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 December 31, 1999

                                       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 February
11, 2000.
<PAGE>
                    SECURITY OF PENNSYLVANIA FINANCIAL CORP.

                                   FORM 10-QSB

                                      INDEX

                                                                            Page
                                                                            ----

PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements

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

           Consolidated Income Statement and Statement of
           Comprehensive Income for the Three and Six Months
           Ended December 31, 1999 and 1998 (unaudited) .....................  2

           Consolidated Statement of Changes in Equity
           for the Six Months Ended December 31, 1999 .......................  4

           Consolidated Statement of Cash Flows for the
           Six Months Ended December 31, 1999 and 1998 ......................  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 .................................. 14
Item 4.    Submission of Matters to a Vote of Security Holders .............. 14
Item 5.    Other Information ................................................ 14
Item 6.    Exhibits and Reports on Form 8-K ................................. 15

SIGNATURES .................................................................. 16
<PAGE>
                          PART I. FINANCIAL INFORMATION

Item 1.    Financial Statements.
           --------------------

<TABLE>
<CAPTION>
                    SECURITY OF PENNSYLVANIA FINANCIAL CORP.
                           Consolidated Balance Sheet

                 December 31, 1999 (unaudited) and June 30, 1999
             (In thousands, except share and per share information)

                                                                     December 31,   June 30,
                                                                        1999          1999
                                                                      ---------    ---------
                                                                     (Unaudited)
<S>                                                                   <C>          <C>
Assets:
         Cash and cash equivalents ................................   $   2,293    $   1,853
         Interest-bearing deposits with banks .....................       9,715       13,383
                                                                      ---------    ---------
            Total cash and cash equivalents .......................      12,008       15,236
         Held-to-maturity securities ..............................       5,290        1,492
            (fair value of $4,345 at 12/99 and $1,492 at 6/99)
         Available for sale securities ............................      32,742       27,424
         Loans (less allowance for loan loss of $430 at 12/99 .....      78,986       72,789
            and $419 at 6/99)
         Property and equipment, net ..............................       1,271        1,281
         Accrued interest receivable ..............................         885          836
         Real estate owned, net ...................................         186           53
         Other assets .............................................         432          420
                                                                      ---------    ---------
                  Total assets ....................................   $ 131,800    $ 119,531
                                                                      =========    =========

Liabilities and Equity:
         Deposits .................................................   $ 100,135    $  95,815
         Advances from borrowers for taxes and insurance ..........          19           26
         Borrowed funds ...........................................      12,000        1,000
         Accrued interest payable and other liabilities ...........        (168)         174
                                                                      ---------    ---------
                  Total liabilities ...............................     111,986       97,015

         Common Stock ($.01 par value; 6,000,000 authorized shares,
            1,356,885 shares issued ...............................          16           16
         Additional paid-in capital ...............................      14,869       14,869
         Unearned Employee Stock Ownership Plan (ESOP) shares .....      (1,194)      (1,227)
         Treasury stock ...........................................      (2,377)        --
         Retained earnings - substantially restricted .............       9,933        9,596
         Accumulated other comprehensive income ...................      (1,433)        (738)
                                                                      ---------    ---------
                  Total equity ....................................      19,814       22,516
                                                                      ---------    ---------

                  Total liabilities and equity ....................   $ 131,800    $ 119,531
                                                                      =========    =========
</TABLE>

                                       1
<PAGE>
<TABLE>
<CAPTION>
                    SECURITY OF PENNSYLVANIA FINANCIAL CORP.
                          Consolidated Income Statement

       For the Three Months Ended December 31, 1999 and December 31, 1998
                                 (In thousands)

                                                            December 31,  December 31,
                                                                1999        1998
                                                               -------    -------
                                                                  (Unaudited)
<S>                                                            <C>        <C>
Interest income:
         Loans .............................................   $ 1,459    $ 1,294
         Interest and dividends on securities:
                  Taxable ..................................       500        299
                  Non-taxable ..............................       114         11
                  Dividends ................................        10         10
                  Interest-bearing deposits with banks .....       106        240
                                                               -------    -------
                           Total interest income ...........     2,189      1,854

Interest expense:
         Deposits ..........................................     1,017      1,066
         FHLB advances and other borrowings ................       170       --
                                                               -------    -------
                  Total interest expense ...................     1,187      1,066

