UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                For the quarterly period ended March 31, 2000

                                       or

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(D)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from __________________ to _________________

                         Commission File Number 1-14577

                    SECURITY OF PENNSYLVANIA FINANCIAL CORP.
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

 Delaware                                                         23-2980576
--------------------------------------------------------------------------------
(State or other jurisdiction of                                (I.R.S. Employer
 incorporation or organization)                              Identification No.)


31 W. Broad Street, Hazleton, Pennsylvania                          18201
--------------------------------------------------------------------------------
(Address of principal executive offices)                          (Zip Code)

                                 (570) 454-0824
--------------------------------------------------------------------------------
                (Issuer's telephone number, including area code)

                                 Not Applicable
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changes since last report)

        Check  whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.
                 Yes   [ X ]       No   [   ]


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

         State the number of shares  outstanding of each of the issuer's classes
of common stock,  as of the latest  practicable  date:  the Issuer had 1,356,885
shares of common  stock,  par value  $0.01 per share,  outstanding  as of May 9,
2000.
<PAGE>
                    SECURITY OF PENNSYLVANIA FINANCIAL CORP.
                                   FORM 10-QSB

                                      INDEX



Item 1.    Financial Statements

           Consolidated Balance Sheet at
           March 31, 2000 (unaudited) and June 30, 1999...................   1

           Consolidated Income Statement and Statement of
           Comprehensive Income for the Three and Nine Months Ended
           March 31, 2000 and 1999 (unaudited)...........................    2

           Consolidated Statement of Changes in Equity
           for the Nine Months Ended March 31, 2000 (unaudited)...........   4

           Consolidated Statement of Cash Flows for the
           Nine Months Ended March 31, 2000 and 1999 (unaudited)..........   5

           Notes to Consolidated Financial Statements.....................   6


Item 2.  Management's Discussion and Analysis or Plan of Operation........   6

PART II:          OTHER INFORMATION

Item 1.    Legal Proceedings..............................................  13
Item 2.    Changes in Securities and Use of Proceeds......................  13
Item 3.    Defaults Upon Senior Securities................................  13
Item 4.    Submission of Matters to a Vote of Security Holders............  13
Item 5.    Other Information..............................................  13
Item 6.    Exhibits and Reports on Form 8-K...............................  14

SIGNATURES




<PAGE>
                          PART I. FINANCIAL INFORMATION


Item 1.    Financial Statements.
           --------------------
<TABLE>
<CAPTION>
                         SECURITY OF PENNSYLVANIA FINANCIAL CORP.
                                Consolidated Balance Sheet
                       March 31, 2000 (unaudited) and June 30, 1999
                  (In thousands, except share and per share information)

                                                                    March 31,     June 30,
                                                                      2000          1999
                                                                   ---------     ---------
                                                                    (Unaudited)
<S>                                                                <C>           <C>
Assets:
    Cash and cash equivalents ..................................    $     830     $   1,853
    Interest-bearing deposits with banks .......................        9,704        13,383
                                                                    ---------     ---------
          Total cash and cash equivalents ......................       10,534        15,236
    Held-to-maturity securities
       (fair value of $7,194 at 3/00 and $1,492 at 6/99) .......        7,955         1,492
    Available for sale securities ..............................       33,101        27,425
    Loans (less allowance for loan losses of $430 at 3/00
       and $419 at 6/99) .......................................       79,492        72,789
    Property and equipment, net ................................        1,247         1,281
    Accrued interest receivable ................................          893           835
    Real estate owned, net .....................................          113            53
    Other assets ...............................................        1,065           420
                                                                    ---------     ---------
       Total assets ............................................    $ 134,400     $ 119,531
                                                                    =========     =========

Liabilities and Equity:
    Deposits ...................................................    $ 100,314     $  95,816
    Advances from borrowers for taxes and insurance ............           27            26
    Borrowed funds .............................................       14,000         1,000
    Accrued interest payable and other liabilities .............          618           174
                                                                    ---------     ---------
       Total liabilities .......................................      114,959        97,016

    Common Stock ($.01 par value; 6,000,000 authorized shares,
       1,587,000 shares issued) ................................           16            16
    Additional paid-in capital .................................       14,867        14,869
    Unearned employee stock ownership plan shares ..............       (1,176)       (1,227)
    Treasury stock (230,115 shares, at cost) ...................       (2,377)         --
    Common Stock acquired by stock benefit plans (63,480 shares)         (584)         --
    Retained earnings - substantially restricted ...............       10,070         9,596
    Accumulated other comprehensive loss .......................       (1,375)         (739)
                                                                    ---------     ---------
       Total equity ............................................       19,441        22,515
                                                                    ---------     ---------

       Total liabilities and equity ............................    $ 134,400     $ 119,531
                                                                    =========     =========
</TABLE>
                                        1
<PAGE>
<TABLE>
<CAPTION>
                    SECURITY OF PENNSYLVANIA FINANCIAL CORP.
                          Consolidated Income Statement
          For the Three Months Ended March 31, 2000 and March 31, 1999
                      (In thousands, except per share data)

