The following discussion and analysis provides further detail to the financial condition and results of operations of the Company. The section should be read in conjunction with the notes and financial statements presented elsewhere in this report.

The Company's critical accounting policies involving the significant judgments and assumptions used in the preparation of the Consolidated Financial Statements as of March 31, 2012 have remained unchanged from the disclosures presented in the Company's Annual Report on Form 10-K for the year ended September 30, 2011 under the section "Management's Discussion and Analysis of Financial Condition and Results of Operation."

Forward-looking statements in this report relating to the Company's plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The information contained in this report should be read in conjunction with the Company's most recent annual report filed with the Securities and Exchange Commission on Form 10-K for the year ended September 30, 2011. Investors are cautioned that forward-looking statements include risks and uncertainties that could cause actual results to differ materially from those contemplated by such statements, including without limitation, the effect of regional and national general economic conditions; competition among depository and other financial institutions; inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments; adverse changes in the securities markets; changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; our ability to enter new markets successfully and capitalize on growth opportunities; our ability to successfully integrate acquired entities, if any; changes in consumer spending, borrowing and savings habits; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board; changes in our organization, compensation and benefit plans; changes in our financial condition or results of operations that reduce capital available to pay dividends; changes in the financial condition or future prospects of issuers of securities that we own. The Company does not assume any duty to update forward-looking statements.

Standard Financial Corp. is a Maryland corporation that provides a wide array of retail and commercial financial products and services to individuals, families and businesses through ten banking offices located in the Pennsylvania counties of Allegheny, Westmoreland and Bedford and Allegany County, Maryland through its wholly-owned subsidiary Standard Bank.

Comparison of Financial Condition at March 31, 2012 and September 30, 2011

General. The Company's total assets increased $14.7 million, or 3.4%, to $449.3 million at March 31, 2012 from $434.6 million at September 30, 2011. The increase was due primarily to increases in net loans and cash and cash equivalents. Total liabilities increased $14.5 million, or 4.1%, to $370.4 million at March 31, 2012 from $355.9 million at September 30, 2011. The increase was due primarily to increases in total deposits and Federal Home Loan Bank advances.

Cash and Cash Equivalents. Cash and cash equivalents increased $5.6 million, or 44.1%, to $18.2 million at March 31, 2012 from $12.7 million at September 30, 2011. During the six months ended March 31, 2012, net deposit inflows were partly offset by a net increase in loans.

Loans. At March 31, 2012, net loans were $292.7 million, or 65.1% of total assets, an increase of $7.6 million from $285.1 million or 65.6% of total assets at September 30, 2011. This increase was primarily due to increases of $3.2 million in the commercial real estate and commercial loan portfolios and $3.1 million in the one- to four-family residential real estate portfolio. We have continued our focus on steadily increasing our commercial real estate loans to better diversify our loan portfolio.

Investment Securities. Investment securities available for sale increased $264,000 to $63.2 million at March 31, 2012 from $62.9 million at September 30, 2011. Purchases of $17.5 million during the six months ended March 31, 2012 consisted primarily of government agency bonds and tax-exempt municipal securities. The purchases were offset by sales of government agency bonds of $6.0 million and calls and maturities of government agency bonds and municipals securities totaling $11.7 million during the six months ended March 31, 2012.

Mortgage-Backed Securities. The Company's mortgage-backed securities available for sale portfolio increased $1.7 million, or 4.0% to $44.5 million at March 31, 2012 from $42.8 million at September 30, 2011. Purchases during the six months ended March 31, 2012 consisted of $7.5 million of mortgage-backed securities offset by repayments on mortgage-backed securities of $5.5 million.

