EXHIBIT 99.3

PRO FORMA VALUATION REPORT

STANDARD FINANCIAL CORP.
Murrysville, Pennsylvania

PROPOSED HOLDING COMPANY FOR:
STANDARD BANK, PASB
Murrysville, Pennsylvania

Dated As Of:
May 28, 2010

Prepared By:

RP^® Financial, LC.
1100 North Glebe Road
Suite 1100
Arlington, Virginia 22201

RP® FINANCIAL,LC.
Serving the Financial Services Industry Since 1988

 

May 28, 2010

Boards of Directors
Standard Mutual Holding Company
Standard Bank, PaSB
2640 Monroeville Boulevard
Monroeville, Pennsylvania 15146

Members of the Boards of Directors:

     At your request, we have completed and hereby provide an independent appraisal (“Appraisal”) of the estimated pro forma market value of the common stock which is to be issued in connection with the mutual-to-stock conversion transaction described below. This Appraisal is furnished pursuant to the requirements of 563b.7 and has been prepared in accordance with the “Guidelines for Appraisal Reports for the Valuation of Savings and Loan Associations Converting from Mutual to Stock Form of Organization” of the Office of Thrift Supervision (“OTS”) and applicable interpretations thereof. Such Valuation Guidelines are relied upon by the Federal Deposit Insurance Corporation (“FDIC”) and the Pennsylvania Department of Banking (“PDOB”) in the absence of separate written valuation guidelines.

Description of Plan of Conversion of Standard Mutual Holding Company

     On May 18, 2010 and amended on June 8, 2010, the Board of Directors of Standard Mutual Holding Company, Monroeville, Pennsylvania (the “MHC”), a mutual holding company that owns all of the outstanding shares of common stock of Standard Bank, PaSB (“Standard Bank”, or the “Bank”), adopted the plan of conversion whereby the MHC will convert to stock form. As a result of the conversion, the MHC will be succeeded by a Maryland corporation with the name of Standard Financial Corp. (the “Company”). Following the conversion, the MHC will no longer exist. For purposes of this document, the existing consolidated entity will hereinafter be referred to as Standard or the Company.

     The Company will offer its common stock in a subscription offering to Eligible Account Holders, Tax-Qualified Plans including the Bank’s employee stock ownership plan (the “ESOP”), Supplemental Eligible Account Holders and Other Depositors, as such terms are defined for purposes of applicable regulatory guidelines governing mutual-to-stock conversions. To the extent that shares remain available for purchase after satisfaction of all subscriptions received in the subscription offering, the shares may be offered for sale to members of the general public in a community offering and/or a syndicated community offering. A portion of the net proceeds received from the sale of the common stock will be used to purchase all of the then to be issued and outstanding capital stock of the Bank and the balance of the net proceeds will be retained by the Company.

     

Washington Headquarters Three Ballston Plaza 1100 North Glebe Road, Suite1100 Arlington, VA 22201 www.rpfinancial.com		Telephone: (703) 528-1700 Fax No.: (703) 528-1788 Toll-Free No.: (866) 723-0594 E-Mail: mail@rpfinancial.com

Boards of Directors
May 28, 2010
Page 2

     At this time, no other activities are contemplated for the Company other than the ownership of Standard Bank, a loan to the newly-formed ESOP and reinvestment of the proceeds that are retained by the Company. In the future, Standard Financial Corp. may acquire or organize other operating subsidiaries, diversify into other banking-related activities, pay dividends or repurchase its stock, although there are no specific plans to undertake such activities at the present time.

     The plan of conversion provides for the establishment of a charitable foundation (the “Foundation”). The Foundation will be funded with $200,000 of cash and a contribution of Standard Financial Corp. common stock equal to 3.5% of the shares of common stock issued in the offering. The purpose of the Foundation is to provide financial support to charitable organizations in the communities in which Standard Bank operates and to enable those communities to share in the Bank’s long-term growth. The Foundation will be dedicated completely to community activities and the promotion of charitable causes.

     RP^® Financial, LC. (“RP Financial”) is a financial consulting firm serving the financial services industry nationwide that, among other things, specializes in financial valuations and analyses of business enterprises and securities, including the pro forma valuation for savings institutions converting from mutual-to-stock form. The background and experience of RP Financial is detailed in Exhibit V-1. For its appraisal services, RP Financial is being compensated on a fixed fee basis for the original appraisal and for any subsequent updates, and such fees are payable regardless of the valuation conclusion or the completion of the conversion offering transaction. We believe that we are independent of the Company, the Bank, the MHC and the other parties engaged by Standard Bank or the Company to assist in the stock conversion process.

Valuation Methodology

     In preparing our Appraisal, we have reviewed the regulatory applications of Standard Financial Corp., Standard Bank and the MHC, including the prospectus as filed with the OTS and the Securities and Exchange Commission (“SEC”). We have conducted a financial analysis of the Company that has included a review of audited financial information for the past five years through the fiscal year ended September 30, 2009 and a review of various unaudited information and internal financial reports through March 31, 2010. We have also conducted due diligence related discussions with the Company’s management; independent auditor; conversion counsel; and financial and marketing advisor in connection with the stock offering. All assumptions and conclusions set forth in the Appraisal were reached independently from such discussions. In addition, where appropriate, we have considered information based on other available published sources that we believe are reliable. While we believe the information and data gathered from all these sources are reliable, we cannot guarantee the accuracy and completeness of such information.

     We have investigated the competitive environment within which Standard operates and have assessed the Company’s relative strengths and weaknesses. We have monitored all material regulatory and legislative actions affecting financial institutions generally and analyzed

Boards of Directors
May 28, 2010
Page 3

the potential impact of such developments on Standard Bank and the industry as a whole to the extent we were aware of such matters. We have analyzed the potential effects of the stock conversion on the Company’s operating characteristics and financial performance as they relate to the pro forma market value of the Company. We have reviewed the economy and demographic characteristics of the primary market area in which the Company currently operates. We have compared the Company’s financial performance and condition with publicly-traded thrift institutions evaluated and selected in accordance with the Valuation Guidelines, as well as all publicly-traded thrifts and thrift holding companies. We have reviewed conditions in the securities markets in general and the market for thrifts and thrift holding companies, including the market for new issues.

     The Appraisal is based on the Company’s representation that the information contained in the regulatory applications and additional information furnished to us by the Company and its independent auditors, legal counsel, investment bankers and other authorized agents are truthful, accurate and complete. We did not independently verify the financial statements and other information provided by the Company, or its independent auditors, legal counsel, investment bankers and other authorized agents nor did we independently value the assets or liabilities of the Company. The valuation considers Standard Financial Corp. only as a going concern and should not be considered as an indication of the Company’s liquidation value.

     Our appraised value is predicated on a continuation of the current operating environment for the Company and for all thrifts and their holding companies. Changes in the local and national economy, the federal and state legislative and regulatory environments for financial institutions, the stock market, interest rates, and other external forces (such as natural disasters or significant world events) may occur from time to time, often with great unpredictability, and may materially impact the value of thrift stocks as a whole or the Company’s value alone. It is our understanding that the Company intends to remain an independent institution and there are no current plans for selling control of the Company as a converted institution. To the extent that such factors can be foreseen, they have been factored into our analysis.

     The estimated pro forma market value is defined as the price at which the Company’s stock, immediately upon completion of the offering, would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.

Valuation Conclusion

     It is our opinion that, as of May 28, 2010, the estimated aggregate pro forma market value of the shares to be issued immediately following the conversion, including shares to be issued to the Foundation, equaled $31,050,000 at the midpoint, equal to 3,105,000 shares offered at a per share value of $10.00. Pursuant to conversion guidelines, the 15% offering range indicates a minimum value of $26,392,500 and a maximum value of $35,707,500. Based on the $10.00 per share offering price determined by the Board, this valuation range equates to total shares outstanding of 2,639,250 at the minimum and 3,570,750 at the maximum. In the event the appraised value is subject to an increase, the aggregate pro forma market value may be increased up to a supermaximum value of $41,063,630 without a resolicitation. Based on the $10.00 per share offering price, the supermaximum value would result in total shares outstanding of 4,106,363. Based on this valuation range, the offering range is as follows:

Boards of Directors
May 28, 2010
Page 4

$25,500,000 at the minimum, $30,000,000 at the midpoint, $34,500,000 at the maximum and $39,675,000 at the supermaximum. Based on the $10.00 per share offering price, the number of offering shares is as follows: 2,550,000 at the minimum, 3,000,000 at the midpoint, 3,450,000 at the maximum and 3,967,500 at the supermaximum.

Limiting Factors and Considerations

     The valuation is not intended, and must not be construed, as a recommendation of any kind as to the advisability of purchasing shares of the common stock. Moreover, because such valuation is determined in accordance with applicable regulatory guidelines and is necessarily based upon estimates and projections of a number of matters, all of which are subject to change from time to time, no assurance can be given that persons who purchase shares of common stock in the conversion will thereafter be able to buy or sell such shares at prices related to the foregoing valuation of the estimated pro forma market value thereof. The Appraisal reflects only a valuation range as of this date for the pro forma market value of the Company immediately upon issuance of the stock and does not take into account any trading activity with respect to the purchase and sale of common stock in the secondary market on the date of issuance of such securities or at anytime thereafter following the completion of the public stock offering.

     The valuation prepared by RP Financial in accordance with applicable regulatory guidelines was based on the financial condition and operations of the Company as of March 31, 2010, the date of the financial data included in the prospectus.