         Net interest income ...............................     1,002        788
         Provision for loan losses .........................      --           50
                                                               -------    -------
         Net interest income after provision for loan losses     1,002        738

Noninterest income:
         Other loan fees and service charges ...............        73         75
         Gain (loss) on sale of:
                  Real estate owned ........................       (28)      (113)
                  Other ....................................        15         10
                                                               -------    -------
                           Total noninterest income ........        60        (28)

Noninterest Expense:
         Salaries and net employee benefits ................       444        357
         Occupancy costs ...................................        60         67
         Federal deposit insurance premiums ................        15         15
         Data processing ...................................        36         36
         Professional fees .................................        57         16
         Foreclosed real estate expenses, net ..............        35         41
         Charitable contributions ..........................         2        755
         Other noninterest expense .........................       175        122
                                                               -------    -------
                           Total noninterest expense .......       824      1,409

Income before provision for income taxes ...................       238       (699)
Income tax provision .......................................        64       (222)
                                                               -------    -------
Net income .................................................   $   174    $  (477)
                                                               =======    =======
</TABLE>

                                       2
<PAGE>

                    SECURITY OF PENNSYLVANIA FINANCIAL CORP.
                          Consolidated Income Statement

        For the Six Months Ended December 31, 1999 and December 31, 1998
                                 (In thousands)
<TABLE>
<CAPTION>


                                                             December 31,     December 31,
                                                                 1999             1998
                                                            --------------   --------------
                                                              (Unaudited)
Interest income:
<S>                                                            <C>             <C>
    Loans .............................................        $ 2,885         $ 2,630
    Interest and dividends on securities:
       Taxable ........................................            963             620
       Non-taxable ....................................            234              18
       Dividends ......................................             20              19
       Interest-bearing deposits with banks ...........            239             486
                                                               -------         -------
           Total interest income ......................          4,341           3,773

Interest expense:
    Deposits ..........................................          1,987           2,151
    FHLB advances and other borrowings ................            220            --
                                                               -------         -------
       Total interest expense .........................          2,207           2,151

    Net interest income ...............................          2,134           1,622
    Provision for loan losses .........................              9              55
                                                               -------         -------
    Net interest income after provision for loan losses          2,125           1,567

Noninterest income:
    Other loan fees and service charges ...............            165             144
    Gain (loss) on sale of:
       Real estate owned ..............................            (49)           (111)
       Other ..........................................             26              21
                                                               -------         -------
           Total noninterest income ...................            142              54

Noninterest Expense:
    Salaries and net employee benefits ................            832             679
    Occupancy costs ...................................            129             136
    Federal deposit insurance premiums ................             29              30
    Data processing ...................................             75              74
    Professional fees .................................            136              53
    Foreclosed real estate expenses, net ..............             68              72
    Charitable contributions ..........................              6             757
    Other noninterest expense .........................            311             228
                                                               -------         -------
           Total noninterest expense ..................          1,586           2,029

Income (Loss) before provision for income taxes .......            681            (408)
Income tax provision (benefit) ........................            189            (130)
                                                               -------         -------
Net income (loss) .....................................        $   492         $  (278)
                                                               =======         =======
</TABLE>


                                        3


<PAGE>
<TABLE>
<CAPTION>
                    SECURITY OF PENNSYLVANIA FINANCIAL CORP.
                 Consolidated Statement of Comprehensive Income

       For the Three Months Ended December 31, 1999 and December 31, 1998
                                 (In thousands)

                                                                                 December 31,        December 31,
                                                                                     1999                1998
                                                                               -----------------   -----------------
                                                                                            (Unaudited)
<S>                                                                                   <C>                <C>
Net income ...........................................................               $ 174              $(476)
Increase/(decrease) in unrealized losses available-for-sale securities                (581)                (47)
                                                                                      -----             ------

Comprehensive income .................................................               $ 407             $ (523)
                                                                                      =====             ======

</TABLE>

<TABLE>
<CAPTION>
        For the Six Months Ended December 31, 1999 and December 31, 1998
                                 (In thousands)