Deposits. We accept deposits primarily from the areas in which our offices are located. We have consistently focused on building broader customer relationships and targeting small business customers to increase our core deposits. We also rely on our enhanced technology and our customer service to attract and retain deposits. We offer a variety of deposit accounts with a range of interest rates and terms. Our deposit accounts consist of savings accounts, certificates of deposit, money market accounts, commercial and regular checking accounts and individual retirement accounts. We do not accept brokered deposits. Interest rates, maturity terms, service fees and withdrawal penalties are established on a periodic basis. Deposit rates and terms are based primarily on current operating strategies and market interest rates, liquidity requirements and our deposit growth goals.

Our deposits increased $10.6 million, or 3.3%, to $330.9 million at March 31, 2012 from $320.3 million at September 30, 2011. The increase resulted from a $6.4 million, or 4.8%, increase in certificates of deposit and a $4.2 million, or 2.2%, increase in demand and savings accounts during the six months ended March 31, 2012. The increase in certificates of deposit resulted from an increase in longer term certificate products some of which provide the customer an option to increase the interest rate on the certificate in the future.

Borrowings. Our borrowings consist of advances from the Federal Home Loan Bank of Pittsburgh and funds borrowed under repurchase agreements. Total borrowings increased $3.5 million, or 11.1% to $34.9 million at March 31, 2012 from $31.4 million at September 30, 2011. The increase was due primarily to new Federal Home Loan Bank advances totaling $6.0 million partly offset by the repayment of $2.9 million of advances during the six months ended March 31, 2012.

Stockholders' Equity. Stockholders' equity increased $206,000 to $78.9 million at March 31, 2012 from $78.7 million at September 30, 2011. The increase was due primarily to net income of $1.6 million partly offset by the repurchase of common stock totaling $981,000 and cash dividends paid totaling $297,000 for the six months ended March 31, 2012.

Average Balance and Yields

The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments were made, as the effect thereof was not material. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances, but have been reflected in the tables as loans carrying a zero yield. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.

                                                                     For the Three Months Ended March 31,
                                                             2012                                           2011
                                              Average                                        Average
                                            Outstanding                      Yield/        Outstanding                      Yield/
                                              Balance          Interest       Rate           Balance          Interest       Rate
                                                                            (Dollars in thousands)
Interest-earning assets:
Loans                                      $     297,932      $    3,717        4.99 %    $     296,375      $    3,955        5.34 %
Investment and mortgage-backed
securities                                       102,466             656        2.56 %           95,941             686        2.86 %
Interest earning deposits                         11,219               1        0.04 %           11,075               2        0.07 %

Total interest-earning assets                    411,617           4,374        4.25 %          403,391           4,643        4.60 %

Noninterest-earning assets                        27,569                                         28,878

Total assets                               $     439,186                                  $     432,269

Interest-bearing liabilities:
Savings accounts                           $     110,951              46        0.17 %    $     120,524             135        0.45 %
Certificates of deposit                          139,445             853        2.45 %          124,134             785        2.53 %
Money market accounts                              5,750               3        0.21 %            5,836               3        0.21 %
Demand and NOW accounts                           68,257              11        0.06 %           60,946              13        0.09 %

Total deposits                                   324,403             913        1.13 %          311,440             936        1.20 %
Federal Home Loan Bank advances                   29,707             187        2.52 %           37,944             292        3.08 %
Securities sold under agreements to
repurchase                                         3,261               2        0.25 %            4,822               4        0.33 %

Total interest-bearing liabilities               357,371           1,102        1.23 %          354,206           1,232        1.39 %

Noninterest-bearing liabilities                    3,048                                          2,911

Total liabilities                                360,419                                        357,117
Stockholders' equity                              78,767                                         75,152

Total liabilities and stockholders'
equity                                     $     439,186                                  $     432,269


Net interest income                                           $    3,272                                     $    3,411

Net interest rate spread (1)                                                    3.02 %                                         3.21 %
Net interest-earning assets (2)            $      54,246                                  $      49,185

Net interest margin (3)                                                         3.18 %                                         3.38 %
Average interest-earning assets to
interest-bearing liabilities                      115.18 %                                       113.89 %

(1) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

(2) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

(3) Net interest margin represents net interest income divided by average total interest-earning assets.

