|  UNITED                  STATES                |
|-----------------------------------------------------|
| SECURITIES                  AND EXCHANGE COMMISSION |
| Washington,                  D.C. 20429             |

| **FORM                  10-Q** |
|--------------------------------|

| (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, 2005** |   |
|--------|-----------------------------------------------------|---------------------------------------------------------------|--------|

| o | TRANSITION                      REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES |   |
|---|-------------------------------------------------------------------------------------------|--------|

|   | For                  the transition period from |                      to |   |
|--------|-------------------------------------------------|----------------------------------------|--------|

| Commission                  file number 0-29709                                          |
|------------------------------------------------------------------------------------------|
|                                                                                     |
| **HARLEYSVILLE                  SAVINGS FINANCIAL CORPORATION**                          |
| (Exact                  name of registrant as specified in its                  charter) |

|   | Pennsylvania                                     |   | 23-3028464                           |   |
|--------|--------------------------------------------------|--------|--------------------------------------|--------|
|   | (State                  or other jurisdiction of |   | (I.R.S.                  Employer    |   |
|   | incorporation                  or organization)  |   | Identification                  No.) |   |

| 271                  Main Street, Harleysville, Pennsylvania 19438                                                   |
|----------------------------------------------------------------------------------------------------------------------|
| (Address                  of principal executive offices)                                                            |
| (Zip                  Code)                                                                                          |
|                                                                                                                 |
| (215)                  256-8828                                                                                      |
| (Registrant's                  telephone number, including area code)                                                |
|                                                                                                                 |
|                                                                                                                 |
| (Former                  name, former address and former fiscal year, if changed since last                  report) |

|  Large              accelerated filer o |  Accelerated              filer o | Non-accelerated              filer x |
|----------------------------------------------|----------------------------------------|--------------------------------------|

----

| **HARLEYSVILLE                  SAVINGS FINANCIAL CORPORATION****AND                    SUBSIDIARY** |
|------------------------------------------------------------------------------------------------------|

```
**Index**
```

|                                                                                                 |                         |                                                                                                                     |                         |
|------------------------------------------------------------------------------------------------------|------------------------------|--------------------------------------------------------------------------------------------------------------------------|------------------------------|
|                                                                                                 |                         |                                                                                                                     | **PAGE(S)**                  |
|                                                                                                 |                         |                                                                                                                     |                         |
| **Part                      I                          FINANCIAL INFORMATION**   |                         |
|                                                                                                 | Item                      1. | Financial                      Statements                                                                                |                         |
|                                                                                                 |                         |                                                                                                                     |                         |
|                                                                                                 |                         | Unaudited                      Condensed Consolidated Statements of Financial Condition as                      of       |                         |
|                                                                                                 |                         | December                      31, 2005 and September 30, 2005                                                            | 1                            |
|                                                                                                 |                         |                                                                                                                     |                         |
|                                                                                                 |                         | Unaudited                      Condensed Consolidated Statements of Income for the Three                                 |                         |
|                                                                                                 |                         | Months                      Ended December 31, 2005 and 2004                                                             | 2                            |
|                                                                                                 |                         |                                                                                                                     |                         |
|                                                                                                 |                         | Unaudited                      Condensed Consolidated Statement of Comprehensive Income                                  |                         |
|                                                                                                 |                         | for                      the Three Months Ended December 31, 2005 and 2004                                               | 3                            |
|                                                                                                 |                         |                                                                                                                     |                         |
|                                                                                                 |                         | Unaudited                      Condensed Consolidated Statement of Stockholders' Equity                                  |                         |
|                                                                                                 |                         | for                      the Three Months Ended December 31, 2005                                                        | 4                            |
|                                                                                                 |                         |                                                                                                                     |                         |
|                                                                                                 |                         | Unaudited                      Condensed Consolidated Statements of Cash Flows for the Three                      Months |
|                                                                                                 |                         | Ended                      December 31, 2005 and 2004                                                                    | 5                            |
|                                                                                                 |                         |                                                                                                                     |                         |
|                                                                                                 |                         | Notes                      to Unaudited Condensed Consolidated Financial Statements                                      | 6                      - 12  |
|                                                                                                 |                         |                                                                                                                     |                         |
|                                                                                                 | Item                      2. | Management's                      Discussion and Analysis of Financial                                                   |                         |
|                                                                                                 |                         | Condition                      and Results of Operations                                                                 | 13                      - 15 |
|                                                                                                 |                         |                                                                                                                     |                         |
|                                                                                                 | Item                      3. | Quantitative                      and Qualitative Disclosures About Market Risk                                          | 15                      - 16 |
|                                                                                                 |                         |                                                                                                                     |                         |
|                                                                                                 | Item                      4. | Control                      and Procedures                                                                              | 17                           |
|                                                                                                 |                         |                                                                                                                     |                         |
| **Part                      II     OTHER                      INFORMATION** |                         |
|                                                                                                 |                         |                                                                                                                     |                         |
|                                                                                                 |                         |                                                                                                                     |                         |
|                                                                                                 | Item                    1    | Legal                    Proceedings                                                                                     | 18                           |
|                                                                                                 |                         |                                                                                                                     |                         |
|                                                                                                 | Item                    1A.  | Risk                    Factors                                                                                          | 18                           |
|                                                                                                 |                         |                                                                                                                     |                         |
|                                                                                                 | Item                    2.   | Unregistered                    Sales of Equity Securities and Use of Proceeds                                           | 18                           |
|                                                                                                 |                         |                                                                                                                     |                         |
|                                                                                                 | Item                    3.   | Defaults                    upon Senior Securities                                                                       | 18                           |
|                                                                                                 |                         |                                                                                                                     |                         |
|                                                                                                 | Item                    4.   | Submission                    of Matters to a Vote of Security Holders                                                   | 18                           |
|                                                                                                 |                         |                                                                                                                     |                         |
|                                                                                                 | Item                    5.   | Other                    information                                                                                     | 18                           |
|                                                                                                 |                         |                                                                                                                     |                         |
|                                                                                                 | Item                    6.   | Exhibits                                                                                                                 | 18                           |
|                                                                                                 |                         |                                                                                                                     |                         |
|                                                                                                 | Signatures                   | 19                                                                                                                       |