     RP Financial is not a seller of securities within the meaning of any federal and state securities laws and any report prepared by RP Financial shall not be used as an offer or solicitation with respect to the purchase or sale of any securities. RP Financial maintains a policy which prohibits RP Financial, its principals or employees from purchasing stock of its financial institution clients.

Boards of Directors
May 28, 2010
Page 5

     The valuation will be updated as provided for in the conversion regulations and guidelines. These updates will consider, among other things, any developments or changes in the financial performance and condition of the Company, management policies, and current conditions in the equity markets for thrift stocks, both existing issues and new issues. These updates may also consider changes in other external factors which impact value including, but not limited to: various changes in the federal and state legislative and regulatory environments for financial institutions, the stock market, the market for thrift stocks, and interest rates. Should any such new developments or changes be material, in our opinion, to the valuation of the shares, appropriate adjustments to the estimated pro forma market value will be made. The reasons for any such adjustments will be explained in the update at the date of the release of the update.

RP® Financial, LC.		TABLE OF CONTENTS
		i

TABLE OF CONTENTS
STANDARD FINANCIAL CORP.
STANDARD BANK, PaSB
Murrysville, Pennsylvania

		PAGE
DESCRIPTION		NUMBER
CHAPTER ONE            OVERVIEW AND FINANCIAL ANALYSIS
Introduction		I.1
Plan of Conversion and Reorganization		I.1
Strategic Overview		I.2
Balance Sheet Trends		I.4
Income and Expense Trends		I.7
Interest Rate Risk Management		I.10
Lending Activities and Strategy		I.11
Asset Quality		I.12
Funding Composition and Strategy		I.13
Legal Proceedings		I.14
CHAPTER TWO            MARKET AREA
Introduction		II.1
National Economic Factors		II.2
Market Area Demographics		II.6
Regional Economy		II.8
Unemployment Trends		II.10
Market Area Deposit Characteristics		II.11
Deposit Competition		II.13
CHAPTER THREE            PEER GROUP ANALYSIS
Peer Group Selection		III.1
Financial Condition		III.5
Income and Expense Components		III.9
Loan Composition		III.11
Credit Risk		III.14
Interest Rate Risk		III.14
Summary		III.17

RP® Financial, LC.		TABLE OF CONTENTS
		ii

TABLE OF CONTENTS
STANDARD FINANCIAL CORP.
STANDARD BANK, PaSB
Murrysville, Pennsylvania
(continued)

		PAGE
DESCRIPTION		NUMBER
CHAPTER FOUR            VALUATION ANALYSIS
Introduction		IV.1
Appraisal Guidelines		IV.1
RP Financial Approach to the Valuation		IV.1
Valuation Analysis		IV.2
1.Financial Condition		IV.2
2.Profitability, Growth and Viability of Earnings		IV.4
3.Asset Growth		IV.6
4.Primary Market Area		IV.6
5.Dividends		IV.6
6.Liquidity of the Shares		IV.7
7.Marketing of the Issue		IV.8
A.The Public Market		IV.8
B.The New Issue Market		IV.12
C.The Acquisition Market		IV.15
8.Management		IV.15
9.Effect of Government Regulation and Regulatory Reform		IV.16
Summary of Adjustments		IV.16
Valuation Approaches:		IV.16
1.Price-to-Earnings (“P/E”)		IV.18
2.Price-to-Book (“P/B”)		IV.19
3.Price-to-Assets (“P/A”)		IV.20
Valuation Conclusion		IV.20

RP® Financial, LC.		LIST OF TABLE
		iii

LIST OF TABLES
STANDARD FINANCIAL CORP.
STANDARD BANK, PaSB
Murrysville, Pennsylvania

TABLE
NUMBER		DESCRIPTION		PAGE
1.1		Historical Balance Sheet Data		I.5
1.2		Historical Income Statements		I.8
2.1		Summary Demographic Data		II.7
2.2		Primary Market Area Employment Sectors		II.9
2.3		Unemployment Trends		II.11
2.4		Deposit Summary		II.12
2.5		Market Area Deposit Competitors		II.14
3.1		Peer Group of Publicly-Traded Thrifts		III.4
3.2		Balance Sheet Composition and Growth Rates		III.8
3.3		Income as a Pct. of Avg. Assets and Yields, Costs, Spreads		III.10
3.4		Loan Portfolio Composition and Related Information		III.13
3.5		Credit Risk Measures and Related Information		III.15
3.6		Interest Rate Risk Measures and Net Interest Income Volatility		III.16
4.1		Pricing Characteristics and After-Market Trends		IV.14
4.2		Public Market Pricing		IV.21

RP® Financial, LC.		OVERVIEW AND FINANCIAL ANALYSIS I.1

I. OVERVIEW AND FINANCIAL ANALYSIS

Introduction

     Standard Bank, PaSB (“Standard Bank”, or the “Bank”), chartered in 1913, is a state-chartered stock savings bank headquartered in Murrysville, Pennsylvania. In 1998, the Bank reorganized into the mutual holding company structure, forming Standard Mutual Holding Company (the “MHC”). The MHC owns 100% of the outstanding common stock of Standard Bank. The Bank serves the eastern suburbs of Pittsburgh and rural areas in Bedford, Westmoreland, and Fayette County, Pennsylvania and Allegany County, Maryland through ten banking offices and one administrative office. A map of office locations is provided in Exhibit I-1. Standard Bank is a member of the Federal Home Loan Bank (“FHLB”) system and its deposits are insured up to the maximum allowable amount by the Federal Deposit Insurance Corporation (“FDIC”). As of March 31, 2010, the MHC had consolidated total assets of $403.2 million, total deposits of $311.2 million and total equity of $43.6 million equal to 10.8% of total assets. The MHC’s audited financial statements are included by reference as Exhibit I-2.

Plan of Conversion

     On May 18, 2010 and amended June 8, 2010, the Board of Directors of the MHC adopted the plan of conversion whereby the MHC will convert to stock form. As a result of the conversion, the MHC will be succeeded by a Maryland corporation with the name of Standard Financial Corp (“Standard” or the “Company”). Following the conversion, the MHC will no longer exist. For purposes of this document, the existing consolidated entity will hereinafter be referred to as Standard or the Company.

     The Company will offer its common stock in a subscription offering to Eligible Account Holders, Tax-Qualified Plans including Standard’s employee stock ownership plan (the “ESOP”), Supplemental Eligible Account Holders and Other Depositors, as such terms are defined for purposes of applicable federal regulatory guidelines governing mutual-to-stock conversions. To the extent that shares remain available for purchase after satisfaction of all subscriptions received in the subscription offering, the shares may be offered for sale to members of the general public in a community offering and/or a syndicated community offering. A portion of the net proceeds received from the sale of the common stock will be used to

RP® Financial, LC.		OVERVIEW AND FINANCIAL ANALYSIS I.2

purchase all of the then to be issued and outstanding capital stock of the Bank, and the balance of the net proceeds will be retained by the Company. In addition, Standard intends to form a charitable foundation (“Foundation”) that will be funded with $200,000 of cash and a contribution of Company stock equal to 3.5% of the offering amount.

     At this time, the Company has no plans for any activities other than owning the Bank, funding a loan to the newly-formed ESOP, and reinvesting the proceeds that are retained by the Company. In the future, the Company may acquire or organize other operating subsidiaries, diversify into other banking-related activities, pay dividends or repurchase its stock, although there are no specific plans to undertake such activities at the present time.

Strategic Overview

     Standard’s primary strategic objective is meeting the borrowing and savings needs of its local customer base in Allegheny, Bedford, Westmoreland, and Fayette Counties in Pennsylvania and Allegany County in Maryland. The Company’s operating strategy reflects that of a traditional thrift operating strategy of originating primarily 1-4 family residential mortgage loans funded with retail deposits. In recent years, the Company has supplemented originations of 1-4 family loans with originations of commercial real estate mortgages for diversification purposes. Virtually all loans originated by the Bank are secured by real estate within the market area.

     In 2006, the Company completed an acquisition of Hoblitzell National Bank (“HNB”), a federally-chartered bank with $70.1 million in total assets and four full service branch offices located in Bedford County, Pennsylvania and Allegany County, Maryland. The acquisition of HNB also boosted the Bank’s portfolio balance of commercial real estate mortgages, and increased core deposits.

     The Company’s recent balance sheet trends show asset growth that has been sustained by loan growth and an increase in liquidity, funded by a combination of retail deposits and borrowings. The Company’s loan portfolio remains anchored in 1-4 family permanent mortgage loans with growing diversification into commercial real estate lending. Investments are purchased using excess liquidity from deposit growth and loan cash flow.

     The post-offering business plan of the Company is expected to focus on operating and growing a profitable institution serving retail customers and businesses in local markets. Specifically, Standard will continue to be an independent community-oriented financial institution

RP® Financial, LC.		OVERVIEW AND FINANCIAL ANALYSIS I.3

committed to financing local real estate mortgages with operations funded by retail deposits, borrowings, equity capital and internal cash flows. In addition, the Company will continue to diversify its loan portfolio composition with a particular emphasis on growth of commercial real estate lending relationships. The Company’s strategy is to emphasize growth of core deposits as the primary source of funding, pursuant to which the Company seeks to establish full service banking relationships with its commercial loan customers. Contemplated growth strategies are expected to improve interest rate spreads, as well as generate additional revenues from sources of non-interest operating income.

