Exhibit 13

LOGO

FINANCIAL

CORP.

- THE
HOLDING COMPANY OF WEST VIEW SAVINGS BANK -

Over 100 Years of Quality Banking

2010

ANNUAL
REPORT



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TABLE OF CONTENTS



|                                                          |  |           
|--------------------------------------------------------- |  | ----------
|                                                          |  | PageNumber
|                                                          | 
|Stockholders Letter                                      |  | 1         
|                                                          | 
|Selected Financial and Other Data                         |  | 2         
|                                                          | 
|Managements Discussion and Analysis                      |  | 4         
|                                                          | 
|Report of Independent Registered Public Accounting Firm   |  | 21        
|                                                          | 
|Consolidated Balance Sheet                                |  | 23        
|                                                          | 
|Consolidated Statement of Income                          |  | 24        
|                                                          | 
|Consolidated Statement of Changes in Stockholders Equity |  | 25        
|                                                          | 
|Consolidated Statement of Cash Flows                      |  | 26        
|                                                          | 
|Notes to the Consolidated Financial Statements            |  | 27        
|                                                          | 
|Common Stock Market Price and Dividend Information        |  | 63        
|                                                          | 
|Corporate Information                                     |  | 64        





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|                                                  |  |              
|------------------------------------------------- |  | -------------
|LOGO                                              |  | (412)364-1911
|                                                 
|- THE HOLDING COMPANY OF WEST VIEW SAVINGS BANK -

To Our Shareholders:

During Fiscal 2010, the worlds economies continued their worst decline since the end of World War II. In the United
States, the unemployment rate continues to hover around 9.5%, consumer and business confidence are low, and the near term prospects for economic growth are limited. Pittsburgh has avoided the worst of the economic recession. The Pittsburgh housing
market has not experienced a housing bust  however home sales and construction activity have slowed. The key to any meaningful economic recovery is job growth. Job growth will increase household income, stimulate the demand for goods and
services, and allow businesses the opportunity to expand.

Interest rates continue to test historical lows.
Due to the low levels of market interest rates, and continued economic weakness, the banking business  like many businesses - has fallen on hard times. For the first time since we became a public company in 1993, the Company did not fully earn
its shareholders dividend. Fiscal 2010 earnings totaled $372 thousand. The $2.5 million decrease in net income was primarily the result of a $3.5 million decline in net interest income, a $194 thousand other-than-temporary impairment charge on
two mortgage-backed securities and a $141 thousand increase in FDIC deposit insurance premium expense, which were partially offset by a $1.4 million reduction in income tax expense. The decrease in net interest income was mainly the result of fixed
rate interest costs associated with legacy long-term FHLB advances. These advances were taken out about ten years ago, when interest rates were much higher. Also affecting earnings was the fact that the FHLB-Pittsburgh has not paid a dividend on its
common stock since November 2008.

We expect our fixed rate interest costs on the legacy long-term FHLB
advances to fall as they mature throughout Fiscal 2011. During the September and December 2010 quarters, $60 million, with average rates ranging from 5.44% to 5.77%, will mature. Another $27 million, with average rates ranging from 4.99% to 5.28%,
will mature in the March and June 2011 quarters. We expect net interest income to begin to improve in the December 2010 quarter.

During Fiscal 2010, we fundamentally adjusted our asset/liability management strategy. Our two main goals were to
increase our Tier 1 capital ratio and to reduce overall borrowings. The Tier 1 capital (to average assets) ratio increased to 8.21% at June 30, 2010 from 7.35% at June 30, 2009. Overall borrowings were reduced by about $60 million. We
believe that with market interest rates at historical lows, the risks of maintaining a leveraged balance sheet far exceed the additional income that could prudently be earned.

The Companys Board of Directors, management, and employees are committed to working through the economic recession.
We thank our shareholders, customers, and employees for your business and support.



|                                      |  |  |  |                                   
|------------------------------------- |  |  |  | ----------------------------------
|/s/ David J. Bursic                   |  |  |  | /s/ David L. Aeberli              
|David J. Bursic                       |  |  |  | David L. Aeberli                  
|President and Chief Executive Officer |  |  |  | Chairman of the Board of Directors

Town of McCandless  9001 Perry Highway, Pittsburgh, Pennsylvania 15237



1



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FIVE YEAR SUMMARY OF SELECTED CONSOLIDATED

FINANCIAL AND OTHER DATA



|                                                                                   |  |                                               |           |   |      |   |           |      |  |   |           |   |  |      |           |   |  |   |           |  
|---------------------------------------------------------------------------------- |  | --------------------------------------------- | --------- | - | ---- | - | --------- | ---- |  | - | --------- | - |  | ---- | --------- | - |  | - | --------- | -
|                                                                                   |  | As of or For the Year Ended June 30,          |          
|                                                                                   |  | 2010                                          |           |   | 2009 |   |           | 2008 |  |   | 2007      |   |  | 2006 |          
|                                                                                   |  | (Dollars in Thousands, except per share data) |          
|Selected Financial Data:                                                           |  |                                               |           |   |      |   |           |      |  |   |           |   |  |      |           |   |  |   |           |  
|Total assets                                                                       |  | $                                             | 354,668   |   |      | $ | 419,434   |      |  | $ | 423,109   |   |  | $    | 408,076   |   |  | $ | 421,742   |  
|Net loans receivable                                                               |  |                                               | 56,315    |   |      |   | 58,148    |      |  |   | 56,477    |   |  |      | 60,350    |   |  |   | 55,702    |  
|Mortgage-backed securities                                                         |  |                                               | 117,132   |   |      |   | 176,204   |      |  |   | 215,905   |   |  |      | 121,517   |   |  |   | 155,753   |  
|Investment securities                                                              |  |                                               | 153,193   |   |      |   | 123,621   |      |  |   | 128,537   |   |  |      | 211,597   |   |  |   | 196,421   |  
|Deposit accounts                                                                   |  |                                               | 201,922   |   |      |   | 146,315   |      |  |   | 150,142   |   |  |      | 159,377   |   |  |   | 151,713   |  
|FHLB advances                                                                      |  |                                               | 109,500   |   |      |   | 130,079   |      |  |   | 135,579   |   |  |      | 130,579   |   |  |   | 161,729   |  
|FRB short-term borrowings                                                          |  |                                               | 0         |   |      |   | 108,800   |      |  |   | 80,600    |   |  |      | 0         |   |  |   | 0         |  
|Other short-term borrowings                                                        |  |                                               | 12,510    |   |      |   | 0         |      |  |   | 20,000    |   |  |      | 82,950    |   |  |   | 76,048    |  
|Stockholders equity                                                               |  |                                               | 27,795    |   |      |   | 31,123    |      |  |   | 32,148    |   |  |      | 31,293    |   |  |   | 29,418    |  
|Non-performing assets, troubled debt restructurings and potential problem loans(2) |  |                                               | 1,666     |   |      |   | 1,268     |      |  |   | 1,924     |   |  |      | 1,574     |   |  |   | 1,695     |  
|                                                                                   |  |                                               |           |   |     
|Selected Operating Data:                                                           |  |                                               |           |   |      |   |           |      |  |   |           |   |  |      |           |   |  |   |           |  
|Interest income                                                                    |  | $                                             | 12,083    |   |      | $ | 17,438    |      |  | $ | 23,681    |   |  | $    | 24,310    |   |  | $ | 22,248    |  
|Interest expense                                                                   |  |                                               | 8,481     |   |      |   | 10,311    |      |  |   | 15,143    |   |  |      | 15,985    |   |  |   | 15,460    |  
|                                                                                   |  |                                               |           |   |      |   |           |      |  |   |           |   |  |      |           |   |  |   |           |  
|Net interest income                                                                |  |                                               | 3,602     |   |      |   | 7,127     |      |  |   | 8,538     |   |  |      | 8,325     |   |  |   | 6,788     |  
|Provision for (Recovery of) loan losses                                            |  |                                               | (11       | ) |      |   | (294      | )    |  |   | (123      | ) |  |      | 13        |   |  |   | (161      | )
|                                                                                   |  |                                               |           |   |      |   |           |      |  |   |           |   |  |      |           |   |  |   |           |  
|Net interest income after provision for (recovery of) loan losses                  |  |                                               | 3,613     |   |      |   | 7,421     |      |  |   | 8,661     |   |  |      | 8,312     |   |  |   | 6,949     |  
|Non-interest income                                                                |  |                                               | 370       |   |      |   | 604       |      |  |   | 597       |   |  |      | 626       |   |  |   | 705       |  
|Non-interest expense                                                               |  |                                               | 3,624     |   |      |   | 3,795     |      |  |   | 3,636     |   |  |      | 3,529     |   |  |   | 3,521     |  
|                                                                                   |  |                                               |           |   |      |   |           |      |  |   |           |   |  |      |           |   |  |   |           |  
|Income before income tax expense                                                   |  |                                               | 359       |   |      |   | 4,230     |      |  |   | 5,622     |   |  |      | 5,409     |   |  |   | 4,133     |  
|Income tax expense (benefit)                                                       |  |                                               | (13       | ) |      |   | 1,352     |      |  |   | 1,850     |   |  |      | 1,763     |   |  |   | 1,287     |  
|                                                                                   |  |                                               |           |   |      |   |           |      |  |   |           |   |  |      |           |   |  |   |           |  
|Net income                                                                         |  | $                                             | 372       |   |      | $ | 2,878     |      |  | $ | 3,772     |   |  | $    | 3,646     |   |  | $ | 2,846     |  
|                                                                                   |  |                                               |           |   |      |   |           |      |  |   |           |   |  |      |           |   |  |   |           |  
|                                                                                   |  |                                               |           |   |     
|Per Share Information:                                                             |  |                                               |           |   |      |   |           |      |  |   |           |   |  |      |           |   |  |   |           |  
|Basic earnings                                                                     |  | $                                             | 0.18      |   |      | $ | 1.35      |      |  | $ | 1.67      |   |  | $    | 1.57      |   |  | $ | 1.21      |  
|Diluted earnings                                                                   |  | $                                             | 0.18      |   |      | $ | 1.35      |      |  | $ | 1.67      |   |  | $    | 1.57      |   |  | $ | 1.21      |  
|Dividends per share                                                                |  | $                                             | 0.64      |   |      | $ | 0.64      |      |  | $ | 0.64      |   |  | $    | 0.64      |   |  | $ | 0.64      |  
|Dividend payout ratio                                                              |  |                                               | 355.56    | % |      |   | 47.41     | %    |  |   | 38.32     | % |  |      | 46.76     | % |  |   | 46.76     | %
|Book value per share at period end:                                                |  |                                               |           |   |      |   |           |      |  |   |           |   |  |      |           |   |  |   |           |  
|Common Equity                                                                      |  | $                                             | 13.51     |   |      | $ | 15.03     |      |  | $ | 14.44     |   |  | $    | 13.49     |   |  | $ | 12.60     |  
|Tier I Equity                                                                      |  | $                                             | 14.59     |   |      | $ | 15.03     |      |  | $ | 14.40     |   |  | $    | 13.48     |   |  | $ | 12.58     |  
|Average shares outstanding:                                                        |  |                                               |           |   |      |   |           |      |  |   |           |   |  |      |           |   |  |   |           |  
|Basic                                                                              |  |                                               | 2,066,335 |   |      |   | 2,133,234 |      |  |   | 2,252,604 |   |  |      | 2,319,928 |   |  |   | 2,357,217 |  
|Diluted                                                                            |  |                                               | 2,066,335 |   |      |   | 2,133,308 |      |  |   | 2,252,906 |   |  |      | 2,321,536 |   |  |   | 2,359,996 |  