----

| **Harleysville                    Savings Financial                    Corporation**                                               |
|------------------------------------------------------------------------------------------------------------------------------------|
| **Condensed                    Consolidated Statements of Financial Condition**                                                    |
|                                                                                                                               |   |   |   |   |   |
|                                                                                                                               |   | **December                    31,** |   | September                    30, |   |
|                                                                                                                               |   | **2005** |   | 2005 |   |
|                                                                                                                               |   | **(Unaudited)** |   |   |   |
| **Assets**                                                                                                                         |   |   |   |   |   |   |   |
| Cash                    and amounts due from depository institutions                                                               |   | **$** | **1,175,728** |   | $ | 1,193,285 |   |
| Interest                    bearing deposits in other banks                                                                        |   |   | **6,300,408** |   |   | 6,741,695 |   |
|     Total                    cash and cash equivalents                                                         |   |   | **7,476,136** |   |   | 7,934,980 |   |
| Investment                    securities held to maturity (fair value -                                                            |   |   |   |   |   |  |   |
|     December                    31,                    $101,186,000; September 30, $88,404,000)                |   |   | **101,062,105** |   |   | 87,364,445 |   |
| Investment                    securities available-for-sale at fair value                                                          |   |   | **2,568,681** |   |   | 2,835,244 |   |
| Mortgage-backed                    securities held to maturity (fair value -                                                       |   |   |   |   |   |   |   |
|     December                    31,                    $246,349,000; September 30, $259,994,000)               |   |   | **251,735,833** |   |   | 263,963,765 |   |
| Mortgage-backed                    securities available-for-sale at fair value                                                     |   |   | **809,617** |   |   | 1,045,087 |   |
| Loans                    receivable (net of allowance for loan losses -                                                            |   |   |   |   |   |   |   |
|     December                    31,                    $1,967,000; September 30, $1,968,000)                   |   |   | **365,811,146** |   |   | 366,006,917 |   |
| Accrued                    interest receivable                                                                                     |   |   | **3,596,010** |   |   | 3,432,054 |   |
| Federal                    Home Loan Bank stock - at cost                                                                          |   |   | **14,672,900** |   |   | 16,035,900 |   |
| Office                    properties and equipment, net                                                                            |   |   | **6,363,615** |   |   | 5,829,694 |   |
| Deferred                    income taxes                                                                                           |   |   | **395,884** |   |   | 339,587 |   |
| Prepaid                    expenses and other assets                                                                               |   |   | **12,152,051** |   |   | 12,202,792 |   |
| TOTAL                    ASSETS                                                                                                    |   | **$** | **766,643,978** |   | $ | 766,990,465 |   |
|                                                                                                                               |   |   |   |   |   |   |   |
| **Liabilities                    and Stockholders' Equity**                                                                        |   |   |   |   |   |   |   |
| Liabilities:                                                                                                                       |   |   |   |   |   |   |   |
|     Deposits                                                                                                   |   | **$** | **429,513,266** |   | $ | 418,979,655 |   |
|     Advances                    from                    Federal Home Loan Bank                                 |   |   | **283,790,774** |   |   | 297,268,488 |   |
|     Accrued                    interest payable                                                                |   |   | **1,315,977** |   |   | 1,358,953 |   |
|     Advances                    from                    borrowers for taxes and insurance                      |   |   | **2,922,370** |   |   | 1,135,429 |   |
|     Accounts                    payable and accrued expenses                                                   |   |   | **916,325** |   |   | 672,124 |   |
| Total                    liabilities                                                                                               |   |   | **718,458,712** |   |   | 719,414,649 |   |
|                                                                                                                               |   |   |   |   |   |   |   |
| Commitments                    (Note 9)                                                                                            |   |   |   |   |   |   |   |
| Stockholders'                    equity:                                                                                           |   |   |   |   |   |   |   |
|     Preferred                    Stock: $.01 par value;                                                        |   |   |   |   |   |   |   |
|                          12,500,000 shares authorized; none issued                                        |   |   |   |   |   |   |   |
|     Common                    stock: $.01 par value; 15,000,000                                                |   |   |   |   |   |   |   |
|                          shares authorized; issued and outstanding                                        |   |   |   |   |   |   |   |
|                          Dec. 2005, 3,912,794; Sept. 2005, 3,904,136                                      |   |   | **39,128** |   |   | 39,041 |   |
|     Additional                    Paid-in capital                                                              |   |   | **7,840,791** |   |   | 7,610,511 |   |
|     Treasury                    stock,                    at cost (Dec. 2005, 6,255 shares; Sept. 2005, 3,255) |   |   | **(112,307** | **)** |   | (60,107 | ) |
|     Retained                    earnings - partially restricted                                                |   |   | **40,452,635** |   |   | 39,995,584 |   |
|     Accumulated                    other comprehensive loss                                                    |   |   | **(34,981** | **)** |   | (9,213 | ) |
| Total                    stockholders' equity                                                                                      |   |   | **48,185,266** |   |   | 47,575,816 |   |
| TOTAL                    LIABILITIES AND STOCKHOLDERS' EQUITY                                                                      |   | **$** | **766,643,978** |   | $ | 766,990,465 |   |
|                                                                                                                               |   |   |   |   |   |   |   |
| *See                    notes to unaudited condensed consolidated financial                    statements.*                        |   |   |   |   |   |   |   |

----

| **Harleysville                  Savings Financial                  Corporation**                           |
|------------------------------------------------------------------------------------------------------------|
| **Unaudited                  Condensed Consolidated Statements of Income**                                 |
|                                                                                                       |   |   |   |   |   |
|                                                                                                       |   | **For                  the Three Months Ended** |   |
|                                                                                                       |   | **December                  31,** |   |
|                                                                                                       |   | **2005** |   | 2004 |   |
| **INTEREST                  INCOME:**                                                                      |   |   |   |   |   |   |   |
|     Interest                  on                  mortgage loans                       |   | **$** | **3,933,960** |   | $ | 3,807,587 |   |
|     Interest                  on                  mortgage-backed securities           |   |   | **2,848,259** |   |   | 2,846,287 |   |
|     Interest                  on                  consumer and other loans             |   |   | **1,344,005** |   |   | 1,055,729 |   |
|     Interest                  and                  dividends on tax-exempt investments |   |   | **346,373** |   |   | 336,580 |   |
|     Interest                  and                  dividends on taxable investments    |   |   | **990,801** |   |   | 539,820 |   |
|     Total                  interest income                                             |   |   | **9,463,398** |   |   | 8,586,003 |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **Interest                  Expense:**                                                                     |   |   |   |   |   |   |   |
|     Interest                  on                  deposits                             |   |   | **3,113,376** |   |   | 2,395,751 |   |
|     Interest                  on                  borrowings                           |   |   | **3,308,655** |   |   | 2,954,901 |   |
| Total                  interest expense                                                                    |   |   | **6,422,031** |   |   | 5,350,652 |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **Net                  Interest Income**                                                                   |   |   | **3,041,367** |   |   | 3,235,351 |   |
| **Provision                  for loan losses**                                                             |   |   | **-** |   |   | - |   |
| **Net                  Interest Income after Provision**                                                   |   |   |   |   |   |   |   |
| **                   for Loan Losses**                                                                |   |   | **3,041,367** |   |   | 3,235,351 |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **Non                  interest Income:**                                                                  |   |   |   |   |   |   |   |
|     Gain                  on                  sales of securities                      |   |   | **-** |   |   | 63,743 |   |
|     Other                  income                                                      |   |   | **329,144** |   |   | 342,744 |   |
| Total                  non interest income                                                                 |   |   | **329,144** |   |   | 406,487 |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **Non                  interest Expenses:**                                                                |   |   |   |   |   |   |   |
|     Salaries                  and                  employee benefits                   |   |   | **1,038,230** |   |   | 1,016,619 |   |
|     Occupancy                  and                  equipment                          |   |   | **367,973** |   |   | 369,511 |   |
|     Deposit                  insurance premiums                                        |   |   | **13,797** |   |   | 14,670 |   |
|     Other                                                                              |   |   | **553,319** |   |   | 558,143 |   |
| Total                  non interest expenses                                                               |   |   | **1,973,319** |   |   | 1,958,943 |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **Income                  before Income Taxes**                                                            |   |   | **1,397,192** |   |   | 1,682,895 |   |
|                                                                                                       |   |   |   |   |   |   |   |
| Income                  tax expense                                                                        |   |   | **316,000** |   |   | 427,400 |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **Net                  Income**                                                                            |   | **$** | **1,081,192** |   | $ | 1,255,495 |   |
|                                                                                                       |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **Basic                  Earnings Per Share**                                                              |   | **$** | **0.28** |   | $ | 0.33 |   |
| **Diluted                  Earnings Per Share**                                                            |   | **$** | **0.27** |   | $ | 0.32 |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **Dividends                  Per Share**                                                                   |   | **$** | **0.15** |   | $ | 0.13 |   |
|                                                                                                       |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |
| *See                  notes to unaudited condensed consolidated financial                  statements.*    |   |   |   |   |   |   |   |

