion of our home equity lines of credit, we do not offer “interest only” mortgage loans on one- to four-family residential properties (where the borrower pays interest but no principal for an initial period, after which the loan converts to a fully amortizing loan). We also do not offer loans that provide for negative amortization of principal, such as “Option ARM” loans, where the borrower can pay less than the interest owed on their loan, resulting in an increased principal balance during the life of the loan. We do not offer “subprime loans” (loans that generally target borrowers with weakened credit histories typically characterized by payment delinquencies, previous charge-offs, judgments, bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burden ratios) or Alt-A loans (traditionally defined as loans having less than full documentation). We also do not own any private label mortgage-backed securities that are collateralized by Alt-A, low or no documentation or subprime mortgage loans.
     At March 31, 2010, 95.8% of our mortgage-backed securities have been issued by Freddie Mac, Fannie Mae or Government National Mortgage Association, U.S. government agencies or government-sponsored enterprises. These entities guarantee the payment of principal and interest on our mortgage-backed securities. We own $33,000 of common stock issued by Freddie Mac. During fiscal year 2008, impairment charges totaling $1.6 million were recorded primarily relating to $1.5 million of Fannie Mae and Freddie Mac preferred stock.

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Business Strategy
     Our primary objective is to operate as a profitable, community-oriented financial institution serving customers in our market areas. We have sought to accomplish this objective by adopting a business strategy that is designed to maintain strong capital and high asset quality. This business strategy includes the following elements:
    Remaining a community-oriented financial institution while continuing to increase our customer base of small and medium-size businesses in our market area. We were established in 1913 and have operated continuously in the Pittsburgh Metropolitan Area since that date. In 2006, we acquired Hoblitzell National Bank, which expanded our branch network to Bedford County, Pennsylvania and Allegany County, Maryland. We are committed to meeting the financial needs of the communities in which we operate, and we are dedicated to providing quality personal service to our customers. We provide a broad range of consumer and business financial services from our ten banking offices, and have expanded our commercial real estate staff to enhance our capacity to serve small businesses in our market area.
 
    Increasing commercial real estate lending while maintaining our conservative loan underwriting. Our loan portfolio balance has increased in recent years due in part to the growth in our commercial real estate loan portfolio to $80.9 million, or 28.6% of our gross loan portfolio at March 31, 2010, from $26.5 million, or 21.0% of our gross loan portfolio at September 30, 2005. This growth was due in part to the acquisition of HNB, a commercial bank that emphasized commercial real estate lending. In growing our commercial loan portfolio, we have emphasized maintaining strong asset quality by following conservative loan underwriting guidelines. We underwrite all of our loans in our main office to ensure uniformity and consistency in underwriting decisions. Our non-performing assets at March 31, 2010 were $1.7 million, or 0.41% of total assets, compared to $2.3 million, or 0.61% of total assets at September 30, 2009, and $1.8 million, or 0.51% of total assets at September 30, 2008.
 
    Emphasizing lower cost core deposits by attracting new customers and enhancing existing customer relationships. In an effort to grow our banking franchise, we have enhanced our direct marketing efforts to local businesses and established a stronger culture of cross-selling our products to our existing customers. In addition, we attract and retain deposits by offering enhanced technology, such as online banking and remote deposit capture, with a continued emphasis on quality customer service.
 
    Expanding our branch network, primarily through branch purchases and de novo branching. We currently operate from ten banking offices (nine of which are full service). We intend to evaluate additional branch expansion opportunities, primarily through branch purchases, to expand our presence in our current market area.
 
    To provide additional financial resources to pursue future expansion and acquisition opportunities, although we have no current arrangements or agreements with respect to any such acquisitions. We intend to evaluate acquisitions of other financial institutions, as opportunities present themselves.

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Anticipated Increase in Noninterest Expense
     Following the completion of the conversion and offering, we anticipate that our noninterest expense will increase as a result of the increased costs associated with managing a public company, increased compensation expenses associated with the purchases of shares of common stock by our employee stock ownership plan, and the adoption of one or more stock-based benefit plans, if approved by our stockholders.
     Assuming that the adjusted maximum number of shares are sold in the offering (3,967,500 shares):
    our employee stock ownership plan would acquire 328,509 shares of common stock with a $3.3 million loan that is expected to be repaid over 20 years, resulting in an annual pre-tax expense of approximately $164,000 (assuming that the common stock maintains a value of $10.00 per share);
 
    our stock-based benefit plans would grant stock options to purchase shares equal to 10% of the total shares issued in the offering, including shares issued to the charitable foundation, or 410,636 shares, to eligible participants, which would result in compensation expense over the vesting period of the options. Assuming a five-year vesting period and a Black-Scholes option pricing analysis of $2.97 per option, as described in “Pro Forma Data,” the annual pre-tax expense associated with stock options granted under the stock-based benefit plans would be approximately $244,000; and
 
    our stock-based benefit plans would award a number of shares equal to 4% of the shares issued in the offering, including shares issued to the charitable foundation, or 164,255 shares, to eligible participants, which would be expensed as the awards vest. Assuming that all shares are awarded under the stock-based benefit plans at a price of $10.00 per share, and that the awards vest over a five-year period, the corresponding annual pre-tax expense associated with shares awarded under the stock-based benefit plans would be approximately $329,000.
     The actual expense that will be recorded for the employee stock ownership plan will be determined by the market value of the shares of common stock as they are released to employees over the term of the loan, and whether the loan is repaid faster than its contractual term. Accordingly, increases in the stock price above $10.00 per share would increase the total employee stock ownership plan expense, and any accelerated repayment of the loan would increase the annual employee stock ownership plan expense. Additionally, the actual expense of shares awarded under one or more stock-based benefit plans will be determined by the fair market value of the stock on the grant date, which might be greater than $10.00 per share. Further, the actual expense of stock options granted under one or more stock-based benefit plans would be determined by the grant-date fair value of the options, which would depend on a number of factors, including the valuation assumptions used in the option pricing model ultimately used.
     We may award shares of common stock and grant options in excess of 4% and 10%, respectively, of our shares of stock sold in the stock offering and issued to the charitable foundation if our stock-based benefit plans are adopted more than one year following the completion of the stock offering. This would further increase our expenses associated with stock-based benefit plans.

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Critical Accounting Policies
     We consider accounting policies that require management to exercise significant judgment or discretion or make significant assumptions that have, or could have, a material impact on the carrying value of certain assets or on income, to be critical accounting policies. We consider the following to be our critical accounting policies.
     Allowance for Loan Losses. We maintain an allowance for loan losses at an amount estimated to equal all credit losses incurred in our loan portfolio that are both probable and reasonable to estimate at a balance sheet date. Management’s determination of the adequacy of the allowance is based on periodic evaluations of the loan portfolio and other relevant factors. However, this evaluation is inherently subjective, as it requires an estimate of the loss content for each risk rating and for each impaired loan, an estimate of the amounts and timing of expected future cash flows, and an estimate of the value of collateral. Based on our estimate of the level of allowance for loan losses required, we record a provision for loan losses to maintain the allowance for loan losses at an appropriate level.
     The determination of the allowance for loan losses is based on management’s current judgments about the loan portfolio credit quality and management’s consideration of all known relevant internal and external factors that affect loan collectibility, as of the reporting date. We cannot predict with certainty the amount of loan charge-offs that will be incurred. We do not currently determine a range of loss with respect to the allowance for loan losses. In addition, various regulatory agencies, as an integral part of their examination processes, periodically review our allowance for loan losses. Such agencies may require that we recognize additions to the allowance for loan losses based on their judgments about information available to them at the time of their examination. Accordingly, actual results could differ from those estimates.
     Other-Than-Temporary Impairment. In estimating other-than-temporary impairment of investment securities, securities are evaluated periodically, and at least quarterly, to determine whether a decline in their value is other than temporary.
     We consider numerous factors when determining whether potential other-than-temporary impairment exists and the period over which a debt security is expected to recover. The principal factors considered are (1) the length of time and the extent to which the fair value has been less than the amortized cost basis, (2) the financial condition of the issuer (and guarantor, if any) and adverse conditions specifically related to the security, industry or geographic area, (3) failure of the issuer of the security to make scheduled interest or principal payments, (4) any changes to the rating of a security by a rating agency, and (5) the presence of credit enhancements, if any, including the guarantee of the federal government or any of its agencies.
     For debt securities, other-than-temporary impairment is considered to have occurred if (1) we intend to sell the security, (2) it is more likely than not we will be required to sell the security before recovery of its amortized cost basis, or (3) if the present value of expected cash flows is not sufficient to recover the entire amortized cost basis. In determining the present value of expected cash flows, we discount the expected cash flows at the effective interest rate implicit in the security at the date of acquisition or, for debt securities that are beneficial interests in securitized financial assets, at the current rate used to accrete the beneficial interest. In estimating cash flows expected to be collected, we use available information with respect to security prepayment speeds, expected deferral rates and severity, whether subordinated interests, if any, are capable of absorbing estimated losses and the value of any underlying collateral.