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|                                                                                                               |  |                                      |   |  |        |   |  |        |   |  |        |   |  |        |  
|-------------------------------------------------------------------------------------------------------------- |  | ------------------------------------ | - |  | ------ | - |  | ------ | - |  | ------ | - |  | ------ | -
|                                                                                                               |  | As of or For the Year Ended June 30, |  
|                                                                                                               |  | 2010                                 |   |  | 2009   |   |  | 2008   |   |  | 2007   |   |  | 2006   |  
|                                                                                                               | 
|Selected Operating Ratios(1):                                                                                  |  |                                      |  
|Average yield earned on interest-earning assets(3)                                                             |  | 3.27                                 | % |  | 4.16   | % |  | 5.72   | % |  | 6.15   | % |  | 5.29   | %
|Average rate paid on interest-bearing liabilities                                                              |  | 2.56                                 |   |  | 2.72   |   |  | 4.06   |   |  | 4.46   |   |  | 4.01   |  
|Average interest rate spread(4)                                                                                |  | 0.71                                 |   |  | 1.44   |   |  | 1.66   |   |  | 1.69   |   |  | 1.28   |  
|Net interest margin(4)                                                                                         |  | 1.00                                 |   |  | 1.73   |   |  | 2.10   |   |  | 2.14   |   |  | 1.67   |  
|Ratio of interest-earning assets to interest-bearing liabilities                                               |  | 113.27                               |   |  | 111.82 |   |  | 112.02 |   |  | 111.53 |   |  | 110.48 |  
|Non-interest expense as a percent of average assets                                                            |  | 0.96                                 |   |  | 0.89   |   |  | 0.86   |   |  | 0.87   |   |  | 0.82   |  
|Return on average assets                                                                                       |  | 0.10                                 |   |  | 0.67   |   |  | 0.89   |   |  | 0.90   |   |  | 0.66   |  
|Return on average equity                                                                                       |  | 1.22                                 |   |  | 9.15   |   |  | 12.03  |   |  | 12.14  |   |  | 9.87   |  
|Ratio of average equity to average assets                                                                      |  | 8.04                                 |   |  | 7.37   |   |  | 7.43   |   |  | 7.43   |   |  | 6.70   |  
|Full-service offices at end of period                                                                          |  | 5                                    |   |  | 5      |   |  | 5      |   |  | 5      |   |  | 5      |  
|                                                                                                               |  |                                      |   |  |       
|Asset Quality Ratios(1):                                                                                       |  |                                      |   |  |        |   |  |        |   |  |        |   |  |        |  
|Non-performing and potential problem loans and troubled debt restructurings as a percent of net total loans(2) |  | 2.96                                 | % |  | 2.18   | % |  | 3.41   | % |  | 2.60   | % |  | 3.03   | %
|Non-performing assets as a percent of total assets(2)                                                          |  | 0.47                                 |   |  | 0.23   |   |  | 0.37   |   |  | 0.30   |   |  | 0.08   |  
|Non-performing assets, troubled debt restructurings and potential problem loans as a percent of total assets   |  | 0.47                                 |   |  | 0.30   |   |  | 0.45   |   |  | 0.39   |   |  | 0.40   |  
|Allowance for loan losses as a percent of total loans receivable                                               |  | 1.13                                 |   |  | 1.12   |   |  | 1.66   |   |  | 1.60   |   |  | 1.69   |  
|Allowance for loan losses as a percent of non-performing loans                                                 |  | 38.72                                |   |  | 69.46  |   |  | 60.43  |   |  | 81.89  |   |  | 310.71 |  
|Charge-offs to average loans receivable outstanding during the period                                          |  | 0.01                                 |   |  | 0.00   |   |  | 0.00   |   |  | 0.00   |   |  | 0.01   |  
|                                                                                                               |  |                                      |   |  |       
|Capital Ratios(1):                                                                                             |  |                                      |   |  |        |   |  |        |   |  |        |   |  |        |  
|Tier 1 risk-based capital ratio                                                                                |  | 14.10                                | % |  | 14.18  | % |  | 21.71  | % |  | 22.41  | % |  | 22.12  | %
|Total risk-based capital ratio                                                                                 |  | 14.41                                |   |  | 14.50  |   |  | 22.37  |   |  | 23.15  |   |  | 22.88  |  
|Tier 1 leverage capital ratio                                                                                  |  | 8.21                                 |   |  | 7.35   |   |  | 7.75   |   |  | 8.13   |   |  | 6.78   |  



|(1) | Consolidated asset quality ratios and capital ratios are end of period ratios, except for charge-offs to average net loans. With the exception of
end of period ratios, all ratios are based on average monthly balances during the indicated periods.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Non-performing assets consist of non-performing loans and real estate owned (REO). Non-performing loans consist of non-accrual loans and
accruing loans greater than 90 days delinquent, while REO consists of real estate acquired through foreclosure and real estate acquired by acceptance of a deed in lieu of foreclosure. Potential problem loans include loans where management has some
doubt as to the ability of the borrower to comply with present loan repayment terms.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Interest and yields on tax-exempt loans and securities (tax-exempt for federal income tax purposes) are shown on a fully taxable equivalent basis.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of
interest-bearing liabilities, and net interest margin represents net interest income as a percent of average interest-earning assets.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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WVS FINANCIAL CORP. AND SUBSIDIARY

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENTS

When used in this Annual Report, or, in future filings by WVS Financial Corp. (WVS or the Company) with the
Securities and Exchange Commission, in the Companys press releases or other public or shareholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases will likely
result, are expected to, will continue, is anticipated, estimate, project or similar expressions are intended to identify forward looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties including changes in economic conditions in the Companys market area, changes in policies by regulatory agencies, fluctuations
in interest rates, demand for loans in the Companys market area and competition that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The Company wishes to caution readers
not to place undue reliance on any such forward looking statements, which speak only as of the date made. The Company wishes to advise readers that the factors listed above could affect the Companys financial performance and could cause the
Companys actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.

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

GENERAL

WVS Financial
Corp. is the parent holding company of West View Savings Bank (West View or the Savings Bank). The Company was organized in July 1993 as a Pennsylvania-chartered unitary bank holding company and acquired 100% of the common
stock of the Savings Bank in November 1993.

West View Savings Bank is a Pennsylvania-chartered, FDIC-insured stock savings
bank conducting business from six offices in the North Hills suburbs of Pittsburgh. The Savings Bank converted from the mutual to the stock form of ownership in November 1993. The Savings Bank had no subsidiaries at June 30, 2010.

The operating results of the Company depend primarily upon its net interest income, which is determined by the difference between income
on interest-earning assets, principally loans, mortgage-backed securities and investment securities, and interest expense on interest-bearing liabilities, which consist primarily of deposits and borrowings. The Companys net income is also
affected by its provision for loan losses, as well as the level of its non-interest income, including loan fees and service charges, and its non-interest expenses, such as compensation and employee benefits, income taxes, deposit insurance and
occupancy costs.



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CHANGES IN FINANCIAL CONDITION

Condensed Balance Sheet



|                        |  |                        |         |        |   |         |  |   |            |   |  |       |  
|----------------------- |  | ---------------------- | ------- | ------ | - | ------- |  | - | ---------- | - |  | ----- | -
|                        |  | June 30,               |         | Change |  
|                        |  | 2010                   |         | 2009   |   | Dollars |  |   | Percentage |  
|                        |  | (Dollars in Thousands) |         |        |   |        
|                        |  |                        |         |       
|Cash equivalents        |  | $                      | 2,198   |        | $ | 21,828  |  | $ | (19,630    | ) |  | -89.9 | %
|                        |  |                        |         |       
|Certificates of deposit |  |                        | 8,605   |        |   | 24,719  |  |   | (16,114    | ) |  | -65.2 |  
|                        |  |                        |         |       
|Investments (1)         |  |                        | 281,200 |        |   | 310,700 |  |   | (29,500    | ) |  | -9.5  |  
|                        |  |                        |         |       
|Net loans receivable    |  |                        | 56,315  |        |   | 58,148  |  |   | (1,833     | ) |  | -3.2  |  
|                        |  |                        |         |       
|Total assets            |  |                        | 354,668 |        |   | 419,434 |  |   | (64,766    | ) |  | -15.4 |  
|                        |  |                        |         |       
|Deposits                |  |                        | 201,922 |        |   | 146,315 |  |   | 55,607     |   |  | 38.0  |  
|                        |  |                        |         |       
|Borrowed funds          |  |                        | 122,010 |        |   | 238,879 |  |   | (116,869   | ) |  | -48.9 |  
|                        |  |                        |         |       
|Total liabilities       |  |                        | 326,873 |        |   | 388,311 |  |   | (61,438    | ) |  | -15.8 |  
|                        |  |                        |         |       
|Stockholders equity    |  |                        | 27,795  |        |   | 31,123  |  |   | (3,328     | ) |  | -10.7 |  



|(1) | Includes Federal Home Loan Bank stock.
|--- | --------------------------------------

Cash Equivalents. Cash on hand and interest-earning deposits represent cash equivalents. Cash equivalents decreased $19.6 million
to $2.2 million at June 30, 2010 from $21.8 million at June 30, 2009. The decreased cash equivalents at June 30, 2010 was primarily the result of repaying maturing Federal Reserve Bank short-term borrowings in July 2009. Other changes
in cash equivalents are influenced by the timing of customer transaction account deposits, the redeployment of funds into other earning assets such as investments or loans, and the repayment of Company borrowings.