----

| **Harleysville                    Savings Financial                    Corporation**                                                 |
|--------------------------------------------------------------------------------------------------------------------------------------|
| **Unaudited                    Condensed Consolidated Statement of Comprehensive                    Income**                         |
|                                                                                                                                 |   |   |   |   |   |
|                                                                                                                                 |   |   |   |   |   |
|                                                                                                                                 |   | **Three                    Months Ended** |   |
|                                                                                                                                 |   | **December                    31,** |   |
|                                                                                                                                 |   | **2005** |   | 2004 |   |
|                                                                                                                                 |   |   |   |   |   |
| **Net                    Income**                                                                                                    |   | **$** | **1,081,192** |   | $ | 1,255,495 |   |
|                                                                                                                                 |   |   |   |   |   |   |   |
| **Other                    Comprehensive Income**                                                                                    |   |   |   |   |   |   |   |
|                                                                                                                                 |   |   |   |   |   |   |   |
| Unrealized                    (loss) gain on securities net of tax                                                                   |   |   |   |   |   |   |   |
| 2005,                    $9,378; 2004, ($3,653)                                                                                      |   |   | **(25,768** | **)**(1) |   | 10,037 |  (1) |
|                                                                                                                                 |   |   |   |   |   |   |   |
| **Total                    Comprehensive Income**                                                                                    |   | **$** | **1,055,424** |   | $ | 1,265,532 |   |
|                                                                                                                                 |   |   |   |   |   |   |   |
| (1)                     Disclosure of reclassification amount, net of tax for the years                    ended:               |   |   | **2005** |   |   | 2004 |   |
|     Net                    unrealized (loss) gain arising during the year                                        |   | $ | (25,768 | ) | $ | 52,107 |   |
|     Less:                    Reclassification adjustment for net gains included in net                    income |   |   |   |   |   |   |   |
|     Net                    of                    tax expense -2005, $0; 2004, $21,673                            |   |   | **-** |   |   | 42,070 |   |
|                                                                                                                                 |   |   |   |   |   |   |   |
|     Net                    unrealized gain on securities                                                         |   | **$** | **(25,768** | **)** | $ | 10,037 |   |
|                                                                                                                                 |   |   |   |   |   |   |   |
|                                                                                                                                 |   |   |   |   |   |   |   |
|                                                                                                                                 |   |   |   |   |   |   |   |
| *See                    notes to unaudited condensed consolidated financial                    statements.*                          |   |   |   |   |   |   |   |

----

| **Harleysville                  Savings Financial                  Corporation**                         |
|----------------------------------------------------------------------------------------------------------|
| **Unaudited                  Condensed Consolidated Statement of Stockholders'                  Equity** |
|                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                     |   |   |   |   |   |   |   |   |   | **Retained** |   | **Accumulated** |   |   |   |
|                                                                                                     |   | **Common** |   |   |   | **Additional** |   |   |   | **Earnings-** |   | **Other** |   | **Total** |   |
|                                                                                                     |   | **Stock** |   | **Common** |   | **Paid-in** |   | **Treasury** |   | **Partially** |   | **Comprehensive** |   | **Stockholders'** |   |
|                                                                                                     |   | **Shares** |   | **Stock** |   | **Capital** |   | **Stock** |   | **Restricted** |   | **Loss** |   | **Equity** |   |
|                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                  at October 1, 2005                                                              |   |   | 3,904,136 |   | $ | 39,041 |   | $ | 7,610,511 |   | $ | (60,107 | ) | $ | 39,995,584 |   | $ | (9,213 | ) | $ | 47,575,816 |   |
|                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  Income                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,081,192 |   |   |   |   |   | 1,081,192 |   |
| Issuance                  of Common Stock                                                                |   |   |   |   |   | 87 |   |   | 152,641 |   |   |   |   |   |   |   |   |   |   |   | 152,728 |   |
| Dividends                  - $.15 per share                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (624,141 | ) |   |   |   |   | (624,141 | ) |
| Option                  Compensation                                                                     |   |   |   |   |   |   |   |   | 12,000 |   |   |   |   |   |   |   |   |   |   |   | 12,000 |   |
| Treasury                  stock purchased                                                                |   |   |   |   |   |   |   |   |   |   |   | (52,200 | ) |   |   |   |   |   |   |   | (52,200 | ) |
|                    Stock delivered under                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                     Dividend Reinvestment Plan                                                 |   |   |   |   |   |   |   |   | 65,639 |   |   |   |   |   |   |   |   |   |   |   | 65,639 |   |
| Unrealized                  holding loss on available - for- sale securities, net of tax                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (25,768 | ) |   | (25,768 | ) |
|                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                  at December 31, 2005                                                            |   |   | 3,912,794 |   | $ | 39,128 |   | $ | 7,840,791 |   | $ | (112,307 | ) | $ | 40,452,635 |   | $ | (34,981 | ) | $ | 48,185,266 |   |
|                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *See                  notes to unaudited condensed consolidated financial                  statements.*  |

----

| **Harleysville                  Savings Financial                  Corporation**                          |
|-----------------------------------------------------------------------------------------------------------|
| **Unaudited                  Condensed Consolidated Statements of Cash                  Flows**           |
|                                                                                                      |   |   |   |   |   |
|                                                                                                      |   | **Three                  Months Ended December 31,** |   |
|                                                                                                      |   | **2005** |   | 2004 |   |
| **Operating                  Activities:**                                                                |   |   |   |   |   |   |   |
| Net                  Income                                                                               |   | **$** | **1,081,192** |   | $ | 1,255,495 |   |
| Adjustments                  to reconcile net income to net cash (used in) provided by                    |   |   |   |   |   |   |   |
|     operating                  activities:                                            |   |   |   |   |   |   |   |
|     Depreciation                                                                      |   |   | **108,228** |   |   | 64,224 |   |
|     Deferred                  income                  taxes                           |   |   | **(9,213** | **)** |   |   |   |
|     Compensation                  charge on stock options                             |   |   | **12,000** |   |   |   |   |
|     Amortization                  of                  deferred loan fees              |   |   | **(9,546** | **)** |   | (54,480 | ) |
|     Gain                  on                  sale of securities                      |   |   |   |   |   | (63,743 | ) |
|     Increase                  in                  cash surrender value                |   |   | **(107,999** | **)** |   | (112,000 | ) |
|     Net                  amortization of premiums and discounts                       |   |   | **135,604** |   |   | 180,548 |   |
|     Changes                  in assets and liabilities which provided (used) cash:    |   |   |   |   |   |   |   |
|                        Increase in accounts payable and accrued                  |   |   |   |   |   |   |   |
|                        expenses                                                  |   |   | **244,201** |   |   | 232,664 |   |
|                        Increase in prepaid expenses and other assets             |   |   | **158,740** |   |   | (2,837,755 | ) |
|                        (Increase) decrease in accrued interest receivable        |   |   | **(163,956** | **)** |   | 74,105 |   |
|                        (Decrease) increase in accrued interest payable           |   |   | **(42,976** | **)** |   | 56,980 |   |
|                        Net cash provided by (used in) operating activities       |   |   | **1,406,275** |   |   | (1,203,962 | ) |
|                                                                                                      |   |   |   |   |   |   |   |
| **Investing                  Activities:**                                                                |   |   |   |   |   |   |   |
| Purchase                  of investment securities held to maturity                                       |   |   | **(13,796,875** | **)** |   | (11,000,000 | ) |
| Purchase                  of investment securities available for sale                                     |   |   | **(201,792** | **)** |   | (575,249 | ) |
| Purchase                  of mortgage-backed securities held to maturity                                  |   |   | **(2,011,250** | **)** |   | (20,131,609 | ) |
| Proceeds                  from maturities of investment securities held to maturity                       |   |   | **99,215** |   |   | 8,152,467 |   |
| Proceeds                  from sale of investment securities available for sale                           |   |   | **468,355** |   |   | 4,613,148 |   |
| Principal                  collected on long-term loans & mortgage-backed                  securities |   |   | **40,550,809** |   |   | 41,135,550 |   |
| Proceeds                  (purchase) of FHLB stock                                                        |   |   | **1,363,000** |   |   | (155,600 | ) |
| Long-term                  loans originated or acquired                                                   |   |   | **(26,076,172** | **)** |   | (27,479,179 | ) |
| Purchases                  of premises and equipment                                                      |   |   | **(645,273** | **)** |   | (249,616 | ) |
| Net                  cash used in investing activities                                                    |   |   | **(249,983** | **)** |   | (5,690,088 | ) |
|                                                                                                      |   |   |   |   |   |   |   |
| **Financing                  Activities:**                                                                |   |   |   |   |   |   |   |
| Net                  (decrease) increase in demand deposits, NOW accounts                                 |   |   |   |   |   |   |   |
|     and                  savings accounts                                             |   |   | **(2,090,736** | **)** |   | 1,262,241 |   |
| Net                  increase in certificates of deposit                                                  |   |   | **12,624,347** |   |   | 2,273,518 |   |
| Cash                  dividends                                                                           |   |   | **(624,141** | **)** |   | (505,875 | ) |
| Net                  (decrease) increase in FHLB advances                                                 |   |   | **(13,477,714** | **)** |   | 2,269,380 |   |
| Stock                  delivered under Dividend Reinvestment Plan                                         |   |   | **65,639** |   |   | 129,946 |   |
| Purchase                  of treasury stock                                                               |   |   | **(52,200** | **)** |   |   |   |
| Net                  proceeds from issuance of stock                                                      |   |   | **152,728** |   |   |   |   |
| Net                  increase in advances from borrowers for taxes &                  insurance       |   |   | **1,786,941** |   |   | 1,740,914 |   |
| Net                  cash (used in ) provided by financing activities                                     |   |   | **(1,615,136** | **)** |   | 7,170,124 |   |
|                                                                                                      |   |   |   |   |   |   |   |
| (DECREASE)                  INCREASE IN CASH AND CASH EQUIVALENTS                                         |   |   | **(458,844** | **)** |   | 276,074 |   |
|                                                                                                      |   |   |   |   |   |   |   |
| CASH                  AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                           |   |   | **7,934,980** |   |   | 4,718,784 |   |
|                                                                                                      |   |   |   |   |   |   |   |
| CASH                  AND CASH EQUIVALENTS AT END OF PERIOD                                               |   | **$** | **7,476,136** |   | $ | 4,994,858 |   |
|                                                                                                      |   |   |   |   |   |   |   |
| SUPPLEMENTAL                  DISCLOSURES OF CASH FLOW INFORMATION:                                       |   |   |   |   |   |   |   |
|     Cash                  paid during the period for:                                 |   |   |   |   |   |   |   |
|                        Income taxes                                              |   |   |   |   | $ | 31,000 |   |
|                        Interest expense                                          |   | **$** | **6,465,007** |   |   | 5,293,672 |   |
|                                                                                                      |   |   |   |   |   |   |   |
|                                                                                                      |   |   |   |   |   |   |   |
|                                                                                                      |   |   |   |   |   |   |   |
| *See                  notes to unaudited condensed consolidated financial                  statements.*   |   |   |   |   |   |   |   |
|                                                                                                      |   |   |   |   |   |   |   |