     The Board of Directors has elected to complete a mutual-to-stock conversion to increase the operating flexibility and overall financial strength of the Company. The proceeds raised in the stock offering will also increase liquidity to support funding of future loan growth and other interest-earning assets. The Company’s elevated capital compliance will also reduce interest rate risk, particularly by enhancing the interest-earning-assets-to-interest-bearing-liabilities (“IEA/IBL”) ratio. The cash proceeds raised in the offering will provide an alternative funding source and may facilitate a reduction in the Company’s funding costs. The higher equity-to-assets ratio will also better position the Company to take advantage of expansion opportunities as they arise. Such expansion would most likely occur through the acquisition of branches that would provide for further penetration in the markets currently served by the Company, or into nearby surrounding markets. Expansion could also include growth through acquisition of other financial institutions or financial service providers following the stock offering, given its strengthened capital position and its ability to offer stock as consideration. At this time, the Company has no specific plans for expansion, but as part of its business plan has identified expanding its branch network as a growth strategy to be pursued. The projected uses of proceeds are highlighted below.

	•		Standard. The Company is expected to retain up to 50% of the net offering proceeds. At present, funds at the Company level, net of the loan to the ESOP and cash contribution to the Foundation, are expected to be invested into short-term investment grade securities and liquid funds. Over time, the funds may be utilized for various corporate purposes, possibly including acquisitions, infusing additional equity into the Company, repurchases of common stock, and the payment of cash dividends.
	•		Standard Bank. Approximately 50% of the net stock proceeds will be infused into the Bank in exchange for all of the Bank’s stock. Cash proceeds (i.e., net proceeds less deposits withdrawn to fund stock purchases) infused into the Bank are anticipated to become part of general operating funds, and are expected to be primarily utilized to fund loan growth over time.

RP® Financial, LC.		OVERVIEW AND FINANCIAL ANALYSIS I.4

     Overall, it is the Company’s objective to pursue growth that will serve to increase returns without increasing the overall risk associated with the Company’s operations.

Balance Sheet Trends

     Table 1.1 shows the Company’s historical balance sheet data for the past five and one-half fiscal years (the “analysis period”). From calendar year end 2005 through March 31, 2010, the Company experienced asset growth at an annual rate of 10.0%, and assets grew at an annualized rate of 11.2% for the six months ended March 31, 2010. The asset growth from fiscal years ended 2005 to 2009 occurred primarily in the portfolio of loans receivable. Asset growth during the first six months of 2010 has occurred within the portfolios of cash and investments, as the Bank experienced an influx of new deposits that have not yet been deployed to loans receivable.

     The intent of Standard’s investment policy is to provide adequate liquidity and to generate a favorable return within the context of supporting the Company’s overall credit and interest rate risk objectives. It is anticipated that proceeds retained at the holding company level will primarily be invested into investments with short-term maturities. The balance of investment securities has fluctuated since fiscal 2005, starting the period at $56.2 million and dipping to $17.9 million by the end of fiscal 2007 as excess liquidity was invested into loans receivable. Since then, the Bank has been directing more funding to the purchase of investment securities due to reduced loan demand and due to the Bank’s desire to maintain strong liquidity. At March 31, 2010, the investment portfolio, which consists primarily of U.S. Government agency securities and municipal bonds (all of which were classified as available for sale), had a balance of $49.5 million, or 12.3% of assets. MBS, on the other hand, have experienced a year over year reduction since 2005, declining from $63.3 million at the end of fiscal 2005 to $20.5 million at March 31, 2010. The MBS were replaced by higher yielding loans receivable. The balance of cash and equivalents has stayed between 3.3% and 6.5% of assets during this period. Exhibit I-4 provides historical detail of the Company’s investment portfolio.

     Standard’s portfolio of loans receivable increased at a 21.9% annual rate between fiscal year end 2005 and March 31, 2010 and has grown at an annualized rate of 4.8% during the first six months of 2010. Much of the loan growth between 2005 and 2009 was attributable to the acquisition of HNB in 2006 — loan growth following the merger was lower at 9.6%. Loan portfolio composition remained relatively consistent during this period, with 1-4 family residential mortgages remaining between 46.4% and 49.6% of the portfolio. The Company has diversified

     

RP® Financial, LC.		OVERVIEW AND FINANCIAL ANALYSIS I.5

Table 1.1
Standard Mutual Holding Company
Historical Balance Sheet Data

																																																		9/30/05-
																																																		3/31/10
		At Fiscal Year Ended September 30,																																								At March 31,								Annual.
		2005								2006								2007								2008								2009								2010								Growth Rate
		Amount				Pct(1)				Amount				Pct(1)				Amount				Pct(1)				Amount				Pct(1)				Amount				Pct(1)				Amount				Pct(1)				Pct
		($000)				(%)				($000)				(%)				($000)				(%)				($000)				(%)				($000)				(%)				($000)				(%)				(%)
Total Amount of:
Cash and cash equivalents			14,695				5.46	%			21,485				6.53	%			18,143				5.29	%			18,817				5.32	%			12,420				3.25	%			25,130				6.23	%			13.46	%
Investment securities			56,232				20.90	%			28,888				8.78	%			17,931				5.23	%			18,711				5.29	%			42,550				11.13	%			49,539				12.29	%			-2.94	%
MBS			63,288				23.53	%			45,762				13.91	%			36,019				10.50	%			29,756				8.41	%			26,694				6.98	%			20,484				5.08	%			-23.31	%
Loans receivable, net			119,288				44.34	%			205,653				62.51	%			243,742				71.07	%			257,551				72.76	%			270,769				70.81	%			277,148				68.74	%			21.94	%
FHLB stock			2,271				0.84	%			1,939				0.59	%			2,488				0.73	%			3,335				0.94	%			3,416				0.89	%			3,416				0.85	%			10.08	%
Bank-owned life insurance			7,805				2.90	%			8,106				2.46	%			8,424				2.46	%			8,756				2.47	%			9,080				2.37	%			9,244				2.29	%			4.06	%
Intangible Assets			151				0.06	%			10,377				3.15	%			10,134				2.96	%			9,960				2.81	%			9,792				2.56	%			9,739				2.42	%			166.55	%
Other Assets			5,286				1.96	%			6,779				2.06	%			6,057				1.77	%			7,085				2.00	%			7,694				2.01	%			8,509				2.11	%			11.85	%
Total Assets		$	269,016				100.00	%		$	328,989				100.00	%		$	342,938				100.00	%		$	353,971				100.00	%		$	382,415				100.00	%		$	403,209				100.00	%			9.99	%
Deposits		$	199,267				74.07	%		$	262,999				79.94	%		$	263,977				76.98	%		$	254,632				71.94	%		$	286,934				75.03	%		$	311,196				77.18	%			11.06	%
Borrowings			31,506				11.71	%			25,382				7.72	%			36,799				10.73	%			54,485				15.39	%			50,484				13.20	%			44,983				11.16	%			8.74	%
Other Liabilities			1,869				0.69	%			2,764				0.84	%			2,718				0.79	%			6,159				1.74	%			2,829				0.74	%			3,469				0.86	%			15.66	%
Total Liabilities			232,642				86.48	%			291,145				88.50	%			303,494				88.50	%			315,276				89.07	%			340,247				88.97	%			359,648				89.20	%			10.79	%
Equity		$	36,374				13.52	%		$	37,844				11.50	%		$	39,444				11.50	%		$	38,695				10.93	%		$	42,168				11.03	%		$	43,561				10.80	%			4.33	%
Loans/Deposits							59.86	%							78.20	%							92.33	%							101.15	%							94.37	%							89.06	%
Number of Banking Offices Open			7								11								10								10								10								10

Sources: Standard MHC’s prospectus, audited and unaudited financial statements and RP Financial calculations.

RP® Financial, LC.		OVERVIEW AND FINANCIAL ANALYSIS
		I.6

its portfolio by originating commercial real estate mortgages, which grew modestly from 21.0% of loans at the end of 2005 to 28.6% of the portfolio at March 31, 2010. The growth in commercial real estate mortgages offset a decline in home equity loans and lines of credit. Non-mortgage loans have remained between 3.5% and 6.4% of the portfolio since 2005.

     Standard generally sells fixed-rate residential mortgages with maturities in excess of 15 years in the secondary market with servicing retained. At March 31, 2010, the balance of loans serviced for others totaled $17.7 million.

     The Company also maintains an investment in bank-owned life insurance (“BOLI”) policies, which cover the lives of some of the Company’s directors and management. The purpose of the investment is to provide funding for the benefit plans of the covered individuals. The life insurance policies earn tax-exempt income through cash value accumulation and death proceeds. As of March 31, 2010, the cash surrender value of the Company’s BOLI equaled $9.2 million.

     Over the analysis period, Standard’s funding needs have been addressed through a combination of deposits, borrowings and internal cash flows. From fiscal year end 2005 through March 31, 2010, the Company’s deposits increased at an 11.1% annual rate. After experiencing minimal deposit growth in fiscal 2007 and deposit shrinkage during fiscal 2008, Standard experienced deposit growth of 12.6% in fiscal 2009 and experienced an annualized deposit growth rate of 17.6% during the first half of fiscal 2010. Deposit growth was driven primarily by growth of statement savings accounts, transaction accounts, and certificates of deposit (“CDs”), which offset the decline the decline in money market accounts (“MMAs”). Core deposits, including retail CDs with balances under $100,000, comprised 89.4% of total deposits for the six months ended March 31, 2010, equal to the ratio had at year end 2006.

     Borrowings have served as an alternative funding source for the Company to varying degrees since 2006, ranging from $25.4 million, or 7.7% of assets at September 30, 2006 to $54.5 million, or 15.4% of assets at September 30, 2008. Since 2008, borrowings have declined and were $45.0 million at March 31, 2010. Borrowings are used by the Company to address funding needs for growth and to support management of deposit costs and interest rate risk. The Company uses FHLB advances and customer repurchase agreements to meet its borrowing needs.