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     Deferred Tax Assets. The Company uses an estimate of future earnings to support our position that the benefit of our deferred tax assets will be realized. If future income should prove non-existent or less than the amount of the deferred tax assets within the tax years to which they may be applied, the asset may not be realized and our net income will be reduced.
     Goodwill and Other Intangible Assets. As discussed in Note 1 of the consolidated financial statements, the Company must assess goodwill and other intangible assets each year for impairment. This assessment involves estimating the fair value of the Company’s reporting units. If the fair value of the reporting unit is less than its carrying value including goodwill, we would be required to take a charge against earnings to write down the assets to the lower value.
Balance Sheet Analysis: March 31, 2010 and September 30, 2009
     Assets. Our total assets increased $20.8 million, or 5.4%, to $403.2 million at March 31, 2010 from $382.4 million at September 30, 2009. The increase was due to increases in net loans of $6.4 million and cash and cash equivalents of $12.7 million or 102%. The net increase in total assets was funded by an increase in deposits of $24.3 million, partially offset by a decrease in borrowed funds of $4.5 million.
     Loans. At March 31, 2010, net loans were $277.2 million, or 68.7% of total assets, an increase of $6.4 million from $270.8 million at September 30, 2009. This increase was primarily due to increase of $4.1 million in the one- to four-family residential real estate portfolio and $4.0 million in the commercial real estate portfolio. We have continued our focus on steadily increasing our commercial real estate loans to better diversify our loan portfolio. Partially offsetting these loan portfolio increases was a decrease of $1.8 million in home equity loans and lines of credit.

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     Loan Portfolio Composition. The following table sets forth the composition of our loan portfolio at the dates indicated. We had no loans held for sale at any of the dates indicated.
                                                                                                 
    At March 31,       At September 30,  
    2010     2009     2008     2007     2006     2005  
    Amount     Percent     Amount     Percent     Amount     Percent     Amount     Percent     Amount     Percent     Amount     Percent  
    (Dollars in thousands)  
Real estate loans:
                                                                                               
One- to four-family residential
  $ 139,018       49.2 %   $ 134,958       49.1 %   $ 129,973       49.6 %   $ 120,914       48.4 %   $ 97,918       46.4 %   $ 60,823       48.1 %
Commercial
    80,921       28.6       76,890       27.9       67,411       25.7       61,918       24.8       53,566       25.4       26,506       21.0  
Home equity loans and lines of credit
    43,669       15.4       45,486       16.5       44,079       16.8       42,657       17.1       40,422       19.1       27,947       22.1  
Construction
    3,133       1.1       2,145       0.8       5,028       1.9       8,358       3.3       5,992       2.8       6,790       5.4  
Commercial loans
    13,137       4.6       12,414       4.5       12,052       4.6       12,207       4.9       9,042       4.3       3,378       2.7  
Other loans(1)
    2,989       1.1       3,261       1.2       3,696       1.4       3,760       1.5       4,282       2.0       1,074       0.8  
 
                                                                       
 
                                                                                               
Total loans
    282,867       100.0 %     275,154       100.0 %     262,239       100.0 %     249,814       100.0 %     211,222       100.0 %     126,518       100.0 %
 
                                                                                   
 
                                                                                               
Other items:
                                                                                               
Deferred loan costs (fees), net
    (57 )             (47 )             63               44               (62 )             (22 )        
Loans in process
    (2,211 )             (1,260 )             (2,325 )             (3,737 )             (3,084 )             (5,628 )        
Allowance for loan losses
    (3,451 )             (3,078 )             (2,426 )             (2,379 )             (2,423 )             (1,580 )        
 
                                                                                   
 
                                                                                               
Total loans, net
  $ 277,148             $ 270,769             $ 257,551             $ 243,742             $ 205,653             $ 119,288          
 
                                                                                   
 
(1)   Consists of automobile loans, consumer loans and loans secured by savings accounts.
     Loan Portfolio Maturities and Yields. The following table summarizes the scheduled repayments of our loan portfolio at March 31, 2010. Demand loans, loans having no stated repayment schedule or maturity, and overdraft loans are reported as being due in one year or less.
                                                                 
    One- to four-family residential                     Home equity loans and lines of        
    real estate     Commercial real estate     credit     Construction  
            Weighted Average             Weighted Average             Weighted Average             Weighted Average  
    Amount     Rate     Amount     Rate     Amount     Rate     Amount     Rate  
                            (Dollars in thousands)                          
Due During the Twelve Months Ending March 31,
                                                               
2011
  $ 1,756       1.88 %   $ 4,188       5.03 %   $ 520       4.55 %   $        
2012
    856       5.22 %     2,085       4.57 %     349       6.58 %            
2013
    1,258       6.04 %     5,702       5.55 %     582       6.57 %            
2014 to 2015
    3,191       4.74 %     8,880       4.77 %     4,612       5.32 %            
2016 to 2020
    21,092       4.73 %     9,965       6.33 %     15,463       5.65 %            
2022 to 2025
    36,213       5.07 %     18,566       6.52 %     12,207       5.80 %            
2026 and beyond
    74,652       5.68 %     31,535       6.94 %     9,936       6.10 %     3,133       5.98 %
 
                                                       
 
                                                               
Total
  $ 139,018       5.31 %   $ 80,921       6.27 %   $ 43,669       5.84 %   $ 3,133       5.98 %
 
                                                       

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    Commercial     Other Loans     Total  
            Weighted             Weighted             Weighted  
            Average             Average             Average  
    Amount     Rate     Amount     Rate     Amount     Rate  
Due During the Twelve Months Ending March 31,
                                               
2011
  $ 2,839       5.36 %   $ 216       8.13 %   $ 9,519       4.59 %
2012
    1,998       5.15 %     627       8.32 %     5,915       5.38 %
2013
    2,555       5.77 %     774       8.76 %     10,871       5.94 %
2014 to 2015
    3,795       6.30 %     1,122       8.32 %     21,600       5.34 %
2016 to 2020
    1,335       6.76 %     250       3.17 %     48,105       5.41 %
2021 to 2025
    234       5.84 %                 67,220       5.60 %
2026 and beyond
    381       7.13 %                 119,637       6.06 %
 
                                         
 
                                               
Total
  $ 13,137       5.88 %   $ 2,989       7.99 %   $ 282,867       5.72 %
 
                                         
Fixed and Adjustable Rate Loans:
     The following table sets forth the scheduled repayments of fixed- and adjustable-rate loans at September 30, 2009 that are contractually due after September 30, 2010.
                         
    Due After September 30, 2010  
    Fixed     Adjustable     Total  
            (In thousands)          
Real estate loans:
                       
One- to four-family residential
  $ 96,543     $ 37,400     $ 133,943  
Commercial
    17,183       54,177       71,360  
Home equity loans and lines of credit
    44,833             44,833  
Construction
    488       1,657       2,145  
Commercial
    10,250       374       10,624  
Other loans (1)
    2,984             2,984  
 
                 
 
                       
Total loans
  $ 172,281     $ 93,608     $ 265,889  
 
                 
 
(1)   Consists of automobile loans, consumer loans and loans secured by savings accounts.

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     Investment Securities Portfolio. The following table sets forth the composition of our investment securities portfolio at the dates indicated.
                                                                 
                    At September 30,  
    At March 31, 2010     2009     2008     2007  
    Amortized             Amortized             Amortized             Amortized        
    Cost     Fair Value     Cost     Fair Value     Cost     Fair Value     Cost     Fair Value  
                            (In thousands)                          
Investment securities available for sale:
                                                               
Municipal obligations
  $ 17,253     $ 17,876     $ 18,066     $ 18,736     $ 11,666     $ 11,854     $ 11,500     $ 12,181  
U.S. government and agency obligations
    26,882       26,857       17,791       17,871       5,000       4,996              
Corporate bonds
    2,700       2,761       4,686       4,780       1,012       600       1,017       969  
U.S. government sponsored mortgage-backed securities:
                                                               
Freddie Mac pass through certificates
    9,639       10,076       12,466       12,948       5,835       5,759       4,120       4,045  
Fannie Mae pass through certificates
    8,979       9,287       10,850       11,149       1,329       1,337       133       134  
Government National Mortgage Association pass through certificates
    1,087       1,121       1,518       1,554       1,837       1,839       2,661       2,677  
Collateralized mortgage obligations
    761       745       920       898       1,186       1,148       1,327       1,295  
Private pass through certificates
    144       142       148       145       156       155       162       159  
Equity securities
    1,236       1,158       1,236       1,163       1,377       1,261       2,908       4,781  
 
                                               
Total securities available for sale
  $ 68,681     $ 70,023     $ 67,681     $ 69,244     $ 29,398     $ 28,949     $ 23,828     $ 26,241  
 
                                               
                                                                 
                    At September 30,  
    At March 31, 2010     2009     2008     2007  
    Amortized             Amortized             Amortized             Amortized        
    Cost     Fair Value     Cost     Fair Value     Cost     Fair Value     Cost     Fair Value  
                            (In thousands)                          
Investment securities held to maturity:
                                                               
