Forward Looking Statements

This quarterly report contains forward-looking statements, which can be identified by the use of such words as estimate, project, believe, intend, anticipate, plan, seek, expect and similar expressions. These forward-looking statements include:

• statements of our goals, intentions and expectations;

• statements regarding our business plans and prospects and 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.

By identifying these forward-looking statements for you in this manner, we are alerting you to the possibility that our actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Important factors that could cause our actual results and financial condition to differ from those indicated in the forward-looking statements include, among others, those discussed under "Risk Factors" in Part I, Item 1A of the Company's Annual Report on Form 10-K and Part II, Item 1A of this Report on Form 10-Q, as well as the following factors:

• significantly increased 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;

• general economic conditions, either nationally or in our market areas, that are worse than expected;

• adverse changes in the securities markets;

• legislative or regulatory changes that adversely affect our business;

• our ability to enter new markets successfully and take advantage of growth opportunities, and the possible short-term dilutive effect of potential acquisitions or de novo branches, 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 and the Financial Accounting Standards Board; and

• changes in our organization, compensation and benefit plans.

These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

Total Assets. Total assets increased by $16.7 million, or 1.52%, to $1,114.2 million at March 31, 2012 from $1,097.5 million at September 30, 2011. This increase was primarily due to increases in investment securities available for sale offset, in part, by decreases in interest bearing deposits with other institutions.

Interest-Bearing Deposits with Other Institutions. Interest-bearing deposits with other institutions decreased $15.3 million, or 47.9%, to $16.6 million at March 31, 2012 from $31.9 million at September 30, 2011. This decrease was primarily the result of the increase in purchases of investment securities available for sale along with loan growth at March 31, 2012 from September 30, 2011.

Net Loans. Net loans increased $3.0 million, or 0.4%, to $741.6 million at March 31, 2012 from $738.6 million at September 30, 2011. The increase in net loans receivable was primarily attributed to an increase in residential real estate loans. During this period, residential real estate loans outstanding increased by $6.7 million to $590.3 million. Construction loans increased $1.2 million to $1.9 million, commercial real estate loans increased $62,000 to $79.4 million, obligations of states and political subdivisions increased $3.3 million to $29.2 million and other loans increased $54,000 to $2.1 million. These increases were partially offset by decreases in commercial loans outstanding of $6.2 million to $8.6 million and home equity loans and lines of credit outstanding of $2.2 million to $38.3 million.

Investment Securities Available for Sale. Investment securities available for sale increased $32.2 million, or 13.1%, to $277.6 million at March 31, 2012 from $245.4 million at September 30, 2011. The increase was due primarily to increases in the Company's U.S. Government agency securities portfolio of $17.3 million and in its mortgage-backed securities portfolio of $6.2 million.

Deposits. Deposits increased $37.9 million, or 6.0%, to $675.9 million at March 31, 2012 from $637.9 million at September 30, 2011. At March 31, 2012 compared to September 30, 2011, certificate of deposit accounts increased $33.0 million to $384.9 million, non-interest bearing demand accounts increased $3.1 million to $36.3 million and savings and club accounts increased $7.2 million to $80.3 million. These increases were offset in part during the same period by decreases in NOW accounts of $1.0 million to $64.1 million and money market accounts of $4.3 million to $110.3 million. Included in the certificates of deposit at March 31, 2012 was an increase in brokered certificates of $25.8 million to $146.7 million. The increase in brokered certificates was the result of the Company's decision to replace maturing FHLBank Pittsburgh borrowings with lower priced brokered certificates of deposit.

Borrowed Funds. Borrowed funds decreased by $25.5 million, or 8.8%, to $262.9 million at March 31, 2012, from $288.4 million at September 30, 2011. The decrease in borrowed funds was primarily due to maturities of FHLBank Pittsburgh borrowings.

Stockholders' Equity. Stockholders' equity increased by $351,000, or 0.2%, to $162.0 million at March 31, 2012 from $161.7 million at September 30, 2011. This increase was primarily the result of net income of $1.5 million which was partially offset by a decline in accumulated other comprehensive income of $1.4 million to $(811,000) at March 31, 2012 from $586,000 at September 30, 2011.

The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated. All average balances are daily average balances, the yields set forth below include the effect of deferred fees and discounts and premiums that are amortized or accreted to interest income.