RP® Financial, LC.		OVERVIEW AND FINANCIAL ANALYSIS
		I.7

     The Company’s equity has increased every year since 2006 via profitable operations and the retention of earnings, and totaled $43.6 million at March 31, 2010. The Company had a balance of $9.7 million in intangible assets at March 31, 2010, which consisted of $8.8 million in goodwill and $0.9 million in core deposit intangibles. Tangible capital, which excludes intangible assets, totaled $33.8 million at March 31, 2010. The Bank maintained capital surpluses relative to all of its regulatory capital requirements at March 31, 2010. The addition of stock proceeds will serve to strengthen the Bank capital position, as well as support growth opportunities. However, the Company’s ROE will be depressed for a period of time until the proceeds from the stock conversion are fully leveraged into interest earning assets.

Income and Expense Trends

     Table 1.2 shows the Company’s historical income statements for the analysis period. The Company was profitable throughout this period, based on net income ranging from a low of 0.33% of average assets in fiscal 2005 to a high of 0.62% of average assets in fiscal 2007. Net income for the trailing twelve months ended March 31, 2010 was $2.4 million, equal to 0.61% of average assets. Net interest income and operating expenses represent the primary components of the Company’s earnings. Non-interest operating income has been a stable and significant source of earnings for the Company as well. Loan loss provisions have had a more significant impact on the Company’s earnings primarily since calendar 2008, although the Company has had strong asset quality throughout the economic downturn and loss provisions are thus lower for the Company than for many other financial institutions. Losses on sale had a significant earnings impact in fiscal 2008 when the Company took impairment charges totaling $1.6 million related to $1.5 million of Freddie Mac and Fannie Mae preferred stocks and $104,000 of financial industry related stocks, but overall, gains and losses generally have not had a major earnings impact.

     The Company’s net interest income ratio has trended upward since calendar 2006 due in large part to the Company’s success in generating lower costing core deposits and higher yielding assets. Overall, the Company’s net interest income to average assets ratio increased from 2.08% during fiscal 2005 to 2.79% for the trailing twelve months ended March 31, 2010. The Company’s net interest rate spreads and yields and costs for the past five and one-half fiscal years are set forth in Exhibits I-3 and I-5.

RP® Financial, LC.		OVERVIEW AND FINANCIAL ANALYSIS
		I.8

     Non-interest operating income has been a fairly stable and significant contributor to the Company’s earnings over the period, reflecting income from deposit fees, loan servicing fees, fees from the sale of annuities and mutual funds, income from BOLI and other sources. During the analysis period, non-interest operating income ranged from a low of 0.51% of average assets during fiscal 2005 to a high of 0.75% of average assets during calendar 2007.

     Operating expenses peaked, in relative terms, at a high of 2.42% of average assets during fiscal 2007, but have steadily declined since then and were measured at 2.36% in fiscal 2009 and 2.14% for the trailing twelve months ended March 31, 2010. Asset growth has successfully leveraged the Company’s operating expense ratio. The Company is likely to experience some upward pressure on the operating expense ratio following the stock offering due to additional public company expenses, including expenses related to the stock benefit plans. At the same, the increase in capital realized from the stock offering will increase the Company’s capacity to leverage operating expenses through pursuing a more aggressive growth strategy.

     Overall, the general trends in the Company’s net interest margin and operating expense ratio since fiscal 2005 reflect a steady increase in core earnings, as indicated by the growing expense coverage ratio (net interest income divided by operating expenses) and declining efficiency ratio (shown at the bottom of Table 1.2).

     Over the analysis period, maintenance of strong asset quality limited loan loss provisions, and no provisions were had in fiscal 2005, 2006, or 2007. Modest provisions were taken in fiscal 2008, and more significant provisions were taken in fiscal 2009 and for the trailing twelve months ended March 31, 2010, but overall, loan loss provisions have had a fairly insignificant impact on the Bank’s earnings. At March 31, 2010, the Company maintained a reserve balance of $3.5 million, equal to 1.23% of gross receivable and over 6 times non-performing loans (“NPLs”). Exhibit I-6 sets forth the Company’s recent loan loss allowance activity.

     Non-operating income has primarily consisted of gains on the sale of securities, which generally have had a relatively minor impact on the Company’s earnings. Other than impairment charges totaling $1.6 million related to $1.5 million of Freddie Mac and Fannie Mae preferred stocks and $104,000 of financial industry related stocks, non-operating items have contributed less than +/- 20 basis points to the Bank’s earnings over the analysis period. During

     

RP® Financial, LC.		OVERVIEW AND FINANCIAL ANALYSIS
		I.9

Table 1.2
Standard Mutual Holding Company
Historical Income Statements

		For the Fiscal Year Ended September 30,																																								For the 12 months
		2005								2006								2007								2008								2009								Ended 3/31/10(5)
		Amount				Pct(1)				Amount				Pct(1)				Amount				Pct(1)				Amount				Pct(1)				Amount				Pct(1)				Amount				Pct(1)
		($000)				(%)				($000)				(%)				($000)				(%)				($000)				(%)				($000)				(%)				($000)				(%)
Interest income		$	11,652				4.49	%		$	15,527				4.99	%		$	18,191				5.47	%		$	18,679				5.41	%		$	18,236				4.95	%		$	18,199				4.63	%
Interest expense			(6,252	)			-2.41	%			(8,394	)			-2.70	%			(10,075	)			-3.03	%			(9,237	)			-2.67	%			(8,091	)			-2.20	%			(7,239	)			-1.84	%
Net interest income		$	5,400				2.08	%		$	7,133				2.29	%		$	8,116				2.44	%		$	9,442				2.73	%		$	10,145				2.76	%		$	10,960				2.79	%
Provision for loan losses			0				0.00	%			0				0.00	%			0				0.00	%			(316	)			-0.09	%			(1,100	)			-0.30	%			(982	)			-0.25	%
Net interest income after provisions		$	5,400				2.08	%		$	7,133				2.29	%		$	8,116				2.44	%		$	9,126				2.64	%		$	9,045				2.46	%		$	9,978				2.54	%
Other operating income		$	1,313				0.51	%		$	1,833				0.59	%		$	2,498				0.75	%		$	2,545				0.74	%		$	2,395				0.65	%		$	2,322				0.59	%
Operating expense			(5,930	)			-2.29	%			(7,373	)			-2.37	%			(8,036	)			-2.42	%			(8,169	)			-2.36	%			(8,698	)			-2.36	%			(8,396	)			-2.14	%
Net operating income		$	783				0.30	%		$	1,593				0.51	%		$	2,578				0.78	%		$	3,502				1.01	%		$	2,742				0.74	%		$	3,904				0.99	%
Non-Operating Income
Gain(loss) on sale of loans		$	0				0.00	%		$	0				0.00	%		$	0				0.00	%		$	0				0.00	%		$	0				0.00	%		$	0				0.00	%
Gain(loss) on sale of securities			(27	)			-0.01	%			398				0.13	%			89				0.03	%			(1,586	)			-0.46	%			(597	)			-0.16	%			(448	)			-0.11	%
Other non-operating income (expense)			0								(297	)							0								0								0								0
Net non-operating income			($27	)			-0.01	%		$	101				0.03	%		$	89				0.03	%			($1,586	)			-0.46	%			($597	)			-0.16	%			($448	)			-0.11	%
Net income before tax		$	756				0.29	%		$	1,694				0.54	%		$	2,667				0.80	%		$	1,916				0.55	%		$	2,145				0.58	%		$	3,456				0.88	%
Income tax provision			101				0.04	%			(264	)			-0.08	%			(607	)			-0.18	%			(776	)			-0.22	%			(1	)			0.00	%			(1,057	)			-0.27	%
Net income (loss)		$	857				0.33	%		$	1,430				0.46	%		$	2,060				0.62	%		$	1,140				0.33	%		$	2,144				0.58	%		$	2,399				0.61	%
Adjusted Earnings
Net income		$	857				0.33	%		$	1,430				0.46	%		$	2,060				0.62	%		$	1,140				0.33	%		$	2,144				0.58	%		$	2,399				0.61	%
Add(Deduct): Net gain/(loss) on sale			27				0.01	%			(101	)			-0.03	%			(89	)			-0.03	%			1,586				0.46	%			597				0.16	%			448				0.11	%
Tax effect (2)			(9	)			0.00	%			34				0.01	%			30				0.01	%			(539	)			-0.16	%			(203	)			-0.06	%			(152	)			-0.04	%
Adjusted earnings		$	875				0.34	%		$	1,363				0.44	%		$	2,001				0.60	%		$	2,187				0.63	%		$	2,538				0.69	%		$	2,695				0.69	%
Expense coverage ratio (3)			0.91								0.97								1.01								1.16								1.17								1.31
Efficiency ratio (4)			88.3	%							82.2	%							75.7	%							68.1	%							69.4	%							63.2	%

Sources: Standard’s prospectus, audited & unaudited financial statements and RP Financial calculations.

RP® Financial, LC.		OVERVIEW AND FINANCIAL ANALYSIS
		I.10

the trailing twelve months ended March 31, 2010, non-operating losses totaled $448,000, consisting of losses on the sale of securities.

     The Company’s effective tax rate has fluctuated widely during the analysis period, ranging from a tax credit of 13.4% in fiscal 2005 to an effective rate of 40.5% during fiscal 2008. As set forth in the prospectus, the Company’s marginal effective statutory tax rate is 34.2%.