U.S. government sponsored mortgage-backed securities:
                                                               
Freddie Mac pass through certificates
  $     $     $     $     $ 10,157     $ 10,076     $ 15,800     $ 15,405  
Fannie Mae pass through certificates
                            9,361       9,269       11,910       11,599  
 
                                               
Total securities held to maturity
  $     $     $     $     $ 19,518     $ 19,345     $ 27,710     $ 27,004  
 
                                               

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     At March 31, 2010 and September 30, 2009 all of our investment securities were classified as available for sale and recorded at current fair value. We held investment securities with an amortized cost of $68.7 million and a fair value of $70.0 million at March 31, 2010, compared to $67.7 million and $69.2 million at September 30, 2009, respectively. At March 31, 2010, our investment portfolio consisted of $26.9 million in U.S. government and agency obligations, $20.6 million of mortgage-backed securities (of which $19.7 million were U.S. government sponsored mortgage-backed securities), $17.3 million of municipal bonds, $2.7 million in corporate bonds and $1.2 million in equity securities.
     During the six months ended March 31, 2010, gains on sales of investment securities and mortgage-backed securities totaled $8,000. During the year ended September 30, 2009, losses on investment securities and mortgage-backed securities totaled $597,000. Included in the losses in the year ended September 30, 2009 were impairment losses totaling $141,000 for other-than-temporary declines in market value on investment securities relating to financial industry common stocks. During 2008, impairment charges totaling $1.6 million were recorded related to $1.5 million of Freddie Mac and Fannie Mae preferred stocks and $104,000 of financial industry related common stocks. At March 31, 2010 and September 30, 2009, no securities were held in the trading portfolio.
     At March 31, 2010 and September 30, 2009, the Company held 19 securities and 15 securities in unrealized loss positions of $163,000 and $246,000, respectively. The decline in the fair value of these securities resulted primarily from interest rate fluctuations. The Company does not intend to sell these securities nor is it more likely than not that the Company would be required to sell these securities before its anticipated recovery and the Company believes the collection of the investment and related interest is probable. Based on this analysis, the Company considers all of the unrealized losses to be temporary impairment losses.

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     Portfolio Maturities and Yields. The composition and maturities of the investment securities portfolio at March 31, 2010 are summarized in the following table. Maturities are based on the final contractual payment dates, and do not reflect the impact of prepayments or early redemptions that may occur. State and municipal securities yields have not been adjusted to a tax-equivalent basis.
                                                                                         
                    More than One Year     More than Five Years              
    One Year or Less     through Five Years     through Ten Years     More than Ten Years     Total Securities  
            Weighted             Weighted             Weighted             Weighted                     Weighted  
            Average             Average             Average             Average                     Average  
    Amortized Cost     Yield     Amortized Cost     Yield     Amortized Cost     Yield     Amortized Cost     Yield     Amortized Cost     Fair Value     Yield  
                                            (Dollars in thousands)                                          
Municipal obligations
  $ 4,001       2.92 %   $ 4,217       2.07 %   $ 2,518       6.44 %   $ 6,517       5.27 %   $ 17,253     $ 17,876       4.12 %
U.S. government and agency obligations
                19,343       1.74 %     2,614       2.19 %     4,925       1.69 %     26,882       26,857       1.77 %
Corporate bonds
    1,405       3.45 %     1,295       3.58 %                             2,700       2,761       3.51 %
U.S. government sponsored mortgage-backed securities:
                                                                                       
Freddie Mac pass through certificates
    1,021       4.01 %     1,438       3.91 %     5,371       4.47 %     1,809       4.12 %     9,639       10,076       4.27 %
Fannie Mae pass through certificates
    1,562       3.93 %     3,233       3.82 %     2,497       4.01 %     1,687       4.80 %     8,979       9,287       4.08 %
Government National Mortgage Association pass through certificates
                72       7.50 %                 1,015       3.65 %     1,087       1,121       3.91 %
Collateralized mortgage obligations
                            667       4.75 %     94       1.26 %     761       745       4.32 %
Private pass through certificates
                                        144       0.88 %     144       142       0.88 %
Equity securities
                                        1,236       3.43 %     1,236       1,158       3.43 %
 
                                                                           
Total
  $ 7,989       3.35 %   $ 29,598       2.21 %   $ 13,667       4.33 %   $ 17,427       3.81 %   $ 68,681     $ 70,023       3.17 %
 
                                                                           

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     Bank Owned Life Insurance. We invest in bank owned life insurance to provide us with a funding source for our benefit plan obligations. Bank owned life insurance also generally provides us noninterest income that is non-taxable. At March 31, 2010, we had invested $9.2 million in bank owned life insurance.
     Deposits. We accept deposits primarily from the areas in which our offices are located. We have consistently focused on building broader customer relationships and targeting small business customers to increase our core deposits. We also rely on our enhanced technology and our customer service to attract and retain deposits. We offer a variety of deposit accounts with a range of interest rates and terms. Our deposit accounts consist of savings accounts, certificates of deposit, money market accounts, commercial and regular checking accounts and individual retirement accounts. We do not accept brokered deposits.
     Interest rates paid, maturity terms, service fees and withdrawal penalties are established on a periodic basis. Deposit rates and terms are based primarily on current operating strategies and market interest rates, liquidity requirements and our deposit growth goals.
     Our deposits increased $24.3 million, or 8.5%, to $311.2 million at March 31, 2010 from $286.9 million at September 30, 2009. The increase resulted from a $10.7 million, or 9.9%, increase in certificates of deposits and an $8.8 million, or 16.7%, increase in demand and NOW accounts and a $4.4 million, or 3.6%, increase in savings accounts. The increase in certificates of deposit resulted from offering a step-up certificate product with a tiered rate structure earned over a four or five year time period. The intent of offering the step-up certificate of deposit was to draw funds from a liquid savings account to extend the maturities of our deposit base in anticipation of future market interest rate increases. The increase in demand and NOW accounts was due primarily to cash flows from commercial checking accounts.
     At March 31, 2010, we had a total of $118.9 million in certificates of deposit, of which $33.6 million had remaining maturities of one year or less. Based on historical experience and current market interest rates, we believe we will retain upon maturity a large portion of our certificates of deposit with maturities of one year or less as of March 31, 2010.
     The following table sets forth the distribution of total deposit accounts, by account type, for the periods indicated.
                                                 
    At March 31, 2010     At September 30, 2009  
                    Weighted Average                     Weighted Average  
    Balance     Percent     Rate     Balance     Percent     Rate  
                    (Dollars in thousands)                  
Deposit type:
                                               
Savings accounts
  $ 125,273       40.26 %     1.08 %   $ 120,896       42.13 %     1.81 %
Certificates of deposit
    118,897       38.21 %     2.93 %     108,176       37.70 %     3.41 %
Money market accounts
    5,821       1.87 %     0.28 %     5,415       1.89 %     0.53 %
Demand and NOW accounts
    61,205       19.67 %     0.20 %     52,447       18.28 %     0.31 %
 
                                       
 
                                               
Total deposits
  $ 311,196       100.00 %     1.62 %   $ 286,934       100.00 %     2.12 %
 
                                       

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    At September 30,  
    2008     2007  
                    Weighted Average                     Weighted Average  
    Balance     Percent     Rate     Balance     Percent     Rate  
    (Dollars in thousands)
Deposit type:
                                               
Savings accounts
  $ 92,705       36.41 %     2.20 %   $ 77,311       29.29 %     3.31 %
Certificates of deposit
    105,082       41.27 %     4.28 %     124,126       47.02 %     4.48 %
Money market accounts
    6,074       2.39 %     0.99 %     6,776       2.57 %     1.84 %
Demand and NOW accounts
    50,771       19.94 %     0.41 %     55,764       21.12 %     0.55 %
 
                                       
 
                                               
Total deposits
  $ 254,632       100.00 %     2.77 %   $ 263,977       100.00 %     3.27 %
 
                                       
     The following table sets forth certificates of deposit classified by interest rate as of the dates indicated.
                                 
    At March 31,     At September 30,  
    2010     2009     2008     2007  
            (In thousands)          
Interest Rate:
                               
Less than 2.00%
  $ 49,412     $ 25,602     $ 10,151     $ 387  
2.00% to 3.99%
    49,270       60,167       53,631       29,702  
4.00% to 5.99%
    17,700       19,673       38,514       91,154  
6.00% to 7.99%
    2,515       2,734       2,786       2,883  
 
                       
 
                               
Total
  $ 118,897     $ 108,176     $ 105,082     $ 124,126  
 
                       
     The following table sets forth, by interest rate ranges, information concerning our certificates of deposit.
                                                 
    At March 31, 2010  
    Period to Maturity  
    Less Than or Equal to     More Than One to     More Than Two to Three                    
    One Year     Two Years     Years     More Than Three Years     Total     Percent of Total  
    (Dollars in thousands)
Interest Rate Range:
                                               
Less than 2.00%
  $ 21,537     $ 6,248     $ 832     $ 20,795     $ 49,412       41.56 %
2.00% to 3.99%
    6,076       10,022       15,257       17,915       49,270       41.44  
4.00% to 5.99%
    3,586       2,979       864       10,271       17,700       14.89  
6.00% to 7.99%
    2,440       23       44       8       2,515       2.12  
 
                                   
 
                                               
Total
  $ 33,639     $ 19,272     $ 16,997     $ 48,989     $ 118,897       100.00 %
 
                                   
     As of March 31, 2010, the aggregate amount of outstanding certificates of deposit in amounts greater than or equal to $100,000 was $32.9 million. The following table sets forth the maturity of those certificates as of March 31, 2010.
         