Certificates of Deposit.Certificates of deposit decreased $16.1 million or 65.2% to $8.6 million at June 30, 2010. As part
of our asset liability and liquidity management strategies, the Company began to redeem maturing FDIC insured certificates of deposit with other financial institutions. Contract terms typically ranged from five to twenty-four months at various
times, risk-adjusted rates earned on certificates of deposit were higher than other investment alternatives at the time of investment and contributed to net interest income. These redemptions/maturities were primarily used to pay down borrowings.

Investments.The Companys investment portfolio is primarily comprised of U.S. Government Agency bonds, corporate
bonds, FHLB stock and mortgaged-backed securities issued by U.S. Government Agencies and private-issuers. See Notes 4 and 5 to the Consolidated Financial Statements for additional information. The Companys investment portfolio decreased $29.5
million or 9.5% to $281.2 million at June 30, 2010 from $310.7 million at June 30, 2009. Mortgage-backed securities decreased $59.1 million or 33.5% to $117.1 million at June 30, 2010. This decrease was due primarily to cash
repayments on U.S. Government Agency floating rate mortgage-backed securities totaling $70.9 million which were partially offset by $15.5 million in purchases of U.S. Government Agency floating rate mortgage-backed securities. Investment securities
increased $29.6 million or 23.9% to $153.2 million at June 30, 2010. This increase was due primarily to purchases of callable U.S. Government Agency securities totaling $67.0 million, investment grade corporate bonds totaling $34.7 million,
U.S. dollar denominated investment grade foreign bonds totaling $5.4 million, investment grade short-term commercial paper totaling $3.0 million and municipal obligations totaling $1.9 million, which were partially offset by early



5



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redemptions and maturities totaling $44.8 million of U.S. Government Agency securities, $23.5 million of investment grade corporate bonds, $5.2 million of municipal obligations, $3.7 million of
U.S. dollar-denominated investment grade foreign bonds and $3.0 million of investment grade short-term commercial paper. Our investment in Federal Home Loan Bank stock remained constant at $10.9 million during the fiscal year. See Quantitative
and Qualitative Disclosures about Market Risk beginning on page 14.

Net Loans Receivable.Net loans receivable
decreased $1.8 million or 3.2% to $56.3 million at June 30, 2010, compared to June 30, 2009. The decrease in net loans receivable during fiscal 2010 was primarily due to increased loan repayments and decreased construction loan
disbursements which were partially offset by increased loan originations. Our single-family residential loan portfolio increased and our consumer loan portfolio decreased in part due to approximately $3.3 million of loans previously classified as
consumer being reclassified as single-family residential mortgages. Residential loan originations remained soft in fiscal 2010 due to the continued weak economic environment, an increase in the inventory of existing houses for sale and fewer
construction loan starts. We expect these trends to continue into fiscal 2011.

Deposits.Total deposits increased
$55.6 million or 38.0% to $201.9 million at June 30, 2010, compared to June 30, 2009. Certificates of deposit increased approximately $52.2 million or 90.8%. As part of our asset/liability management strategy, during fiscal 2010 we began
to issue wholesale CDs with deposit brokers to pay down short-term borrowings. This strategy also allows us to better match maturities within our corporate bond portfolio and to fund our floating rate mortgage-backed securities with CDs
that also float on a monthly basis. At June 30, 2010, the Company had $55.3 million of fully insured brokered certificates of deposit. Transaction accounts increased approximately $2.8 million or 9.0% as we continued to grow our customer base.
Savings accounts increased $2.5 million or 7.5% while money market accounts decreased $1.7 million or 6.9%. See Note 12 to the Consolidated Financial Statements and Quantitative and Qualitative Disclosures on Market Risk for a more detailed
discussion of our use of wholesale CD funding.

Borrowed Funds.Borrowed funds include FHLB short and long term
advances, Federal Reserve Bank short-term borrowings and short-term broker repurchase agreements. Borrowed funds decreased $116.9 million or 48.9% to $122.0 million at June 30, 2010, compared to June 30, 2009. FRB short-term borrowings
decreased $108.8 million and were entirely repaid. FHLB long-term advances decreased $20.6 million or 15.8% to $109.5 million. Other short-term borrowings increased $12.5 million from none at June 30, 2009. The Company repositioned its
borrowing mix as part of its assets/liability management program. In general, due to the overall continued weakness in the economy during fiscal 2010, the Company decided to reduce borrowings and increase its Tier 1 capital ratio.

Stockholders Equity.Total stockholders equity decreased $3.3 million or 10.7% to $27.8 million at June 30, 2010,
compared to June 30, 2009. Accumulated other comprehensive income decreased $2.2 million primarily due to non-credit unrealized holding losses on securities with an other-than-temporary-impairment of $2.3 million, while capital expenditures for
cash dividends and treasury stock purchases totaled $1.3 million and $159 thousand, respectively. See Note 6 to the Consolidated Financial Statements for a discussion of the accounting treatment of other than temporary impairments. These decreases
were partially offset by net income of $372 thousand. Due to the overall reduction in stockholders equity, the Company chose to substantially reduce its borrowings in order to increase its Tier 1 capital ratio. We decreased our borrowings by
reducing our investment and mortgage-backed securities and CDs portfolios through attrition (approximately $40 million) and cash and cash equivalents by about $20 million. Due to these efforts, our Tier 1 capital ratio increased to 8.21% at
June 30, 2010 from 7.35% at June 30, 2009.



6



---

RESULTS OF OPERATIONS

Condensed Statements of Income



|                                     |  |                        |        |   |        |    |        |                        |  |   |        |   |  |                        |       |   |  |   |        |  
|------------------------------------ |  | ---------------------- | ------ | - | ------ | -- | ------ | ---------------------- |  | - | ------ | - |  | ---------------------- | ----- | - |  | - | ------ | -
|                                     |  | Year EndedJune 30,2010 |        |   | Change |    |        | Year EndedJune 30,2009 |  |   | Change |   |  | Year EndedJune 30,2008 |      
|                                     |  | (Dollars in Thousands) |       
|Interest income                      |  | $                      | 12,083 |   |        | ($ | 5,355  | )                      |  | $ | 17,438 |   |  | ($                     | 6,243 | ) |  | $ | 23,681 |  
|                                     |  |                        |        |   |        |    | -30.7  | %                      |  |   |        |   |  |                        | -26.4 | % |  |   |        |  
|                                     |  |                        |        |   |       
|Interest expense                     |  | $                      | 8,481  |   |        | ($ | 1,830  | )                      |  | $ | 10,311 |   |  | ($                     | 4,832 | ) |  | $ | 15,143 |  
|                                     |  |                        |        |   |        |    | -17.7  | %                      |  |   |        |   |  |                        | -31.9 | % |  |   |        |  
|                                     |  |                        |        |   |       
|Net interest income                  |  | $                      | 3,602  |   |        | ($ | 3,525  | )                      |  | $ | 7,127  |   |  | ($                     | 1,411 | ) |  | $ | 8,538  |  
|                                     |  |                        |        |   |        |    | -49.5  | %                      |  |   |        |   |  |                        | -16.5 | % |  |   |        |  
|                                     |  |                        |        |   |       
|(Recovery) provision for loan losses |  | $                      | (11    | ) |        | $  | 283    |                        |  | $ | (294   | ) |  | ($                     | 171   | ) |  | $ | (123   | )
|                                     |  |                        |        |   |        |    | -96.3  | %                      |  |   |        |   |  |                        | 139.0 | % |  |   |        |  
|                                     |  |                        |        |   |       
|Non-interest income                  |  | $                      | 370    |   |        | ($ | 234    | )                      |  | $ | 604    |   |  | $                      | 7     |   |  | $ | 597    |  
|                                     |  |                        |        |   |        |    | -38.7  | %                      |  |   |        |   |  |                        | 1.2   | % |  |   |        |  
|                                     |  |                        |        |   |       
|Non-interest expense                 |  | $                      | 3,624  |   |        | ($ | 171    | )                      |  | $ | 3,795  |   |  | $                      | 159   |   |  | $ | 3,636  |  
|                                     |  |                        |        |   |        |    | -4.5   | %                      |  |   |        |   |  |                        | 4.4   | % |  |   |        |  
|                                     |  |                        |        |   |       
|Income tax expense (benefit)         |  | $                      | (13    | ) |        | ($ | 1,365  | )                      |  | $ | 1,352  |   |  | ($                     | 498   | ) |  | $ | 1,850  |  
|                                     |  |                        |        |   |        |    | -101.0 | %                      |  |   |        |   |  |                        | -26.9 | % |  |   |        |  
|                                     |  |                        |        |   |       
|Net income                           |  | $                      | 372    |   |        | ($ | 2,506  | )                      |  | $ | 2,878  |   |  | ($                     | 894   | ) |  | $ | 3,772  |  
|                                     |  |                        |        |   |        |    | -87.1  | %                      |  |   |        |   |  |                        | -23.7 | % |  |   |        |  

General. WVS reported net income of $372 thousand, $2.9 million and $3.8 million for the
fiscal years ended June 30, 2010, 2009 and 2008, respectively. The $2.5 million decrease in net income during fiscal 2010 was primarily the result of a $3.5 million decrease in net interest income, a $283 decrease in recoveries for loan losses
and a $234 thousand decrease in non-interest income, which were partially offset by a $1.4 million decrease in income tax expense and a $171 thousand decrease in non-interest expense. Earnings per share totaled $0.18 (basic and diluted) for fiscal
2010 as compared to $1.35 (basic and diluted) for fiscal 2009. The decrease in earnings per share was due to a decrease in net income which was partially offset by a reduction in the weighted average number of shares outstanding due to the
Companys stock repurchases during fiscal 2010.



