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.

Comparison of Financial Condition at June 30, 2012 and September 30, 2011

Total Assets. Total assets increased by $15.6 million, or 1.42%, to $1,131.1 million at June 30, 2012 from $1,097.5 million at September 30, 2011. Increases in investment securities available for sale, loans receivable and other assets were offset, in part, by a decrease in interest-bearing deposits with other institutions.

Interest-Bearing Deposits with Other Institutions. Interest-bearing deposits with other institutions decreased $17.7 million, or 55.6%, to $14.2 million at June 30, 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 from September 30, 2011 through June 30, 2012.

Net Loans. Net loans increased $2.6 million, or 0.4%, to $741.2 million at June 30, 2012 from $738.6 million at September 30, 2011. During this period, residential real estate loans outstanding increased by $2.7 million to $586.3 million. Construction loans increased $1.5 million to $2.1 million, commercial real estate loans increased $2.9 million to $82.3 million, obligations of states and political subdivisions increased $7.2 million to $33.1 million. These increases were partially offset by decreases in commercial loans outstanding of $9.6 million to $5.2 million, home equity loans and lines of credit outstanding of $3.2 million to $38.3 million and other loans outstanding of $54,000 to $2.0 million.

Goodwill. Goodwill increased $373,000 to $413,000 at June 30, 2012 from $40,000 at September 30, 2011. The Company's previously disclosed purchase of an insurance business during the third fiscal quarter of 2011 included the potential for the Company to pay two performance based payments as part of the original purchase price. Performance would be measured on each of the first two anniversaries of the original purchase. According to these terms, a payment of $373,000 was made during the third fiscal quarter of 2012.

Other Assets. Other assets increased $3.1 million, or 19.6%, to $19.0 million at June 30, 2012 from $15.9 million at September 30, 2011. This increase was primarily due to the purchase of federal tax credits through an investment in a limited partnership related to a low income housing project. This investment increased $4.4 million at June 30, 2012 compared to September 30, 2011.

Investment Securities Available for Sale. Investment securities available for sale increased $31.1 million, or 12.7%, to $276.5 million at June 30, 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 $51.0 million, or 8.0%, to $688.9 million at June 30, 2012 from $637.9 million at September 30, 2011. At June 30, 2012 compared to September 30, 2011, certificate of deposit accounts increased $44.8 million to $396.7 million, non-interest bearing demand accounts increased $6.2 million to $39.5 million, savings and club accounts increased $8.0 million to $81.1 million and NOW accounts increased $600,000 to $65.7 million. These increases were offset in part during the same period by a decrease in money market accounts of $8.6 million to $106.0 million. Included in the certificates of deposit at June 30, 2012 was an increase in brokered certificates of $45.6 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 $43.0 million, or 14.9%, to $245.4 million at June 30, 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 $2.0 million, or 1.2%, to $163.7 million at June 30, 2012 from $161.7 million at September 30, 2011. This increase was primarily the result of net income of $2.3 million which was partially offset by a decrease in accumulated other comprehensive income of $339,000 to $247,000 at June 30, 2012 from $586,000 at September 30, 2011.

Average Balance Sheets for the Three and Nine Months Ended June 30, 2012 and 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 June 30
                                                                  2012                                               2011
                                                               Interest                                           Interest
                                                Average         Income/                            Average         Income/
                                                Balance         Expense        Yield/ Cost         Balance         Expense        Yield/ Cost
                                                                                   (dollars in thousands)
Interest-earning assets:
Loans (1)                                     $   749,165      $   8,880               4.75 %    $   751,112      $   9,683               5.17 %
Investment securities
Taxable (2)                                        58,654            264               1.81 %         41,132            231               2.25 %
Exempt from federal income tax (2) (3)              8,898             51               3.48 %          5,506             66               7.28 %

Total investment securities                        67,552            315               2.03 %         46,638            297               2.85 %
Mortgage-backed securities                        207,447          1,376               2.66 %        216,260          1,861               3.45 %
Federal Home Loan Bank stock                       14,719              4               0.11 %         18,061             -                0.00 %
Other                                              10,891              1               0.04 %         12,914              1               0.03 %

Total interest-earning assets                   1,049,774         10,576               4.05 %      1,044,985         11,842               4.56 %
Allowance for loan losses                          (7,632 )                                           (8,125 )
Noninterest-earning assets                         63,558                                             60,461

Total assets                                  $ 1,105,700                                        $ 1,097,321


Interest-bearing liabilities:
NOW accounts                                  $    61,982              4               0.03 %    $    58,584              7               0.05 %
Money market accounts                             108,390             69               0.26 %        118,208            127               0.43 %
Savings and club accounts                          77,847             15               0.08 %         71,961             37               0.21 %
Certificates of deposit                           389,464          1,692               1.74 %        362,233          1,762               1.95 %
Borrowed funds                                    254,414          2,060               3.25 %        278,591          2,549               3.67 %

Total interest-bearing liabilities            $   892,097      $   3,840               1.73 %    $   889,577      $   4,482               2.02 %
Non-interest bearing NOW accounts                  35,480                                             31,116
Noninterest-bearing liabilities                    14,109                                             12,305

Total liabilities                                 941,686                                            932,998
Equity                                            164,014                                            164,323

Total liabilities and equity                  $ 1,105,700                                        $ 1,097,321


Net interest income                                            $   6,736                                          $   7,360

Interest rate spread                                                                   2.32 %                                             2.54 %
Net interest-earning assets                   $   157,677                                        $   155,408

Net interest margin (4)                                                                2.57 %                                             2.83 %
Average interest-earning assets to average
interest-bearing liabilities                                      117.67 %                                           117.47 %

(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.