    At  
    March 31, 2010  
    (In thousands)  
Three months or less
  $ 2,033  
Over three months through six months
    1,527  
Over six months through one year
    4,769  
Over one year to three years
    8,870  
Over three years
    15,672  
 
     
 
       
Total
  $ 32,871  
 
     

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     Borrowings. Our borrowings consist of advances from the Federal Home Loan Bank of Pittsburgh and funds borrowed under repurchase agreements. At March 31, 2010, we had access to additional Federal Home Loan Bank advances of up to $92.4 million. The following table sets forth information concerning balances and interest rates on our Federal Home Loan Bank advances at the dates and for the periods indicated.
                                         
    At or For the Six Months    
    Ended March 31,   At or For the Years Ended September 30,
    2010   2009   2009   2008   2007
    (Dollars in thousands)
Balance at end of period
  $ 42,078     $ 50,919     $ 46,618     $ 50,948     $ 32,809  
Average balance during period
  $ 45,947     $ 50,932     $ 49,353     $ 44,052     $ 25,783  
Maximum outstanding at any month end
  $ 46,613     $ 50,943     $ 50,943     $ 50,957     $ 33,680  
Weighted average interest rate at end of period
    3.97 %     4.57 %     4.18 %     4.57 %     5.04 %
Average interest rate during period
    4.19 %     4.63 %     4.59 %     4.79 %     5.51 %
     The following table sets forth information concerning balances and interest rates on our repurchase agreements at the dates and for the periods indicated.
                                         
    At or For the Six Months    
    Ended March 31,   At or For the Years Ended September 30,
    2010   2009   2009   2008   2007
    (Dollars in thousands)
Balance at end of period
  $ 2,905     $ 5,081     $ 3,866     $ 3,537     $ 3,990  
Average balance during period
  $ 3,534     $ 4,420     $ 4,532     $ 3,429     $ 3,577  
Maximum outstanding at any month end
  $ 3,667     $ 6,380     $ 6,380     $ 7,231     $ 5,784  
Weighted average interest rate at end of period
    0.78 %     1.75 %     1.26 %     1.54 %     3.83 %
Average interest rate during period
    0.85 %     1.86 %     1.63 %     2.05 %     2.87 %
     Net Worth. Net worth increased $1.4 million, or 3.3%, to $43.6 million at March 31, 2010 from $42.2 million at September 30, 2009. The increase resulted from net income of $1.5 million for the six months ended March 31, 2010.

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Average Balance and Yields:
     The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments were made, as the effect thereof was not material. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero yield. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.
                                                         
           
    At March 31,     For the Six Months Ended March 31,  
    2010     2010     2009  
            Average                     Average                
            Outstanding             Yield/     Outstanding             Yield/  
    Yield/ Rate     Balance     Interest     Rate(1)     Balance     Interest     Rate(1)  
    (Dollars in thousands)  
Interest-earning assets:
                                                       
Loans
    5.72 %   $ 277,862     $ 8,000       5.76 %   $ 261,055     $ 8,007       6.13 %
Investment and mortgage-backed securities
    3.17       68,777       1,143       3.32       53,041       1,157       4.36  
Interest earning deposits
    0.10       15,142       17       0.22       14,193       33       0.47  
 
                                                 
Total interest-earning assets
    5.00       361,781       9,160       5.06       328,289       9,197       5.60  
 
                                                   
Noninterest-earning assets
            29,508                       28,866                  
 
                                                   
Total assets
          $ 391,289                     $ 357,155                  
 
                                                   
 
                                                       
Interest-bearing liabilities:
                                                       
Savings accounts
    0.88     $ 123,146       665       1.08     $ 102,006       1,101       2.16  
Certificates of deposit
    2.75       114,224       1,671       2.93       101,641       1,791       3.52  
Money market accounts
    0.19       5,316       7       0.26       5,688       20       0.70  
Demand and NOW accounts
    0.17       53,381       53       0.20       49,837       94       0.38  
 
                                               
Total deposits
    1.44       296,067       2,396       1.62       259,172       3,006       2.32  
Federal Home Loan Bank advances
    3.97       45,947       962       4.19       50,932       1,178       4.63  
Securities sold under agreements to repurchase
    0.78       3,534       15       0.85       4,420       41       1.86  
 
                                               
Total interest-bearing liabilities
    1.77 %     345,548       3,373       1.95       314,524       4,225       2.69  
 
                                                   
Noninterest-bearing liabilities
            2,613                       2,713                  
 
                                                   
Total liabilities
            348,161                       317,237                  
Net worth
            43,128                       39,918                  
 
                                                   
Total liabilities and net worth
          $ 391,289                     $ 357,155                  
 
                                                   
 
                                                       
Net interest income
                  $ 5,787       3.11 %           $ 4,972       2.92 %
 
                                                   
Net interest rate spread (2)
                                                       
Net interest-earning assets (3)
          $ 16,233                     $ 13,765                  
 
                                                   
Net interest margin (4)
                            3.20 %                     3.03 %
Average interest-earning assets to interest-bearing liabilities
            104.70 %                     104.38 %                
(footnotes on following page)

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    For the Years Ended September 30,  
    2009     2008  
    Average                     Average              
    Outstanding                     Outstanding              
    Balance     Interest     Yield/ Rate     Balance     Interest     Yield/ Rate  
                    (Dollars in thousands)                  
Interest-earning assets:
                                               
Loans
  $ 263,311     $ 15,837       6.01 %   $ 256,599     $ 16,220       6.32 %
Investment and mortgage-backed securities
    59,442       2,343       3.94       47,043       2,141       4.55  
Interest earning deposits
    17,017       56       0.33       13,378       318       2.38  
 
                                       
Total interest-earning assets
    339,770       18,236       5.37       317,020       18,679       5.89  
 
                                           
Noninterest-earning assets
    28,923                       27,168                  
 
                                           
Total assets
  $ 368,693                     $ 344,188                  
 
                                           
 
                                               
Interest-bearing liabilities:
                                               
Savings accounts
  $ 109,524       1,985       1.81     $ 80,169       1,760       2.20  
Certificates of deposit
    104,961       3,579       3.41       117,488       5,023       4.28  
Money market accounts
    5,523       29       0.53       6,656       66       0.99  
Demand and NOW accounts
    51,402       159       0.31       50,312       206       0.41  
 
                                       
Total deposits
    271,410       5,752       2.12       254,625       7,055       2.77  
Federal Home Loan Bank advances
    49,353       2,265       4.59       44,052       2,112       4.79  
Securities sold under agreements to repurchase
    4,532       74       1.63       3,429       70       2.04  
 
                                       
Total interest-bearing liabilities
    325,295       8,091       2.49       302,106       9,237       3.06  
 
                                           
Noninterest-bearing liabilities
    2,733                       2,184                  
 
                                           
Total liabilities
    328,028                       304,290                  
Net worth
    40,665                       39,898                  
 
                                           
Total liabilities and net worth
  $ 368,693                     $ 344,188                  
 
                                           
 
                                               
Net interest income
          $ 10,145                     $ 9,442          
 
                                           
Net interest rate spread (2)
                    2.88 %                     2.83 %
Net interest-earning assets (3)
  $ 14,475                     $ 14,914                  
 
                                           
Net interest margin (4)
                    2.99 %                     2.98 %
Average interest-earning assets to interest-bearing liabilities
    104.45 %                     104.94 %                
 
(1)   Yields and rates for the six months ended March 31, 2010 and 2009 are annualized.
 
(2)   Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
 
(3)   Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
 
(4)   Net interest margin represents net interest income divided by average total interest-earning assets.