7



---

Average Balances, Net Interest Income and Yields Earned and Rates Paid. The
following average balance sheet table sets forth at and for the periods indicated information on the Company regarding: (1) the total dollar amounts of interest income on interest-earning assets and the resulting average yields; (2) the
total dollar amounts of interest expense on interest-bearing liabilities and the resulting average costs; (3) net interest income; (4) interest rate spread; (5) net interest-earning assets (interest-bearing liabilities); (6) the
net yield earned on interest-earning assets; and (7) the ratio of total interest-earning assets to total interest-bearing liabilities.



|                                                                     |  |                              |         |          |      |                   |  |        |                |  |          |         |                   |   |        |                |        |          |  |                   |         |  |   |        |  |        |  
|-------------------------------------------------------------------- |  | ---------------------------- | ------- | -------- | ---- | ----------------- |  | ------ | -------------- |  | -------- | ------- | ----------------- | - | ------ | -------------- | ------ | -------- |  | ----------------- | ------- |  | - | ------ |  | ------ | -
|                                                                     |  | For the Years Ended June 30, |        
|                                                                     |  | 2010                         |         |          | 2009 |                   |  | 2008   |               
|                                                                     |  | AverageBalance               |         | Interest |      | AverageYield/Rate |  |        | AverageBalance |  | Interest |         | AverageYield/Rate |   |        | AverageBalance |        | Interest |  | AverageYield/Rate |        
|                                                                     |  | (Dollars in Thousands)       |        
|Interest-earning assets:                                             |  |                              |         |          |      |                   |  |        |                |  |          |         |                   |   |        |                |        |          |  |                   |         |  |   |        |  |        |  
|                                                                     |  |                              |         |          |      |                   |  |        |               
|Net loans receivable(1)                                              |  | $                            | 58,895  |          | $    | 3,956             |  | 6.72   | %              |  | $        | 58,744  |                   | $ | 4,050  |                | 6.89   | %        |  | $                 | 59,437  |  | $ | 4,298  |  | 7.23   | %
|Mortgage-backed securities                                           |  |                              | 150,043 |          |      | 2,094             |  | 1.40   |                |  |          | 206,336 |                   |   | 5,762  |                | 2.79   |          |  |                   | 168,124 |  |   | 8,518  |  | 5.07   |  
|Investments - taxable                                                |  |                              | 131,604 |          |      | 5,273             |  | 4.01   |                |  |          | 119,630 |                   |   | 6,339  |                | 5.30   |          |  |                   | 169,019 |  |   | 9,861  |  | 5.83   |  
|Investments - tax-free(2)                                            |  |                              | 6,380   |          |      | 351               |  | 8.07   |                |  |          | 7,598   |                   |   | 425    |                | 8.19   |          |  |                   | 8,575   |  |   | 480    |  | 8.06   |  
|FHLB stock                                                           |  |                              | 10,875  |          |      |                  |  | 0.00   |                |  |          | 10,108  |                   |   | 137    |                | 1.36   |          |  |                   | 9,506   |  |   | 433    |  | 4.56   |  
|Interest-bearing deposits                                            |  |                              | 2,488   |          |      | 3                 |  | 0.12   |                |  |          | 716     |                   |   | 2      |                | 0.28   |          |  |                   | 422     |  |   | 4      |  | 0.95   |  
|Certificates of deposits                                             |  |                              | 14,538  |          |      | 406               |  | 2.79   |                |  |          | 20,287  |                   |   | 723    |                | 3.56   |          |  |                   | 2,468   |  |   | 87     |  | 3.53   |  
|                                                                     |  |                              |         |          |      |                   |  |        |                |  |          |         |                   |   |        |                |        |          |  |                   |         |  |   |        |  |        |  
|Total interest-earning assets                                        |  |                              | 374,823 |          |      | 12,083            |  | 3.27   | %              |  |          | 423,419 |                   |   | 17,438 |                | 4.16   | %        |  |                   | 417,551 |  |   | 23,681 |  | 5.72   | %
|                                                                     |  |                              |         |          |      |                   |  |        |                |  |          |         |                   |   |        |                |        |          |  |                   |         |  |   |        |  |        |  
|Non-interest-earning assets                                          |  |                              | 3,534   |          |      |                   |  |        |                |  |          | 3,424   |                   |   |        |                |        |          |  |                   | 4,239   |  |   |        |  |        |  
|                                                                     |  |                              |         |          |      |                   |  |        |                |  |          |         |                   |   |        |                |        |          |  |                   |         |  |   |        |  |        |  
|Total assets                                                         |  | $                            | 378,357 |          |      |                   |  |        |                |  | $        | 426,843 |                   |   |        |                |        |          |  | $                 | 421,790 |  |   |        |  |        |  
|                                                                     |  |                              |         |          |      |                   |  |        |                |  |          |         |                   |   |        |                |        |          |  |                   |         |  |   |        |  |        |  
|                                                                     |  |                              |         |          |      |                   |  |        |               
|Interest-bearing liabilities:                                        |  |                              |         |          |      |                   |  |        |                |  |          |         |                   |   |        |                |        |          |  |                   |         |  |   |        |  |        |  
|                                                                     |  |                              |         |          |      |                   |  |        |               
|Interest-bearing deposits and escrows                                |  | $                            | 144,057 |          | $    | 1,251             |  | 0.87   | %              |  | $        | 134,887 |                   | $ | 2,164  |                | 1.60   | %        |  | $                 | 140,875 |  | $ | 3,927  |  | 2.79   | %
|FHLB long-term advances                                              |  |                              | 129,163 |          |      | 7,071             |  | 5.47   |                |  |          | 134,002 |                   |   | 7,322  |                | 5.46   |          |  |                   | 134,937 |  |   | 7,397  |  | 5.48   |  
|FHLB short-term advances                                             |  |                              | 2,037   |          |      | 6                 |  | 0.29   |                |  |          | 18,350  |                   |   | 208    |                | 1.13   |          |  |                   | 52,440  |  |   | 1,902  |  | 3.63   |  
|FRB short-term borrowings                                            |  |                              | 52,401  |          |      | 142               |  | 0.27   |                |  |          | 72,826  |                   |   | 299    |                | 0.41   |          |  |                   | 3,195   |  |   | 72     |  | 2.25   |  
|Other short-term borrowings                                          |  |                              | 3,259   |          |      | 11                |  | 0.34   |                |  |          | 18,603  |                   |   | 318    |                | 1.71   |          |  |                   | 41,293  |  |   | 1,845  |  | 4.47   |  
|                                                                     |  |                              |         |          |      |                   |  |        |                |  |          |         |                   |   |        |                |        |          |  |                   |         |  |   |        |  |        |  
|Total interest-bearing liabilities                                   |  |                              | 330,917 |          |      | 8,481             |  | 2.56   | %              |  |          | 378,668 |                   |   | 10,311 |                | 2.72   | %        |  |                   | 372,740 |  |   | 15,143 |  | 4.06   | %
|                                                                     |  |                              |         |          |      |                   |  |        |                |  |          |         |                   |   |        |                |        |          |  |                   |         |  |   |        |  |        |  
|Non-interest-bearing accounts                                        |  |                              | 15,144  |          |      |                   |  |        |                |  |          | 14,191  |                   |   |        |                |        |          |  |                   | 13,787  |  |   |        |  |        |  
|                                                                     |  |                              |         |          |      |                   |  |        |                |  |          |         |                   |   |        |                |        |          |  |                   |         |  |   |        |  |        |  
|Total interest-bearing liabilities and non-interest-bearing accounts |  |                              | 346,061 |          |      |                   |  |        |                |  |          | 392,859 |                   |   |        |                |        |          |  |                   | 386,527 |  |   |        |  |        |  
|Non-interest-bearing liabilities                                     |  |                              | 1,877   |          |      |                   |  |        |                |  |          | 2,546   |                   |   |        |                |        |          |  |                   | 3,915   |  |   |        |  |        |  
|                                                                     |  |                              |         |          |      |                   |  |        |                |  |          |         |                   |   |        |                |        |          |  |                   |         |  |   |        |  |        |  
|Total liabilities                                                    |  |                              | 347,938 |          |      |                   |  |        |                |  |          | 395,405 |                   |   |        |                |        |          |  |                   | 390,442 |  |   |        |  |        |  
|Equity                                                               |  |                              | 30,419  |          |      |                   |  |        |                |  |          | 31,438  |                   |   |        |                |        |          |  |                   | 31,348  |  |   |        |  |        |  
|                                                                     |  |                              |         |          |      |                   |  |        |                |  |          |         |                   |   |        |                |        |          |  |                   |         |  |   |        |  |        |  
|Total liabilities and equity                                         |  | $                            | 378,357 |          |      |                   |  |        |                |  | $        | 426,843 |                   |   |        |                |        |          |  | $                 | 421,790 |  |   |        |  |        |  
|                                                                     |  |                              |         |          |      |                   |  |        |                |  |          |         |                   |   |        |                |        |          |  |                   |         |  |   |        |  |        |  
|Net interest income                                                  |  |                              |         |          | $    | 3,602             |  |        |                |  |          |         |                   | $ | 7,127  |                |        |          |  |                   |         |  | $ | 8,538  |  |        |  
|                                                                     |  |                              |         |          |      |                   |  |        |                |  |          |         |                   |   |        |                |        |          |  |                   |         |  |   |        |  |        |  
|Interest rate spread                                                 |  |                              |         |          |      |                   |  | 0.71   | %              |  |          |         |                   |   |        |                | 1.44   | %        |  |                   |         |  |   |        |  | 1.66   | %
|                                                                     |  |                              |         |          |      |                   |  |        |                |  |          |         |                   |   |        |                |        |          |  |                   |         |  |   |        |  |        |  
|Net yield on interest-earning assets(3)                              |  |                              |         |          |      |                   |  | 1.00   | %              |  |          |         |                   |   |        |                | 1.73   | %        |  |                   |         |  |   |        |  | 2.10   | %
|                                                                     |  |                              |         |          |      |                   |  |        |                |  |          |         |                   |   |        |                |        |          |  |                   |         |  |   |        |  |        |  
|Ratio of interest-earning assets to interest-bearing liabilities     |  |                              |         |          |      |                   |  | 113.27 | %              |  |          |         |                   |   |        |                | 111.82 | %        |  |                   |         |  |   |        |  | 112.02 | %
|                                                                     |  |                              |         |          |      |                   |  |        |                |  |          |         |                   |   |        |                |        |          |  |                   |         |  |   |        |  |        |  



|(1) | Includes non-accrual loans.
|--- | ---------------------------

|(2) | Yields on tax-exempt securities (tax-exempt for federal income tax purposes) are shown on a fully taxable equivalent basis utilizing a calculation
that reflects the tax-exempt coupon, a 20% interest expense disallowance and a federal tax rate of 34%.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Net interest income divided by average interest-earning assets.
|--- | ---------------------------------------------------------------



8



---

Rate/Volume Analysis. The following table describes the extent to which
changes in interest rates and changes in volume of interest-related assets and liabilities have affected the Companys interest income and expense during the periods indicated. For each category of interest-earning assets and interest-bearing
liabilities, information is provided on changes attributable to: (1) changes in volume (change in volume multiplied by prior year rate), (2) changes in rate (change in rate multiplied by prior year volume), and (3) total change in
rate and volume. The combined effect of changes in both rate and volume has been allocated proportionately to the change due to rate and the change due to volume.