                                                                             For the Nine Months Ended June 30,
                                                               2012                                                  2011
                                                            Interest                                                 Interest
                                             Average         Income/                                                  Income/
                                             Balance         Expense        Yield/ Cost        Average Balance        Expense        Yield/ Cost
                                                                                  (dollars in thousands)
Interest-earning assets:
Loans (1)                                  $   748,803      $  27,366               4.87 %    $         748,984      $  29,322               5.23 %
Investment securities
Taxable (2)                                     46,713            728               2.08 %               45,422            673               1.98 %
Exempt from federal income tax (2) (3)           8,661            158               3.68 %                6,332            219               7.01 %

Total investment securities                     55,374            886               2.33 %               51,754            892               2.60 %
Mortgage-backed securities                     206,614          4,174               2.69 %              209,819          5,357               3.41 %
Federal Home Loan Bank stock                    15,569              8               0.07 %               19,118             -                  -
Other                                           16,893              5               0.04 %                7,042              2               0.04 %

Total interest-earning assets                1,043,253         32,439               4.15 %            1,036,717         35,573               4.60 %
Allowance for loan losses                       (8,135 )                                                 (7,870 )
Noninterest-earning assets                      62,903                                                   56,428

Total assets                               $ 1,098,021                                        $       1,085,275


Interest-bearing liabilities:
NOW accounts                               $    59,647             13               0.03 %    $          57,715             20               0.05 %
Money market accounts                          110,106            225               0.27 %              118,456            448               0.51 %
Savings and club accounts                       74,103             58               0.10 %               68,812            127               0.25 %
Certificates of deposit                        372,408          5,231               1.87 %              324,458          4,828               1.99 %
Borrowed funds                                 272,701          6,697               3.27 %              307,242          8,318               3.62 %

Total interest-bearing liabilities             888,965         12,224               1.83 %              876,683         13,741               2.10 %
Non-interest bearing NOW accounts               33,512                                                   29,704
Noninterest-bearing liabilities                 12,596                                                   11,302

Total liabilities                              935,073                                                  917,689
Equity                                         162,948                                                  167,586

Total liabilities and equity               $ 1,098,021                                        $       1,085,275


Net interest income                                         $  20,215                                                $  21,832

Interest rate spread                                                                2.32 %                                                   2.50 %
Net interest-earning assets                $   154,288                                        $         160,034

Net interest margin (4)                                                             2.58 %                                                   2.82 %
Average interest-earning assets to
average interest-bearing liabilities                           117.36 %                                                 118.25 %

(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 June 30, 2012 and June 30, 2011

Net Income. Net income decreased $447,000, or 36.0%, to $794,000 for the three months ended June 30, 2012 compared to net income of $1.2 million for the comparable period in 2011. Net income for the three months ending June 30, 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 $624,000, or 8.5%, to $6.7 million for the three months ended June 30, 2012 from $7.4 million for the comparable period in 2011. The decrease was primarily attributable to a decrease in the Company's interest rate spread to 2.32% for the three months ended June 30, 2012, from 2.54% for the comparable period in 2011, offset in part by an increase of $2.3 million in the Company's average net earnings assets.

Interest Income. Interest income decreased $1.3 million, or 10.7%, to $10.6 million for the three months ended June 30, 2012 from $11.8 million for the comparable 2011 period. The decrease resulted primarily from a 51 basis point decrease in average yield on interest earning assets, partially offset by a $4.8 million increase in average

interest-earning assets. The average yield on interest earning assets was 4.05% for the three months ended June 30, 2012, as compared to 4.56% for the comparable 2011 period as the Company's interest earning assets continued to re-price downward throughout the period. Total investment securities increased an average $20.9 million. This increase was offset in part by declines in average balances of loans, mortgage backed securities, Federal Home Loan Bank stock and other investments. Loans decreased on average $2.0 million between the two periods along with decreases in the average balance of mortgage backed securities of $8.8 million. In addition, Federal Home Loan Bank stock decreased $3.3 million and other investments decreased $2.0 million. The primary reasons for the decrease in average loan balances were declines in one-four family residential loans, commercial loans and home equity loans and lines of credit which were offset in part by increases in commercial real estate loans and obligations of states and political subdivisions. Average FHLBank Pittsburgh stock declined $3.3 million as a result of repurchases by the FHLB of its stock. The decrease in other interest earning assets was primarily due to a decrease in the average balance of cash held at FHLBank Pittsburgh.