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Rate/Volume Analysis:
     The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The total column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately, based on the changes due to rate and the changes due to volume.
                                                 
    For the Six Months Ended March 31,     For the Years Ended September 30,  
    2010 vs. 2009     2009 vs. 2008  
    Increase (Decrease) Due to     Total Increase     Increase (Decrease) Due to     Total Increase  
    Volume     Rate     (Decrease)     Volume     Rate     (Decrease)  
                    (In thousands)                  
Interest-earning assets:
                                               
Loans
  $ 500     $ (507 )   $ (7 )   $ 417     $ (800 )   $ (383 )
Investment and mortgage-backed securities
    298       (312 )     (14 )     515       (313 )     202  
Interest earning deposits
    2       (18 )     (16 )     69       (331 )     (262 )
 
                                   
 
                                               
Total interest-earning assets
    800       (837 )     (37 )     1,001       (1,444 )     (443 )
 
                                   
 
                                               
Interest-bearing liabilities:
                                               
Savings accounts
    195       (631 )     (436 )     568       (343 )     225  
Certificates of deposit
    206       (326 )     (120 )     (498 )     (946 )     (1,444 )
Money market accounts
    (1 )     (12 )     (13 )     (10 )     (27 )     (37 )
Demand and NOW accounts
    6       (47 )     (41 )     4       (51 )     (47 )
 
                                   
Total deposits
    406       (1,016 )     (610 )     64       (1,367 )     (1,303 )
Federal Home Loan Bank advances
    (110 )     (106 )     (216 )     246       (93 )     153  
Securities sold under agreements to repurchase
    (7 )     (19 )     (26 )     20       (16 )     4  
 
                                   
 
                                               
Total interest-bearing liabilities
    289       (1,141 )     (852 )     330       (1,476 )     (1,146 )
 
                                   
 
                                               
Change in net interest income
  $ 511     $ 304     $ 815     $ 671     $ 32     $ 703  
 
                                   

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Comparison of Operating Results for the Six Months Ended March 31, 2010 and 2009
     General. Net income for the six months ended March 31, 2010 was $1.5 million, an increase of $256,000, or 20.0%, from $1.3 million for the same period last year. The increase in net income resulted primarily from a decrease of $852,000 in total interest expense and a decrease of $302,000 in total noninterest expenses, offset in part by increased federal and state income taxes. Total interest income remained steady at $9.2 million for each six month period. The provision for loan losses decreased from $547,000 for the six month period ended March 31, 2009 to $429,000 for the six month period ended March 31, 2010.
     Interest Income. Total interest income remained unchanged at $9.2 million for each six month period, due to a decrease in the average yield earned on interest earning assets, which was offset by an increase in the average balance of interest earning assets. The average yield on interest earning assets decreased to 5.06% for the six month period ended March 31, 2010 from 5.60% for the six month period ended March 31, 2009. The average yield on all categories of interest earning assets decreased from the previous period. Average interest earning assets increased by $33.5 million, or 10.2%, to $361.8 million for the six month period ended March 31, 2010 from $328.3 million for the six month period ended March 31, 2009.
     Interest income on loans remained unchanged at $8.0 million for each period. The average yield on loans receivable decreased to 5.76% for the six month period ended March 31, 2010 from 6.13% for the six month period ended March 31, 2009. The decrease in average yield was primarily attributable to our variable rate loans adjusting downward as prime and short-term interest rates decreased as well as the origination of new loans in a generally lower interest rate environment and repayment/refinance of higher rate loans. This decrease in average yield was partially offset by an increase in the average balance of loans receivable. Average loans receivable increased by $16.8 million, or 6.4%, to $277.9 million for the six month period ended March 31, 2010 from $261.1 million for the six month period ended March 31, 2009. This increase was primarily attributable to continued strong loan demand throughout our market area.
     Interest income on investment and mortgage-backed securities decreased by $14,000, or 1.2%, to $1.1 million for the six month period ended March 31, 2010 from $1.2 million for the six month period ended March 31, 2009. This decrease was primarily the result of a decrease in the average yield earned, which decreased to 3.32% for the six month period ended March 31, 2010 from 4.36% for the six month period ended March 31, 2009, due to new investments added in a lower interest rate environment and variable rate investments that adjusted downward. Partially offsetting this decrease in interest income was an increase in the average balance, which increased by $15.7 million, or 29.7%, to $68.8 million for the six month period ended March 31, 2010 from $53.0 million for the six month period ended March 31, 2009.
     Interest income on interest-earning deposits decreased by $16,000, or 48.5%, to $17,000 for the six month period ended March 31, 2010 from $33,000 for the six month period ended March 31, 2009. The average yield decreased to 0.22% from 0.47% as a result of decreases in the overnight federal funds rate. The average balance increased by $949,000, or 6.7%, to $15.1 million for the six month period ended March 31, 2010 from $14.2 million for the six month period ended March 31, 2009 as we experienced considerable deposit growth that was invested in overnight deposits until it could be deployed into higher yielding assets.
     Interest Expense. Total interest expense decreased by $852,000, or 20.2%, to $3.4 million for the six month period ended March 31, 2010 from $4.2 million for the six month period ended March 31, 2009. This decrease in interest expense was due to a decrease in the average cost of interest-bearing liabilities to 1.95% from 2.69%, which was partially offset by an increase in the average balance of interest-bearing liabilities. Average interest-bearing liabilities increased by $31.0 million, or 9.9%, to

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$345.5 million for the six month period ended March 31, 2010 from $314.5 million for the six month period ended March 31, 2009. The decrease in the cost of funds resulted primarily from a decrease in the level of market interest rates which enabled us to reduce the rate of interest paid on all deposit products. The increase in liabilities resulted primarily from deposit growth in all of our markets.
     Net Interest Income. Net interest income increased by $815,000, or 16.4%, to $5.8 million for the six month period ended March 31, 2010 from $5.0 million for the six month period ended March 31, 2009. This increase in net interest income was attributable to the factors discussed above. Our net interest rate spread increased to 3.11% for the six month period ended March 31, 2010 from 2.92% for the six month period ended March 31, 2009, and our net interest margin increased to 3.20% for the six month period ended March 31, 2010 from 3.03% for the six month period ended March 31, 2009.
     Provision for Loan Losses. The provision for loan losses decreased by $118,000, or 21.6%, to $429,000 for the six month period ended March 31, 2010 from $547,000 for the six month period ended March 31, 2009. The decrease in the provision for loan losses during the comparative period was due to a decline in the level of delinquent and non performing loans and lower net loan charge-offs. Management analyzes the allowance for loan losses as described in the section entitled “Allowance for Loan Losses.” The provision that is recorded is sufficient, in management’s judgment, to bring the allowance for loan losses to a level that reflects the losses inherent in our loan portfolio relative to loan mix, economic conditions and historical loss experience. Management believes, to the best of their knowledge, that all known losses as of the balance sheet dates have been recorded.
     Noninterest Income. Noninterest income increased $76,000, or 7.1%, to $1.2 million for the six month period ended March 31, 2010 from $1.1 million for the same period in the prior year. Net securities gains increased by $149,000, due to gains of $8,000 for the six month period ended March 31, 2010 compared to an impairment loss of $141,000 for the six month period ended March 31, 2009. Partially offsetting this increase, mutual fund and annuity fees decreased by $70,000, or 44.2%, to $89,000 for the six month period ended March 31, 2010 from $159,000 for the six month period ended March 31, 2009, due in part to customer preferences to invest in insured investments in light of the financial crisis.
     Noninterest Expense. Noninterest expense decreased by $302,000, or 6.8%, to $4.2 million for the six month period ended March 31, 2010 from $4.5 million for the same period in the prior year. The largest decreases were in compensation and employee benefits, premises and occupancy costs and other operating expenses, partially offset by increased FDIC insurance premiums. Compensation and employee benefits decreased by $352,000, or 12.7%, to $2.4 million for the six month period ended March 31, 2010 from $2.8 million for the six month period ended March 31, 2009 due to a pension plan accrual in the 2009 period. The higher pension plan accrual was due to the use of lower interest rate assumptions in determining the related pension plan liability. Premises and occupancy costs decreased $34,000 due to cost control initiatives implemented in late 2009 and early 2010. Other operating expenses decreased $46,000 or 6.7%, to $645,000 during the six month period ended March 31, 2010 from $691,000 for the six month period ended March 31, 2010 due to above mentioned cost reduction initiatives. FDIC insurance premiums increased by $114,000, or 112% to $216,000 for the six month period ended March 31, 2010 from $102,000 for the six month period ended March 31, 2009 as a result of increased FDIC assessment rates.
     Income Taxes. The provision for income taxes for the six month period ended March 31, 2010 increased by $1.1 million, compared to the same period last year. This increase in income tax was primarily a result of an increase in income before income taxes of $1.3 million, or 127% from $1.0 million for the six months ended March 31, 2009 to $2.3 million for the six months ended March 31, 2010. Our effective tax rate for the six month period ended March 31, 2010 was 34.2% compared to a benefit of (24.7%) experienced in the same period last year. The reason for the negative tax rate for the six months ended March 31, 2009 was due to the reversal of a $510,000 valuation allowance on October