----

**Harleysville        Savings Financial Corporation**

**Notes        to Unaudited Condensed Consolidated Financial Statements **

** **

** **

**1.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES **

** **

**Use            of Estimates in Preparation of Consolidated Financial Statements**

----

**2.        INVESTMENT SECURITIES HELD TO MATURITY **

|                                                                           |   | **December                    31, 2005** |            |
|--------------------------------------------------------------------------------|--------|------------------------------------------|-----------------|
|                                                                           |   |                                     |            | **Gross** |   | **Gross** |   |   |   |
|                                                                           |   | **Amortized**                            |            | **Unrealized** |   | **Unrealized** |   | **Approximate** |   |
|                                                                           |   | **Cost**                                 |            | **Gains** |   | **Losses** |   | **Fair                    Value** |   |
| U.S.                    Government Agencies                                    |   |                                     |            |   |   |   |   |   |   |   |   |   |   |
|     Due                    after 1 years through 5 years   |   | **$**                                    | **12,000,000**  |   |   |   |   | **$** | **(246,000** | **)** | **$** | **11,754,000** |   |
|     Due                    after 5 years through 10 years  |   |                                     | **26,576,030**  |   | **$** | **41,564** |   |   | **(421,594** | **)** |   | **26,196,000** |   |
|     Due                    after 10 years through 15 years |   |                                     | **37,664,789**  |   |   |   |   |   | **(898,789** | **)** |   | **36,766,000** |   |
| Tax-Exempt                    Obligations                                      |   |                                     |            |   |   |   |   |   |   |   |   |   |   |
|     Due                    after 10 years through 15 years |   |                                     | **13,059,876**  |   |   | **838,124** |   |   |   |   |   | **13,898,000** |   |
|     Due                    after 15 years                  |   |                                     | **11,761,410**  |   |   | **810,590** |   |   |   |   |   | **12,572,000** |   |
|                                                                           |   |                                     |            |   |   |   |   |   |   |   |   |   |   |
| Total                    Investment Securities                                 |   | **$**                                    | **101,062,105** |   | **$** | **1,690,278** |   | **$** | **(1,566,383** | **)** | **$** | **101,186,000** |   |
|                                                                           |   |                                     |            |   |   |   |   |   |   |   |   |   |   |

| A                  summary of investment with unrealized losses, aggregated by category,                  at                  December 31, 2005 is as                  follows: |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                      |   | Less                    than 12 Months |       | 12                    Months or Longer |   | Total                         |   | Total                                |       |
|-------------------------------------------|--------|----------------------------------------|------------|----------------------------------------|--------|-------------------------------|--------|--------------------------------------|------------|
|                                      |   | Fair                    Value          |       | Unrealized                    Losses   |   | Fair                    Value |   | Unrealized                    Losses |       | Fair                    Value |   | Unrealized                    Losses |   |
| US                    Government agencies |   | $                                      | 43,972,738 |                                   | $      | (677,624                      | )      | $                                    | 26,075,210 |   | $ | (888,759 | ) | $ | 70,047,948 |   | $ | (1,566,383 | ) |
| Total                                     |   | $                                      | 43,972,738 |                                   | $      | (677,624                      | )      | $                                    | 26,075,210 |   | $ | (888,759 | ) | $ | 70,047,948 |   | $ | (1,566,383 | ) |
|                                      |   |                                   |       |                                   |   |                          |   |                                 |       |   |   |   |   |   |   |   |   |   |   |

|                                                                           |   | September                    30, 2005 |       |
|--------------------------------------------------------------------------------|--------|---------------------------------------|------------|
|                                                                           |   |                                  |       | Gross |   | Gross |   |   |   |
|                                                                           |   |                                  |       | Unrealized |   | Unrealized |   | Approximate |   |
|                                                                           |   | Cost                                  |       | Gains |   | Losses |   | Fair                    Value |   |
| U.S.                    Government Agencies                                    |   |                                  |       |   |   |   |   |   |   |   |   |   |   |
|     Due                    after 1 years through 5 years   |   | $                                     | 12,000,000 |   |   |   |   | $ | (197,000 | ) | $ | 11,803,000 |   |
|     Due                    after 5 years through 10 years  |   |                                  | 25,703,340 |   | $ | 77,445 |   |   | (207,785 | ) |   | 25,573,000 |   |
|     Due                    after 10 years through 15 years |   |                                  | 24,862,533 |   |   | 5,200 |   |   | (497,733 | ) |   | 24,370,000 |   |
| Tax-Exempt                    Obligations                                      |   |                                  |       |   |   |   |   |   |   |   |   |   |   |
|     Due                    after 10 years through 15 years |   |                                  | 13,050,956 |   |   | 949,044 |   |   |   |   |   | 14,000,000 |   |
|     Due                    after 15 years                  |   |                                  | 11,747,616 |   |   | 910,384 |   |   |   |   |   | 12,658,000 |   |
|                                                                           |   |                                  |       |   |   |   |   |   |   |   |   |   |   |
| Total                    Investment Securities                                 |   | $                                     | 87,364,445 |   | $ | 1,942,073 |   | $ | (902,518 | ) | $ | 88,404,000 |   |

|     |   | Less                            than 12 Months |       | 12                            Months or Longer |   | Total                                 |   | Total                                        |       |
|----------|--------|------------------------------------------------|------------|------------------------------------------------|--------|---------------------------------------|--------|----------------------------------------------|------------|
|     |   | Fair                              Value        |       | Unrealized                            Losses   |   | Fair                            Value |   | Unrealized                            Losses |       | Fair                            Value |   | Unrealized                            Losses |   |
| Equities |   | $                                              | 31,567,124 |                                           | $      | (284,269                              | )      | $                                            | 21,339,331 |   | $ | (618,249 | ) | $ | 52,906,455 |   | $ | (902,518 | ) |
| Total    |   | $                                              | 31,567,124 |                                           | $      | (284,269                              | )      | $                                            | 21,339,331 |   | $ | (618,249 | ) | $ | 52,906,455 |   | $ | (902,518 | ) |