                                                                               December 31,          December 31,
                                                                                   1999                  1998
                                                                              ----------------      ----------------
                                                                                (Unaudited)
<S>                                                                                   <C>                 <C>
Net income (loss).....................................................                $  491              $(278)
Increase (decrease) in unrealized losses available-for-sale securities                (1,008)                 2
                                                                                      ------              -----
   Comprehensive income (loss)                                                        $ (517)             $(276)
                                                                                      ======              =====

</TABLE>

<TABLE>
<CAPTION>
                    SECURITY OF PENNSYLVANIA FINANCIAL CORP.
                         Statement of Changes in Equity

                  For the Three Months Ended December 31, 1999
                                 (In thousands)

                                                                                          Accumulated
                                               Additional                                   Other
                                      Common    Paid-in             Treasury  Retained   Comprehensive     Net
                                       Stock    Capital    ESOP       Stock   Earnings      (Loss)       Equity
                                       -----    -------    ----       -----   --------      ------       ------
<S>                                 <C>         <C>         <C>              <C>        <C>         <C>          <C>
Balance at June 30, 1999 .......    $     16    $ 14,869    $ (1,227)        $   --     $  9,596    $   (738)    $ 22,516
Net income .....................          --          --          --            492           --         492
Dividend payment ...............          --          --          --           (155)          --        (155)
Increase in unrealized losses on
   available-for-sale securities          --          --          --             --           --        (695)        (695)
ESOP shares earned .............          --          --          33             --           --          --           33
Stock repurchase ...............          --          --          --         (2,377)          --          --       (2,377)
                                    --------    --------    --------        --------       --------    --------     --------
Balance at December 31, 1999 ...    $     16    $ 14,869    $ (1,194)      $ (2,377)      $  9,933    $ (1,433)    $ 19,814
                                    ========    ========    ========        ========       ========    ========     ========
</TABLE>

                                       4
<PAGE>
<TABLE>
<CAPTION>
                    SECURITY OF PENNSYLVANIA FINANCIAL CORP.
                      Consolidated Statement of Cash Flows

                 For Six Months Ended December 31, 1999 and 1998
                                 (In thousands)

                                                                   December 31,  December 31,
                                                                      1999          1998
                                                                    --------      --------
                                                                         (unaudited)
<S>                                                                 <C>           <C>
Operating activities:
Net income (loss) .............................................     $    492      $   (279)
Adjustments to reconcile net income to net cash provided
         by operating activities:
Provision for loan losses and foreclosed real estate ..........            9            55
Amortization and accretion on investment securities ...........          104            81
Depreciation and amortization .................................          152            74
Dividend Payment ..............................................         (155)         --
(Gain) Loss on sale of real estate acquired through foreclosure         (133)            4
Change in assets and liabilities:
         Accrued interest receivable ..........................          (51)           98
         Other assets .........................................         (355)       (1,388)
         Accrued interest payable and other liabilities .......         (342)          284
                                                                    --------      --------

Net cash provided by operating activities .....................         (279)       (1,071)
                                                                    --------      --------
Investment activities:
Purchase of held-to-maturity securities .......................       (8,640)         --
Purchase of available-for-sale securities .....................       (6,984)       (8,120)
Proceeds from maturities of held-to-maturity securities .......        4,559          --
Proceeds from the call of held-to-maturity securities .........            6         6,435
Proceeds from maturities, calls and principal paydowns on
         available-for-sale securities ........................          250           600
Proceeds from principal paydowns of held-to-maturity securities          283           715
Loans made to customers, net of principal collected ...........       (6,205)       (2,773)
Release - ESOP shares .........................................           33          --
Acquisition of office premises and equipment ..................         (142)          (12)
Proceeds from sale of foreclosed real estate ..................           (9)          349
                                                                    --------      --------

Net cash used in investing activities .........................      (16,849)       (2,806)
                                                                    --------      --------
Financing activities:
Net increase in deposit accounts ..............................        4,320         2,360
Net (decrease) in advances from borrowers
         for taxes and insurance ..............................           (7)          (17)
Purchase - treasury stock .....................................       (2,377)         --
Borrowed funds ................................................       11,000          --
Net proceeds from issuance of common stock ....................         --          16,145
                                                                    --------      --------
Net cash provided by financing activities .....................       12,936        18,488
                                                                    --------      --------

Increase (decrease) by cash and equivalents ...................       (3,229)       16,152
Cash and equivalents - beginning of the period ................       15,236        11,858
                                                                    --------      --------
Cash and equivalents - end of period ..........................     $ 12,007      $ 28,010
                                                                    ========      ========

Supplemental Disclosure of Cash Flow Information:
         Interest paid on deposits ............................        1,987         2,151
         Income taxes paid ....................................          189          (130)

Supplemental Disclosure of Non-Cash Information:
         Transfer from loans to real estate owned .............          200           638

</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 six months ended  December 31, 1999 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 months ended  December 31, 1999,  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  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

                                       6
<PAGE>
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 SEC.