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3, 2008 related to impairment losses recognized on Fannie Mae and Freddie Mac preferred stock. The $1.5 million impairment loss on the stocks was recognized in the year ended September 30, 2008 while the tax benefit was recognized in the following year at the time the Emergency Economic Stabilization Act of 2009 was enacted which allowed banks to recognize these losses as ordinary loss for tax purposes.
Comparison of Operating Results for the Fiscal Years Ended September 30, 2009 and 2008
     General. Net income for the fiscal year ended September 30, 2009 was $2.1 million, an increase of $1.0 million, or 88.1%, from $1.1 million for the fiscal year ended September 30, 2008. The increase in net income resulted primarily from an increase in net interest income of $703,000, an increase in noninterest income of $839,000 and a decrease in income tax expense of $775,000, partially offset by an increase in provision for loan losses of $784,000, and an increase in noninterest expenses of $529,000.
     Net Interest Income. Net interest income increased by $703,000, or 7.4%, to $10.1 million for the fiscal year ended September 30, 2009 from $9.4 million for the fiscal year ended September 30, 2008. Our net interest rate spread and net interest rate margin were 2.88% and 2.99%, respectively for the fiscal year ended September 30, 2009 compared to 2.83% and 2.98% for the fiscal year 2008.
     Interest and Dividend Income. Total interest income decreased $443,000, or 2.4% to $18.2 million for the fiscal year ended September 30, 2009 from $18.7 million due to a decrease in the average yield earned on interest earning assets, which was offset by an increase in the average balance of interest earning assets. The average yield on interest earning assets decreased to 5.37% for the fiscal year ended September 30, 2009 from 5.89% for the fiscal year 2008. The average yield on all categories of interest earning assets decreased from the previous period. Average interest earning assets increased by $22.7 million, or 7.2%, to $339.8 million for the fiscal year ended September 30, 2009 from $317.0 million for the fiscal year 2008.
     Interest income on loans decreased $383,000 or 2.4% to $15.8 million for the fiscal year ended September 30, 2009 from $16.2 million for fiscal year ended September 30, 2008. The average yield on loans receivable decreased to 6.01% for the fiscal year ended September 30, 2009 from 6.32% for the fiscal year 2008. The decrease in average yield was primarily attributable to our variable rate loans adjusting downward as prime and short-term interest rates decreased as well as the origination of new loans in a generally lower interest rate environment and repayment/refinance of higher rate loans. This decrease in average yield was partially offset by an increase in the average balance of loans receivable. Average loans receivable increased by $6.7 million, or 2.6%, to $263.3 million for the fiscal year ended September 30, 2009 from $256.6 million for the fiscal year 2008. This increase was primarily attributable to continued strong loan demand throughout our market area.
     Interest income on investment and mortgage-backed securities increased by $202,000, or 9.4%, to $2.3 million for the fiscal year ended September 30, 2009 from $2.1 million for the fiscal year ended September 30, 2008. This increase was due primarily to an increase in the average balance, which increased by $12.4 million, or 26.4%, to $59.4 million for the fiscal year ended September 30, 2009 from $47.0 million for the fiscal year 2008. Partially offsetting this increase in interest income was a decrease in the average yield earned, which decreased to 3.94% for the fiscal year ended September 30, 2009 from 4.55% for the fiscal year 2008, due to new investments added in a lower interest rate environment and variable rate investments that adjusted downward.
     Interest income on interest-earning deposits decreased by $262,000, or 82.4%, to $56,000 for the fiscal year ended September 30, 2009 from $318,000 for the fiscal year ended September 30, 2008. The average yield decreased to 0.33% from 2.38% as a result of decreases in the overnight federal funds rate. The average balance increased by $3.6 million, or 27.2%, to $17.0 million for the fiscal year ended September 30, 2009 from $13.4 million for the fiscal year 2008 as we experienced considerable deposit growth that was invested in overnight deposits until it could be deployed into higher yielding assets.

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     Interest Expense. Total interest expense decreased by $1.1 million, or 12.4%, to $8.1 million for the fiscal year ended September 30, 2009 from $9.2 million for the fiscal year ended September 30, 2008. This decrease in interest expense was due to a decrease in the average cost of interest-bearing liabilities to 2.49% from 3.06%, which was partially offset by an increase in the average balance of interest-bearing liabilities. Average interest-bearing liabilities increased by $23.2 million, or 7.8%, to $325.3 million for the fiscal year ended September 30, 2009 from $302.1 million for the fiscal year 2008.
     Interest expense on deposits decreased by $1.3 million, or 18.5%, to $5.8 million for the fiscal year ended September 30, 2009 from $7.1 million for the fiscal year ended September 30, 2008. This was primarily the result of a decrease in interest expense on certificates of deposit of $1.4 million or 28.7%. A decrease in the level of market interest rates enabled us to reduce the rate of interest paid on deposit products. Partially offsetting this decrease in interest expense was an increase in the average balance of savings accounts which increased $29.4 million or 36.6% for the fiscal year ended September 30, 2009 from $80.2 for the fiscal year ended September 30, 2008.
     Partially offsetting the decrease in interest expense was an increase in interest expense on Federal Home Loan Bank advances, which increased $153,000 or 7.2% to $2.3 million for the fiscal year ended September 30, 2009 from $2.1 million for the fiscal year ended September 30, 2008. We increased our average balance of advances outstanding to take advantage of low borrowing costs as a result of the low level of market interest rates.
     Provision for Loan Losses. The provision for loan losses increased by $784,000, or 248%, to $1.1 million for the fiscal year ended September 30, 2009 from $316,000 for the fiscal year ended September 30, 2008. The increase in the provision for loan losses was due to an increase in the level of total nonperforming assets, which increased $502,000 or 27.6% to $2.3 million for the fiscal year ended September 30, 2009 from $1.8 million for the fiscal year ended September 30, 2008. Management analyzes the allowance for loan losses as described in the section entitled “Allowance for Loan Losses.” The provision that is recorded is sufficient, in management’s judgment, to bring the allowance for loan losses to a level that reflects the losses inherent in our loan portfolio relative to loan mix, economic conditions and historical loss experience. Management believes, to the best of their knowledge, that all known losses as of the balance sheet dates have been recorded.
     Noninterest Income. Noninterest income increased $839,000, or 87.5%, to $1.8 million for the fiscal year ended September 30, 2009 from $959,000 for the fiscal year ended September 30, 2008. Net securities losses decreased $989,000, or 62.4%, to $597,000 for the fiscal year ended September 30, 2009 from $1.6 million for the fiscal year ended September 30, 2008. During the 2009 fiscal year losses on sales of investments securities totaled $456,000. In addition, impairment losses totaling $141,000 were recorded for other-than-temporary declines in market value on investment securities relating to financial industry common stocks. During the 2008 fiscal year impairment charges totaling $1.6 million were recorded related to $1.5 million of Freddie Mac and Fannie Mae preferred stocks, and $104,000 of financial industry related stocks. Partially offsetting this change, mutual fund and annuity fees decreased by $69,000, or 22.3%, to $240,000 for the fiscal year ended September 30, 2009 from $309,000 for the fiscal year ended September 30, 2008, due in part to customer preferences to invest in insured investments in light of the financial crisis.
     Noninterest Expense. Noninterest expense increased by $529,000, or 6.5%, to $8.7 million for the fiscal year ended September 30, 2009 from $8.2 million for the fiscal year ended September 30, 2008. The largest increases were in compensation and employee benefits and FDIC insurance premiums. Compensation and employee benefits increased by $239,000, or 5.0%, to $5.1 million for the fiscal year ended September 30, 2009 from $4.8 million for the fiscal year ended September 30, 2008. The increase is due to normal salary increases and increased medical insurance costs. FDIC insurance premiums increased by $464,000 to $497,000 for the fiscal year ended September 30, 2009 from $33,000 in the

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fiscal year ended September 30, 2008. This increase was the result of increased FDIC insurance premiums and the FDIC’s special assessment levied on all banks as of June 30, 2009. Our FDIC special assessment was $177,000.
     Income Tax Expense. The provision for income taxes for the fiscal year ended September 30, 2009 decreased by $775,000, compared to the prior year. This decrease in income tax was primarily a result of the reversal of a $510,000 valuation allowance on October 3, 2008 related to impairment losses recognized on Fannie Mae and Freddie Mac preferred stock. The $1.5 million impairment loss on the stocks was recognized in the fiscal year ended September 30, 2008 while the tax benefit was recognized in the fiscal year ended September 30, 2009. The Emergency Economic Stabilization Act of 2009 was enacted in the 2009 fiscal year, which allowed banks to recognize these losses as ordinary loss for tax purposes.
Non-Performing and Problem Assets
     When a residential mortgage loan or home equity line of credit is 15 days past due, we contact the borrower to inquire as to why the loan is past due. When a loan is 30 days or more past due, we mail a default notice and attempt additional personal, direct contact with the borrower to determine the reason for the delinquency and establish the procedures by which the borrower will bring the loan current. When the loan is 45 days past due, we explore the customer’s issues and repayment options and inspect the collateral. In addition, our Board of Directors determines whether to initiate foreclosure proceedings, which will be initiated by counsel if the loan is not brought current by the end of the calendar month. Procedures for avoiding foreclosure can include restructuring the loan in a manner that provides concessions to the borrower to facilitate payment.
     Commercial business loans, commercial real estate loans and consumer loans are generally handled in the same manner as residential mortgage loans or home equity lines of credit. When a loan is 30 days past due, we contact the borrower and inquire of the principals the status of the loan and what actions are being implemented to bring the loan current.
     Loans are placed on non-accrual status when payment of principal or interest is 90 days or more delinquent. Loans are also placed on non-accrual status if collection of principal or interest in full is in doubt. When loans are placed on a non-accrual status, unpaid accrued interest is fully reversed, and further income is recognized only to the extent received. The loan may be returned to accrual status if payments are brought to less than 90 days delinquent and full payment of principal and interest is expected.
     The table below sets forth the amounts and categories of our non-performing assets at the dates indicated. At March 31, 2010 and September 30, 2009, 2008, 2007, 2006 and 2005, we had no troubled debt restructurings (loans for which a portion of interest or principal has been forgiven and loans modified at interest rates materially less than current market rates).