                                                                                March 31,    March 31,
                                                                                  2000         1999
                                                                                 -------     -------
                                                                                      (Unaudited)
<S>                                                                              <C>         <C>
Interest income:
    Loans ...................................................................    $ 1,491     $ 1,323
    Interest and dividends on securities:
       Taxable ..............................................................        567         203
       Non-taxable ..........................................................        111          24
       Dividends ............................................................         10          10
       Interest-bearing deposits with banks .................................        135         451
                                                                                 -------     -------
           Total interest income ............................................      2,314       2,011

Interest expense:
    Deposits ................................................................      1,034         987
    Federal Home Loan Bank advances and other borrowings ....................        179          24
                                                                                 -------     -------
       Total interest expense ...............................................      1,213       1,011

    Net interest income .....................................................      1,101       1,000
    Provision for loan losses ...............................................       --            10
                                                                                 -------     -------
    Net interest income after provision for loan losses .....................      1,101         990

Noninterest income:
    Other loan fees and service charges .....................................         69          85
    Other ...................................................................         14          14
                                                                                 -------     -------
           Total noninterest income .........................................         83          99
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                              <C>         <C>
Noninterest Expense:
    Salaries and net employee benefits ......................................        449         349
    Occupancy costs .........................................................         65          83
    Federal deposit insurance premiums ......................................          5          15
    Data processing .........................................................         41          45
    Professional fees .......................................................         56          39
    Foreclosed real estate expenses .........................................         51          83
    Charitable contributions ................................................          1           7
    Other noninterest expense ...............................................        193         144
                                                                                 -------     -------
           Total noninterest expense ........................................        861         765

Income before provision for income taxes ....................................        323         324
Income tax provision ........................................................        118          77
                                                                                 -------     -------
Net income ..................................................................    $   205     $   247
                                                                                 =======     =======

Earnings per share:
    Basic ...................................................................    $  0.17     $  0.17
                                                                                 =======     =======
    Diluted .................................................................    $  0.16     $  0.17
                                                                                 =======     =======
</TABLE>
                                       2
<PAGE>
<TABLE>
<CAPTION>
                                SECURITY OF PENNSYLVANIA FINANCIAL CORP
                                     Consolidated Income Statement
                      For the Nine Months Ended March 31, 2000 and March 31, 1999
                                 (In thousands, except per share data)

                                                                                 March 31,   March 31,
                                                                                   2000       1999
                                                                                 -------     -------
                                                                                      (Unaudited)
<S>                                                                              <C>         <C>
Interest income:
    Loans ...................................................................    $ 4,353     $ 3,929
    Interest and dividends on securities:
       Taxable ..............................................................      1,458         549
       Non-taxable ..........................................................        345          41
       Dividends ............................................................         30          29
       Interest-bearing deposits with banks .................................        441       1,202
                                                                                 -------     -------
           Total interest income ............................................      6,627       5,750

Interest expense:
    Deposits ................................................................      3,016       3,129
    Federal Home Loan Bank advances and other borrowings ....................        376        --
                                                                                 -------     -------
       Total interest expense ...............................................      3,392       3,129

    Net interest income .....................................................      3,235       2,621
    Provision for loan losses ...............................................          9          65
                                                                                 -------     -------
    Net interest income after provision for loan losses .....................      3,226       2,556

Noninterest income:
    Other loan fees and service charges .....................................        234         230
    Other ...................................................................         39          34
                                                                                 -------     -------
           Total noninterest income .........................................        273         264
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                              <C>         <C>
Noninterest Expense:
    Salaries and net employee benefits ......................................      1,281       1,028
    Occupancy costs .........................................................        194         219
    Federal deposit insurance premiums ......................................         34          45
    Data processing .........................................................        116         120
    Professional fees .......................................................        192          91
    Foreclosed real estate expenses .........................................        168         266
    Charitable contributions ................................................          7         763
    Other noninterest expense ...............................................        503         372
                                                                                 -------     -------
           Total noninterest expense ........................................      2,495       2,904

Income (Loss) before provision for income taxes .............................      1,004         (84)
Income tax provision (benefit) ..............................................        308         (53)
                                                                                 -------     -------
Net income (loss) ...........................................................    $   696     $   (31)
                                                                                 =======     =======

Earnings per share:
    Basic ...................................................................    $  0.52         N/A
                                                                                 =======
    Diluted .................................................................    $  0.49         N/A
                                                                                 =======
</TABLE>


                                      3
<PAGE>
<TABLE>
<CAPTION>
                                    SECURITY OF PENNSYLVANIA FINANCIAL CORP
                                 Consolidated Statement of Comprehensive Income
                          For the Three Months Ended March 31, 2000 and March 31, 1999
                                                 (In thousands)