         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  opened a  commercial  loan
department.  The  Association  expects to expand its  services in that area.  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

                                       7
<PAGE>
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 December 31, 1999 and June 30, 1999

         Total assets increased $12.3 million,  or 10.3%, from $119.5 million at
June 30,  1999 to $131.8  million  at  December  31,  1999.  This  increase  was
primarily due to a $9.1 million increase in our investment  portfolio from $28.9
million at June 30, 1999 to $38.0 million at December 31, 1999. In addition, the
loan  portfolio  increased  $6.2 million from $72.8  million at June 30, 1999 to
$79.0  million at December 31, 1999.  The increase was  primarily  due to a $3.2
million  increase in real estate loans and a $3.1 million increase in commercial
loans,  offset by a  $162,000  decrease  in  consumer  loans.  The  increase  in
commercial  loans was primarily due to the increased  efforts of the  commercial
loan department, which was formed in February 1999.

         This  increase  in assets  was  primarily  funded  by an $11.0  million
increase in  borrowings  from the Federal  Home Loan Bank,  which went from $1.0
million at June 30, 1999 to $12.0  million at December 31,  1999.  Additionally,
deposits  increased  $4.3 million from $95.8  million at June 30, 1999 to $100.1
million  at  December  31,  1999.  The  increase  in  deposits  was  due to more
aggressive  pricing of certificates of deposit during the quarter which resulted
in an increase  in  certificates  of deposit of $4.1  million.  The  increase in
certificates  of deposit  reflected both an infusion of new deposits and a shift
in the deposit mix to  certificates of deposit from passbook  savings  accounts,
which decreased by $1.6 million.  The increase in deposits was also attributable
to a $1.8 million increase in NOW and money market accounts.

         Total equity  decreased $2.7 million,  or 12.0%,  from $22.5 million at
June 30, 1999 to $19.8 million at December 31, 1999. This decrease was primarily
due to  repurchase  of 230,115  shares of stock at a total cost of $2.4  million
during the quarter, offset by net income for the quarter of $174,000.

Comparison of Operating Results for the Three Months Ended
December 31, 1999 and 1998

         General.  The Company  reported  net income of  $174,000  for the three
months ended  December 31, 1999 compared to a net loss of $476,000 for the three
months ended  December 31, 1998. The loss reported in 1998 was due to a one-time
expense of $754,000 in  connection  with the funding of a charitable  foundation
established in connection with the Association's conversion to the stock form of
ownership in December 1998. Excluding the foundation  contribution,  the Company
would have  reported net income of  approximately  $276,000 for the three months
ended December 31, 1999.

         Interest Income.  Total interest income increased  $335,000,  or 18.1%,
for the three month

                                       8
<PAGE>
period  ended  December  31,  1999  compared  to the  comparable  period for the
previous year. The increase in interest  income was primarily due to an increase
in interest on  investment  securities  of $305,000  and an increase in interest
earned  on  loans of  $165,000,  both of which  were due to the  higher  average
balances  of the  respective  portfolios.  The higher  average  balances  of the
investment and loan portfolios were funded primarily with additional  borrowings
from the  Federal  Home  Loan  Bank  and,  to a lesser  extent,  from  increased
deposits.  These  increases  were offset by a $134,000  decrease in the interest
income earned from interest-bearing  deposits with banks, due to the decrease in
the amount of certificates of deposits invested at other financial institutions.
The decrease in  interest-bearing  deposits was due to the Company's decision to
utilize the funds which became  available as the certificates of deposit matured
to fund the stock repurchase and to increase liquidity in preparation for Y2K in
lieu of reinvesting such funds.