|                                      |  |                           |        |   |                         |   |        |                           |        |   |                         |      |  |   |        |   |  |   |        |   |  |   |        |  
|------------------------------------- |  | ------------------------- | ------ | - | ----------------------- | - | ------ | ------------------------- | ------ | - | ----------------------- | ---- |  | - | ------ | - |  | - | ------ | - |  | - | ------ | -
|                                      |  | Year Ended June 30,       |       
|                                      |  | 2010 vs. 2009             |        |   | 2009 vs. 2008           |  
|                                      |  | Increase (Decrease)Due
to |        |   | TotalIncrease(Decrease) |   |        | Increase (Decrease)Due to |        |   | TotalIncrease(Decrease) |     
|                                      |  | Volume                    |        |   | Rate                    |   |        |                           | Volume |   |                         | Rate |  |  
|                                      |  | (Dollars in Thousands)    |       
|Interest-earning assets:              |  |                           |        |   |                         |   |        |                           |        |   |                         |      |  |   |        |   |  |   |        |   |  |   |        |  
|Net loans receivable                  |  | $                         | 6      |   |                         | $ | (100   | )                         |        | $ | (94                     | )    |  | $ | (48    | ) |  | $ | (200   | ) |  | $ | (248   | )
|Mortgage-backed securities            |  |                           | (1,308 | ) |                         |   | (2,360 | )                         |        |   | (3,668                  | )    |  |   | 1,554  |   |  |   | (4,310 | ) |  |   | (2,756 | )
|Investments - taxable                 |  |                           | 462    |   |                         |   | (1,528 | )                         |        |   | (1,066                  | )    |  |   | (3,060 | ) |  |   | (462   | ) |  |   | (3,522 | )
|Investments - tax-free                |  |                           | (65    | ) |                         |   | (9     | )                         |        |   | (74                     | )    |  |   | (66    | ) |  |   | 11     |   |  |   | (55    | )
|FHLB stock                            |  |                           | 9      |   |                         |   | (146   | )                         |        |   | (137                    | )    |  |   | 25     |   |  |   | (321   | ) |  |   | (296   | )
|Interest-bearing deposits             |  |                           | 2      |   |                         |   | (1     | )                         |        |   | 1                       |      |  |   | 2      |   |  |   | (4     | ) |  |   | (2     | )
|Certificates of deposit               |  |                           | (180   | ) |                         |   | (137   | )                         |        |   | (317                    | )    |  |   | 635    |   |  |   | 1      |   |  |   | 636    |  
|                                      |  |                           |        |   |                         |   |        |                           |        |   |                         |      |  |   |        |   |  |   |        |   |  |   |        |  
|Total interest-earning assets         |  |                           | (1,074 | ) |                         |   | (4,281 | )                         |        |   | (5,355                  | )    |  |   | (958   | ) |  |   | (5,285 | ) |  |   | (6,243 | )
|Interest-bearing liabilities:         |  |                           |        |   |                         |   |        |                           |        |   |                         |      |  |   |        |   |  |   |        |   |  |   |        |  
|Interest-bearing deposits and Escrows |  |                           | 189    |   |                         |   | (1,102 | )                         |        |   | (913                    | )    |  |   | (293   | ) |  |   | (1,470 | ) |  |   | (1,763 | )
|FHLB long-term borrowings             |  |                           | (264   | ) |                         |   | 13     |                           |        |   | (251                    | )    |  |   | (48    | ) |  |   | (27    | ) |  |   | (75    | )
|FHLB short-term borrowings            |  |                           | (110   | ) |                         |   | (92    | )                         |        |   | (202                    | )    |  |   | (822   | ) |  |   | (872   | ) |  |   | (1,694 | )
|FRB short-term borrowings             |  |                           | (71    | ) |                         |   | (86    | )                         |        |   | (157                    | )    |  |   | 332    |   |  |   | (105   | ) |  |   | 227    |  
|Other short-term borrowings           |  |                           | (156   | ) |                         |   | (151   | )                         |        |   | (307                    | )    |  |   | (718   | ) |  |   | (809   | ) |  |   | (1,527 | )
|                                      |  |                           |        |   |                         |   |        |                           |        |   |                         |      |  |   |        |   |  |   |        |   |  |   |        |  
|Total interest-bearing liabilities    |  |                           | (412   | ) |                         |   | (1,418 | )                         |        |   | (1,830                  | )    |  |   | (1,549 | ) |  |   | (3,283 | ) |  |   | (4,832 | )
|                                      |  |                           |        |   |                         |   |        |                           |        |   |                         |      |  |   |        |   |  |   |        |   |  |   |        |  
|Change in net interest income         |  | $                         | (662   | ) |                         | $ | (2,863 | )                         |        | $ | (3,525                  | )    |  | $ | 591    |   |  | $ | (2,002 | ) |  | $ | (1,411 | )
|                                      |  |                           |        |   |                         |   |        |                           |        |   |                         |      |  |   |        |   |  |   |        |   |  |   |        |  

Net Interest Income. Net interest income is determined by the Companys interest rate spread
(i.e. the difference between the yields earned on its interest-earning assets and the rates paid on its interest-bearing liabilities) and the relative amounts of interest-earning assets and interest-bearing liabilities. Net interest income decreased
by $3.5 million or 49.5% in fiscal 2010 and $1.4 million or 16.5% in fiscal 2009. The decrease in fiscal 2010 was the result of a $5.4 million or 30.7% decrease in interest and dividend income, which was partially offset by a decrease in interest
expense of $1.8 million or 17.7%. The decrease in fiscal 2009 was the result of a decrease in interest and dividend income of $6.2 million or 26.4%, which was partially offset by a decrease in interest expense of $4.8 million or 31.9%. Both fiscal
years were adversely impacted due to fixed interest costs associated with our legacy FHLB long-term advances. We expect our fiscal 2011 fixed rate interest costs to fall substantially as these legacy long-term FHLB advances continue to mature.

Interest Income. Total interest income decreased by $5.4 million or 30.7% during fiscal 2010 and $6.2 million or 26.4%
during fiscal 2009. The decreases in both fiscal 2009 and 2008 were primarily the result of decreased yields on the Companys interest-earning assets which more than offset the decreases in rates paid on interest-bearing liabilities. During
fiscal 2009, the global economy went into a deep recession and this weakness continued into fiscal 2010. In response to the weak global economy, the worlds central banks implemented a variety of programs including lowering short-term interest
rates and various liquidity programs to help restore investor confidence. The overall impact of the global recession, central bank intervention efforts and market disruptions was markedly lower interest rates, especially in the short and
intermediate term bond markets. Within the Companys investment portfolio, proceeds from early redemptions (i.e., calls) of U.S. Government Agency fixed-rate securities and repayments of U.S. Government Agency floating-rate mortgage-backed
securities were primarily used to reduce borrowings.



9



---

Interest income on mortgage-backed securities decreased $3.7 million or 63.7% during fiscal
2010 and decreased $2.8 million or 32.4% during fiscal 2009. The decrease in fiscal 2010 was primarily attributable to a 139 basis point decrease in the weighted average yield on the Companys mortgage-backed securities portfolio, and a $56.3
million decrease in the average balance of the mortgage-backed securities portfolio. Proceeds from repayments on the mortgage-backed securities were primarily used to reduce borrowings during fiscal 2010. The decrease in fiscal 2009 was primarily
attributable to a 228 basis point decrease in the weighted average yield on the Companys mortgage-backed securities portfolio which was partially offset by a $38.2 million increase in the average balance of mortgage-backed securities
portfolio.

Interest income on investment securities decreased $1.1 million or 16.9% during fiscal 2010 and $3.6 million or
34.6% during fiscal 2009. The decrease in fiscal 2010 was primarily attributable to a 124 basis point decrease in the weighted average yield on the Companys investment securities portfolio which was partially offset by a $10.8 million increase
in the average balance of investments outstanding. The decrease in fiscal 2009 was primarily attributable to a $50.4 million decrease in the average balance of investments outstanding and a 50 basis point decrease in the weighted average yield on
the Companys investment securities portfolio.

Interest income on certificates of deposit decreased $317 thousand or
43.8% during fiscal 2010 and increased $636 thousand or 731.0% during fiscal 2009. The decrease in fiscal 2010 was primarily attributable to a $5.7 million decrease in the average balance of the Companys holding of FDIC insured certificates of
deposit and a 77 basis point decrease in the weighted average yield earned on the Companys certificate of deposit holdings. Proceeds from maturing CDs were primarily used to reduce borrowings during fiscal 2010. The increase in fiscal
2009 was primarily attributable to a $17.8 million increase in the average balance of the Companys holdings of FDIC  insured certificates of deposit and a 3 basis point increase in the weighted average yield earned on the Companys
certificate of deposit holdings.

Dividend income on FHLB stock decreased $137 thousand or 100.0% during fiscal 2010 and $296
thousand or 68.4% during fiscal 2009. The decrease in fiscal 2010 was due to the December 2008 announcement by the FHLB of Pittsburgh suspending the payment of dividends and redemptions of excess capital stock from members. The decrease in fiscal
2009 was primarily attributable to a 320 basis point decrease in the weighted average yield earned on the Companys holding of FHLB stock outstanding, which was partially offset by a $602 thousand increase in the average balance of FHLB stock
outstanding. The FHLBs stated purpose of the 2008 decision is to rebuild retained earnings to ensure adequate regulatory capital.

Interest income on net loans receivable decreased $94 thousand or 2.3% during fiscal 2010 and decreased $248 thousand or 5.8% during
fiscal 2009. The decrease in fiscal 2010 was primarily the result of a 17 basis point decrease in the yield earned on the Companys loan portfolio, which was partially offset by a $151 thousand increase in the average balance of net loans
outstanding. The decrease in fiscal 2009 was primarily the result of a 34 basis point decrease in the yield earned on the Companys loan portfolio, and a $693 thousand decrease in the average balance of net loans outstanding. As part of its
asset/liability management strategy, historically low long-term mortgage rates, weakness in the economy, rising inventories of existing homes available for sale, and lower construction starts throughout our lending area, the Company limited its
origination of longer-term fixed rate loans to mitigate its exposure to a rise in market interest rates and credit risk. The Company continued to offer longer-term fixed rate loans on a correspondent basis during fiscal 2010 and 2009, as well as
offering multi-family and commercial real estate loans, construction loans, land acquisition and development loans, consumer loans, small business and commercial loans. Overall loan demand, and borrower financial capacity, was constrained during
both fiscal 2010 and 2009 due to weakness in the national economy. Management anticipates weakness in the real estate market to continue into fiscal 2011.

Interest Expense. Total interest expense decreased $1.8 million or 17.7% during fiscal 2010 and decreased $4.8 million or 31.9%
during fiscal 2009. The decrease in fiscal 2010 was primarily attributable to a $1.4 million decrease as a result of lower rates paid on interest-bearing liabilities due to lower market interest rates and a benefit of $412 thousand associated with a
decrease in the weighted average balance of interest-bearing liabilities. The decrease in fiscal 2009 was primarily attributable to a $3.3 million decrease as a result of lower rates paid on interest-bearing liabilities due to lower market interest
rates and a $1.5 million benefit associated with a change in the mix of total liabilities towards FRB short-term borrowings.