                                                                                 March 31,           March 31,
                                                                                    2000                1999
                                                                                    ----                ----
                                                                                          (Unaudited)
<S>                                                                                 <C>                 <C>
Net income...............................................................           $205                $247
Increase/(decrease) in unrealized losses available-for-sale securities...             59                (126)
                                                                                    ----                ----
    Comprehensive income.................................................           $264                $121
                                                                                    ====                ====
<CAPTION>
                            For the Nine Months Ended March 31, 2000 and March 31, 1999
                                                  (In thousands)

                                                                                 March 31,           March 31,
                                                                                    2000                1999
                                                                                    ----                ----
                                                                                          (Unaudited)
<S>                                                                                 <C>                 <C>
Net income (loss)..........................................................         $ 696               $  (31)
Decrease in unrealized losses available-for-sale securities................          (636)                (125)
                                                                                    -----               ------
   Comprehensive income (loss).............................................         $  60               $ (156)
                                                                                    =====               ======
<CAPTION>
                                             SECURITY OF PENNSYLVANIA FINANCIAL CORP.
                                                  Statement of Changes in Equity
                                                           (Unaudited)

                                            For the Nine Months Ended March 31, 2000
                                                          (In thousands)
                                                                                                        Accumulated
                                                Additional                          Stock                  Other
                                     Common      Paid-in                Treasury   Benefit  Retained   Comprehensive       Net
                                     Stock       Capital     ESOP        Stock     Plans    Earnings       (Loss)        Equity
                                     -----       -------     ----        -----     -----    --------       ------        ------
<S>                                   <C>        <C>       <C>         <C>        <C>      <C>           <C>             <C>
Balance at June 30, 1999........      $16        $14,869   $(1,227)    $      --  $    --  $  9,596      $   (739)       $22,515
Net income .....................       --             --        --                              696            --            696
Dividend paid...................       --             --        --                             (222)           --           (222)
(Increase)/decrease in unrealized
   losses on available-for-sale
   securities...................       --             --        --            --       --        --          (636)          (636)
ESOP shares earned..............       --             (2)       51            --       --        --            --             49
Stock repurchase................       --             --        --        (2,377)      --        --            --         (2,377)
Common stock acquired for                                                                                                   (584)
   stock benefit plan...........       --             --        --            --     (584)       --            --
                                      ===        =======   =======       =======    =====   =======       =======        =======
Balance at March 31, 2000.......      $16        $14,867   $(1,176)      $(2,377)   $(584)  $10,070       $(1,375)       $19,441
                                      ===        =======   =======       =======    =====   =======       =======        =======

</TABLE>
                                        4
<PAGE>
<TABLE>
<CAPTION>
                         SECURITY OF PENNSYLVANIA FINANCIAL CORP.
                           Consolidated Statement of Cash Flows
                       For Nine Months Ended March 31, 2000 and 1999
                                      (In thousands)

                                                                   March 31,    March 31,
                                                                     2000         1999
                                                                   --------     --------
Operating activities:                                                  (unaudited)
<S>                                                                <C>          <C>
Net income/(loss) .............................................    $    696     $    (31)
Adjustments to reconcile net income to net cash
   provided by operating activities:
Provision for loan losses and foreclosed real estate ..........           9           65
Amortization and accretion on investment securities ...........           1           (2)
Depreciation and amortization .................................          78          109
Release - ESOP shares .........................................          49           --
Loss on sale of real estate acquired through foreclosure ......          34           37
Change in assets and liabilities:
    Accrued interest receivable ...............................         (58)          (1)
    Other assets ..............................................        (331)      (2,081)
    Accrued interest payable and other liabilities ............         444          275
                                                                   --------     --------

Net cash provided by operating activities .....................         922       (1,629)
                                                                   --------     --------
Investment activities:
Purchase of held-to-maturity securities .......................     (14,811)      (1,500)
Purchase of available-for-sale securities .....................      (8,531)     (20,545)
Proceeds from maturities, calls and principal paydowns on
    held-to-maturity securities ...............................       9,852        3,480
Proceeds from maturities, calls and principal paydowns on
    available-for-sale securities .............................         400        7,085
Loans made to customers, net of principal collected ...........      (6,915)         (38)
Acquisition of office premises and equipment ..................         (44)         (36)
Proceeds from sale of foreclosed real estate ..................         109          534
                                                                   --------     --------

Net cash used in investing activities .........................     (19,940)     (11,020)
                                                                   --------     --------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                <C>          <C>
Financing activities:
Net increase/(decrease) in deposit accounts ...................       4,498       (2,086)
Net increase/(decrease) in advances from borrowers
    for taxes and insurance ...................................           1          (10)
Purchase - treasury stock .....................................      (2,377)        --
Borrowed funds ................................................      13,000         --
Net proceeds from issuance of common stock ....................        --         13,614
Dividend Payment ..............................................        (222)        --
Common stock acquired for stock benefit plans .................        (584)        --
                                                                   --------     --------
Net cash provided by financing activities .....................      14,316       11,518
                                                                   --------     --------