Interest Expense. Interest expense decreased $642,000, or 14.3%, to $3.8 million for the three months ended June 30, 2012 from $4.5 million for the comparable 2011 period. The decrease resulted from a 29 basis point decrease in the overall cost of interest bearing liabilities to 1.73% for the three months ended June 30, 2012 from 2.02% for the comparable 2011 period, partially offset by a $2.5 million increase in average interest-bearing liabilities. Average interest bearing deposits increased $26.7 million and average borrowed funds decreased $24.2 million. Average interest bearing deposits increased primarily as a result of a $27.2 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 $23.6 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 $600,000 for the three month period ended June 30, 2012 as compared to $475,000 for the three month period ended June 30, 2011. The allowance for loan losses was $7.1 million, or 0.95% of loans outstanding, at June 30, 2012, compared to $8.2 million, or 1.09% of loans outstanding at September 30, 2011.

Non-interest Income. Non-interest income increased $36,000, or 2.5%, to $1.5 million for the three months ended June 30, 2012 from $1.5 million for the comparable period in 2011. The primary reasons for the increase were increases in insurance commissions of $52,000 and trust and investment fee income of $72,000 during the 2012 period. These increases were offset in part by a decline in service fees on deposit accounts of $98,000.

Non-interest Expense. Non-interest expense decreased $41,000, or 0.6%, to $6.5 million for the three months ended June 30, 2012 from $6.6 million for the comparable period in 2011. The primary reasons for the decrease were decreases in professional fees of $72,000, loss on foreclosed real estate of $98,000 and advertising expense of $55,000. These decreases were partially offset by increases in merger related costs of $168,000 and data processing expense of $46,000. 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 $225,000 to $311,000 for the three months ended June 30, 2012 from $536,000 for the comparable 2011 period. The decrease was primarily a result of the decrease in income before taxes of $672,000 for the three months ended June 30, 2012. The effective tax rate was 28.1% for the three months ended June 30, 2012, compared to 30.1% for the 2011 period. The decrease in the effective tax rate was primarily due to the increase in the portion of pre-tax income derived from non-taxable loan and investment income for the three months ended June 30, 2012 compared to the 2011 period.

Comparison of Operating Results for the Nine Months Ended June 30, 2012 and June 30, 2011

Net Income. Net income decreased $1.1 million, or 32.6%, to $2.3 million for the nine months ended June 30, 2012 compared to net income of $3.5 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 $1.6 million, or 7.4%, to $20.2 million for the nine months ended June 30, 2012 from $21.8 million for the comparable period in 2011. The decrease was primarily attributable to a decrease in the Company's interest rate spread to 2.32% for the nine months ended June 30, 2012 from 2.50% for the comparable period in 2011 and a decrease of $5.7 million in the Company's average net earning assets.

Interest Income. Interest income decreased $3.1 million, or 8.8%, to $32.4 million for the nine months ended June 30, 2012 from $35.6 million for the comparable 2011 period. The decrease resulted primarily from a 45 basis point decrease in average yield on interest earning assets partially offset by a $6.5 million increase in average interest-earning assets. The average yield on interest earning assets was 4.15% for the nine months ended June 30, 2012, as compared to 4.60% for the comparable 2011 period. Total investment securities increased on average $3.6 million between the two periods along with increases in the average balance of other investment securities of $9.9 million. These increases were offset in part by decreases in the average balances of mortgage backed securities of $3.2 million, capital stock of FHLBank Pittsburgh of $3.5 million and loans of $181,000. 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 increased primarily due to an increase in the average balance of U.S. government agency securities. Average FHLBank Pittsburgh stock declined as a result of repurchases by the FHLBank of its stock.

Interest Expense. Interest expense decreased $1.5 million, or 11.0%, to $12.2 million for the nine months ended June 30, 2012 from $13.7 million for the comparable 2011 period. The decrease resulted from a 27 basis point decrease in the overall cost of interest bearing liabilities to 1.83% for the nine months ended June 30, 2012 from 2.10% for the comparable 2011 period, partially offset by a $12.3 million increase in average interest-bearing liabilities. Average interest bearing deposits increased $46.8 million and average borrowed funds decreased $34.5 million. Average interest bearing deposits increased primarily as a result of an increase of $48.0 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 $25.3 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 June 30, 2012 were $18.2 million compared to non-performing assets of $13.9 million at June 30, 2011. After an evaluation of these factors, management made a provision for loan losses of $1.8 million for the nine months ended June 30, 2012 as compared to $1.6 million for the nine months ended June 30, 2011. The allowance for loan losses was $7.1 million, or 0.95% of loans outstanding, at June 30, 2012, compared to $8.1 million, or 1.08% of loans outstanding at June 30, 2011.

Non-interest Income. Non-interest income increased $525,000, or 12.8%, to $4.6 million for the nine months ended June 30, 2012 from $4.1 million for the comparable period in 2011. The primary reasons for the increase were increases in insurance commissions of $438,000 and earnings on bank owned life insurance of $150,000, which were partially offset by decreases in service fees on deposit accounts of $201,000. 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 a total of $7.0 million . . .