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            At September 30,  
    At March 31,                                
    2010     2009     2008     2007     2006     2005  
                    (Dollars in thousands)          
Non-accrual loans:
                                               
Real estate loans:
                                               
One- to four-family residential
  $ 262     $ 895     $ 1,600     $ 737     $ 481     $ 151  
Commercial
    261       415       2       71       112       129  
Home equity loans and lines of credit
    22       7       9               75       82  
Construction
                                   
Commercial
                                   
Other loans (1)
    5       4       5             13       1  
 
                                   
Total non-accrual loans
    550       1,321       1,616       808       681       363  
 
                                   
 
                                               
Loans delinquent 90 days or greater and still accruing:
                                               
Real estate loans:
                                               
One- to four-family residential
                                   
Commercial
                                   
Home equity loans and lines of credit
                                   
Construction
                                   
Commercial
                                   
Other loans (1)
                                   
 
                                   
Total loans delinquent 90 days or greater and still accruing
                                   
 
                                   
 
                                               
Foreclosed real estate:
                                               
One- to four-family residential
    1,112       1,002       205       71       17        
Commercial
                                   
Home equity loans and lines of credit
                                   
Construction
                                   
Commercial
                                   
Other loans (1)
                                   
 
                                   
Total foreclosed real estate
    1,112       1,002       205       71       17        
 
                                   
 
                                               
Total non-performing assets
  $ 1,662     $ 2,323     $ 1,821     $ 879     $ 698     $ 363  
 
                                   
 
                                               
Ratios:
                                               
Non-performing loans to total loans
    0.60 %     0.86 %     0.71 %     0.36 %     0.34 %     0.30 %
Non-performing assets to total assets
    0.41 %     0.61 %     0.51 %     0.26 %     0.21 %     0.13 %
 
(1)   Consists of automobile loans, consumer loans and loans secured by savings accounts.

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     Delinquent Loans. The following table sets forth certain information with respect to our loan portfolio delinquencies at the dates indicated.
                                                 
    Loans Delinquent For        
    60-89 Days     90 Days and Over     Total  
    Number     Amount     Number     Amount     Number     Amount  
                    (Dollars in thousands)                  
At March 31, 2010
                                               
Real estate loans:
                                               
One- to four-family residential
    2     $ 434       6     $ 262       8     $ 696  
Commercial
    3       140       2       261       5       401  
Home equity loans and lines of credit
    2       150       1       22       3       172  
Construction
    1       358                   1       358  
Commercial
                                   
Other loans (1)
    4       19       2       5       6       24  
 
                                   
Total loans
    12     $ 1,101       11     $ 550       23     $ 1,651  
 
                                   
 
                                               
At September 30, 2009
                                               
Real estate loans:
                                               
One- to four-family residential
    8     $ 975       13     $ 895       21     $ 1,870  
Commercial
    3       242       3       415       6       657  
Home equity loans and lines of credit
    2       29       1       7       3       36  
Construction
                                   
Commercial
                                   
Other loans (1)
    4       13       4       4       8       17  
 
                                   
Total loans
    17     $ 1,259       21     $ 1,321       38     $ 2,580  
 
                                   
 
                                               
At September 30, 2008
                                               
Real estate loans:
                                               
One- to four-family residential
    8     $ 1,017       13     $ 1,600       21     $ 2,617  
Commercial
                1       2       1       2  
Home equity loans and lines of credit
    1       5       1       9       2       14  
Construction
                                   
Commercial
                                   
Other loans (1)
    1       2       3       5       4       7  
 
                                   
Total loans
    10     $ 1,024       18     $ 1,616       28     $ 2,640  
 
                                   
 
                                               
At September 30, 2007
                                               
Real estate loans:
                                               
One- to four-family residential
    8     $ 548       12     $ 737       20     $ 1,285  
Commercial
                2       71       2       71  
Home equity loans and lines of credit
                                   
Construction
                                   
Commercial
                                   
Other loans (1)
    5       18                   5       18  
 
                                   
Total loans
    13     $ 566       14     $ 808       27     $ 1,374  
 
                                   
 
                                               
At September 30, 2006
                                               
Real estate loans:
                                               
One- to four-family residential
    7     $ 234       10     $ 481       17     $ 715  
Commercial
    1       63       2       112       3       175  
Home equity loans and lines of credit
                1       75       1       75  
Construction
                                   
Commercial
                                   
Other loans (1)
    5       11       2       13       7       24  
 
                                   
Total loans
    13     $ 308       15     $ 681       28     $ 989  
 
                                   
 
                                               
At September 30, 2005
                                               
Real estate loans:
                                               
One- to four-family residential
    7     $ 210       4     $ 151       11     $ 361  
Commercial
                3       129       3       129  
Home equity loans and lines of credit
                2       82       2       82  
Construction
                                   
Commercial
                                   
Other loans (1)
                2       1       2       1  
 
                                   
Total loans
    7     $ 210       11     $ 363       18     $ 573  
 
                                   
 
(1)   Consists of automobile loans, consumer loans and loans secured by savings accounts.

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     Foreclosed Real Estate. Real estate acquired by us as a result of foreclosure or by deed in lieu of foreclosure is classified as real estate owned. When property is acquired it is recorded at estimated fair value at the date of foreclosure less the cost to sell, establishing a new cost basis. Estimated fair value generally represents the sale price a buyer would be willing to pay on the basis of current market conditions, including normal terms from other financial institutions. Holding costs and declines in estimated fair market value result in charges to expense after acquisition. At March 31, 2010, we had foreclosed real estate of $1.1 million, and at September 30, 2009, 2008, 2007, 2006 and 2005, we had foreclosed real estate of $1.0 million, $205,000, $70,000, $117,000 and $0, respectively. Foreclosed real estate at March 31, 2010 consisted of four residential real estate properties, two of which were located in a lake resort area in Maryland totaling $860,000.
     Classification of Assets. Our policies, consistent with regulatory guidelines, provide for the classification of loans and other assets that are considered to be of lesser quality as substandard, doubtful, or loss assets. An asset is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard assets include those assets characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. Assets classified as doubtful have all of the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Assets (or portions of assets) classified as loss are those considered uncollectible and of such little value that their continuance as assets is not warranted. Assets that do not expose us to risk sufficient to warrant classification in one of the aforementioned categories, but which possess potential weaknesses that deserve our close attention, are required to be designated as special mention.
     We maintain an allowance for loan losses at an amount estimated to equal all credit losses incurred in our loan portfolio that are both probable and reasonable to estimate at a balance sheet date. Our determination as to the classification of our assets is subject to review by our principal federal regulators, the Federal Deposit Insurance Corporation. We regularly review our asset portfolio to determine whether any assets require classification in accordance with applicable regulations.
     The following table sets forth our amounts of classified assets and criticized assets (classified assets and loans designated as special mention) as of the periods indicated.
                         
    At March 31,     At September 30,  
    2010     2009     2008  
    (In thousands)  
Classified assets:
                       
Substandard
  $ 1,806     $ 2,497     $ 1,819  
Doubtful
    5       4       3  
Loss
                 
 
                 
Total classified assets
    1,811       2,501       1,822  
Special mention
    7,078       5,929       3,685  
 
                 
Total criticized assets
  $ 8,889     $ 8,430     $ 5,507  
 
                 
     At March 31, 2010, total criticized assets consisted of $550,000 of non-accrual loans (consisting of $284,000 residential real estate and home equity loans and lines of credit; $261,000 commercial loans; $5,000 consumer loans), $1.1 million of foreclosed real estate and $7.1 million of performing loans that were considered special mention. At September 30, 2009, criticized assets consisted of $1.4 million non-accrual loans (consisting of $902,000 residential and home equity loans and lines of credit; $415,000 commercial real estate loans; $4,000 consumer loans), $1.0 million of real estate owned and $5.9 million of non-performing loans that were considered special mention.