10



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Interest expense on interest-bearing deposits and escrows decreased $913 thousand or 42.2%
in fiscal 2010 and decreased $1.8 million or 44.9% in fiscal 2009. The decrease in fiscal 2010 was primarily attributable to lower rates paid on time deposits, money market and passbook accounts, and decreased average balances of money market
accounts, which were partially offset by increased average balances of time deposits and passbook accounts. Average rates on time deposits, money markets and passbook accounts decreased by 129, 66 and 27 basis points, respectively. Average balances
of money markets decreased $1.4 million, while average balances of time deposits and passbook accounts increased $7.6 million and $2.0 million, respectively. The decrease in fiscal 2009 was primarily attributable to lower rates paid on time
deposits, money market and passbook accounts, and decreased average balances of time deposits, which were partially offset by increased average balances of money market and passbook accounts. Average rates on time deposits, money market and passbook
accounts decreased by 159, 183, and 8 basis points, respectively. Average balances of time deposits decreased $9.1 million while average balances of money market and passbook accounts increased $2.6 million and $934 thousand, respectively, during
fiscal 2009.

Interest expense on FHLB advances decreased $453 thousand or 6.0% during fiscal 2010 and decreased $1.8 million
or 19.0% during fiscal 2009. The decrease in fiscal 2010 was primarily attributable to decreases in the average balance of FHLB long-term and FHLB short-term advances of $4.8 million and $16.3 million, respectively, and an 84 basis point decrease in
the weighted average rate paid on FHLB short-term advances, which were partially offset by a 1 basis point increase in the weighted average rate paid on FHLB long-term advances. The decrease in fiscal 2009 was primarily attributable to decreases in
the weighted average rate paid on FHLB short-term advances and FHLB long-term advances of 250 and 2 basis points, respectively, and decreases in the average balances of FHLB short-term advances and FHLB long-term advances of $34.1 million and $935
thousand, respectively. The decreases in the average rates on FHLB short-term advances reflects lower short-term market interest rates. Both fiscal years were adversely impacted due to fixed interest costs associated with our legacy FHLB long-term
advances. We expect our fiscal 2011 fixed rate interest costs to fall substantially as these legacy long-term FHLB advances continue to mature.

Interest expense on other short-term borrowings decreased $307 thousand or 96.5% during fiscal 2010, and decreased $1.5 million or 82.8%
during fiscal 2009. The decrease in fiscal 2010 was primarily attributable to a $15.3 million decrease in the average balance of other short-term borrowings outstanding, and a 137 basis point decrease in the weighted average rate paid on other
short-term borrowings. The decrease in fiscal 2009 was primarily attributable to a 276 basis point decrease in the weighted average rate paid on other short-term borrowings and a $22.7 million decrease in the average balance of other short-term
borrowings outstanding. The decrease in the average rate on other short-term borrowings reflects lower short-term market interest rates.

Interest expense on FRB short-term borrowings decreased $157 thousand or 52.5% during fiscal 2010, and increased $227 thousand or 315.3%
during fiscal 2009. The decrease in fiscal 2010 was primarily attributable to a 14 basis point decrease in the weighted average rate paid on FRB short-term borrowings, and a $20.4 million decrease in the average balance of FRB short-term borrowings
outstanding. The increase in fiscal 2009 was primarily attributable to a $69.6 million increase in the average balance of FRB short-term borrowings outstanding, which was partially offset by a 184 basis point decrease in the weighted average rate
paid on FRB short-term borrowings. The decrease in the average rate on FRB short-term borrowings reflects lower short-term market interest rates.

Recovery for Loan Losses. A provision for loan losses is charged to earnings to bring the total allowance to a level considered
adequate by management to absorb potential losses in the portfolio. Managements determination of the adequacy of the allowance is based on periodic evaluations of the loan portfolio considering past experience, current economic conditions,
volume, growth, composition of the loan portfolio and other relevant factors. The Company recorded recoveries of $11 thousand and $294 thousand in fiscal 2010 and 2009, respectively. The recovery for fiscal 2010 was primarily attributable to the
payoff of a non-performing multi-family residential real estate loan which was partially offset by the classification of three single-family residential real estate loans and two home equity lines of credit. The recovery for fiscal 2009 was
primarily attributable to the payoff of one non-performing non-residential real estate loan.



11



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Non-interest Income. Total non-interest income decreased by $234
thousand or 38.7% in fiscal 2010 and increased by $7 thousand or 1.2% in fiscal 2009. The decrease in fiscal 2010 was primarily attributable to a $194 thousand other-than-temporary-impairment credit loss taken on two private-label collateralized
mortgage obligations, and a $40 thousand decrease in service fee income on deposit accounts. The increase in fiscal 2009 was primarily attributable to increases in ATM and debit card fee income which was partially offset by decreases in service fee
income on deposit accounts and a decrease in gains on investment securities sold.

Non-interest Expense.
Total non-interest expense decreased $171 thousand or 4.5% in fiscal 2010, and increased $159 thousand or 4.4% during fiscal 2009. The decrease in fiscal 2010 was primarily attributable to a $141 thousand increase in the FDICs regular
quarterly assessment rates, which were more than offset by decreases in employee related expenses and various other non-interest expenses. The increase in fiscal 2009 was primarily attributable to the Federal Deposit Insurance Corporations
emergency deposit insurance assessment at June 30, 2009 which totaled $149 thousand and increases in the FDICs regular quarterly assessment rates, which were partially offset by decreases in various other non-interest expenses.

Income Taxes. Income taxes decreased $1.4 million or 101.0% during fiscal 2010 and decreased $498
thousand or 26.9% during fiscal 2009. The decrease in both fiscal 2010 and fiscal 2009 were primarily attributable to lower levels of taxable income. State mutual thrift tax expense for both fiscal 2010 and 2009 was favorably impacted by PA
Education Improvement tax credits totaling $32 thousand and $135 thousand, respectively. The Companys combined effective tax rate was -3.6% for the year ended June 30, 2010 and 32.0% for the year ended June 30, 2009.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity is often analyzed by reviewing the cash flow statement. Cash and cash equivalents decreased by $19.6 million
during fiscal 2010 primarily due to $62.7 million of net cash used for financing activities which was partially offset by $42.2 million provided by investing activities and $900 thousand provided by operating activities.

Funds provided by operating activities totaled $900 thousand during fiscal 2010 as compared to $921 thousand during fiscal
2009. Net cash provided by operating activities was primarily comprised of $1.6 million of amortization and accretion of discounts, premiums and deferred loan fees, and $372 thousand of net income, which were partially offset by an $855 thousand
increase in prepaid FDIC insurance premiums.

Funds provided by investing activities totaled $42.2 million
during fiscal 2010 as compared to $24.5 million during fiscal 2009. Primary sources of funds during fiscal 2010 included repayments of investments, mortgage-backed securities and certificates of deposit totaling $80.9 million, $71.0 million and
$25.9 million, respectively, and a decrease in net loans receivable of $1.8 million, which were partially offset by purchases of investments, mortgage-backed securities, certificates of deposits and fixed assets of $112.0 million, $15.5 million,
$9.8 million, and $90 thousand, respectively. Investment purchases were comprised primarily of U.S. Government Agency Step-up notes and investment grade corporate debt obligations. Certificates of deposits purchased ranged in term from twelve to
thirty months.

Funds used for financing activities totaled $62.7 million for fiscal 2010 as compared to $5.4
million in fiscal 2009. Primary uses of funds for fiscal 2010 were a $108.8 million decrease in FRB short-term borrowings, a $20.6 million decrease in FHLB long-term advances, $1.3 million in cash dividends paid on the Companys common stock
and $159 thousand in treasury stock purchases, which were partially offset by a $55.6 million increase in total deposits and a $12.5 million increase in other short-term borrowings. During fiscal 2010, the Company purchased 12,155 shares of Company
common stock for approximately $159 thousand. Management has determined that it currently is maintaining adequate liquidity and continues to match funding sources with lending and investment opportunities.



12



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The Companys primary sources of funds are deposits, repayments on
existing loans, investment portfolio cash flow, funds from operations and funds obtained through various borrowings. At June 30, 2010, the total approved loan commitments outstanding amounted to $1.1 million. At the same date, commitments under
unused letters and lines of credit amounted to $5.4 million and the unadvanced portion of construction loans approximated $10.9 million. Certificates of deposit scheduled to mature in one year or less at June 30, 2010, totaled $97.3 million, of
which $49.5 million are through the CDARS One-Way Buy Program and $5.8 million were other brokered CDs. Management believes that a significant portion of our local maturing deposits will remain with the Company. Management intends to repay a
portion of the maturing wholesale CDs with investment and MBS cash flows during fiscal 2011. The remaining wholesale CDs will either be rolled over or replaced with borrowings depending upon market conditions.

The Companys contractual obligations at June 30, 2010 were as follows:



|                            |  |                                               |  |                 |  |           |  |           |  |                 
|--------------------------- |  | --------------------------------------------- |  | --------------- |  | --------- |  | --------- |  | ----------------
|                            |  | Contractual Obligations(Dollars in
Thousands)
|                            |  | Total                                         |  | Less than1 year |  | 1-3 years |  | 3-5 years |  | More than5 years
|Long-term debt              |  | 109,500                                       |  | 87,000          |  | 5,000     |  | 5,000     |  | 12,500          
|Operating lease obligations |  | 277,077                                       |  | 52,283          |  | 88,127    |  | 80,000    |  | 56,667          
|                            |  |                                               |  |                 |  |           |  |           |  |                 
|                            |  | 386,577                                       |  | 139,283         |  | 93,127    |  | 85,000    |  | 69,167          

See
also Note 15 of the Companys Consolidated Financial Statements.

Historically, the Company used its
sources of funds primarily to meet its ongoing commitments to pay maturing certificates of deposit and savings withdrawals, fund loan commitments and maintain a substantial portfolio of investment securities. The Company has been able to generate
sufficient cash through FHLB advances, other borrowings and through the retail and broker deposit market to provide the cash utilized in investing and financing activities. Management believes that the Company currently has adequate liquidity
available to respond to liquidity demands.

On July 27, 2010, the Companys Board of Directors
declared a cash dividend of $0.16 per share payable on August 26, 2010 to shareholders of record at the close of business on August 16, 2010. Dividends are subject to determination and declaration by the Board of Directors, which take into
account the Companys financial condition, statutory and regulatory restrictions, general economic conditions and other factors. There can be no assurance that dividends will in fact be paid on the common stock in the future or that, if paid,
such dividends will not be reduced or eliminated in future periods.