Interest Rate Risk Management

     The Company’s balance sheet is asset-sensitive in the short-term (less than one year) and, thus, the net interest margin will typically benefit during periods of rising and higher interest rates, as well as in the interest rate environment that generally prevailed during 2006 and 2007, in which the yield curve was flat or inverted. Comparatively, the Company’s interest rate spreads will tend to be adversely impacted when short-term interest rates decline and the yield curve steepens. As of March 31, 2010, the FDIC Net Portfolio Value (“NPV”) analysis indicated that a 2.0% instantaneous and sustained increase in interest rates would result in a 4.9% decrease in the Company’s NPV (see Exhibit I-7).

     The Company pursues a number of strategies to manage interest rate risk, particularly with respect to seeking to limit the repricing mismatch between interest rate sensitive assets and liabilities. The Company manages interest rate risk from the asset side of the balance sheet through selling originations of fixed rate 1-4 family loans with terms of 15 years or more, building up its liquidity position in low interest rate environments and diversifying into other types of lending beyond 1-4 family permanent mortgage loans which consists primarily of shorter term fixed rate loans, adjustable rate residential mortgages, and adjustable rate commercial real estate mortgages. As of September 30, 2009, ARM loans comprised 35% of the Company’s total loans due after September 30, 2010 (see Exhibit I-8). On the liability side of the balance sheet, management of interest rate risk has been pursued by utilizing FHLB advances with laddered terms out to five years and by emphasizing growth of lower costing and less interest rate sensitive transaction and statement savings accounts. Transaction and statement savings accounts comprised 61.8% of the Company’s total deposits at March 31, 2010.

     The infusion of stock proceeds will serve to further limit the Company’s interest rate risk exposure, as most of the net proceeds will be redeployed into interest-earning assets and the increase in the Company’s capital position will reduce the proportion of interest rate sensitive liabilities that are funding assets.

RP® Financial, LC.		OVERVIEW AND FINANCIAL ANALYSIS
		I.11

Lending Activities and Strategy

     Standard’s lending activities have traditionally emphasized 1-4 family permanent mortgage loans and such loans continue to comprise the largest component of the Company’s loan portfolio. Beyond 1-4 family loans, lending diversification by the Company has emphasized commercial real estate/multi-family loans followed by construction loans. To a lesser extent, the Company originates commercial business loans and consumer loans. Going forward, the Company’s lending strategy is to continue to emphasize diversification of the loan portfolio, particularly with respect to growth of commercial real estate loans. The origination of 1-4 family permanent mortgage loans is expected to remain an active area of lending for the Company, although growth of the 1-4 family loan portfolio will be limited as new loan production will be offset by loan sales of most fixed rate originations with terms of more than 15 years and repayments on the existing portfolio. The Company does not actively seek to build its portfolio of construction loans, but offers such loans on a case by case basis. Exhibit I-9 provides historical detail of the Company’s loan portfolio composition over the past five and one-half fiscal years and Exhibit I-10 provides the contractual maturity of the Company’s loan portfolio by loan type as of March 31, 2010.

     Standard offers both fixed rate and adjustable rate 1-4 family permanent mortgage loans. Loans are underwritten to secondary market guidelines, as the Company’s current philosophy has been to sell most originations of fixed rate loans with terms of more than 15 years. Loans are sold on a servicing retained basis. ARM loans offered by the Company have initial repricing terms of one, three, five, seven or ten years and then reprice annually for the balance of the loan term. ARM loans are indexed to the comparable term treasury rate. The Company does not originate or purchase any Alt-A, sub-prime, interest-only, or option ARM loans for 1-4 family residential properties. As of March 31, 2010, the outstanding balance of 1-4 family loans approximated $139.0 million or 49.2% of total loans outstanding. Home equity loans and lines of credit comprised an additional $43.7 million, or 15.4% of the loan portfolio.

     Construction loans are not a major part of Standard’s lending strategy and totaled only $3.1 million, or 1.1% of total loans, at March 31, 2010. The Company’s 1-4 family construction lending activities consist mostly of commercial construction loans for rental properties, commercial buildings and homes built by developers on speculative, undeveloped property. Construction loans are extended primarily to experienced builders in the Company’s market area. Construction loans are offered up to a LTV ratio of 80.0%. Commercial real estate

RP® Financial, LC.		OVERVIEW AND FINANCIAL ANALYSIS
		I.12

construction loans generally require a commitment for permanent financing to be in place prior to closing. Residential and commercial construction loans are interest only loans during the construction period.

     Most of the Company’s lending diversification is found in the portfolio of commercial real estate and multi-family loans, which are collateralized by properties in the regional lending area. Standard originates commercial real estate and multi-family loans up to a maximum LTV ratio of 80.0% and requires a minimum debt-coverage ratio of 1.25 times. Commercial real estate/multi-family loans are generally originated as adjustable rate loans for terms of up to 30 years. Properties securing the commercial real estate loan portfolio include office buildings, retail space, industrial buildings, mixed-use properties and apartments. At March 31, 2010, the largest commercial real estate/multi-family loan in the Company’s loan portfolio had a balance of $2.4 million, was secured by a first mortgage on land and condominiums, and was performing in accordance with its terms. As of March 31, 2010, the outstanding balance of commercial real estate/multi-family loans totaled $80.9 million, representing 28.6% of total loans outstanding.

     Standard’s diversification into non-mortgage loans has been somewhat limited, consisting of consumer loans and commercial business loans. The consumer loan portfolio, excluding home equity loans and home equity lines of credit, consists of various types of installment loans, loans secured by deposits and personal loans. As of March 31, 2010, the consumer loan portfolio totaled $3.0 million or 1.1% of total loans outstanding.

     Commercial business loans are extended to businesses operating in the local market area. The terms of these loans generally range from less than one year to a maximum of ten years. The loans are either negotiated on a fixed-rate basis or carry adjustable interest rates indexed to a lending rate that is determined internally, or a short-term market rate index. The commercial business loan portfolio consists substantially of loans secured by business assets such as accounts receivable, inventory and equipment. The Company also originates working capital lines credit to finance the short-term business needs of businesses. As of March 31, 2010, the Company had $13.1 million in outstanding commercial business loans (4.6% of total loans outstanding.)

Asset Quality

     The Company’s historical 1-4 family lending emphasis and emphasis on lending in local and familiar markets has generally supported the maintenance of relatively favorable credit

RP® Financial, LC.		OVERVIEW AND FINANCIAL ANALYSIS
		I.13

quality measures; although, with the onset of the recession in the Company’s lending markets, the Company has experienced some credit quality deterioration in its loan portfolio in recent periods. Over the analysis period, Standard’s balance of non-performing assets (“NPAs”) ranged from a low of 0.13% of assets at fiscal year end 2005 to a high of 0.61% of assets at year end 2009. The Company had $1.7 million of NPAs at March 31, 2010, equal to 0.41% of total assets. As shown in Exhibit I-11, NPAs at March 31, 2010 consisted of $0.550 million of non-accruing loans and $1.112 million of foreclosed real estate. The non-accruing loans consisted of nearly equal proportions of residential mortgages and commercial real estate mortgages.

     To track the Company’s asset quality and the adequacy of valuation allowances, the Company has established detailed asset classification policies and procedures which are consistent with regulatory guidelines. Classified assets are reviewed at least quarterly by senior management and the Board. Pursuant to these procedures, when needed, the Company establishes additional valuation allowances to cover anticipated losses in classified or non-classified assets. As of March 31, 2010, reserves totaled $3.5 million, equal to 1.23% of gross loans receivable and over 6 times the balance of NPLs.

Funding Composition and Strategy

     Deposits have consistently served as the Company’s primary funding source and at March 31, 2010 deposits accounted for 87.3% of the Company’s interest-bearing liabilities. Exhibit I-12 sets forth the Company’s deposit composition for the past three and one-quarter fiscal years. Transaction and statement savings account deposits constituted 61.8% of total deposits at March 31, 2010 and 62.3% of total deposits at September 30, 2009. Most of the core deposit growth has consisted of statement savings accounts, which was facilitated by strong customer service and shrinkage among many of the Bank’s competitors. Statement savings accounts comprised 40.3% of the Company’s total deposits at March 31, 2010.

     The balance of the Company’s deposits consists of CDs, which equaled 38.2% of total deposits at March 31, 2010 compared to 47.0% of total deposits at September 30, 2007. Standard’s current CD composition reflects a higher concentration of long -term CDs (maturities of more than one year). The CD portfolio totaled $118.9 million at March 31, 2010 and 71.7% of them were scheduled to mature in more than one year. Exhibit I-13 sets forth the maturity schedule of the Company’s CDs as of March 31, 2010. As of March 31, 2010, jumbo CDs (CD

RP® Financial, LC.		OVERVIEW AND FINANCIAL ANALYSIS
		I.14

accounts with balances of $100,000 or more) amounted to $32.9 million or 27.6% of total CDs. The Company did not maintain any brokered CDs at March 31, 2010.

     Borrowings serve as an alternative funding source for the Company to facilitate management of funding costs and interest rate risk. The Company maintained $42.1 million of FHLB advances at March 31, 2010 with a weighted average rate of 3.97%. The FHLB advances consisted of a mix of short- and long-term borrowings with laddered terms out to five years. The Bank also maintained $2.9 million in repurchase agreements at March 31, 2010. Exhibit I-14 provides further detail of the Company’s borrowings activities during the past three and one-quarter fiscal years.