----

| **3.                        INVESTMENT SECURITIES AVAILABLE-FOR-SALE**                                                                                                                                                                               |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| A                        comparison of amortized cost and approximate fair value of                        investment                        securities with gross unrealized gains and losses, by                        maturities, is as follows: |

|                                                 |   | **December                          31, 2005** |          |
|------------------------------------------------------|--------|------------------------------------------------|---------------|
|                                                 |   |                                           |          | **Gross** |   | **Gross** |   |   |   |
|                                                 |   | **Amortized**                                  |          | **Unrealized** |   | **Unrealized** |   |   |   |
|                                                 |   | **Cost**                                       |          | **Gains** |   | **Losses** |   | **Fair                          Value** |   |
|                                                 |   |                                           |          |   |   |   |   |   |   |
| Equities                                             |   | **$**                                          | **1,107,905** |   | **$** | **12,390** |   | **$** | **(89,819** | **)** | **$** | **1,030,476** |   |
| Mutual                          Funds                |   |                                           | **1,538,205** |   |   |   |   |   |   |   |   | **1,538,205** |   |
|                                                 |   |                                           |          |   |   |   |   |   |   |   |   |   |   |
| Total                          Investment Securities |   | **$**                                          | **2,646,110** |   | **$** | **12,390** |   | **$** | **(89,819** | **)** | **$** | **2,568,681** |   |

| A                summary of investment with unrealized losses, aggregated by category,                at                December 31, 2005 is as follows: |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|     |   | Less                  than 12 Months |    | 12                  Months or Longer |   | Total                       |   | Total                              |   |
|----------|--------|--------------------------------------|---------|--------------------------------------|--------|-----------------------------|--------|------------------------------------|--------|
|     |   | Fair                  Value          |    | Unrealized                  Losses   |   | Fair                  Value |   | Unrealized                  Losses |   | Fair                  Value |   | Unrealized                  Losses |   |
| Equities |   | $                                    | 919,916 |                                 | $      | (677,624                    | )      | $                                  | -      |   | $ | - |   | $ | 919,916 |   | $ | (89,819 | ) |
| Total    |   | $                                    | 919,916 |                                 | $      | (677,624                    | )      | $                                  | -      |   | $ | - |   | $ | 919,916 |   | $ | (89,819 | ) |

|                                           |   | September                    30, 2005 |      |
|------------------------------------------------|--------|---------------------------------------|-----------|
|                                           |   |                                  |      | Gross |   | Gross |   |   |   |
|                                           |   | Amortized                             |      | Unrealized |   | Unrealized |   |   |   |
|                                           |   | Cost                                  |      | Gains |   | Losses |   | Fair                    Value |   |
|                                           |   |                                  |      |   |   |   |   |   |   |
| Equity                    Securities           |   | $                                     | 906,113   |   | $ | 9,830 |   | $ | (56,723 | ) | $ | 859,220 |   |
| Money                    Market Mutual Funds   |   |                                  | 1,976,024 |   |   |   |   |   |   |   |   | 1,976,024 |   |
|                                           |   |                                  |      |   |   |   |   |   |   |   |   |   |   |
| Total                    Investment Securities |   | $                                     | 2,882,137 |   | $ | 9,830 |   | $ | (56,723 | ) | $ | 2,835,244 |   |

----

| **4.                  MORTGAGE-BACKED SECURITIES HELD TO MATURITY**                                                                                                                                                               |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| A                  comparison of amortized cost and approximate fair value of mortgage-backed                  securities with gross unrealized gains and losses, by                  maturities, is as                  follows: |

|                                                                                                                                                                            |   | **December                  31,2005** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|
|                                                                                                                                                                            |   |                                  |   | **Gross** |   | **Gross** |   |   |   |
|                                                                                                                                                                            |   | **Amortized**                         |   | **Unrealized** |   | **Unrealized** |   | **Approximate** |   |
|                                                                                                                                                                            |   | **Cost**                              |   | **Gains** |   | **Losses** |   | **Fair                  Value** |   |
|                                                                                                                                                                            |   |                                  |   |   |   |   |   |   |   |
| Collateralized                  mortgage obligations                                                                                                                            |   | **$**                                 | **16,459,880** |   | **$** | **53,853** |   | **$** | **(343,733** | **)** | **$** | **16,170,000** |   |
| FHLMC                  pass-through certificates                                                                                                                                |   |                                  | **112,843,023** |   |   | **98,383** |   |   | **(2,657,406** | **)** |   | **110,284,000** |   |
| FNMA                  pass-through certificates                                                                                                                                 |   |                                  | **116,510,710** |   |   | **133,873** |   |   | **(2,885,583** | **)** |   | **113,759,000** |   |
| GNMA                  pass-through certificates                                                                                                                                 |   |                                  | **5,922,220** |   |   | **213,780** |   |   |   |   |   | **6,136,000** |   |
|                                                                                                                                                                            |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Mortgage-Backed Securities                                                                                                                               |   | **$**                                 | **251,735,833** |   | **$** | **499,889** |   | **$** | **(5,886,722** | **)** | **$** | **246,349,000** |   |
|                                                                                                                                                                            |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| A                  summary of investment with unrealized losses, aggregated by category,                  at                  December 31, 2005 is as                  follows: |

|                                                                                |   | Less                  than 12 Months |        | 12                  Months or Longer |   | Total                       |   | Total                              |       |
|-------------------------------------------------------------------------------------|--------|--------------------------------------|-------------|--------------------------------------|--------|-----------------------------|--------|------------------------------------|------------|
|                                                                                |   | Fair                  Value          |        | Unrealized                  Losses   |   | Fair                  Value |   | Unrealized                  Losses |       | Fair                  Value |   | Unrealized                  Losses |   |
| Mortgage-backed                  securities held to    maturity |   | $                                    | 138,826,451 |                                 | $      | (2,845,173                  | )      | $                                  | 90,376,874 |   | $ | (3,041,549 | ) | $ | 229,203,325 |   | $ | (5,886,722 | ) |
| Total                                                                               |   | $                                    | 138,826,451 |                                 | $      | (2,845,173                  | )      | $                                  | 90,376,874 |   | $ | (3,041,549 | ) | $ | 229,203,325 |   | $ | (5,886,722 | ) |

|                                                                                                                                                                             |   | September                  30,2005 |        |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|-------------|
|                                                                                                                                                                             |   |                               |        | Gross |   | Gross |   |   |   |
|                                                                                                                                                                             |   | Amortized                          |        | Unrealized |   | Unrealized |   | Approximate |   |
|                                                                                                                                                                             |   | Cost                               |        | Gains |   | Losses |   | Fair                  Value |   |
|                                                                                                                                                                             |   |                               |        |   |   |   |   |   |   |
| Collateralized                  mortgage obligations                                                                                                                             |   | $                                  | 17,089,874  |   | $ | 36,738 |   | $ | (278,612 | ) | $ | 16,848,000 |   |
| FHLMC                  pass-through certificates                                                                                                                                 |   |                               | 118,663,486 |   |   | 128,502 |   |   | (2,047,988 | ) |   | 116,744,000 |   |
| FNMA                  pass-through certificates                                                                                                                                  |   |                               | 121,596,729 |   |   | 161,648 |   |   | (2,216,377 | ) |   | 119,542,000 |   |
| GNMA                  pass-through certificates                                                                                                                                  |   |                               | 6,613,676   |   |   | 246,324 |   |   |   |   |   | 6,860,000 |   |
|                                                                                                                                                                             |   |                               |        |   |   |   |   |   |   |   |   |   |   |
| Total                  Mortgage-Backed Securities                                                                                                                                |   | $                                  | 263,963,765 |   | $ | 573,212 |   | $ | (4,542,977 | ) | $ | 259,994,000 |   |
|                                                                                                                                                                             |   |                               |        |   |   |   |   |   |   |   |   |   |   |
| A                  summary of investment with unrealized losses, aggregated by category,                  at                  September 30, 2005 is as                  follows: |

|                                                                                   |   | Less                than 12 Months |        | 12                Months or Longer |   | Total                     |   | Total                            |       |
|-----------------------------------------------------------------------------------|--------|------------------------------------|-------------|------------------------------------|--------|---------------------------|--------|----------------------------------|------------|
|                                                                              |   | Fair                Value          |        | Unrealized                Losses   |   | Fair                Value |   | Unrealized                Losses |       | Fair                Value |   | Unrealized                Losses |   |
| Mortgage-backed                securities held to    maturity |   | $                                  | 178,406,095 |                               | $      | (2,751,178                | )      | $                                | 58,493,074 |   | $ | (1,791,799 | ) | $ | 236,899,169 |   | $ | (4,542,977 | ) |
| Total                                                                             |   | $                                  | 178,406,095 |                               | $      | (2,751,178                | )      | $                                | 58,493,074 |   | $ | (1,791,799 | ) | $ | 236,899,169 |   | $ | (4,542,977 | ) |