The Companys ratio of total capital
to risk weighted assets and Tier 1 capital to risk weighted assets were 14.41% and 14.10%, respectively, at June 30, 2010. The Companys ratio of Tier 1 capital to average total assets increased to 8.21% at June 30, 2010 from 7.35% at
June 30, 2009.

Non-performing assets consist of non-accrual loans and real estate owned. A loan is placed
on non-accrual status when, in the judgment of management, the probability of collection of interest is deemed insufficient to warrant further accrual. When a loan is placed on non-accrual status, previously accrued but uncollected interest is
deducted from interest income. The Company normally does not accrue interest on loans past due 90 days or more, however, interest may be accrued if management believes that it will collect on the loan. The Companys non-performing assets at
June 30, 2010 totaled approximately $1.7 million or 0.5% of total assets compared to $953 thousand or 0.2% of total assets at June 30, 2009. Non-performing assets at June 30, 2010 consisted of five single-family real estate loans
totaling $1.3 million, and two home equity lines of credit totaling $359 thousand.

Impact of Inflation and
Changing Prices.The consolidated financial statements of the Company and related notes presented herein have been prepared in accordance with U.S. generally accepted accounting principles which require the measurement of financial condition and
operating results in terms of historical dollars, without considering changes in the relative purchasing power of money over time due to inflation.



13



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Unlike most industrial companies, substantially all of the assets and
liabilities of a financial institution are monetary in nature. As a result, interest rates have a more significant impact on a financial institutions performance than the effects of general levels of inflation. Interest rates do not
necessarily move in the same direction or in the same magnitude as the prices of goods and services since such prices are affected by inflation to a larger degree than interest rates. In the current interest rate environment, liquidity and the
maturity structure of the Companys assets and liabilities are critical to the maintenance of acceptable performance levels.

Recent Accounting and Regulatory Pronouncements. The Companys discussion of recent accounting and regulatory
pronouncements can be found in Note 1 to the Companys Consolidated Financial Statements.

QUANTATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

The Companys primary market risk exposure is interest rate risk and,
to a lesser extent, liquidity risk. All of the Companys transactions are denominated in US dollars with no specific foreign exchange exposure. The Savings Bank has no agricultural loan assets and therefore would not have a specific exposure to
changes in commodity prices. Any impacts that changes in foreign exchange rates and commodity prices would have on interest rates are assumed to be exogenous and will be analyzed on an ex post basis.

Interest rate risk (IRR) is the exposure of a banking organizations financial condition to adverse
movements in interest rates. Accepting this risk can be an important source of profitability and shareholder value, however excessive levels of IRR can pose a significant threat to the Companys earnings and capital base. Accordingly, effective
risk management that maintains IRR at prudent levels is essential to the Companys safety and soundness.

Evaluating a financial institutions exposure to changes in interest rates includes assessing both the adequacy of
the management process used to control IRR and the organizations quantitative level of exposure. When assessing the IRR management process, the Company seeks to ensure that appropriate policies, procedures, management information systems and
internal controls are in place to maintain IRR at prudent levels with consistency and continuity. Evaluating the quantitative level of IRR exposure requires the Company to assess the existing and potential future effects of changes in interest rates
on its consolidated financial condition, including capital adequacy, earnings, liquidity, and, where appropriate, asset quality.

Throughout fiscal 2010, the global economy remained in the worst recession since the end of World War II. Many factors
contributed to the recession, including: the failure, or near failure, of major financial institutions, marked declines in housing sales and prices, significant defaults in mortgage payments (particularly in the subprime sector), disruptions in
global financial market liquidity, declining stock markets and increased volatility in the bond, commodity and equity markets.

As the various markets began to unravel, historical relationships between bonds, commodities and equities continued to
diverge. This divergence created additional market volatility as market participants attempted to rebalance their portfolios. The worlds central banks continued to intervene in order to stabilize markets, at varying times and with varying
degrees of success. The degree of co-ordination and timing between central banks varied due to differing perceptions of the problem and disparate impacts within a particular countrys economy. For example, the U.S. economy began to recover at a
very slow and uneven rate. Domestic unemployment remained high which continued to impact the housing markets. Several governments within the Eurozone have experienced difficulty in managing their fiscal budgets. By contrast, economies in the Far
East have performed relatively well.

Throughout fiscal 2010, the Company adjusted its asset/liability
management tactics in two ways. First, we substantially increased our Tier 1 capital to average assets ratio from 7.35% at June 30, 2009 to 8.21% at June 30, 2010. We accomplished this primarily by reducing both Company assets and
borrowings. With market interest rates at historical lows, we believed that the risks of maintaining a



14



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leveraged balance sheet far exceed the additional potential income that could be earned. Second, we reduced overall borrowings and changed the composition of our wholesale funding sources. We
reduced our overall borrowings by $116.9 million. Short-term borrowings were reduced by $96.3 million and legacy FHLB long-term borrowings were reduced by over $20.5 million. We added two new sources of wholesale funding: the CDARS One-Way Buy
Program and the limited use of other deposit brokers. We believe that the CDARS One-Way Buy Program made financial sense because it allows us to issue CDs that price monthly using the same LIBOR index used by our floating-rate MBS. The CDARS
CDs, along with the other brokered CDs, also allow us to better match cash flow from our maturing corporate bond investments and monthly principal repayments from the MBS portfolio.

Looking ahead, we continue to believe that our net interest income will significantly improve in the second half of
calendar year 2010. Our legacy long-term FHLB advances, taken out a number of years ago when interest rates were higher, will mature as shown below.



|              |  |            |        |                   |      |  
|------------- |  | ---------- | ------ | ----------------- | ---- | -
|Quarter Ended |  | Amount/$MM |        | WeightedAvg. Rate |     
|09/30/10      |  | $          | 25.000 |                   | 5.77 | %
|12/31/10      |  | $          | 35.000 |                   | 5.44 | %
|03/31/11      |  | $          | 10.000 |                   | 4.99 | %
|06/30/11      |  | $          | 17.000 |                   | 5.28 | %

We expect that these legacy long-term FHLB advances will reprice to much lower rates of interest. In addition, interest
revenue on our substantial floating rate mortgage-backed securities portfolio should increase when market interest rates begin to rise.

Financial institutions derive their income primarily from the excess of interest collected over interest paid. The rates
of interest an institution earns on its assets and owes on its liabilities generally are established contractually for a period of time. Since market interest rates change over time, an institution is exposed to lower profit margins (or losses) if
it cannot adapt to interest-rate changes. For example, assume that an institutions assets carry intermediate- or long-term fixed rates and that those assets were funded with short-term liabilities. If market interest rates rise by the time the
short-term liabilities must be refinanced, the increase in the institutions interest expense on its liabilities may not be sufficiently offset if assets continue to earn at the long-term fixed rates. Accordingly, an institutions profits
could decrease on existing assets because the institution will either have lower net interest income or, possibly, net interest expense. Similar risks exist when assets are subject to contractual interest-rate ceilings, or rate sensitive assets are
funded by longer-term, fixed-rate liabilities in a decreasing-rate environment.



15



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During fiscal 2010, the Federal Open Market Committee maintained its
targeted federal funds rate from at a range of 0.00% to 0.25%. The table below shows the targeted federal funds rate and the benchmark two and ten year treasury yields at June 30, 2007, September 30, 2007, December 31,
2007, March 31, 2008, June 30, 2008, September 30, 2008, December 31, 2008, March 31, 2009, June 30, 2009, September 30, 2009, December 31, 2009, March 31,
2010 and June 30, 2010. The difference in yields on the two year and ten year Treasurys is often used to determine the steepness of the yield curve and to assess the term premium of market interest rates.



|                   |  |                       |  |                     |   |  |                      |   |  |                     
|------------------ |  | --------------------- |  | ------------------- | - |  | -------------------- | - |  | --------------------
|                   |  |                       |  | Yield on:           |   |  |                     
|                   |  | Targeted FederalFunds |  | Two (2)YearTreasury |   |  | Ten (10)YearTreasury |   |  | Shape of
Yield
Curve
|                   |  |                       |  |                    
|June 30, 2007      |  | 5.25%                 |  | 4.87                | % |  | 5.03                 | % |  | Slightly positive   
|September 30, 2007 |  | 4.75%                 |  | 3.97                | % |  | 4.59                 | % |  | Moderately positive 
|December 31, 2007  |  | 4.25%                 |  | 3.05                | % |  | 4.04                 | % |  | Positive            
|March 31, 2008     |  | 2.25%                 |  | 1.62                | % |  | 3.45                 | % |  | Positive            
|June 30, 2008      |  | 2.00%                 |  | 2.63                | % |  | 3.99                 | % |  | Positive            
|September 30, 2008 |  | 2.00%                 |  | 2.00                | % |  | 3.85                 | % |  | Positive            
|December 31, 2008  |  | 0.00% to 0.25%        |  | 0.76                | % |  | 2.25                 | % |  | Positive            
|March 31, 2009     |  | 0.00% to 0.25%        |  | 0.81                | % |  | 2.71                 | % |  | Positive            
|June 30, 2009      |  | 0.00% to 0.25%        |  | 1.11                | % |  | 3.53                 | % |  | Positive            
|September 30, 2009 |  | 0.00% to 0.25%        |  | 0.95                | % |  | 3.31                 | % |  | Positive            
|December 31, 2009  |  | 0.00% to 0.25%        |  | 1.14                | % |  | 3.85                 | % |  | Positive            
|March 31, 2010     |  | 0.00% to 0.25%        |  | 1.02                | % |  | 3.84                 | % |  | Positive            
|June 30, 2010      |  | 0.00% to 0.25%        |  | 0.61                | % |  | 2.97                 | % |  | Positive            

These changes in short, intermediate and long-term market interest rates, the changing slope of the Treasury yield curve,
and continued high levels of interest rate volatility have impacted prepayments on the Companys loan, investment and mortgage-backed securities portfolios. The Companys proceeds from repayments on investment securities were used
primarily to purchase U.S. Government Agency Step-up notes, investment-grade corporate bonds, floating-rate U.S. Government agency mortgage-backed securities and FDIC-insured bank certificates of deposit.

Principal repayments on the Companys loan, investment, mortgage-backed securities and certificate of deposit
portfolios for the fiscal year ended June 30, 2010, totaled $18.6 million, $80.9 million, $71.0 million and $25.9 million, respectively. Due to a marked reduction of global interest rates and Treasury yields, high market volatility and the
declining spreads available on investment securities, the Company chose to reduce its overall level of borrowings. This strategy has allowed the Company to improve its capital ratios and liquidity posture while managing overall interest rate risk.