Legal Proceedings

     The Company is not currently party to any pending legal proceedings that the Company’s management believes would have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

RP® Financial, LC.		MARKET AREA ANALYSIS
		II.1

II. MARKET AREA ANALYSIS

Introduction

     Standard generally considers its market area to encompass areas proximate to its branches. As noted in Section One of the valuation, the Bank operates ten community banking offices and one administrative office with a retail banking footprint covering eastern Allegheny County, Bedford County and Westmoreland County in Pennsylvania and the areas in and around Cumberland, Maryland in Allegany County. -Standard’s markets are a mix of regions suburban to Pittsburgh in Allegheny County and more rural townships in Westmoreland, Bedford, and Allegany County. The Maryland branches and two Bedford County branches were acquired when Standard purchased HNB in 2006.

     Standard’s market area covers a fairly broad swath of western Pennsylvania, and operations tend to be influenced by the regional economic trends being experienced in these areas which, in turn, are largely driven by the economic fortunes of Pittsburgh. Standard is also exposed to substantial deposit competition from both smaller locally-based community banking institutions as well as regional and superregional financial institutions with greater financial and other resources. The majority of the markets where the Company operates can be generally characterized as having slow population growth or even population shrinkage in many cases. From a personal income perspective, income levels are typically in the moderate to middle range, reflective of a high proportion of blue collar or hourly workers in the small-to-mid-sized markets where the Bank typically operates. In order to achieve earnings growth and mitigate the impact of its limited growth markets, the Company has adopted an expansion strategy focused both on organic growth as well as growth through acquisition, including the acquisition of branches and whole institutions as the opportunities arise.

     Future business and growth opportunities will be partially influenced by economic and demographic characteristics of the markets served by the Company, particularly the future growth and stability of the regional economy, demographic growth trends, and the nature and intensity of the competitive environment for financial institutions. These factors have been examined to help determine the growth potential that exists for the Company and the relative economic health of the Company’s market area.

RP® Financial, LC.		MARKET AREA ANALYSIS
		II.2

National Economic Factors

     The future success of the Bank’s operations is partially dependent upon national economic factors and trends. In assessing economic trends over past few quarters, signs that the U.S. economy was pulling out of the recession became more evident at the start of the third quarter of 2009. However, overall economic conditions remained weak. The July 2009 employment report showed the fewest job losses in a year and the unemployment rate dipped to 9.4%, its first decline in nine months. Retail sales were down slightly in July, raising concerns over the durability of the recovery. However, sales of existing homes jumped 7.2% in July, the fastest pace in nearly two years. July new home sales were up sharply as well, which supported a 4.9% increase in July durable-goods orders. August economic data generally indicated that the recession was nearing an end, as manufacturing output grew for the first time since January 2008 and the “cash for clunkers” program fueled a rebound in August retail sales. August employment data showed fewer than expected job losses, while the unemployment rate rose to a 26 year high of 9.7%. The index of leading indicators rose for the fifth straight month in August, providing another sign of recovery. Second quarter GDP declined at a 0.7% annualized rate, which was better than the 1% decline previously estimated. Other economic data suggested an uneven recovery, as existing home sales slid in August and consumer confidence fell in September. Manufacturing and service sector activity both grew in September, while the U.S. unemployment rate rose to 9.8% in September as employers cut more jobs than expected. As job losses continued to mount, vacancy rates for commercial office space continued to increase during the third quarter. Retail sales fell in September from August as the “cash for clunkers’ program ended, however, excluding autos, retail sales increased slightly in September. New home sales fell in September, while orders for durable goods increased in September. Third quarter GDP increased at a 3.5% annual rate (subsequently revised to 2.2%), marking an apparent end to the recession. Notably, a large portion of GDP growth in the third quarter was generated through federal stimulus programs, bringing into question the sustainability of the recovery without government support.

     October 2009 showed further signs of an economic recovery, even as the labor market continued to struggle. U.S. manufacturing activity expanded for the third month in a row in October, while a net loss of 190,000 jobs in October pushed the October unemployment rate up to 10.2%. Retail sales and the index of leading economic indicators both rose in October, while housing data was mixed raising doubts about the strength of the sector’s recovery. New home

RP® Financial, LC.		MARKET AREA ANALYSIS
		II.3

starts tumbled in October, while sales of existing home showed a strong increase in October. Signs of a slow and uneven economic recovery continued to be reflected in the November data. Manufacturing activity continued to grow in November, while the service sector contracted in November after growing in October. Employment data for November reflected the fewest number of job losses since December 2007, which reduced the unemployment rate to 10.0%. The Federal Reserve’s “beige book” released in early-December showed the economy improving moderately, with consumer spending up but commercial real estate weakening. Additional evidence that strength was returning to the economy included a healthy rise in November durable goods orders and manufacturing activity in December expanding at its fastest pace in more than three years. Sales of existing homes were up solidly in November, although construction spending in November was down slightly. Manufacturing activity expanded in December at its fastest pace in more than three years, while the service sector recorded only modest growth in December. Job losses were significantly higher than expected in December, dashing hopes of a near term turnaround in employment. Employers cut 85,000 jobs in December, while the December unemployment rate held steady at 10.0%. The index of leading economic indicators rose 1.1% from November to December for its ninth straight month of gains, while housing data for December was less favorable with both new and existing home sales declining in December. The decline in home sales in December was in part related to a surge in home sales during the fall, as first-time home buyers raced to take advantage of a tax credit before it expired. Fourth quarter GDP increased at an annual rate of 5.7% (subsequently revised to 5.6%), although much of the growth was tied to companies replenishing low inventories that typically only provides a temporary bump in growth.

     Manufacturing activity rose for a sixth straight month in January 2010, with the rate of expansion at its highest point since August 2004. Comparatively, service sector activity remained stable in January. Payrolls unexpectedly fell in January with the loss of 20,000 jobs, but the January unemployment rate surprisingly dropped to a five month low of 9.7%. Retail sales were up in January, although consumer confidence fell in February. Sales of existing homes fell in January and orders for durable goods showed weakness in January, underscoring the uneven progress of the U.S. recovery. The manufacturing and service sectors both showed expansion in February, while the February unemployment rate remained unchanged at 9.7%. The February unemployment report showed a loss of 36,000 jobs, which was fewer than expected. New and existing home sales were lower in February compared to January, but retail sales continued to show an increase for February. U.S. manufacturing and nonmanufacturing

RP® Financial, LC.		MARKET AREA ANALYSIS
		II.4

activity continued to grow in March, while the March unemployment rate held steady at 9.7%. Employers added 162,000 jobs in March, but almost one-third of the jobs came from the government’s hiring for the census. A surge in March retail sales and home construction increasing for a third straight month in March provided evidence that the economic recovery was gaining traction. Other signs of the economy gaining momentum included an increase in March existing home sales and a healthy rise in the March index of leading economic indicators. The initial estimate for first quarter GDP growth showed the economy expanded at an annualized rate of 3.2%.

     Positive trends in the economic recovery continued in the second quarter of 2010, as manufacturing activity and retail sales were up in April. The April employment report showed employers added 290,000 jobs, which was more than expected. At the same time, the April unemployment rate increased to 9.9%. Single-family housing starts surged in April, as builders stepped up production ahead of the April 30 deadline for sales qualifying for a federal tax rate. Likewise, sales of existing and new homes showed healthy increases in April, which was also believed in a large part related to home buyers seeking to take advantage of the federal tax credit that was due to expire at the end April. Orders for durable goods rose 2.9% in April, while consumer spending remained flat in April.

     In terms of interest rate trends during the past few quarters, interest rates eased lower at the start of the third quarter of 2009 as investors shunned risk ahead of second quarter earnings reports. Some economic data showing an improving economy and growing belief that the recession was nearing an end pushed long-term Treasury yields up slightly heading into late-July. The upward trend in interest rates continued into the first week of August, as interest rates edged higher following the better-than-expected employment report for July. Long-term Treasury yields eased lower going into the second half of August, as the Federal Reserve concluded its mid-August meeting leaving its key short-term rate near zero and indicated it would stay there for the foreseeable future. Weaker than expected retail sales for July and a decline in July wholesale prices further contributed to the pull back in interest rates. Long-term Treasury yields reversed course after mid-August on the stronger than expected report for July existing home sales. Interest rates stabilized in late-August and remained relatively stable through most of September, as inflation worries remained low amid high unemployment and slack in the economy. News that consumer confidence fell in September pushed Treasury yields lower at the end of the third quarter.

RP® Financial, LC.		MARKET AREA ANALYSIS
		II.5

     Mixed economic data and no apparent threat of inflationary pressures supported a stable interest rate environment at the beginning of the fourth quarter of 2009, providing for the continuation of a relatively steep yield curve. Interest rates remained stable through the balance of October, reflecting uncertainty over the sustainability of the economic recovery with consumer confidence declining for the second month in a row. The Federal Reserve concluded its early-November meeting by keeping its target interest rate near zero, which along with the weaker than expected employment report for October sustained a stable interest rate environment into mid-November. Long-term Treasury yields eased lower heading into the second half of November, following comments by the Federal Reserve Chairman that unemployment and troubles in commercial real estate would weigh on the recovery. Long-term Treasury yields dipped in late-November following news of the credit crisis in Dubai. A better than expected jobs report for November moved interest rates higher in early-December. Following the Federal Reserve’s mid-December meeting and decision to hold its target interest rate steady, the spread between short-term and long-term Treasury yields widened further in the final weeks of 2009 as long-term Treasury yields edged higher amid signs that the U.S. economy was improving.