         Interest Expense. Interest expense increased by $121,000, or 11.4%, for
the three month period ended  December 31, 1999 compared to the same period last
year  primarily  due to the  increased  cost of interest  on  borrowed  funds of
$170,000 due to a higher average  balance on such  borrowings to fund the growth
in the loan and securities portfolios. This was offset by a decrease in interest
on deposits  of $49,000 due to a decrease in the average  balance on deposits of
$2.0 million,  or 2.0% from $101.0  million for the three months ended  December
31, 1998 to $99.0 million for the three months ended  December 31, 1999 and a 16
basis point  decrease in the  average  rate paid on deposits  from 4.26% for the
three  months  ended  December  31,  1998 to 4.10%  for the three  months  ended
December 31, 1999.

         Provision  for Loan Losses.  The  Company's  provision  for loan losses
decreased $50,000 for the three month period ended December 31, 1999 as compared
to the same period one year ago. 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  efficient  collection  efforts  have  resulted  in a 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 December
31, 1998.  The  allowance  for loan losses was $430,000 and $419,000 at December
31, 1999 and December  31, 1998,  respectively.  The  allowance  for loan losses
represents 67.8% of nonperforming loans and 0.54% of total loans at December 31,
1999 and 27.1% of  nonperforming  loans and 0.59% of total loans at December 31,
1998.

         Non-interest  Income.  Non-interest  income  increased  $88,000 for the
three months ended  December 31, 1999 compared to the period ended  December 31,
1998.  This  increase was  primarily  due to an $85,000,  or 75.2%,  decrease in
losses and  write-downs  on the sale of real estate owned from  $113,000 for the
period  ended  December  31, 1998 to $27,000 for the period  ended  December 31,
1999.  This  decrease  was  primarily  due to the  fewer  number  of  foreclosed
properties  due to increased  and more  efficient  collection  efforts  prior to
foreclosure which enabled the Association to avoid the foreclosure process.

         Non-interest  Expense.  Non-interest  expense  decreased  $585,000,  or
41.5%,  from $1.4 million at December 31, 1998 to $824,000 at December 31, 1999.
The decrease in  non-interest

                                       9
<PAGE>
expense was primarily due to the one-time cost of $754,000 of  establishing  the
charitable foundation during the three months ended December 31, 1998. Excluding
that one-time charge,  non-interest  expense increased $169,000,  or 25.8%, from
$655,000 for the three months ended  December 31, 1998 to $824,000 for the three
months ended  December 31, 1999.  This increase was primarily due to an $87,000,
or 24.4%,  increase in salary and net  employee  benefits due to the staffing of
the new  commercial  loan  department  established  in February  1999 and due to
normal annual salary increases and bonuses. Also contributing to the increase in
non-interest  expense was a $41,000 increase in professional  fees and a $53,000
increase in other non-interest expense, primarily due to the increased reporting
and regulatory costs of a publicly held company.

         Provision  for Income  Taxes.  The Company had an increase in provision
for income  taxes of $286,000 for the period  ended  December 31, 1999,  from an
expense of $64,000 for the period ended  December 31, 1999 compared to a benefit
of $222,000 at  December  31,  1998.  The  benefit  for the three  months  ended
December 31, 1998 was the result of the operating loss created by and charitable
deduction  received  through  the  one-time   charitable   contribution  to  the
foundation.

Comparison of Operating Results for the Six Months Ended
December 31, 1998 and 1998

         General. The Company reported net income of $492,000 for the six months
ended  December  31, 1999  compared to a net loss of $278,000 for the six months
ended December 31, 1998. The loss reported in 1998 was due to a one-time expense
of  $754,000  in  connection  with  the  funding  of  a  charitable   foundation
established in connection with the Association's conversion to the stock form of
ownership in December 1998. Excluding the foundation  contribution,  the Company
would have  reported  net income of  approximately  $476,000  for the six months
ended December 31, 1999.