                                                                            For the Six Months Ended March 31,
                                                               2012                                                    2011
                                            Average                                                 Average
                                          Outstanding                                             Outstanding
                                            Balance           Interest        Yield/ Rate           Balance           Interest        Yield/ Rate
                                                                                  (Dollars in thousands)
Interest-earning assets:
Loans                                    $     294,834       $    7,504               5.09 %     $     294,260       $    7,938               5.40 %
Investment and mortgage-backed
securities                                     102,754            1,298               2.53 %            95,486            1,343               2.81 %
Interest earning deposits                       11,460               13               0.23 %            16,560               13               0.16 %

Total interest-earning assets                  409,048            8,815               4.31 %           406,306            9,294               4.58 %

Noninterest-earning assets                      28,953                                                  28,693

Total assets                             $     438,001                                           $     434,999

Interest-bearing liabilities:
Savings accounts                         $     112,502              109               0.19 %     $     121,976              312               0.51 %
Certificates of deposit                        138,124            1,704               2.47 %           124,582            1,610               2.58 %
Money market accounts                            6,263                5               0.16 %             6,332                8               0.25 %
Demand and NOW accounts                         67,084               24               0.07 %            60,358               30               0.10 %

Total deposits                                 323,973            1,842               1.14 %           313,248            1,960               1.25 %
Federal Home Loan Bank advances                 28,960              381               2.63 %            37,697              601               3.19 %
Securities sold under agreements to
repurchase                                       3,662                4               0.22 %             4,899               10               0.41 %

Total interest-bearing liabilities             356,595            2,227               1.25 %           355,844            2,571               1.45 %

Noninterest-bearing liabilities                  2,825                                                   4,114

Total liabilities                              359,420                                                 359,958
Stockholders' equity                            78,581                                                  75,041

Total liabilities and stockholders'
equity                                   $     438,001                                           $     434,999


Net interest income                                          $    6,588                                              $    6,723

Net interest rate spread (1)                                                          3.06 %                                                  3.13 %
Net interest-earning assets (2)          $      52,453                                           $      50,462

Net interest margin (3)                                                               3.22 %                                                  3.31 %
Average interest-earning assets to
interest-bearing liabilities                    114.71 %                                                114.18 %

(1) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

(2) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

(3) Net interest margin represents net interest income divided by average total interest-earning assets.

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

General. Net income for the quarter ended March 31, 2012 was $782,000 compared to $828,000 for the quarter ended March 31, 2011, a decrease of $46,000, or 5.6%. The decrease was due primarily to an increase in noninterest expenses of $151,000 and a decrease in net interest income of $139,000, partially offset by a $125,000 decrease in the provision for loan losses, lower income tax expense of $63,000 and higher noninterest income of $56,000.

Net Interest Income. Net interest income for the quarter ended March 31, 2012 was $3.3 million compared to $3.4 million for the quarter ended March 31, 2011. Our net interest rate spread and net interest margin were 3.02% and 3.18%, respectively for the three months ended March 31, 2012 compared to 3.21% and 3.38% for the same period in the prior year.

Interest and Dividend Income. Total interest and dividend income of $4.4 million for the three months ended March 31, 2012 decreased $269,000 compared to the same period in the prior year. The decrease was due to a decrease in the average yield on interest-earning assets, partially offset by an increase in the average balance of interest-earning assets. The average yield on interest-earning assets decreased to 4.25% for the three months ended March 31, 2012 from 4.60% for the same period in the prior year. Average interest-earning assets increased by $8.2 million, or 2.0% to $411.6 million for the three months ended March 31, 2012 from $403.4 million for the same period in 2011.