                                                                        For the Three Months Ended March 31
                                                               2012                                             2011
                                                             Interest                                         Interest
                                              Average         Income/                          Average         Income/
                                              Balance         Expense       Yield/Cost         Balance         Expense       Yield/Cost
                                                                               (dollars in thousands)
Interest-earning assets:
Loans (1)                                   $   749,029      $   9,145             4.95 %    $   756,105      $   9,795             5.25 %
Investment securities
Taxable (2)                                      44,714            237             2.15 %         44,739            234             2.12 %
Exempt from federal income tax (2) (3)            9,342             55             3.62 %          6,649             75             6.93 %

Total investment securities                      54,056            292             2.40 %         51,388            309             2.74 %
Mortgage-backed securities                      206,015          1,391             2.74 %        210,447          1,782             3.43 %
Federal Home Loan Bank stock                     15,706              4             0.10 %         19,292             -              0.00 %
Other                                            18,006              2             0.05 %          6,603              1             0.06 %

Total interest-earning assets                 1,042,812         10,834             4.22 %      1,043,835         11,887             4.63 %
Allowance for loan losses                        (8,517 )                                         (7,857 )
Noninterest-earning assets                       62,313                                           54,515

Total assets                                $ 1,096,608                                      $ 1,090,493


Interest-bearing liabilities:
NOW accounts                                $    58,027              4             0.03 %    $    56,376              6             0.04 %
Money market accounts                           109,103             76             0.28 %        119,474            155             0.53 %
Savings and club accounts                        73,493             20             0.11 %         67,972             48             0.29 %
Certificates of deposit                         373,864          1,736             1.88 %        326,236          1,586             1.97 %
Borrowed funds                                  273,273          2,227             3.31 %        312,757          2,750             3.57 %

Total interest-bearing liabilities          $   887,760      $   4,063             1.86 %    $   882,815      $   4,545             2.09 %
Non-interest bearing NOW accounts                32,814                                           28,766
Noninterest-bearing liabilities                  13,086                                           11,685

Total liabilities                               933,660                                          923,266
Equity                                          162,948                                          167,227

Total liabilities and equity                $ 1,096,608                                      $ 1,090,493


Net interest income                                          $   6,771                                        $   7,342

Interest rate spread                                                               2.36 %                                           2.54 %
Net interest-earning assets                 $   155,052                                      $   161,020

Net interest margin (4)                                                            2.63 %                                           2.85 %
Average interest-earning assets to
average interest-bearing liabilities                            117.47 %                                         118.24 %

(1) Non-accruing loans are included in the outstanding loan balances.

(2) Held to maturity securities are reported at amortized cost. Available for sale securities are reported at fair value.

(3) Yields on tax exempt securities have been calculated on a fully tax equivalent basis assuming a tax rate of 34%.

(4) Represents the difference between interest earned and interest paid, divided by average total interest earning assets.

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                                                                           For the Six Months Ended March 31,
                                                              2012                                                 2011
                                                           Interest                                                 Interest
                                            Average         Income/                                                  Income/
                                            Balance         Expense        Yield/ Cost        Average Balance        Expense       Yield/Cost
                                                                                 (dollars in thousands)
Interest-earning assets:
Loans (1)                                 $   748,622      $  18,486               4.95 %    $         747,920      $  19,639             5.27 %
Investment securities
Taxable (2)                                    40,743            468               2.28 %               47,566            442             1.86 %
Exempt from federal income tax (2) (3)          8,542            103               3.66 %                6,745            153             6.89 %

Total investment securities                    49,285            571               2.55 %               54,311            595             2.49 %
Mortgage-backed securities                    206,197          2,798               2.72 %              206,599          3,496             3.39 %
Federal Home Loan Bank stock                   15,994              4               0.05 %               19,647             -                -
Other                                          19,894              4               0.04 %                4,106              1             0.05 %

Total interest-earning assets               1,039,992         21,863               4.23 %            1,032,583         23,731             4.62 %
Allowance for loan losses                      (8,387 )                                                 (7,743 )
Noninterest-earning assets                     62,577                                                   54,534

Total assets                              $ 1,094,182                                        $       1,079,374


Interest-bearing liabilities:
NOW accounts                              $    58,479              8               0.03 %    $          57,280             13             0.05 %
Money market accounts                         110,965            156               0.28 %              118,580            320             0.54 %
Savings and club accounts                      72,231             43               0.12 %               67,238             90             0.27 %
Certificates of deposit                       363,880          3,540               1.95 %              305,571          3,067             2.01 %
Borrowed funds                                281,844          4,637               3.30 %              321,567          5,769             3.60 %

Total interest-bearing liabilities            887,399          8,384               1.89 %              870,236          9,259             2.13 %
Non-interest bearing NOW accounts              32,528                                                   28,998
Noninterest-bearing liabilities                11,841                                                   10,923

Total liabilities                             931,768                                                  910,157
Equity                                        162,414                                                  169,217

Total liabilities and equity              $ 1,094,182                                        $       1,079,374


Net interest income                                        $  13,479                                                $  14,472

Interest rate spread                                                               2.34 %                                                 2.49 %
Net interest-earning assets               $   152,593                                        $         162,347

Net interest margin (4)                                                            2.60 %                                                 2.81 %
Average interest-earning assets to
average interest-bearing liabilities                          117.20 %                                                 118.66 %

(1) Non-accruing loans are included in the outstanding loan balances.