     Interest rates stabilized at the start of 2010 and then edged lower in heading into the second half of January, reflecting uncertainty on the strength of the recovery. The Federal Reserve’s two day meeting in late-January concluded with no change in its key rate target, but offered a slightly rosier economic outlook in its statement. A rise in January consumer confidence, along with the Federal Reserve’s more upbeat assessment of the economy, provided for a slight upward trend in long-term Treasury yields in late-January. Worries that Greece’s debt woes were spreading across Europe and job losses reflected in the January employment report pushed Treasury yields lower in late-January and into early-February. Some positive economic data regarding home prices and industrial output pushed interest rates higher heading in mid-February. Treasury yields rose in mid-February on the Federal Reserve’s decision to raise the discount rate, spurring thoughts of tighter credit for borrowers in general. Weak economic data and indications from the Federal Reserve that short-term interest rates would remain near zero for at least several months pushed long-term Treasury yields lower at the close of February. Comparatively, long-term Treasury yields eased higher during the first half of March, based on better-than-expected reports for February employment data and retail sales. Interest rates stabilized in mid-March following the Federal Reserve’s mid-March meeting, as the Federal Reserve held its target rate steady and signaled that it would be at least several months before they raise short-term interest rates. Weak demand for an auction of five

RP® Financial, LC.		MARKET AREA ANALYSIS
		II.6

year Treasury notes and debt worries translated into long-term Treasury yields edging higher at the close of the first quarter.

     Signs of the economic recovery gaining traction pushed Treasury yields higher at the start of the second quarter of 2010, with the 10-year Treasury note yield increasing to 4.0% in early-April. Treasury yields eased lower in mid-April and then were relatively stable for the balance of April, as the consumer price index for March indicated that inflation remained muted and the Federal Reserve concluded its late-April meeting with keeping its target interest rate near zero. Investors fled to the safety of U.S. Treasury debt in early-May amid worries about possible ripple effects form Greece’s credit crisis, with the yield on the 10-year Treasury note moving below 3.5% during the first week of May. April’s producer price index reflecting a low level of inflation at the wholesale level and concerns about the U.S. economy on news that mortgage delinquencies hit a record in the first quarter furthered the decline in long-term Treasury yields in mid-May. The downward trend in long-term Treasury yields continued into late-May, as investors moved to the safety of Treasury bonds amid worries about the health of the global economy and growing tensions between North and South Korea. As of May 28, 2010, the bond equivalent yields for U.S. Treasury bonds with terms of one and ten years equaled 0.34% and 3.31%, respectively, versus comparable year ago yields of 0.48% and 3.67%. Exhibit II-1 provides historical interest rate trends.

     Based on the consensus outlook of 46 economists surveyed by The Wall Street Journal in late-April and early-May of 2010, the economy is expected to expand around 3.2% for 2010 and 2011. GDP growth is not expected to make a significant dent in the unemployment rate, as the surveyed economists on average expected the unemployment rate to only fall to 9.4% by the end of 2010. On average, the respondents said the Federal Reserve would raise its benchmark lending rate to 0.5% at the end of 2010, versus a current rate of between zero and 0.25%.

Market Area Demographics

     The following section presents demographic details regarding the Company’s market area. Table 2.1 displays comparative demographic trends for the four counties that contain a branch of the Bank (Allegheny County, Westmoreland County, and Bedford County in Pennsylvania and Allegany County in Maryland) as well as the Pittsburgh MSA and the State of

RP®Financial, LC.		MARKET AREA ANALYSIS
		II.7

Table 2.1
Standard Bank
Summary Demographic Data

		Year												Growth Rate
		2000				2009				2014				2000-2009				2009-2014
Population (000)
Pennsylvania			12,281				12,599				12,700				0.3	%			0.2	%
Pittsburgh MSA			2,431				2,381				2,342				-0.2	%			-0.3	%
Allegheny County			1,282				1,230				1,202				-0.5	%			-0.5	%
Westmoreland County			370				366				361				-0.1	%			-0.3	%
Bedford County			50				50				50				0.0	%			0.0	%
Allegany MD			75				73				71				-0.3	%			-0.5	%
Households (000)
Pennsylvania			4,777				4,959				5,020				0.4	%			0.2	%
Pittsburgh MSA			996				992				982				0.0	%			-0.2	%
Allegheny County			537				525				516				-0.3	%			-0.3	%
Westmoreland County			150				151				150				0.1	%			-0.2	%
Bedford County			20				20				21				0.4	%			0.1	%
Allegany MD			29				29				28				-0.2	%			-0.4	%
Median Household Income ($)
Pennsylvania			40,108				53,225				55,819				3.2	%			1.0	%
Pittsburgh MSA			37,298				49,992				53,149				3.3	%			1.2	%
Allegheny County			38,317				51,686				54,771				3.4	%			1.2	%
Westmoreland County			37,111				48,828				52,033				3.1	%			1.3	%
Bedford County			32,567				40,264				41,140				2.4	%			0.4	%
Allegany MD			30,797				37,698				40,330				2.3	%			1.4	%
Per Capita Income ($)
Pennsylvania			20,880				26,913				28,232				2.9	%			1.0	%
Pittsburgh MSA			20,779				26,561				27,752				2.8	%			0.9	%
Allegheny County			22,491				28,655				30,090				2.7	%			1.0	%
Westmoreland County			19,674				25,371				26,384				2.9	%			0.8	%
Bedford County			16,316				19,987				20,622				2.3	%			0.6	%
Allegany MD			16,780				20,456				21,172				2.2	%			0.7	%
2009 HH Income Dist. (%)			Less Than $25,000				$25,000 to 50,000				$50,000 to 100,000				$100,000 +
Pennsylvania			21.49				25.30				36.88				16.33	%
Pittsburgh MSA			23.73				26.28				36.65				13.34	%
Allegheny County			23.31				24.89				36.96				14.83	%
Westmoreland County			22.52				28.64				36.66				12.17	%
Bedford County			27.16				34.54				32.37				5.94	%
Allegany MD			33.34				30.59				28.82				7.24	%

Source: SNL Financial.

RP® Financial, LC.		MARKET AREA ANALYSIS
		II.8

Pennsylvania since 2000. The Allegheny County market area has a total population of approximately 1.2 million and thus represents the largest market area where the Company has a significant presence. Comparatively, the Westmoreland County, Bedford County and Allegany County markets represent small to mid-sized markets with total populations ranging from 50,000 to 366,000. The table indicates that the Company’s markets have experienced a declining population base or limited growth from 2000 to 2009. Specifically, Allegheny County shrunk over the 2000 to 2009 period at a 0.5% compounded annual rate while Allegany County shrunk at a 0.3% compounded rate, and Westmoreland County shrunk at a 0.1% compounded rate. The Bedford County population base was stable over the corresponding period. These trends are projected to continue for the 2009 to 2014 period for all of the market areas. Household growth trends are relatively similar to the population growth trends, except that the rate of shrinkage for the Company’s markets is moderated by the national trend towards a lower average household size.

     Although the population and number of households in the part of the Company’s primary market is projected to decline, per capita income and household income levels within the Company’s markets reflect an underlying stability. Specifically Allegheny County and Westmoreland County markets have per capita income levels which are in a range of 90% to 106% of the state and national averages. Bedford County and Allegany County are in a lower percentile but still mark in over 50%. Per capita income is projected to experience increases over the next five years consistent with statewide projections. Median household incomes in the Company’s markets, excluding Bedford County, are projected to grow faster than Pennsylvania figures. Notwithstanding some of this favorable data, the lower panel of Table 2.1 demonstrates that comparatively few residents in these markets are in the upper income bracket of $100,000 or more.

Regional Economy

     The branch network maintained by Standard exposes the Bank’s operations to regional economic trends of the Pittsburgh MSA. As with many of the surrounding Pennsylvania counties, agriculture still plays an important role in Bedford County. Principal agricultural products include dairy, cattle, hay, and corn. Although Pennsylvania is still one of the nation’s leading manufacturers of steel, heavy industry as a whole has been on a steady decline while light manufacturing of various products remains a mainstay of the local economy, albeit

RP® Financial, LC.		MARKET AREA ANALYSIS
		II.9

continuing to be subject to competition from other low-cost areas of the U.S. and foreign competition. The limited economic opportunities provided in many of the Company’s markets has been a key factor limiting population growth and has been the impetus for many Pennsylvanians, particularly in rural areas, to relocate to markets where there are greater economic opportunities.

     Table 2.2 displays the employment by sector for the State of Pennsylvania and the principal markets served by the Bank. Although manufacturing has been on the decline, it still comprises the one of the larger employment sectors in many of the Company’s markets. In this regard, the Company has observed that the surviving manufacturers typically have broadened the scope of their marketing and rely on a broad-range of buyers or markets, which increasingly have included foreign markets.

Table 2.2
Standard Bank, PaSB
Primary Market Area Employment Sectors
(Percent of Labor Force)

						Allegheny				Bedford				Westmoreland				Allegany
Employment Sector		Pennsylvania				County				County				County				County
		(% of Total Employment)
Services			43.3	%			51.4	%			31.0	%			40.2	%			42.1	%
Government			11.1	%			8.6	%			10.7	%			9.7	%			16.9	%
Wholesale/Retail Trade			14.6	%			13.8	%			16.4	%			17.7	%			15.2	%
Finance/Insurance/Real Estate			8.7	%			10.6	%			4.7	%			6.9	%			5.4	%
Manufacturing			9.3	%			5.0	%			10.9	%			11.1	%			7.3	%
Construction			5.7	%			5.2	%			9.8	%			6.4	%			5.4	%
Information			1.7	%			2.1	%			0.8	%			1.1	%			1.4	%
Transportation/Utility			3.9	%			2.9	%			8.4	%			5.3	%			4.8	%
Agriculture			1.0	%			0.1	%			5.6	%			0.9	%			0.8	%
Other			0.7	%			0.4	%			1.7	%			0.6	%			0.6	%
Total			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%

(1) Data is as of 2007.