         Interest Income.  Total interest income increased  $569,000,  or 15.1%,
for the six month period ended December 31, 1999 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 $559,000  and an increase in
interest  on loans of  $225,000,  both of which were due to the  higher  average
balances of the respective  portfolios.  The higher average balances were funded
primarily  by  additional  advances  from the  Federal  Home  Loan  Bank.  These
increases were offset by a $247,000  decrease in the interest income earned from
interest-bearing  deposits  with  banks,  due to the  decrease  in the amount of
certificates of deposits invested at other financial institutions.  The decrease
in interest-bearing  deposits was due to the Company's decision to use the funds
which  became  available  as  certificates  of  deposit  matured  to fund  stock
repurchase and to increase  liquidity in preparation for Y2K concerns in lieu of
reinvestment of such funds.

         Interest Expense.  Interest expense increased $57,000 for the six month
period ended  December 31, 1999 as compared to the same period one year ago. The
increase was the result of a $221,000  increase in interest 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.  This
increase  was offset by a $163,000  decrease in interest  expense on deposits as
the average  balance of deposits  decreased $4.2 million,  or 4.1%,  from $102.1
million for the six months ended

                                       10
<PAGE>
December 31, 1998, to $97.9 million for the six months ended  December 31, 1999.
A 7 basis point decrease in the average rate paid on deposits from 4.21% for the
six months ended  December  31, 1998 to 4.14% for the six months ended  December
31, 1999 also contributed to the decrease in the interest expense on deposits.

         Provision  for Loan Losses.  The  Company's  provision  for loan losses
decreased $46,000 for the six month period ended December 31, 1999, from $55,000
for the six month  period  ended  December  31, 1998 to $9,000 for the six month
period ended December 31, 1999.  Increased and more efficient collection efforts
have maintained better control of the Association's delinquent accounts and thus
allow the Association to maintain this level of allowance for loan losses.

         Non-interest Income.  Non-interest income increased $87,000 for the six
month  period ended  December 31, 1999  compared to the same period the previous
year. The increase was primarily due to a $62,000, or 55.9%,  decrease in losses
and  write-downs  on the sale of real estate owned from  $111,000 for the period
ended  December  31,  1998 to $49,000  for the period  ended  December  31, 1999
primarily due to the fewer number of foreclosed  properties due to increased and
more  efficient  collection  efforts  prior to  foreclosure  which  enabled  the
Association to avoid the foreclosure process. Also contributing to this increase
was a $20,000  increase in other loan fees and service charges for the six month
period  ended  December  31,  1999  associated  with a  higher  volume  of  loan
originations during the first six months of 1999 compared to the same period the
previous years.

         Non-interest Expense. Non-interest expense decreased $443,000 from $2.0
million for the six months  ended  December 31, 1998 to $1.6 million for the six
months ended  December 31, 1999.  The decrease was primarily due to the one-time
cost of $754,000 to fund the  charitable  foundation  established  in connection
with the Association's conversion to stock form.  Notwithstanding the charitable
contribution to the foundation,  non-interest  expense  increased  $311,000,  or
24.4%,  from $1.3  million for the six months  ended  December  31, 1998 to $1.6
million for the six months ended December 31, 1999.  This increase was primarily
due to increases in salary and net employee  benefits of $153,000 due  primarily
to the staffing of the new commercial  loan  department  established in February
1999 and to normal annual salary increases and bonuses. Also contributing to the
increase in non-interest  expense was an $83,000  increase in professional  fees
and a $83,000  increase  in other  non-interest  expense,  primarily  due to the
increased reporting and regulatory costs of a publicly held company.

         Provision  for Income  Taxes.  The Company had an increase in provision
for income  taxes of $319,000 for the period  ended  December 31, 1999,  from an
expense of $189,000 for the period ended December 31, 1999 compared to a benefit
of $130,000 at December 31, 1998.  The benefit for the six months ended December
31,  1998 was the result of the  operating  loss  created by and the  charitable
contribution  received  through  the  one-time  charitable  contribution  to the
foundation.

                                       11
<PAGE>

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
December 31, 1999 and 1998 the Company's  liquidity ratios were 33.3% and 31.7%,
respectively.

         At December 31, 1999,  the  Association  exceeded all of its regulatory
capital requirements with a tangible capital level of $16.4 million, or 12.4% of
total adjusted  assets,  which is above the required  level of $2.0 million,  or
1.5%; core capital of $16.4 million,  or 12.4%, 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 30.1%, of risk-weighted  assets,  which is above the required
level of $4.5 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 December 31, 1999,
the Company had  advances  outstanding  from the Federal Home Loan Bank of $12.0
million and at  December  31, 1999 had an overall  borrowing  capacity  from the
Federal Home Loan Bank of $63.9 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 December 31, 1999,  cash and due from banks,  interest-bearing
deposits with banks and investment  securities  available for sale totaled $44.7
million, or 33.9% of total assets.