Decrease in cash and equivalents ..............................    $ (4,702)    $ (1,131)
Cash and equivalents - beginning of the period ................      15,236       27,315
                                                                   --------     --------
Cash and equivalents - end of period ..........................    $ 10,534     $ 26,184
                                                                   ========     ========
Supplemental Disclosure of Cash Flow Information:
    Interest paid .............................................    $  3,392     $  3,129
    Income taxes paid (refunded) ..............................    $    308     $    (65)

Supplemental Disclosure of Non-Cash Information:
    Transfer from loans to real estate owned ..................    $    221     $     50

</TABLE>
                                        5
<PAGE>
                    SECURITY OF PENNSYLVANIA FINANCIAL CORP.
                   Notes to Consolidated Financial Statements

(1)      Organization
         ------------

         Security  of   Pennsylvania   Financial   Corp.   (the  "Company")  was
incorporated  under the laws of  Delaware  in  August  1998 for the  purpose  of
serving as the holding company of Security Savings  Association of Hazleton (the
"Association") as part of the Association's  conversion from the mutual to stock
form of  organization  (the  "Conversion").  The  Company is a savings  and loan
holding company and is subject to regulation by the Office of Thrift Supervision
(the "OTS").  The Association is regulated by the  Commonwealth of Pennsylvania,
the OTS and the Federal Deposit Insurance Corporation. The Conversion, completed
on December 30, 1998  resulted in the Company  issuing an aggregate of 1,587,000
shares of its common  stock,  par value  $.01 per  share,  at a price of $10 per
share,  of which  1,511,617  shares were issued in a  subscription  offering and
75,383 shares were issued and sold to Security  Savings  Charitable  Foundation.
Prior to the Conversion, the Company had not engaged in any material operations.

(2)      Accounting Principles
         ---------------------

         The  accompanying   unaudited  financial   statements  of  Security  of
Pennsylvania  Financial  Corp.  have been prepared in accordance  with generally
accepted  accounting  principles  for  interim  financial  information  and with
instructions  to Form 10-QSB and  Regulation  S-B.  Accordingly,  the  financial
statements  do not  include all of the  information  and  footnotes  required by
generally accepted accounting principles for complete financial  statements.  In
the opinion of management,  all  adjustments  (consisting of a normal  recurring
nature)  considered  necessary  for a  fair  presentation  have  been  included.
Operating  results  for the three and nine  months  ended March 31, 2000 are not
necessarily  indicative  of the  results  that may be  expected  for the current
fiscal year.

         For further information, refer to the consolidated financial statements
included in the Company's Annual Report on Form 10-KSB filed with the Securities
and Exchange Commission.

Item 2.  Management's Discussion and Analysis or Plan of Operation.
         ----------------------------------------------------------

         The following analysis discusses changes in the financial condition and
results of operations at and for the three and nine months ended March 31, 2000,
and should be read in  conjunction  with the  Company's  Consolidated  Financial
Statements and the notes thereto, appearing in Part I, Item 1 of this document.

Forward-Looking Statements

         This report  contains  certain  forward-looking  statements  within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the Securities Exchange Act of 1934, as amended. The Company intends such
forward-looking statements to be covered by the safe harbor

                                        6

<PAGE>
provisions for  forward-looking  statements  contained in the Private Securities
Reform Act of 1995,  and is including  this statement for purposes of these safe
harbor  provisions.  Forward-looking  statements,  which  are  based on  certain
assumptions  and describe  future  plans,  strategies  and  expectations  of the
Company,  are  generally  identified  by use of the words  "believe,"  "expect,"
"intend,"  "anticipate,"  "estimate,"  "project,"  or similar  expressions.  The
Company's  ability to predict  results or the actual  effect of future  plans or
strategies is inherently uncertain.  Factors which could have a material adverse
effect on the operations of the Company and the  subsidiaries  include,  but are
not limited  to,  changes  in:  interest  rates,  general  economic  conditions,
legislative/regulatory  changes,  monetary  and  fiscal  policies  of  the  U.S.
Government,  including  policies of the U.S.  Treasury  and the Federal  Reserve
Board, the quality or composition of the loan or investment  portfolios,  demand
for loan products, deposit flows, competition,  demand for financial services in
the Company's market area and accounting principles and guidelines.  These risks
and uncertainties should be considered in evaluating  forward-looking statements
and undue reliance should not be placed on such statements.  Further information
concerning the Company and its business, including additional factors that could
materially affect the Company's  financial results, is included in the Company's
filings with the Securities and Exchange Commission.

         The  Company  does  not  undertake  - and  specifically  disclaims  any
obligation - to publicly  release the result of any revisions  which may be made
to any  forward-looking  statements to reflect events or circumstances after the
date  of  such  statements  or to  reflect  the  occurrence  of  anticipated  or
unanticipated events.