(2) Held to maturity securities are reported at amortized cost. Available for sale securities are reported at fair value.

(3) Yields on tax exempt securities have been calculated on a fully tax equivalent basis assuming a tax rate of 34%.

(4) Represents the difference between interest earned and interest paid, divided by average total interest earning assets.

Comparison of Operating Results for the Three Months Ended March 31, 2012 and March 31, 2011

Net Income. Net income decreased $556,000, or 45.8%, to $659,000 for the three months ended March 31, 2012 compared to net income of $1.2 million for the comparable period in 2011. Net income for the three months ending March 31, 2012 decreased primarily due to a decrease in net interest income and an increase in noninterest expense offset, in part, by an increase in noninterest income.

Net Interest Income. Net interest income decreased $571,000, or 7.8%, to $6.8 million for the three months ended March 31, 2012 from $7.3 million for the comparable period in 2011. The decrease was primarily attributable to a decrease in the Company's interest rate spread to 2.36% for the three months ended March 31, 2012, from 2.54% for the comparable period in 2011, and a decrease of $6.0 million in the Company's average net earnings assets.

Interest Income. Interest income decreased $1.1 million, or 8.9%, to $10.8 million for the three months ended March 31, 2012 from $11.9 million for the comparable 2011 period. The decrease resulted primarily from a 41 basis point decrease in average yield on interest earning assets and a $1.0 million decrease in average interest-earning

Interest Expense. Interest expense decreased $482,000, or 10.6%, to $4.1 million for the three months ended March 31, 2012 from $4.5 million for the comparable 2011 period. The decrease resulted from a 23 basis point decrease in the overall cost of interest bearing liabilities to 1.86% for the three months ended March 31, 2012 from 2.09% for the comparable 2011 period, partially offset by a $4.9 million increase in average interest-bearing liabilities. Average interest bearing deposits increased $44.4 million and average borrowed funds decreased $39.5 million. Average interest bearing deposits increased primarily as a result of a $47.6 million increase in average certificates of deposit. Borrowed funds decreased primarily due to maturities of FHLBank Pittsburgh borrowings. Average certificates of deposit included an increase of $23.1 million in average brokered certificates of deposit. The Company replaced maturing FHLBank Pittsburgh borrowings with brokered certificates because they were a cheaper funding source.

Provision for Loan Losses. In evaluating the level of the allowance for loan losses, management considers historical loss experience, the types of loans and the amount of loans in the loan portfolio, adverse situations that may affect a borrower's ability to repay, the estimated value of any underlying collateral, peer group information and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are subject to interpretation and revision as more information becomes available or as future events occur. After an evaluation of these factors, management made a provision for loan losses of $650,000 for each of the three months ended March 31, 2012 and March 31, 2011. The allowance for loan losses was $8.1 million, or 1.08% of loans outstanding, at March 31, 2012, compared to $8.2 million, or 1.09% of loans outstanding at September 30, 2011.

Non-interest Income. Non-interest income increased $300,000, or 22.7%, to $1.6 million for the three months ended March 31, 2012 from $1.3 million for the comparable period in 2011. The primary reasons for the increase were increases in insurance commissions of $195,000 and bank-owned life insurance income of $65,000 during the 2012 period. The Company's purchase of ESSA Advisory Services during the quarter ended June 30, 2011 is the primary reason for the increase in insurance commission income. The Company's purchase of $7.0 million in bank-owned life insurance during the quarters ended March 31, 2011 and June 30, 2011 was the principle reason for the increase in bank-owned life insurance income for the period.

Non-interest Expense. Non-interest expense increased $419,000, or 6.5%, to $6.9 million for the three months ended March 31, 2012 from $6.5 million for the comparable period in 2011. The primary reasons for the increase were increases in compensation and employee benefits of $47,000, merger related costs of $227,000, loss on foreclosed real estate of $134,000 and amortization of intangible assets of $81,000. These increases were partially offset by declines in advertising of $116,000, FDIC insurance premiums of $55,000, and occupancy and equipment of $20,000. Amortization of intangible assets increased due to the purchase of ESSA Advisory Services in the third quarter of 2011. Merger related costs increased primarily due to expenses related to the previously announced proposed merger between the Company and First Star Bancorp, Inc.