----

| **5.                  MORTGAGE-BACKED SECURITIES AVAILABLE-FOR-SALE**                                                                                                                                                             |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| A                  comparison of amortized cost and approximate fair value of mortgage-backed                  securities with gross unrealized gains and losses, by                  maturities, is as                  follows: |

|                                                  |   | **December                  31,2005** |        |
|-------------------------------------------------------|--------|---------------------------------------|-------------|
|                                                  |   |                                  |        | **Gross** |   | **Gross** |   |   |   |
|                                                  |   | **Amortized**                         |        | **Unrealized** |   | **Unrealized** |   |   |   |
|                                                  |   | **Cost**                              |        | **Gains** |   | **Losses** |   | **Fair                  Value** |   |
|                                                  |   |                                  |        |   |   |   |   |   |   |
| **FNMA                  pass-through certificates**   |   | **$**                                 | **785,187** |   | **$** | **24,430** |   | **$** | **-** |   | **$** | **809,617** |   |
|                                                  |   |                                  |        |   |   |   |   |   |   |   |   |   |   |
| **Total                  Mortgage-Backed Securities** |   | **$**                                 | **785,187** |   | **$** | **24,430** |   | **$** | **-** |   | **$** | **809,617** |   |
|                                                  |   |                                  |        |   |   |   |   |   |   |   |   |   |   |

|                                            |   | September                30,2005 |      |
|-------------------------------------------------|--------|----------------------------------|-----------|
|                                            |   |                             |      | Gross |   | Gross |   |   |   |
|                                            |   | Amortized                        |      | Unrealized |   | Unrealized |   |   |   |
|                                            |   | Cost                             |      | Gains |   | Losses |   | Fair                Value |   |
|                                            |   |                             |      |   |   |   |   |   |   |
| FNMA                pass-through certificates   |   | $                                | 1,012,154 |   | $ | 32,933 |   | $ | - |   | $ | 1,045,087 |   |
|                                            |   |                             |      |   |   |   |   |   |   |   |   |   |   |
| Total                Mortgage-Backed Securities |   | $                                | 1,012,154 |   | $ | 32,933 |   | $ | - |   | $ | 1,045,087 |   |

| **6.                  LOANS RECEIVABLE**                                     |
|------------------------------------------------------------------------------|
| Loans                  receivable consist of the                  following: |

|                                                                                |   | **December                  31, 2005** |            | September                  30, 2005 |   |
|-------------------------------------------------------------------------------------|--------|----------------------------------------|-----------------|-------------------------------------|--------|
| Residential                  Mortgages                                              |   | **$**                                  | **270,653,571** |                                | $      | 270,940,562 |   |
| Commercial                  Mortgages                                               |   |                                   | **1,980,821**   |                                |   | 2,003,219 |   |
| Construction                                                                        |   |                                   | **7,977,400**   |                                |   | 7,639,300 |   |
| Savings                  Account                                                    |   |                                   | **915,700**     |                                |   | 921,400 |   |
| Home                  Equity                                                        |   |                                   | **61,576,068**  |                                |   | 59,724,004 |   |
| Automobile                  and other                                               |   |                                   | **773,752**     |                                |   | 771,538 |   |
| Line                  of Credit                                                     |   |                                   | **29,854,501**  |                                |   | 31,579,680 |   |
| Total                                                                               |   |                                   | **373,731,813** |                                |   | 373,579,703 |   |
|     Undisbursed                  portion of loans in process    |   |                                   | **(5,316,280**  | **)**                               |   | (4,933,753 | ) |
|     Deferred                  loan                  fees        |   |                                   | **(637,433**    | **)**                               |   | (671,426 | ) |
|     Allowance                  for                  loan losses |   |                                   | **(1,966,954**  | **)**                               |   | (1,967,607 | ) |
| Loans                  receivable - net                                             |   | **$**                                  | **365,811,146** |                                | $      | 366,006,917 |   |

| The                  total amount of loans being serviced for the benefit of others                  was                  approximately $4.5 million and $4.7 million at                  December 31, 2005 and September 30, 2005,                  respectively. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                               |   |   |   |   |   |   |
| The                  following schedule summarizes the changes in the allowance for                  loan                  losses:                                                                                                                                 |

|                                                         |   | **Three                  Months Ended** |          | Year                  Ended    |   |
|--------------------------------------------------------------|--------|-----------------------------------------|---------------|-------------------------------------|--------|
|                                                         |   | **December                  31, 2005**  |          | September                  30, 2005 |   |
| Balance,                  beginning of period                |   | **$**                                   | **1,967,607** |                                | $      | 1,976,849 |   |
|     Amounts                  charged-off |   |                                    | **(2,158**    | **)**                               |   | (92,949 | ) |
|     Loan                  recoveries     |   |                                    | **1,505**     |                                |   | 83,707 |   |
| Balance,                  end of period                      |   | **$**                                   | **1,966,954** |                                | $      | 1,967,607 |   |

----

| **7.                  OFFICE PROPERTIES AND EQUIPMENT**                                                                               |
|---------------------------------------------------------------------------------------------------------------------------------------|
| Office                  properties and equipment are summarized by major classification                  as                  follows: |

|                                                                   |   | **December                  31, 2005** |           | September                  30, 2005 |   |
|------------------------------------------------------------------------|--------|----------------------------------------|----------------|-------------------------------------|--------|
| Land                                                                   |   | **$**                                  | **184,788**    |                                | $      | 184,788 |   |
| Buildings                                                              |   |                                   | **6,921,976**  |                                |   | 6,383,356 |   |
| Furniture,                  fixtures and equipment                     |   |                                   | **3,368,302**  |                                |   | 3,433,247 |   |
| Automobiles                                                            |   |                                   | **24,896**     |                                |   | 24,896 |   |
| Total                                                                  |   |                                   | **10,499,962** |                                |   | 10,026,287 |   |
|     Less                  accumulated depreciation |   |                                   | **(4,136,347** | **)**                               |   | (4,196,593 | ) |
| Net                                                                    |   | **$**                                  | **6,363,615**  |                                | $      | 5,829,694 |   |

| **8.                  DEPOSITS**                     |   |                                   |            |                                |   |
|------------------------------------------------------|--------|----------------------------------------|-----------------|-------------------------------------|--------|
| Deposits                  are summarized as follows: |   |                                   |            |                                |   |
|                                                 |   | **December                  31, 2005** |            | September                  30, 2005 |   |
| Non-interest                  bearing checking       |   | **$**                                  | **9,650,733**   |                                | $      | 9,618,764 |   |
| NOW                  accounts                        |   |                                   | **17,910,730**  |                                |   | 18,282,489 |   |
| Checking                  accounts                   |   |                                   | **14,107,699**  |                                |   | 9,102,649 |   |
| Money                  Market Demand accounts        |   |                                   | **70,172,423**  |                                |   | 76,581,019 |   |
| Passbook                  and Club accounts          |   |                                   | **3,459,199**   |                                |   | 3,806,599 |   |
| Certificate                  accounts                |   |                                   | **314,212,482** |                                |   | 301,588,135 |   |
| Total                  deposits                      |   | **$**                                  | **429,513,266** |                                | $      | 418,979,655 |   |