General

         Security of Pennsylvania Financial Corp. (the "Company") is the holding
company for Security  Savings  Association  of Hazleton (the  "Association"),  a
Pennsylvania  chartered  capital stock savings  association.  The  Association's
results of operations are dependent  primarily on net interest income,  which is
the difference  between the income earned on its loan and investment  portfolios
and its  cost  of  funds,  consisting  of the  interest  paid  on  deposits  and
borrowings.  Results  of  operations  are  also  affected  by the  Association's
provision for loan losses,  loan and security sales activities,  service charges
and other fee income, and non-interest  expense. The Association's  non-interest
expense  principally  consists of  compensation  and employee  benefits,  office
occupancy  and equipment  expense,  federal  deposit  insurance  premiums,  data
processing,  advertising and business  promotion and other expenses.  Results of
operations are also  significantly  affected by general economic and competitive
conditions,  particularly  changes in interest  rates,  government  policies and
actions of regulatory authorities.

Management Strategy

         The  Company's  operating  strategy has been that of a  community-based
banking  institution,  offering a wide variety of savings products to its retail
customers,  while  concentrating  on residential and consumer  lending and, to a
lesser extent, multi-family and commercial real estate and construction lending.
Additionally, in February 1999, the Association began offering commercial

                                        7

<PAGE>
loans through its  commercial  loan  department.  In order to promote  long-term
financial strength and profitability,  the Association's  operating strategy has
focused on: (i) maintaining  strong asset quality by originating  primarily one-
to four-family  mortgage loans and home equity loans and lines of credit secured
by  residential  real  estate  located in its market  area;  (ii)  managing  its
interest  rate risk within the  context of its  significant  fixed-rate  one- to
four-family  mortgage lending  activity;  (iii) providing  products and delivery
systems directed at the needs and  expectations of its customer base,  including
through taking advantage of technological  advances when  appropriate;  and (iv)
maintaining a strong regulatory capital position.

Comparison of Financial Condition at March 31, 2000 and June 30, 1999

         Total assets increased $14.2 million,  or 11.9%, from $119.5 million at
June 30, 1999 to $133.7  million at March 31, 2000.  The increase was  primarily
due to a $12.1 million  increase in the investment  portfolio from $28.9 million
at June 30,  1999 to $41.0  million at March 31,  2000.  In  addition,  the loan
portfolio  increased  $6.7 million from $72.8  million at June 30, 1999 to $79.5
million  at  March  31,  2000,  primarily  due to a  $7.2  million  increase  in
commercial  loans offset by a $470,000  decrease in net real estate  loans.  The
increase in commercial  loans was primarily due to the increased  efforts of the
commercial loan department, which was formed in February 1999.

         The increase in assets was primarily funded by a $13.0 million increase
in borrowings  from the Federal Home Loan Bank,  which went from $1.0 million at
June 30,  1999 to  $14.0  million  at March  31,  2000.  Additionally,  deposits
increased  $4.5 million from $95.8 million at June 30, 1999 to $100.3 million at
March 31, 2000.  The increase in deposits was due  primarily to more  aggressive
pricing of  certificates  of deposit.  Certificates  of deposit  increased  $4.3
million,  which  reflected  both in infusion of new  deposits and a shift in the
deposit mix to certificates  of deposit from passbook  savings  accounts,  which
decreased $1.4 million. The increase in deposits was also attributable to a $1.6
million increase in NOW and money market accounts.

         Total equity  decreased $3.1 million,  or 13.8%,  from $22.5 million at
June 30, 1999 to $19.4  million at March 31, 2000.  This  decrease was primarily
due to  repurchase  of 230,115  shares of stock at a total cost of $2.4  million
during the quarter ended December 31, 1999 and, to a lesser  extent,  a $636,000
increase  in  unrealized  losses  on  available-for-sale  securities  and  stock
acquired  for the 1999  Stock-Based  Incentive  Plan at a cost of  approximately
$584,000  during the quarter ended March 31, 2000.  The decreases were offset by
net income of $696,000 for the nine months ended March 31, 2000.

Comparison of  Operating  Results for the Three  Months Ended March 31, 2000 and
1999

         General.  The Company  reported  net income of  $205,000,  or $0.17 per
share  basic and  $0.16  diluted,  for the three  months  ended  March 31,  2000
compared to net income of $247,000,  or $0.17 per share basic and  diluted,  for
the three months ended March 31, 1999.  The decrease in net income was primarily
due to an increase in  non-interest  expense  and income tax  provision  for the
period ended March 31, 2000 offset in part by  increases in net interest  income
and non-interest income for the period.