         At December 31, 1999, the Company had  commitments  to originate  loans
and unused outstanding lines of credit and undisbursed  proceeds of construction
mortgages  totaling  $4.4  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
December 31, 1999, totaled $24.4 million. The Company expects that substantially
all of the  maturing  certificate  accounts  will be  retained by the Company at
maturity.

Year 2000 Transition

         In connection  with the change to the year 2000, an important  business
issue existed regarding how existing application software programs and operating
systems  accommodated  this  date  value.

                                       12
<PAGE>

Many existing  application  software  products were designed to accommodate only
two-digits. For example, "96" was stored on the system and represented 1996. Due
to  the  Association's   preparation   efforts  and  testing,   the  Association
experienced  no problems with the  transition to the Year 2000.  The cost to the
Association  to prepare for the Year 2000,  including an upgrade of its internal
system, but excluding additional staff time, amounted to less than $50,000.

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 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.

                                       13
<PAGE>
Item 3.  Defaults Upon Senior Securities.

         None.

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

         On  October  25,  1999,   the  Company  held  its  Annual   Meeting  of
Stockholders.  At that  meeting  the  following  items were  brought  before the
stockholders for a vote and the results were as indicated.

<TABLE>
<CAPTION>
         1. Election of Directors.

                                                  For             %           Withheld           %
                                               ---------         ----          ------           ---
<S>                                            <C>               <C>           <C>              <C>
            Richard C. Laubach                 1,432,306         97.1          43,086           2.9
            John J. Raynock                    1,431,919         97.1          43,473           2.9
<CAPTION>

         2. Approval of the 1999 Stock-Based Incentive Plan.

                                                                                 Broker
                 For           %        Withheld     %      Abstain     %        Non-Votes       %
               -------       ----        ------     ---      -----     ---       ---------     ----
<S>            <C>           <C>         <C>        <C>      <C>       <C>       <C>           <C>
               922,199       58.1        78,929     5.0      3,579     0.2       470,685       29.7
<CAPTION>


         3. Ratification of Parente, Orlando, Carey & Associates as independent
            auditors for the fiscal year ended June 30, 2000.

                 For              %          Withheld         %         Abstain             %
              ---------         ----          ------         ---        ------             ---
<S>           <C>               <C>           <C>            <C>        <C>                <C>
              1,426,349         89.9          28,823         1.8        20,220             1.2
</TABLE>


Item 5.  Other Information.

         None.

                                       14
<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.*

                           10.1     Security  of  Pennsylvania  Financial  Corp.
                                    1999 Stock-Based Incentive Plan**

                           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.

                           **       Incorporated by reference into this document
                                    from  the  Proxy  Statement  as filed by the
                                    Company on September 20, 1999.

                  (b)      Reports on Form 8-K

                                    On October 1, 1999, the Company filed an 8-K
                           to announce it had received  regulatory  clearance to
                           repurchase 5% of its  outstanding  shares.  The press
                           release   announcing   the   receipt  of   regulatory
                           clearance was filed by exhibit.

                                    On October 19,  1999,  the Company  filed an
                           8-K to announce it had completed its repurchase of 5%
                           of  its   outstanding   shares.   The  press  release
                           announcing the completion of the stock repurchase was
                           filed by exhibit.

                                    On November 26, 1999,  the Company  filed an
                           8-K to announce it had received regulatory  clearance
                           to  repurchase  10% of its  outstanding  shares.  The
                           press  release  announcing  the receipt of regulatory
                           clearance was filed by exhibit.

                                       15
<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: February 11, 2000               By: /s/ Richard C. Laubach
                                           ----------------------
                                           Richard C. Laubach
                                           President and Chief Executive Officer
                                           (principal executive officer)

Dated: February 11, 2000               By: /s/ David P. Marchetti, Sr.
                                               ---------------------------
                                               David P. Marchetti, Sr.
                                               Chief Financial Officer and
                                               Treasurer (principal financial
                                               and accounting officer)

                                       16