| The                  aggregate amount of certificate accounts in denominations of more                  than                  $100,000 at December 31, 2005 and September 30, 2005 amounted                  to approximately $42.5 million and $39.7 million, respectively.                  Amounts in                  excess of $100,000 may not be federally                  insured. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **9.                  COMMITMENTS**                                                                 |   |   |           |
|-----------------------------------------------------------------------------------------------------|--------|--------|----------------|
| At                  December 31, 2005, the following commitments were                  outstanding: |   |   |           |
|                                                                                                |   |   |           |
| Origination                  of mortgage loans                                                      |   | **$**  | **6,056,142**  |   |
| Unused                  line of credit loans                                                        |   |   | **40,349,972** |   |
| Loans                  in process                                                                   |   |   | **5,316,280**  |   |
|                                                                                                |   |   |           |   |
| Total                                                                                               |   | **$**  | **51,722,394** |   |

| **10.                  DIVIDEND**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| On                  January 25, 2006, the Company's Board of Directors declared a cash                  dividend of $.16 per share payable on February 22, 2006 to                  the stockholders' of record at the close of business on February                  8, 2006.                  The number of shares and per share information for                  all periods presented has been restated to reflect the five for                  three                  stock split as of February 24, 2005. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

----

| **11.                  EARNINGS PER SHARE**                                                                 |
|-------------------------------------------------------------------------------------------------------------|
| The                  following shares were used for the computation of earnings per                  share: |

|    |   | **For                the Three Months Ended** |          |
|---------|--------|-----------------------------------------------|---------------|
|    |   | **December                31,**               |          |
|    |   | **2005**                                      |          | 2004 |   |
| Basic   |   |                                          | **3,902,667** |   |   | 3,832,345 |   |
| Diluted |   |                                          | **3,944,580** |   |   | 3,906,358 |   |

| The                  difference between the number of shares used for computation of                  basic                  earnings per share and diluted earnings per share                  represents the dilutive effect of stock options. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                             |   |   |   |   |   |
| **12.                  ADVANCES FROM FEDERAL HOME LOAN BANK**                                                                                                                                                                                    |
| Advances                  from the Federal Home Loan Bank consists of the                  following:                                                                                                                                            |

|                                                         |   | **December                  31,** |            | September                  30, |   |
|--------------------------------------------------------------|--------|-----------------------------------|-----------------|--------------------------------|--------|
|                                                         |   | **2005**                          |            | 2005                           |   |
|                                                         |   |                              |            | **Weighted**                   |   |   |   | Weighted |   |
|                                                         |   |                              |            | **Interest**                   |   |   |   | Interest |   |
| **    Maturing                  Period** |   | **Amount**                        |            | **Rate**                       |   | Amount |   | Rate |   |
|                                                         |   |                              |            |                           |   |   |   |   |   |
|                    1 to 12 months                       |   | **$**                             | **42,966,667**  |                           |   | **3.89** | **%** | $ | 36,043,911 |   |   | 3.73 | % |
| 13                  to 24 months                             |   |                              | **16,737,739**  |                           |   | **3.43** | **%** |   | 25,446,061 |   |   | 3.66 | % |
| 25                  to 36 months                             |   |                              | **72,367,241**  |                           |   | **4.83** | **%** |   | 69,114,248 |   |   | 4.83 | % |
| 37                  to 48 months                             |   |                              | **17,244,075**  |                           |   | **3.83** | **%** |   | 31,484,966 |   |   | 3.89 | % |
| 49                  to 60 months                             |   |                              | **24,074,029**  |                           |   | **5.28** | **%** |   | 9,302,331 |   |   | 3.97 | % |
| 61                  to 72 months                             |   |                              | **36,761,623**  |                           |   | **4.69** | **%** |   | 40,208,732 |   |   | 5.35 | % |
| 73                  to 84 months                             |   |                              | **48,639,400**  |                           |   | **4.54** | **%** |   | 60,668,239 |   |   | 4.47 | % |
| 85                  to 120 months                            |   |                              | **25,000,000**  |                           |   | **3.80** | **%** |   | 25,000,000 |   |   | 3.80 | % |
|                                                         |   |                              |            |                           |   |   |   |   |   |   |   |   |   |
| Total                                                        |   | **$**                             | **283,790,774** |                           |   | **4.43** | **%** | $ | 297,268,488 |   |   | 4.38 | % |

**13.            REGULATORY CAPITAL REQUIREMENTS **

|                                                                                                               |   |       |           |                                         |   |                                         |   |                                         |           | **To                        Be Considered Well** |   |
|--------------------------------------------------------------------------------------------------------------------|--------|------------|----------------|----------------------------------------------|--------|----------------------------------------------|--------|----------------------------------------------|----------------|--------------------------------------------------|--------|
|                                                                                                               |   |       |           |                                         |   |                                         |   |                                         |           | **Capitalized                        Under**     |   |
|                                                                                                               |   |       |           |                                         |   | **For                        Capital**       |   | **Prompt                        Corrective** |           |
|                                                                                                               |   | **Actual** |           | **Adequacy                        Purposes** |   | **Action                        Provisions** |   |
|                                                                                                               |   |       |           |                                         |   |                                         |   |                                         |           |                                             |   |   |   |
|                                                                                                               |   | **Amount** |           | **Ratio**                                    |   | **Amount**                                   |   | **Ratio**                                    |           | **Amount**                                       |   | **Ratio** |   |
| **As                        of December 31, 2005**                                                                 |   |       |           |                                         |   |                                         |   |                                         |           |                                             |   |   |   |   |   |   |   |   |   |
| **    Tier                        1                        Capital (to assets)**               |   | **$**      | **48,102,489** |                                         |   | **6.30**                                     | **%**  | **$**                                        | **30,555,600** |                                             |   | **4.00** | **%** | **$** | **38,195,750** |   |   | **5.00** | **%** |
| **    Tier                        1                        Capital (to risk weighted assets)** |   |       | **48,102,489** |                                         |   | **13.46**                                    | **%**  |                                         | **14,290,760** |                                             |   | **4.00** | **%** |   | **21,436,140** |   |   | **6.00** | **%** |
| **    Total                        Capital (to risk weighted assets)**                         |   |       | **50,069,461** |                                         |   | **14.01**                                    | **%**  |                                         | **28,581,520** |                                             |   | **8.00** | **%** |   | **35,726,900** |   |   | **10.00** | **%** |
|                                                                                                               |   |       |           |                                         |   |                                         |   |                                         |           |                                             |   |   |   |   |   |   |   |   |   |
| As                        of September 30, 2005                                                                    |   |       |           |                                         |   |                                         |   |                                         |           |                                             |   |   |   |   |   |   |   |   |   |
|     Tier                        1                        Capital (to assets)                   |   | $          | 47,524,213     |                                         |   | 6.26                                         | %      | $                                            | 30,376,680     |                                             |   | 4.00 | % | $ | 37,970,850 |   |   | 5.00 | % |
|     Tier                        1                        Capital (to risk weighted assets)     |   |       | 47,524,213     |                                         |   | 13.31                                        | %      |                                         | 14,283,160     |                                             |   | 4.00 | % |   | 21,424,740 |   |   | 6.00 | % |
|     Total                        Capital (to risk weighted assets)                             |   |       | 49,491,820     |                                         |   | 13.86                                        | %      |                                         | 28,566,320     |                                             |   | 8.00 | % |   | 35,707,900 |   |   | 10.00 | % |

----

**Item        2. Management’s Discussion and Analysis of Financial Condition        and Results of Operations**

**Critical        Accounting Policies and Judgments**

*Analysis        and Determination of the Allowance for Loan Losses *

*Specific        Allowance Required for Certain Impaired or Collateral-Dependent        Loans*

*General        Valuation Allowance on Certain Identified Problem Loans *

*General        Valuation Allowance on the Remainder of the Loan Portfolio *

----

**Changes        in Financial Position for the Three Month Period Ended December 31,        2005**

**Comparisons        of Results of Operations for the Three Month Period Ended December 31, 2005        with        the Three Month Period Ended December 31, 2004**