                                        8

<PAGE>
         Interest Income.  Total interest income increased  $303,000,  or 15.1%,
for the three-month  period ended March 31, 2000 compared to the same period for
the previous  year.  The  increase in interest  income was  primarily  due to an
increase in interest on  investment  securities  of $249,000  and an increase in
interest  earned on loans of $168,000,  both of which were due to higher average
balances in the respective  portfolios.  The increases were offset by a $114,000
decline in interest  earned on  interest-bearing  deposits with banks,  due to a
decrease in the amount of certificates  of deposits  invested at other financial
institutions.  As the certificates of deposit investments  matured, the proceeds
were  used to fund  normal  operations  including  the  growth  in the  loan and
securities portfolios.

         Interest Expense.  Interest expense increased  $202,000,  or 20.0%, for
the three  months  ended  March 31,  2000  compared to the same period last year
primarily  due to the increased  cost of interest on borrowed  funds of $155,000
due to the  higher  average  balance  on such  borrowings.  The  balance  of the
increase  was due to an  increase  of  $47,000 in the  interest  paid on deposit
accounts,  due to the increase in the balance of these  accounts of $4.5 million
since June 30, 1999, offset by a lower rate paid on NOW accounts. The additional
funds were used to fund the growth in the investment and loan portfolios.

         Provision  for Loan Losses.  The  Company's  provision  for loan losses
decreased $10,000 during the three-month period ended March 31, 2000 compared to
the same period  last year.  The  decrease  was based on the  Company's  monthly
review of the loan portfolio, the level of charged-off and non-performing loans,
real estate  owned,  loan  commitments,  unused  lines of credit,  as well as an
evaluation of the general  economic  conditions  in the  Company's  market area.
Increased and more effective  collection efforts have resulted in better control
of delinquent accounts,  thus allowing the Association to maintain the allowance
for loan losses at approximately the same level as it was at March 31, 1999. The
allowance  for loan losses was $430,000 and $435,000 at March 31, 2000 and March
31,  1999,  respectively.  The  allowance  for loan losses  represents  20.1% of
non-performing  loans  and 0.54% of total  loans at March 31,  2000 and 36.2% of
non-performing loans and 0.62% of total loans at March 31, 1999.

         Non-Interest Income. Non-interest income decreasd $16,000 for the three
months ended March 31, 2000  compared to the period  ended March 31, 1999.  This
was primarily due to a decrease in fees.

         Non-Interest Expense. Non-interest expense increased $96,000, or 12.5%,
from $765,000 at March 31, 1999 to $861,000 at March 31, 2000.  The increase was
primarily due to a $100,000  increase in salaries and benefits  primarily due to
added staff in the commercial loan department and calendar year-end bonuses paid
to employees,  and a $17,000 increase in professional  fees primarily due to the
increased  reporting  and  regulatory  requirements  of  being a  publicly  held
company.  Price  increases  for  services  were the major  factor in the $49,000
increase in other expenses.  The increase was partially  offset by a decrease in
forclosed real estate  expenses for the period ended March 31, 2000 because of a
decrease  in the  number  of  real  estate  owned  properties  acquired  through
foreclosure.

                                        9
<PAGE>
         Provision  for Income  Taxes.  The Company had an increase in provision
for income taxes of $41,000 for the period ended March 31, 2000 to an expense of
$118,000  for the three  month  period  ended  March 31, 2000 from an expense of
$77,000  for the same period  last year.  The  Company  paid less for the period
ended March 31,  1999 as its tax expense on an annual  basis was less due to the
operating loss caused by the one-time  charitable  contribution to establish the
Foundation.

Comparison of  Operating  Results for the Nine  Months  Ended March 31, 2000 and
1999

         General.  The Company  reported  net income of  $696,000,  or $0.52 per
share basic and $0.49  diluted for the nine months ended March 31, 2000 compared
to a net loss of $31,000 for the same period ended March 31, 1999.  The loss for
the nine-month  period ended March 31, 1999 was the result of a one-time  charge
of $753,000  related to the  establishment  of the Security  Savings  Charitable
Foundation  at the time of the  conversion  to the stock  form of  ownership  on
December 31, 1998.  If adjusted to eliminate  that one-time  charge,  net income
would have approximated $722,000 for the nine-month period ended March 31, 1999.

         Interest Income.  Total interest income increased  $877,000,  or 15.3%,
for the  nine-month  period ended March 31, 2000 compared to the same period for
the previous  year.  The  increase in interest  income was  primarily  due to an
increase in interest on  investment  securities  of $810,000  and an increase in
interest  on loans of  $424,000,  both of which were due to the  higher  average
balances of the respective portfolios. These increases were offset by a $358,000
decrease in the interest  income  earned from  interest  bearing  deposits  with
banks,  due to the decrease in the amount of certificates of deposit invested at
other financial  institutions.  As certificates of deposit investments  matured,
the proceeds were used to fund the stock repurchase and to increase liquidity in
preparation for Y2K.