Income Taxes. Income tax expense decreased $134,000 to $211,000 for the three months ended March 31, 2012 from $345,000 for the comparable 2011 period. The decrease was primarily a result of the decrease in income before taxes of $690,000 for the three months ended March 31, 2012. The effective tax rate was 24.3% for the three months ended March 31, 2012, compared to 22.1% for the 2011 period. The increase in the effective tax rate was primarily due to the decrease in the portion of pre-tax income derived from non-taxable loan and investment income for the three months ended March 31, 2012 compared to the 2011 period.

Net Income. Net income decreased $682,000, or 30.6%, to $1.5 million for the six months ended March 31, 2012 compared to net income of $2.2 million for the comparable period in 2011. A decrease in net interest income and an increase in noninterest expense were offset, in part, by an increase in noninterest income and a decrease in income taxes.

Net Interest Income. Net interest income decreased $993,000, or 6.9%, to $13.5 million for the six months ended March 31, 2012 from $14.5 million for the comparable period in 2011. The decrease was primarily attributable to a decrease in the Company's interest rate spread to 2.34% for the six months ended March 31, 2012 from 2.49% for the comparable period in 2011 and a decrease of $9.8 million in the Company's average net earning assets.

Interest Income. Interest income decreased $1.9 million, or 7.9%, to $21.9 million for the six months ended March 31, 2012 from $23.7 million for the comparable 2011 period. The decrease resulted primarily from a 40 basis point decrease in average yield on interest earning assets partially offset by a $7.4 million increase in average interest-earning assets. The average yield on interest earning assets was 4.23% for the six months ended March 31, 2012, as compared to 4.62% for the comparable 2011 period. Loans increased on average $702,000 between the two periods along with increases in the average balance of other investment securities of $15.8 million. These increases were offset in part by a decrease in the average balances of total investment securities of $5.0 million and capital stock of FHLBank Pittsburgh of $3.7 million. The primary reason for the increase in other interest earning assets was due to an increase in the average balance of cash held at the FHLBank Pittsburgh. Total investment securities decreased primarily due to a decrease in the average balance of U.S. government agency securities. Average FHLBank Pittsburgh stock declines as a result of repurchases by the FHLBank of their stock.

Interest Expense. Interest expense decreased $875,000, or 9.5%, to $8.4 million for the six months ended March 31, 2012 from $9.3 million for the comparable 2011 period. The decrease resulted from a 24 basis point decrease in the overall cost of interest bearing liabilities to 1.89% for the six months ended March 31, 2012 from 2.13% for the comparable 2011 period, partially offset by a $17.2 million increase in average interest-bearing liabilities. Average interest bearing deposits increased $56.9 million and average borrowed funds decreased $39.7 million. Average interest bearing deposits increased primarily as a result of an increase of $58.3 million in average certificates of deposit. Borrowed funds decreased primarily due to maturities of FHLBank Pittsburgh borrowings. Average certificates of deposit included an increase of $36.3 million in average brokered certificates of deposit. The Company replaced maturing FHLBank Pittsburgh borrowings primarily with brokered certificates of deposit.

Provision for Loan Losses. In evaluating the level of the allowance for loan losses, management considers historical loss experience, the types of loans and the amount of loans in the loan portfolio, adverse situations that may affect a borrower's ability to repay, the estimated value of any underlying collateral, peer group information and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are subject to interpretation and revision as more information becomes available or as future events occur. Non-performing assets at March 31, 2012 were $16.8 million compared to non-performing assets of $15.5 million at March 31, 2011. After an evaluation of these factors, management made a provision for loan losses of $1.2 million for the six months ended March 31, 2012 as compared to $1.1 million for the six months ended March 31, 2011. The allowance for loan losses was $8.1 million, or 1.08% of loans outstanding, at March 31, 2012, compared to $8.1 million, or 1.08% of loans outstanding at March 31, 2011.

Non-interest Income. Non-interest income increased $489,000, or 18.4%, to $3.1 million for the six months ended March 31, 2012 from $2.7 million for the comparable period in 2011. The primary reasons for the increase were increases in insurance commissions of $386,000 and earnings on bank owned life insurance of $126,000, which were partially offset by decreases in service fees on deposit accounts of $103,000. The Company's purchase of ESSA Advisory Services during the quarter ended June 30, 2011 is the primary reason for the increase in insurance commission income. The Company's purchase of $7.0 million in bank owned life insurance during the quarters ended March 31, 2011 and June 30, 2011 was the principle reason for the increase in bank owned life insurance income during the period.