Interest income on loans decreased $238,000, or 6.0%, to $3.7 million for the three months ended March 31, 2012 due primarily to a decrease in the average yield on loans. The average yield on loans receivable decreased to 4.99% for the three months ended March 31, 2012 from 5.34% for the same period in the prior year. The decrease in average yield was primarily attributable to our variable rate loans adjusting downward as prime and short-term interest rates remained low as well as the origination of new loans in a generally lower interest rate environment and repayment/refinance of higher rate loans. Average loans receivable increased by $1.5 million, or 0.5%, to $297.9 million for the three months ended March 31, 2012 from $296.4 million for the same period in the prior year.

Interest income on investment and mortgage-backed securities decreased by $30,000, or 4.4%, to $656,000 for the three months ended March 31, 2012 from $686,000 for the same period in the prior year. This decrease was due primarily to a decrease in the average yield earned on investments and mortgage-backed securities to 2.56% for the three months ended March 31, 2012 from 2.86% for the same period in the prior year due to new investments added in a lower interest rate environment and variable rate investments that adjusted downward. This decrease was partially offset by an increase in the average balance of investment and mortgage-backed securities, which increased by $6.6 million, or 6.9%, to $102.5 million for the three months ended March 31, 2012 from $95.9 million for the same period in the prior year.

Interest Expense. Total interest expense decreased by $130,000, or 10.6%, to $1.1 million for the three months ended March 31, 2012 from $1.2 million for the same period in the prior year. This decrease in interest expense was due to a decrease in the average cost of interest-bearing liabilities to 1.23% for the three months ended March 31, 2012 from 1.39% for the prior year period. Partially offsetting this decrease in interest expense was as an increase in the average balance of interest-bearing liabilities of $3.2 million, or 0.9%, to $357.4 million for the three months ended March 31, 2012 from $354.2 million for the same period in the prior year.

Interest expense on deposits decreased by $23,000, or 2.5%, to $913,000 for the three months ended March 31, 2012 from $936,000 for the same period in the prior year. The average cost of deposits declined from 1.20% for the three months ended March 31, 2011 to 1.13% for the three months ended March 31, 2012. The continued low level of market interest rates enabled us to reduce the rates of interest paid on deposit products. Partially offsetting this decrease in interest expense on deposits was an increase in the average balance of certificates of deposit which increased $15.3 million, or 12.3%, to $139.4 million for the three months ended March 31, 2012 from $124.1 million for the same period in 2011.

Interest expense on Federal Home Loan Bank advances decreased $105,000, or 36%, to $187,000 for the three months ended March 31, 2012 from $292,000 for the same period in the prior year. The average balance of advances decreased $8.2 million or 21.7% to $29.7 million for the three months ended March 31, 2012 compared to the same period in the prior year. In addition, the average cost of advances decreased to 2.52% for the quarter ended March 31, 2012 from 3.08% for the quarter ended March 31, 2011 as higher rate advances matured and were repaid.

Provision for Loan Losses. The provision for loan losses decreased by $125,000, or 29.4%, to $300,000 for the three months ended March 31, 2012 from $425,000 for the same period in 2011. Non-performing loans at March 31, 2012 were $4.4 million or 1.48% of total loans, $4.6 million or 1.60% of total loans at September 30, 2011 and $2.9 million or 0.97% of total loans at March 31, 2011. The provision that was recorded is sufficient, in management's judgment, to bring the allowance for loan losses to a level that reflects the losses inherent in our loan portfolio relative to loan mix, economic conditions and historical loss experience. Management believes, to the best of their knowledge, that all known losses as of the balance sheet dates have been recorded.

Noninterest Income. Noninterest income increased $56,000, or 10.5%, to $591,000 for the three months ended March 31, 2012 from $535,000 for the same period in the prior year due mainly to higher service charges on deposits and higher net loan sale gains.

Noninterest Expenses. Noninterest expenses increased by $151,000, or 6.4%, to $2.5 million for the three months ended March 31, 2012 compared to the same period in 2011. The increase was due primarily to higher compensation and employee benefits and other operating expenses due primarily to general cost increases and additional staffing in the lending area.