         Interest Expense. Interest expense increased $263,000, or 8.4%, for the
nine-month  period  ended March 31, 2000  compared to the same period last year.
The increase was  primarily  due to an increase of $376,000 in the interest paid
on borrowed funds as a result of utilizing borrowings from the Federal Home Loan
Bank to fund the purchase of additional  investment  securities and to fund loan
growth.  The increase was offset by a $113,000  decrease in interest  expense on
deposits in part due to the decrease in the interest  rate paid on NOW accounts.
The increase was also offset by a decrease in the average balance of deposits of
$3.5 million,  from $101.6  million for the period ended March 31, 1999 to $98.1
million for the period ended March 31, 2000,  primarily due to the withdrawal of
$2.6 million by depositors to purchase stock in the Company's public offering in
December 1998.

         Provision  for Loan Losses.  The  Company's  provision  for loan losses
decreased  $56,000 for the  nine-month  period ended March 31, 2000 from $65,000
for the  nine-month  period  ended March 31,  1999 to $9,000 for the  nine-month
period ended March 31, 2000.  Increased and more  efficient  collection  efforts
have maintained better control of the Association's delinquent accounts and thus
allowed the Association to maintain this level of allowance for loan losses.


                                       10

<PAGE>
         Non-interest  Income.  Non-interest  income  increased  $9,000  for the
nine-month  period ended March 31, 2000 compared to the same period the previous
year. The balance of the increase was  attributable to modest increases in other
loan  fees  and  service  charges  of  $4,000  and a  $5,000  increase  in other
non-interest  income for the nine-month  period ended March 31, 2000 compared to
the same period the previous year.

         Non-interest  Expense.  Non-interest  expense  decreased  $409,000,  or
14.1%,  for the  nine-  month  period  ended  March  31,  2000  compared  to the
nine-month  period ended March 31, 1999.  The decrease was  primarily due to the
one-time  expense of funding the Security Savings  Charitable  Foundation in the
nine-month  period  ended March 31, 1999.  Notwithstanding  such  expense,  non-
interest expense would have increased  $345,000,  from the previous year period.
This increase was due to a $253,000  increase in salaries and employee  benefits
primarily  due to added staff in the  commercial  loan  department  and calendar
year-end  bonuses  awarded to the  employees.  In  addition,  professional  fees
increased  $101,000 for the  nine-month  period ended March 31, 2000 compared to
the same period one-year ago and other  non-interest  expense increased $131,000
for this period.  The  increases  in  professional  fees and other  non-interest
expense are  primarily due to the increased  reporting and  regulatory  costs of
being a publicly held company.

         The increase was offset by a $98,000, or 36.8%,  decrease in foreclosed
real estate losses from $266,000 for the nine-month  period ended March 31, 1999
to $168,000 for the period ended March 31, 2000.

         Provision  for Income  Taxes.  The Company had an increase in provision
for income taxes of $361,000 for the period ended March 31, 2000, as a result of
the  expense of  $308,000  for the period  ended  March 31,  2000  compared to a
benefit of $53,000 for the period ended March 31, 1999. The benefit for the nine
months ended March 31, 1999 was the result of the operating  loss created by the
charitable contribution received through the one-time charitable contribution to
the Foundation.

Liquidity and Capital Resources

         The  Company's  primary  sources of funds are  deposits,  principal and
interest  payments on loans,  mortgage-backed  and  investment  securities.  The
Company  uses  the  funds  generated  to  support  its  lending  and  investment
activities as well as any other demands for liquidity such as deposit  outflows.
While maturities and scheduled  amortization of loans are predictable sources of
funds, deposit flows, mortgage prepayments and the exercise of call features are
greatly   influenced  by  general  interest  rates,   economic   conditions  and
competition.  The Company has  continued  to  maintain  levels of liquid  assets
greater than those required by Office of Thrift  Supervision  regulations.  This
requirement  of the  Office  of Thrift  Supervision,  which may be varied at the
direction of the Office of Thrift Supervision depending upon economic conditions
and  deposit  flows,  is based upon a  percentage  of  deposits  and  short-term
borrowings.  The Company's  currently required liquidity ratio is 4.0%. At March
31,  2000 and  1999  the  Company's  liquidity  ratios  were  33.5%  and  30.3%,
respectively.


                                       11
<PAGE>
         At March 31,  2000,  the  Association  exceeded  all of its  regulatory
capital requirements with a tangible capital level of $16.4 million, or 12.3% of
total adjusted  assets,  which is above the required  level of $2.0 million,  or
1.5%; core capital of $16.4 million,  or 12.3%, of total adjusted assets,  which
is above the required level of $5.3 million,  or 4.0%; and risk-based capital of
$16.8 million,  or 29.1%, of risk-weighted  assets,  which is above the required
level of $4.6 million, or 8.0%.

         The Company has other  sources of  liquidity  if a need for  additional
funds arises,  including Federal Home Loan Bank advances. At March 31, 2000, the
Company  had  advances  outstanding  from the  Federal  Home  Loan Bank of $14.0
million and at March 31, 2000 had an overall borrowing capacity from the Federal
Home Loan Bank of $64.1 million.