Source: Regional Economic Information System Bureau of Economic Analysis

RP® Financial, LC.		MARKET AREA ANALYSIS
		II.10

     The decline in manufacturing employment has been offset by the growth of the services sector, which is now the largest employer in all the markets areas. Examples of the transition to a service economy are evidenced by the largest employers in the Pittsburgh MSA. Allegheny County’s largest employers include the University of Pittsburgh Medical Center (47,000 employees), West Penn Allegheny Health System (11,000 employees), and the University of Pittsburgh (10,700 employees). Westmoreland County’s largest employers are Westmoreland County, United Parcel Service (UPS), and the Westmoreland Regional Hospital. The largest employers in Bedford County include the Wal-Mart Distribution Center, the Pennsylvania State Government, and New Enterprise Stone & Limes Co. The largest employers in Allegany County are Western Md. Health Systems (2350 employees), NewPage Pulp and Paper Services (977 employees), and Frostburg State University (916 employees). As both Allegheny County and Westmoreland County are parts of the Pittsburgh MSA a portion of employees commute from one county to the other.

Unemployment Trends

     Unemployment in the Company’s market area varies according to the size and economic composition of the particular markets. Table 2.3 shows comparative unemployment rates for Pennsylvania, Maryland and select key Pennsylvania markets served by the Bank. Overall, the unemployment data shows that the Company’s markets have been impacted by the national recession. The unemployment rates in Westmoreland and Allegheny County’s have increased relative to the levels prevailing one year ago. The unemployment rates in Bedford County and Allegany County have decreased slightly in the past year. Three of the counties have unemployment rates that remain at or below the national average and their state average. Thus, while the Banks markets never expanded rapidly in the boom years from 2003 to 2007, many of its markets have fared comparatively well as the national recession has progressed.

RP® Financial, LC.		MARKET AREA ANALYSIS
		II.11

Table 2.3
Standard Bank, PaSB
Market Area Unemployment Trends

		March, 2009				March, 2010
Region		Unemployment				Unemployment
United States			8.5	%			9.7	%
Pennsylvania			8.3	%			9.4	%
Pittsburgh MSA			7.5	%			8.9	%
Westmoreland County			8.2	%			9.3	%
Allegheny County			6.8	%			8.3	%
Bedford County			12.7	%			12.3	%
Allegany MD			9.4	%			7.7	%

(1) Unemployment rates are not seasonally adjusted

Source: SNL Financial

Market Area Deposit Characteristics

     Table 2.4 displays deposit trends for thrifts and commercial banks in the state of Pennsylvania as well as the market areas of the Pittsburgh MSA, Westmoreland County, Allegheny County, Bedford County, and Allegany County, MD. Within the Pittsburgh MSA, the Company’s market share is limited and overall deposits have increased in the Pittsburgh MSA by 2.6% over the four-year period through 2009. Commercial banks increased deposits in the Pittsburgh MSA at an annual rate of 9.5%, while savings institutions deposits declined at rate of 4.8% over the period of 2005-2009. The Westmoreland County branches contain the Company’s largest source of deposits and account for a greater market share relative to the Bank’s position in the expansive Pittsburgh market. In Westmoreland County, the Bank recorded a market share of 2.8% deposits, and overall deposits have increased in Westmoreland County by 4.0% over the four-year period through 2009 with commercial banks still holding the greater share of the market. In the Allegheny County market, the Bank recorded a market share of 0.1% of deposits, and overall deposits for the Bank have decreased by 3.2% over the four-year period. Commercial bank deposits have grown 9.4% in the four-year period and commercial banks hold about 80% of the market while savings institutions hold 20%. In Bedford County, the Bank recorded a market share of 3.8% of deposits. In Allegany County, the Bank holds 5.8% of market deposits, commercial banks hold the other 94.2% and deposits for commercial banks grew at a rate of 0.4% a year over the four-year period.

RP® Financial, LC.		MARKET AREA ANALYSIS
		II.12

Table 2.4
Standard Bank
Deposit Summary

		As of June 30,																								Deposit
		2005												2009												Growth
						Market				Number of								Market				Number of				Rate
		Deposits				Share				Branches				Deposits				Share				Branches				2005-2009
										(Dollars In Thousands)																(%)
Deposit Summary
State of Pennsylvania		$	225,238,000				100.0	%			4,724			$	294,782,000				100.0	%			4,789				7.0	%
Commercial Banks			161,521,000				71.7	%			3,432				227,075,000				77.0	%			3,545				8.9	%
Savings Institutions			63,717,000				28.3	%			1,292				67,707,000				23.0	%			1,244				1.5	%
Pittsburgh MSA		$	56,557,404				100.0	%			868			$	71,734,776				100.0	%			891				6.1	%
Commercial Banks			41,011,879				72.5	%			538				58,939,109				82.2	%			596				9.5	%
Savings Institutions			15,545,525				27.5	%			330				12,795,667				17.8	%			295				-4.8	%
Standard Bank			200,999				0.4	%			25				222,453				0.3	%			8				2.6	%
Westmoreland County		$	5,505,374				100.0	%			139			$	6,492,915				100.0	%			138				4.2	%
Commercial Banks			4,032,614				73.2	%			104				4,906,390				75.6	%			103				5.0	%
Savings Institutions			1,472,760				26.8	%			35				1,586,525				24.4	%			35				1.9	%
Standard Bank			156,646				2.8	%			6				183,467				2.8	%			5				4.0	%
Allegheny County		$	40,321,295				100.0	%			458			$	53,106,698				100.0	%			474				7.1	%
Commercial Banks			30,181,085				74.9	%			261				43,293,846				81.5	%			284				9.4	%
Savings Institutions			10,140,210				25.1	%			197				9,812,852				18.5	%			190				-0.8	%
Standard Bank			44,353				0.1	%			4				38,986				0.1	%			3				-3.2	%
Bedford County		$	596,028				100.0	%			25			$	665,221				100.0	%			25				2.8	%
Commercial Banks			539,609				90.5	%			23				585,925				88.1	%			21				2.1	%
Savings Institutions			56,419				9.5	%			2				79,296				11.9	%			4				8.9	%
Standard Bank			0				0.0	%			0				25,001				3.8	%			2				—
Allegany County, MD		$	617,339				100.0	%			23			$	665,151				100.0	%			21				1.9	%
Commercial Banks			617,339				100.0	%			23				626,818				94.2	%			19				0.4	%
Savings Institutions			0				0.0	%			0				38,333				5.8	%			2				—
Standard Bank			0				0.0	%			0				38,333				5.8	%			2				—

Source: SNL Financial, LC.

RP® Financial, LC.		MARKET AREA ANALYSIS II.13

Deposit Competition

     The Company faces notable competition in both deposit gathering and lending activities, from large regional and superregional financial institutions operating in Pennsylvania, most of which are based inside of Pennsylvania. Securities firms, credit unions and mutual funds also represent major sources of competition in raising deposits. In many cases, these competitors are also seeking to provide some or all of the community-oriented services as the Bank. With regard to lending competition, the Company encounters the most significant competition from the same institutions providing deposit services. In addition, the Company competes with mortgage companies, independent mortgage brokers, and finance companies in originating mortgage loans. Table 2.5 ranks the banks and savings institutions that maintain a branch presence in the Company’s primary market areas based on deposit market share. As of 2009, the Company maintained the fifth largest share of bank and thrift deposits in Allegany County. The company maintained the seventh largest market share of bank and thrift deposits in Bedford County. In Westmoreland County the Company maintained the ninth largest market share of bank and thrift deposits. The Company’s market share in the State of Pennsylvania equaled 0.1% as of June 2009.

RP® Financial, LC.		MARKET AREA ANALYSIS II.14

Table 2.5
Standard Bank, PaSB
2009 Market Area Deposit Competitors

Location		Name
Pennsylvania		PNC Financial Services (19.91%)
		Wells Fargo (12.06%)
		Royal Bank of Scotland (8.69%)
		Banco Santander (4.71%)
		Standard (0.09%) rank of 108
Pittsburgh MSA		PNC Financial Services (46.51%)
		Bank of New York Mellon (9.59%)
		Royal Bank of Scotland (8.82%)
		First Niagara Financial (4.78%)
		Standard (0.86%) Rank of 25
Allegheny County		PNC Financial Services Group (53.66%)
		Bank of New York Mellon Corp. (12.85%)
		Royal Bank of Scotland Group (7.83%)
		Dollar Bank FSB (4.82%)
		Standard (0.07%) Rank of 27
Bedford County		Susquehanna Bancshares Inc. (22.87%)
		F.N.B. Corp. (20.02%)
		M&T Bank Corp. (18.97%)
		First Commonwealth Financial. (15.05%)
		Standard (3.76%) Rank of 7
Westmoreland County		PNC Financial Group Services (29.08%)
		First Commonwealth Financial (13.00%)
		Royal Bank of Scotland Group (11.69%)
		S&T Bancorp Inc. (10.73%)
		Standard (2.71%) Rank of 9
Allegany County, Maryland		Susquehanna Bancshares Inc. (40.79%)
		M&T Bank Corp. (26.14%)
		First United Corp. 19.17%)
		PNC Financial Services (8.13)
		Standard (5.76) Rank of 5
Source: SNL Financial, LC.