Income Tax Expense. The Company recorded a provision for income tax of $269,000 for the three months ended March 31, 2012 compared to $332,000 for the three months ended March 31, 2011 due to lower income before taxes. The effective tax rates were 25.6% and 28.6% for the three months ended March 31, 2012 and 2011, respectively.

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

General. Net income for the six months ended March 31, 2012 was $1.6 million compared to $846,000 for the six months ended March 31, 2011. Net income for the six months ended March 31, 2011 included a $1.4 million one-time contribution to Standard Charitable Foundation ($908,000 after tax impact). This contribution represented $1.2 million or 3.5% of the stock issued on October 6, 2010 and $200,000 in cash. Excluding the one-time charitable contribution, net income decreased $141,000 for the six months ended March 31, 2012 compared to the same period in the prior year due primarily to an increase in noninterest expenses of $254,000 and a decrease in net interest income of $135,000, partially offset by a lower provision for loan losses of $175,000.

Net Interest Income. Net interest income for the six months ended March 31, 2012 was $6.6 million compared to $6.7 million for the six months ended March 31, 2011. Our net interest rate spread and net interest margin were 3.06% and 3.22%, respectively for the six months ended March 31, 2012 compared to 3.13% and 3.31% for the same period in the prior year.

Interest and Dividend Income. Total interest and dividend income of $8.8 million for the six months ended March 31, 2012 decreased $479,000 compared to the same period in the prior year. The decrease was due to a decrease in the average yield on interest-earning assets, partially offset by an increase in the average balance of interest-earning assets. The average yield on interest-earning assets decreased to 4.31% for the six months ended March 31, 2012 from 4.58% for the same period in the prior year. Average interest-earning assets increased by $2.7 million, or 0.7% to $409.0 million for the six months ended March 31, 2012 from $406.3 million for the same period in 2011.

Interest income on loans decreased $434,000, or 5.5%, to $7.5 million for the six months ended March 31, 2012 due primarily to a decrease in the average yield on loans. The average yield on loans receivable decreased to 5.09% for the six months ended March 31, 2012 from 5.40% for the same period in the prior year. The decrease in average yield was primarily attributable to our variable rate loans adjusting downward as prime and short-term interest rates remained low as well as the origination of new loans in a generally lower interest rate environment and repayment/refinance of higher rate loans. Average loans receivable increased by $574,000, or 0.2%, to $294.8 million for the six months ended March 31, 2012 from $294.3 million for the same period in the prior year.

Interest income on investment and mortgage-backed securities decreased by $45,000, or 3.4%, to $1.3 million for the six months ended March 31, 2012 from the same period in the prior year. This decrease was due primarily to a decrease in the average yield earned on investments and mortgage-backed securities to 2.53% for the six months ended March 31, 2012 from 2.81% for the same period in the prior year due to new investments added in a lower interest rate environment and variable rate investments that adjusted downward. This decrease was partially offset by an increase in the average balance of investment and mortgage-backed securities, which increased by $7.3 million, or 7.6%, to $102.8 million for the six months ended March 31, 2012 from $95.5 million for the same period in the prior year.

Interest Expense. Total interest expense decreased by $344,000, or 13.4%, to $2.2 million for the six months ended March 31, 2012 from $2.6 million for the same period in the prior year. This decrease in interest expense was due to a decrease in the average cost of interest-bearing liabilities to 1.25% for the six months ended March 31, 2012 from 1.45% for the prior year period. Partially offsetting this decrease was an increase in average interest-bearing liabilities of $751,000, or 0.2%, to $356.6 million for the six months ended March 31, 2012 from $355.8 million for the same period in the prior year.

Interest expense on deposits decreased by $118,000, or 6.0%, to $1.8 million for the six months ended March 31, 2012 from $2.0 million for the same period in the prior year. The average cost of deposits declined from 1.25% for the six months ended March 31, 2011 to 1.14% for the six months ended March 31, 2012. The continued low level of market interest rates enabled us to reduce the rates of interest paid on deposit products. Partially offsetting this decrease in interest expense on deposits was an increase in the average balance of . . .