         The  Company's  most  liquid  assets  are  cash  and  due  from  banks,
interest-bearing  deposits with banks and its  investment  and  mortgage-related
securities  available-for-sale.  The levels of these assets are dependent on the
Company's  operating,  financing,  lending and investing  activities  during any
given  period.  At March 31,  2000,  cash and due from  banks,  interest-bearing
deposits with banks and investment  securities  available for sale totaled $43.6
million, or 32.6% of total assets.

         At March 31, 2000, the Company had  commitments to originate  loans and
unused  outstanding  lines of credit and  undisbursed  proceeds of  construction
mortgages  totaling  $4.8  million.  The Company  anticipates  that it will have
sufficient  funds  available to meet its current loan  origination  commitments.
Certificate  accounts,  which are scheduled to mature in less than one year from
March 31, 2000,  totaled $33.6 million.  The Company expects that  substantially
all of the  maturing  certificate  accounts  will be  retained by the Company at
maturity.

Recent Accounting Pronouncements

         Accounting for Derivative  Instruments and Hedging Activities.  In June
1998, the FASB issued SFAS No. 133,  "Accounting for Derivative  Instruments and
Hedging  Activities."  This  statement  establishes   accounting  and  reporting
standards for derivative  instruments,  including certain derivative instruments
embedded in other  contracts  and for hedging  activities.  It requires  that an
entity  recognize  all  derivatives  as  either  assets  or  liabilities  in the
statement of financial  position and measure those instruments at fair value. In
connection with the implementation of this statement,  the Company,  as of April
1, 1999,  transferred  debt  securities  classified as  held-to-maturity  to the
available-for-sale  category.  Such  transfer  will not call into  question  the
Company's intention to hold other debt to maturity in the future. This statement
was originally  effective for financial  statements for periods  beginning after
June 15, 1999, but has been extended to periods beginning after June 15, 2000.

         Accounting   for   Mortgage-Backed   Securities   Retained   after  the
Securitization of Mortgage Loans Held for Sale by a Mortgage Banking Enterprise.
Issued in October  1998,  SFAS No. 134 was  effective  the first fiscal  quarter
beginning after December 15, 1998. This statement further amends Statement 65 to
require that after the securitization of mortgage loans held for sale, an entity
engaged in mortgage banking activities  classifies the resulting mortgage backed
securities or other

                                       12

<PAGE>
retained  interests  based  on its  ability  and  intent  to sell or hold  those
investments.  This statement  conforms the subsequent  accounting for securities
retained after securitization of mortgage loans by a mortgage banking enterprise
with a subsequent accounting for securities retained after the securitization of
other types of assets by a non-mortgage banking enterprise.


                            PART II. OTHER INFORMATION

Item 1.  Legal Proceedings.
         -----------------

         The Company is not involved in any pending legal proceedings other than
routine legal  proceedings  occurring in the ordinary  course of business.  Such
routine legal  proceedings,  in the aggregate,  are believed by management to be
immaterial to the Company's financial condition or results of operations.

Item 2.  Changes in Securities and Use of Proceeds.
         -----------------------------------------

         Not applicable.

Item 3.  Defaults Upon Senior Securities.
         -------------------------------

         None.

Item 4.  Submission of Matters to a Vote of Security Holders.
         ---------------------------------------------------

         Not applicable.

Item 5.  Other Information.
         -----------------

         None.



                                       13

<PAGE>
Item 6. Exhibits and Reports on Form 8-K (ss.249.308 of this Chapter).
        --------------------------------------------------------------

            (a)      Exhibits

                     2.1  Amended  Plan  of  Conversion   (including  the  Stock
                          Articles of  Incorporation  and Bylaws of the Security
                          Savings Association of Hazleton)*
                     3.1  Certificate   of    Incorporation   of   Security   of
                          Pennsylvania Financial Corp.*
                     3.2  Bylaws of Security of Pennsylvania Financial Corp.*
                     11.0 Statement regarding Computation of Per Share Earnings
                     27.0 Financial Data Schedule
                     -------------------------
                     *    Incorporated by reference into this document
                          from  the   Exhibits   to  the  Form   SB-2,
                          Registration  Statement,  and any amendments
                          thereto, Registration No. 333-63271

            (b)      Reports on Form 8-K

                     None.



                                       14

<PAGE>



                                   SIGNATURES

         In  accordance  with the  requirements  of the Exchange Act, the issuer
caused this report to be signed on its behalf by the  undersigned  hereunto duly
authorized.


                              SECURITY OF PENNSYLVANIA FINANCIAL CORP.


Dated:  May 10, 2000          By:   /s/Richard C. Laubach
                                    ---------------------
                                    Richard C. Laubach
                                    President and Chief Executive Officer
                                    (principal executive officer)

Dated:  May 10, 2000          By:   /s/David P. Marchetti, Sr.
                                    --------------------------
                                    David P. Marchetti, Sr.
                                    Chief Financial Officer and Treasurer
                                    (principal financial and accounting officer)




                                       15