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     See “Allowance for Loan Losses” for a discussion of these substandard loans as they relate to the allowance for loan losses.
Allowance for Loan Losses
     We provide for loan losses based upon the consistent application of our documented allowance for loan loss methodology. All loan losses are charged to the allowance for loan losses and all recoveries are credited to it. Additions to the allowance for loan losses are provided by charges to income based on various factors which, in our judgment, deserve current recognition in estimating probable losses. We regularly review the loan portfolio and make provisions for loan losses in order to maintain the allowance for loan losses in accordance with GAAP. The allowance for loan losses consists primarily of two components:
  (1)   specific allowances established for impaired loans (as defined by GAAP). The amount of impairment provided for as a specific allowance is represented by the deficiency, if any, between the estimated fair value of the loan, or the loan’s observable market price, if any, or the underlying collateral, if the loan is collateral dependent, and the carrying value of the loan. Impaired loans for which the estimated fair value of the loan, or the loan’s observable market price or the fair value of the underlying collateral, if the loan is collateral dependent, exceeds the carrying value of the loan are not considered in establishing specific allowances for loan losses; and
 
  (2)   general allowances established for loan losses on a portfolio basis for loans that do not meet the definition of impaired loans. The portfolio is grouped into similar risk characteristics, primarily loan type and regulatory classification. We apply an estimated loss rate to each loan group. The loss rates applied are based upon our loss experience adjusted, as appropriate, for the environmental factors discussed below. This evaluation is inherently subjective, as it requires material estimates that may be susceptible to significant revisions based upon changes in economic and real estate market conditions.
     Actual loan losses may be significantly more than the allowance for loan losses we have established, which could have a material negative effect on our financial results.
     The adjustments to historical loss experience are based on our evaluation of several qualitative and environmental factors, including:
    changes in any concentration of credit (including, but not limited to, concentrations by geography, industry or collateral type);
 
    changes in the number and amount of non-accrual loans, criticized loans and past due loans;
 
    changes in national, state and local economic trends;
 
    changes in the types of loans in the loan portfolio;
 
    changes in the experience and ability of personnel and management in the mortgage loan origination and loan servicing departments;
 
    changes in the value of underlying collateral for collateral dependent loans;

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    changes in lending strategies; and
 
    changes in lending policies and procedures.
In addition, we may establish an unallocated allowance to provide for probable losses that have been incurred as of the reporting date but are not reflected in the allocated allowance.
     We evaluate the allowance for loan losses based upon the combined total of the specific and general components. Generally when the loan portfolio increases, absent other factors, the allowance for loan loss methodology results in a higher dollar amount of estimated probable losses than would be the case without the increase. Generally when the loan portfolio decreases, absent other factors, the allowance for loan loss methodology results in a lower dollar amount of estimated probable losses than would be the case without the decrease.
     Commercial real estate loans generally have greater credit risks compared to the one- to four-family residential mortgage loans we originate, as they typically involve larger loan balances concentrated with single borrowers or groups of related borrowers. In addition, the payment experience on loans secured by income-producing properties typically depends on the successful operation of the related business and thus may be subject to a greater extent to adverse conditions in the real estate market and in the general economy.
     Commercial business loans generally have greater credit risks compared to the one- to four-family residential mortgage loans we originate, as they typically involve larger loan balances concentrated with single borrowers or groups of related borrowers. In addition, the payment experience on commercial business loans typically depends on the successful operation of the related business and thus may be subject to a greater extent to adverse conditions in the real estate market and in the general economy.
     At March 31, 2010 and September 30, 2009 and 2008, the Company had no loans considered to be impaired. There were no loans in arrears 90 days or more still accruing interest. Loans in arrears 90 days or more or in process of foreclosure (nonaccrual loans) were as follows:
                         
    Number of Loans   Amount   Percentage of Loans Receivable
    (Dollars in thousands)  
At March 31, 2010
    11     $ 550       0.20 %
At September 30, 2009
    21     $ 1,321       0.49 %
At September 30, 2008
    18     $ 1,616       0.63 %
     Total interest income which would have been recognized had these loans paid in accordance with their contractual terms and actual interest income recognized on these loans as of the period indicated are summarized as follows:
                                 
    For the Six Months     For the Six     For the Years Ended  
    Ended March 31,     Months Ended     September 30,     September 30,  
    2010     March 31, 2009     2009     2008  
    (Unaudited)     (Dollars in thousands)          
Interest income that would have been recognized
  $ 19     $ 50     $ 80     $ 103  
Interest income recognized
    2       2       34       42  
 
                       
Interest income foregone
  $ 17     $ 48     $ 46     $ 61  
 
                       
     Generally, we underwrite commercial real estate loans and residential real estate loans at a loan-to-value ratio of 80% or less. Accordingly, in the event that a loan becomes past due and,randomly with respect to performing loans, we will conduct visual inspections of collateral properties and/or review

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publicly available information, such as online databases, to ascertain property values. However, we will not perform formal appraisals on collateral properties unless we are considering liquidation of the property to repay a loan. For impaired loans, we utilize the appraised value in determining the appropriate specific allowance for loan losses attributable to a loan. In addition, changes in the appraised value of properties securing our loans can result in an increase or decrease in our general allowance for loan losses as an adjustment to our historical loss experience due to qualitative and environmental factors, as described above.
     We evaluate the loan portfolio on a quarterly basis and the allowance is adjusted accordingly. While we use the best information available to make evaluations, future adjustments to the allowance may be necessary if conditions differ substantially from the information used in making the evaluations. In addition, as an integral part of their examination process, the Pennsylvania Department of Banking and the Federal Deposit Insurance Corporation will periodically review the allowance for loan losses. The Pennsylvania Department of Banking and the Federal Deposit Insurance Corporation may require us to recognize additions to the allowance based on their analysis of information available to them at the time of their examination.
     The following table sets forth activity in our allowance for loan losses for the periods indicated.
                                                         
    At or For the        
    Six Months Ended        
    March 31,     At or For the Years Ended September 30,  
    2010     2009     2009     2008     2007     2006     2005  
                    (Dollars in thousands)                  
Balance at beginning of period
  $ 3,078     $ 2,426     $ 2,426     $ 2,379     $ 2,423     $ 1,580     $ 1,597  
 
                                                       
Charge-offs:
                                                       
Real estate loans
    50       38       118       151       18              
Commercial real estate
    1       300       305       70             105        
Other loans (1)
    11       55       65       132       130       60       20  
 
                                         
Total charge-offs
    62       393       488       353       148       165       20  
 
                                         
 
                                                       
Recoveries:
                                                       
Real estate loans
                                         
Commercial
    1       2       6       6       9       6        
Other loans (1)
    5       18       34       78       95       14       3  
 
                                         
Total recoveries
    6       20       40       84       104       20       3  
 
                                         
 
                                                       
Net charge-offs
    (56 )     (373 )     (448 )     (269 )     (44 )     (145 )     (17 )
Adjustment (2)
                                  988        
Provision for loan losses
    429       547       1,100       316                    
 
                                         
 
                                                       
Balance at end of period
  $ 3,451     $ 2,600     $ 3,078     $ 2,426     $ 2,379     $ 2,423     $ 1,580  
 
                                         
 
                                                       
Ratios:
                                                       
Net charge-offs to average loans outstanding (annualized)
    0.04 %     0.29 %     0.34 %     0.21 %     0.04 %     0.17 %     0.03 %
Allowance for loan losses to non-performing loans at end of period
    627.45 %     152.31 %     233.01 %     150.12 %     294.43 %     355.80 %     435.26 %
Allowance for loan losses to total loans at end of period
    1.23 %     0.99 %     1.12 %     0.93 %     0.97 %     1.16 %     1.31 %
 
(1)   Consists of automobile loans, consumer loans and loans secured by savings accounts.
 
(2)   Addition to allowance as a result of the acquisition of Hoblitzell National Bank in 2006.
     For additional information with respect to the portions of the allowance for loan losses attributable to our loan classifications, see “Allocation of Allowance for Loan Losses.” For additional information with respect to non-performing loans and delinquent loans, see “—Non-performing and Problem Assets” and “—Non-performing and Problem Assets—Delinquent Loans.”

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Table of Contents

     Allocation of Allowance for Loan Losses. The following table sets forth the allowance for loan losses allocated by loan category and the percent of loans in each category to total loans at the dates indicated. The allowance for loan losses allocated to each category is not necessarily indicative of future losses in any particular category and does not restrict the use of the allowance to absorb losses in other categories.
                                                 
    At March 31,     At September 30,  
    2010     2009     2008  
            Percent of Loans in             Percent of Loans in             Percent of Loans in  
    Allowance for Loan     Each Category to     Allowance for Loan     Each Category to     Allowance for Loan     Each Category to  
    Losses     Total Loans     Losses     Total Loans     Losses     Total Loans  
                    (Dollars in thousands)                  
Real estate loans (1)
  $ 1,314       65.7 %   $ 1,064       66.3 %   $ 984       68.3 %
Commercial (2)
    2,064       33.2       1,943       32.5       1,354       30.3  
Other loans (3)
    73       1.1       71       1.2       88       1.4  
 
                                   
Total allocated allowance
    3,451       100.0       3,078       100.0       2,426       100.0  
Unallocated
                                   
 
                                   
Total
  $ 3,451       100.0 %   $ 3,078       100.0 %   $ 2,426       100.0 %
 
                                   
                                                 
    At September 30,  
    2007     2006     2005  
            Percent of Loans in             Percent of Loans in             Percent of Loans in  
    Allowance for Loan     Each Category to     Allowance for Loan     Each Category to     Allowance for Loan     Each Category to  
    Losses     Total Loans     Losses     Total Loans