**Net        Interest Income**

**Non-Interest        Income**

**Non-Interest        Expenses**

**Income        Taxes**

----

**Liquidity        and Capital Recourses**

**Proposed        FASB**

**Item        3**.**Quantitative        and Qualitative Disclosures About Market Risk**

----

|                                                                                 |   | **1                  Year**  |    | **1                  to 3** |   | **3                  to 5** |   | **Over                  5** |    |       |   |
|--------------------------------------------------------------------------------------|--------|------------------------------|---------|-----------------------------|--------|-----------------------------|--------|-----------------------------|---------|-----------------|--------|
|                                                                                 |   | **or                  less** |    | **Years**                   |   | **Years**                   |   | **Years**                   |    |  **Total** |   |
| **Interest-earning                  assets**                                         |   |                         |    |                        |   |                        |   |                        |    |            |   |   |   |   |   |   |
| Mortgage                  loans                                                      |   | $                            | 36,475  |                        | $      | 56,440                      |   | $                           | 42,757  |            | $      | 134,982 |   | $ | 270,654 |   |
| Mortgage-backed                  securities                                          |   |                         | 85,396  |                        |   | 85,247                      |   |                        | 41,771  |            |   | 40,131 |   |   | 252,545 |   |
| Consumer                  and other loans                                            |   |                         | 58,348  |                        |   | 24,571                      |   |                        | 8,511   |            |   | 11,648 |   |   | 103,078 |   |
| Investment                  securities and other investments                         |   |                         | 29,399  |                        |   | 3,414                       |   |                        | 21,698  |            |   | 82,872 |   |   | 137,383 |   |
|                                                                                 |   |                         |    |                        |   |                        |   |                        |    |            |   |   |   |   |   |   |
| Total                  interest-earning assets                                       |   |                         | 209,618 |                        |   | 169,672                     |   |                        | 114,737 |            |   | 269,633 |   |   | 763,660 |   |
|                                                                                 |   |                         |    |                        |   |                        |   |                        |    |            |   |   |   |   |   |   |
| **Interest-bearing                  liabilities**                                    |   |                         |    |                        |   |                        |   |                        |    |            |   |   |   |   |   |   |
|     Passbook                  and                  Club accounts |   |                         | -       |                        |   | -                           |   |                        | -       |            |   | 3,459 |   |   | 3,459 |   |
|     NOW                  and                  checking accounts  |   |                         | -       |                        |   | -                           |   |                        | -       |            |   | 32,019 |   |   | 32,019 |   |
|     Money                  Market Deposit accounts               |   |                         | 21,447  |                        |   | -                           |   |                        | -       |            |   | 48,725 |   |   | 70,172 |   |
|     Choice                  Savings                              |   |                         | -       |                        |   |                        |   |                        |    |            |   | - |   |   | **-** |   |
|     Certificate                  accounts                        |   |                         | 143,554 |                        |   | 153,919                     |   |                        | 16,739  |            |   | - |   |   | 314,212 |   |
|     Borrowed                  money                              |   |                         | 68,021  |                        |   | 84,443                      |   |                        | 31,549  |            |   | 99,778 |   |   | 283,791 |   |
|                                                                                 |   |                         |    |                        |   |                        |   |                        |    |            |   |   |   |   |   |   |
| Total                  interest-bearing liabilities                                  |   |                         | 233,022 |                        |   | 238,362                     |   |                        | 48,288  |            |   | 183,981 |   |   | 703,653 |   |
|                                                                                 |   |                         |    |                        |   |                        |   |                        |    |            |   |   |   |   |   |   |
| Repricing                  GAP during the period                                     |   | $                            | (23,404 | )                           | $      | (68,690                     | )      | $                           | 66,449  |            | $      | 85,652 |   | $ | 60,007 |   |
|                                                                                 |   |                         |    |                        |   |                        |   |                        |    |            |   |   |   |   |   |   |
| Cumulative                  GAP                                                      |   | $                            | (23,404 | )                           | $      | (92,094                     | )      | $                           | (25,645 | )               | $      | 60,007 |   |   |   |   |
|                                                                                 |   |                         |    |                        |   |                        |   |                        |    |            |   |   |   |   |   |   |
| Ratio                  of GAP during the period to total assets                      |   |                         | -3.05   | %                           |   | -8.96                       | %      |                        | 8.67    | %               |   | 11.17 | % |   |   |   |
|                                                                                 |   |                         |    |                        |   |                        |   |                        |    |            |   |   |   |   |   |   |
| Ratio                  of cumulative GAP to total assets                             |   |                         | -3.05   | %                           |   | -12.01                      | %      |                        | -3.35   | %               |   | 7.83 | % |   |   |   |

----

**Item        4. Controls and Procedures **

----

**Part          II OTHER INFORMATION**

**Item            1.    **
**Legal            Proceedings**

**Item            1A.          **
**Risk            Factors**

**Item            2.    **
**Unregistered            Sales of Equity Securities and Use of Proceeds **

| **Period**                             |   | **Total                    Number of Shares Purchased** |                     | **Average****Price                    Paid****per                    Share** |   | **Total                    Number of Shares Purchased as Part of Publicly Announced Plans                    or                    Programs** |   | **Maximum                    Number of Shares that May Yet Be Purchased Under the Plans or                    Programs(1)** |
|----------------------------------------|--------|---------------------------------------------------------|--------------------------|------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------|
|                                   |   |                                                    |                     |                                                                         |   |                                                                                                                                          |   |                                                                                                                        |
| October                    1-31, 2005  |   |                                                    |                     |                                                                         |   |                                                                                                                                               |   |                                                                                                                        |   |   |   | 135,667 |
| November                    1-30, 2005 |   |                                                    | 3,000                    |                                                                         | $      | 17.40                                                                                                                                         |   |                                                                                                                        | 3,000 |   |   | 132,667 |
| December                    1-31, 2005 |   |                                                    |      |                                                                         |   |                                                                                                                                     |   |                                                                                                                        |    |   |   |    |
|     Total          |   |                                                    | 3,000                    |                                                                         | $      | 17.40                                                                                                                                         |   |                                                                                                                        | 3,000 |   |   | 132,667 |

| (a) | On                    June 18, 2003, the Company announced its current program to repurchase                    up                    to 5.0% of the outstanding shares of Common Stock of the Company,                    or                    191,667 shares. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | The                    program does not have an expiration date and all shares are purchased                    in                    the open market. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------|

**Item          3.**
**Defaults          upon Senior Securities**

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

**Item          5.**
**Other          information.**

**                  Item 6.         **Exhibits            and Reports on Form 8-K****

|   | 31.1 |   | Certification                    of Chief Executive Officer                                                             |   |   |   |   |
|--------|------|--------|-------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|
|   | 31.2 |   | Certification                    of Chief Financial Officer                                                             |   |   |   |   |
|   | 32.0 |   | Section                    1350 Certification of Chief Executive Officer and Chief Financial                    Officer |

----

| **Signatures**                                                                                                                                                                                                                                                                                 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                           |
| Pursuant                  to the requirements of the Securities Exchange Act of 1934, the                  Registrant                  has duly caused this                  report to be signed on its behalf by the undersigned thereunto                  duly                  authorized. |

| **HARLEYSVILLE                  SAVINGS FINANCIAL CORPORATION** |
|-----------------------------------------------------------------|
|                                                            |   |   |
| *Date:                  February 10, 2006*                      | *By:                  /s/ Edward J. Molnar* |   |
|                                                            | *Edward                  J. Molnar* |   |
|                                                            | *Chief                  Executive Officer* |   |
|                                                            |   |   |
|                                                            |   |   |
| *Date:                  February 10, 2006*                      | *By:                  /s/ Brendan J. McGill* |   |
|                                                            | *Brendan                  J. McGill* |   |
|                                                            | *Chief                  Executive Officer* |   |
|                                                            | *Senior                  Vice President* |   |
|                                                            | *Treasurer                  and Chief Financial Officer* |   |