Due to the term structure of market interest rates, historically low long-term mortgage interest rates,
weakness in the economy, an excess supply of existing homes available for sale, and lower levels of housing starts, the Company continued to reduce its portfolio originations of long-term fixed rate mortgages while continuing to offer such loans on
a correspondent basis. The Company also makes available for origination residential mortgage loans with interest rates which adjust pursuant to a designated index, although customer acceptance has been somewhat limited in the Savings Banks
market area. We expect that the housing market will continue to be weak throughout calendar year 2010. The Company will continue to selectively offer commercial real estate, land acquisition and development, and shorter-term construction loans
(primarily on residential properties), and commercial loans on business assets to partially increase interest income while limiting credit and interest rate risk. The Company has also offered higher yielding commercial and small business loans to
existing customers and seasoned prospective customers.



16



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Within the investment and mortgage-backed securities portfolio, the Company
used cash flow from maturities, early redemptions and repayments of investments and mortgage-backed securities to purchase new U.S. Government Agency Step-up Notes, intermediate-term investment grade corporate bonds and fixed and floating rate
U.S. Dollar denominated investment grade foreign bonds in order to provide current income and in response to the world-wide recession and the changing term premiums of market interest rates. This strategy has also helped to better match the
interest-rate and liquidity risks associated with the Savings Banks customers liquidity preference for shorter term deposit products.

During fiscal 2010 principal investment purchases were comprised of: $62.9 million of callable U.S. Government Agency
Step-Up Notes with initial lock-out periods as follows: 0-6 months - $59.9 million with a weighted average yield to call of approximately 2.74%; and 6  12 months - $3.0 million with a weighted average yield to call of approximately 2.40%;
fixed rate investment grade corporate bonds - $33.7 million with a weighted average yield of 2.57%; floating rate U.S. Government Agency CMOs - $15.4 million with a weighted average initial rate of 1.53%; bank certificates of deposit - $9.7
million with a weighted average yield of 1.90%; floating rate U.S. dollar denominated investment grade corporate bonds - $4.7 million with a weighted average yield at purchase of 2.18%; short-term investment grade commercial paper - $3.0 million
with a weighted average yield of 0.37%; callable fixed-rate U.S. Government Agency bonds - $2.1 million with a weighted average yield to call of approximately 4.54%; and floating rate U.S. Government Agency bonds - $2.0 million with an initial
weighted average rate of approximately 2.25%.

Major investment proceeds received during fiscal 2010 were:
mortgage-backed securities - $71.0 million; callable U.S. Government Agency bonds - $44.8 million with a weighted average yield of 3.96%; bank certificates of deposit - $25.9 million with a weighted average yield of 3.34%; investment grade corporate
bonds - $23.1 million with a weighted average yield of 3.77%; tax free municipal bonds - $4.0 million with a weighted average yield of 5.89%; U.S. dollar denominated investment grade foreign bonds - $3.7 million with a weighted average yield of
3.61%; and short-term investment grade commercial paper -$3.0 million with a weighted average yield of 0.37%.

As of June 30, 2010, the implementation of these asset and liability management initiatives resulted in the
following:



| | 1) | $115.0 million or 42.5% of the Companys investment portfolio was comprised of floating rate mortgage-backed securities (including
collateralized mortgage obligations  CMOs) that reprice on a monthly basis;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2) | $83.7 million or 31.0% of the Companys investment portfolio consisted of investment grade fixed-rate corporate bonds with remaining maturities
as follows: 3 months or less - $6.7 million or 8.0%; 3  12 months - $35.5 million or 42.4%; 1  2 years - $16.6 million or 19.8%; 2  3 years - $7.8 million or 9.3%; 3  5 years - $11.5 million or 13.8%; and over 5 years - $5.6
million or 6.7%;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3) | $8.6 million or 2.4% of the Companys total assets consisted of FDIC insured bank certificates of deposit with remaining maturities ranging
from one to eighteen months;
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4) | $4.6 million or 1.7% of the Companys investment portfolio was comprised of fixed-rate callable U.S. Government Agency bonds which are callable
as follows: 3 months or less - $2.0 million; and over 1 year - $2.6 million. These bonds may or may not actually be redeemed prior to maturity (i.e. called) depending upon the level of market interest rates at their respective call dates;
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5) | $970 thousand or 0.4% of the Companys investment portfolio consisted of investment grade floating-rate corporate bonds which will reprice
within three months and will mature within seven months;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6) | An aggregate of $30.8 million or 54.8% of the Companys net loan portfolio had adjustable interest rates or maturities of less than 12 months;
and
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------



| | 7) | The maturity distribution of the Companys borrowings is as follows: 3 months or less - $37.5 million or 30.7%; 3  12 months - $62.0
million or 50.8%; 1  3 years - $5.0 million or 4.1%; 3  5 years - $5.0 million or 4.1%; and over 5 years - $12.5 million or 10.3%.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The effect of interest rate changes on a financial institutions assets and liabilities may be analyzed by examining
the interest rate sensitivity of the assets and liabilities and by monitoring an institutions interest rate sensitivity gap. An asset or liability is said to be interest rate sensitive within a specific time period if
it



17



---

will mature or reprice within a given time period. A gap is considered positive (negative) when the amount of rate sensitive assets (liabilities) exceeds the amount of rate sensitive liabilities
(assets). During a period of falling interest rates, a negative gap would tend to result in an increase in net interest income. During a period of rising interest rates, a positive gap would tend to result in an increase in net interest income.

As part of its asset/liability management strategy, the Company maintained an asset sensitive financial
position due to unusually low market interest rates. An asset sensitive financial position may benefit earnings during a period of rising interest rates and reduce earnings during a period of declining interest rates.

The following table sets forth certain information at the dates indicated relating to the Companys interest-earning
assets and interest-bearing liabilities which are estimated to mature or are scheduled to reprice within one year.



|                                                                     |  |                        |         |   |      |   |         |      |  |   |         |  
|-------------------------------------------------------------------- |  | ---------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                                     |  | June 30,               |        
|                                                                     |  | 2010                   |         |   | 2009 |   |         | 2008 | 
|                                                                     |  | (Dollars in Thousands) |        
|Interest-earning assets maturing or repricing within one year        |  | $                      | 243,519 |   |      | $ | 326,316 |      |  | $ | 377,916 |  
|Interest-bearing liabilities maturing or repricing within one year   |  |                        | 248,813 |   |      |   | 228,295 |      |  |   | 207,133 |  
|                                                                     |  |                        |         |   |      |   |         |      |  |   |         |  
|                                                                     |  |                        |        
|Interest sensitivity gap                                             |  | $                      | (5,294  | ) |      | $ | 98,021  |      |  | $ | 170,783 |  
|                                                                     |  |                        |         |   |      |   |         |      |  |   |         |  
|Interest sensitivity gap as a percentage of total assets             |  |                        | -1.5    | % |      |   | 23.37   | %    |  |   | 40.36   | %
|Ratio of assets to liabilities maturing or repricing within one year |  |                        | 97.87   | % |      |   | 142.94  | %    |  |   | 182.45  | %

During
fiscal 2010, the Company managed its one year interest sensitivity gap by: (1) Repaying $108.8 million of maturing FRB short-term debt; (2) Repaying $20.6 million of maturing legacy FHLB long-term debt; (3) Issuing $43.0 million of
floating rate CDARS CDs to match the LIBOR index used on floating rate MBS; (4) Issuing $6.5 million of fixed rate CDARS CDs to align corporate bond maturities and expected MBS cashflows; and (5) Issuing $5.8 million of other fixed rate
brokered CDs at rates generally below those offered in our local market.



18



---

The following table illustrates the Companys estimated stressed
cumulative repricing gap  the difference between the amount of interest-earning assets and interest-bearing liabilities expected to reprice at a given point in time  at June 30, 2010. The table estimates the impact of an upward or
downward change in market interest rates of 100 and 200 basis points.

Cumulative Stressed Repricing Gap



|                      |  |                        |        |   |         |   |         |          |  |   |          |   |  |          |        |   |          |   |        |           |  |   |        |   |  |   |        |  
|--------------------- |  | ---------------------- | ------ | - | ------- | - | ------- | -------- |  | - | -------- | - |  | -------- | ------ | - | -------- | - | ------ | --------- |  | - | ------ | - |  | - | ------ | -
|                      |  | Month 3                |        |   | Month 6 |   |         | Month 12 |  |   | Month 24 |   |  | Month 36 |        |   | Month 60 |   |        | Long Term | 
|                      |  | (Dollars in Thousands) |       
|Base Case Up 200 bp   |  |                        |        |   |         |   |         |          |  |   |          |   |  |          |        |   |          |   |        |           |  |   |        |   |  |   |        |  
|Cummulative Gap ($s) |  | $                      | 23,041 |   |         | $ | (18,225 | )        |  | $ | (13,805  | ) |  | $        | 24,265 |   |          | $ | 34,891 |           |  | $ | 40,666 |   |  | $ | 28,000 |  
|% of Total Assets     |  |                        | 6.5    | % |         |   | -5.1    | %        |  |   | -3.9     | % |  |          | 6.8    | % |          |   | 9.8    | %         |  |   | 11.4   | % |  |   | 7.9    | %
|Base Case Up 100 bp   |  |                        |        |   |         |   |         |          |  |   |          |   |  |          |        |   |          |   |        |           |  |   |        |   |  |   |        |  
|Cummulative Gap ($s) |  | $                      | 25,567 |   |         | $ | (16,955 | )        |  | $ | (11,121  | ) |  | $        | 25,809 |   |          | $ | 36,513 |           |  | $ | 42,352 |   |  | $ | 28,000 |  
|% of Total Assets     |  |                        | 7.2    | % |         |   | -4.8    | %        |  |   | -3.1     | % |  |          | 7.3    | % |          |   | 10.3   | %         |  |   | 11.9   | % |  |   | 7.9    | %
|Base Case No Change   |  |                        |        |   |         |   |         |          |  |   |          |   |  |          |        |   |          |   |        |           |  |   |        |   |  |   |        |  
|Cummulative Gap ($s) |  | $                      | 27,525 |   |         | $ | (12,082 | )        |  | $ | (5,294   | ) |  | $        | 32,241 |   |          | $ | 43,755 |           |  | $ | 49,277 |   |  | $ | 28,000 |  
|% of Total Assets     |  |                        | 7.7    | % |         |   | -3.4    | %        |  |   | -1.5     | % |  |          | 9.1    | % |          |   | 12.3   | %         |  |   | 13.9   | % |  |   | 7.9    | %
|Base Case Down 100 bp |  |                        |        |   |         |   |         |          |  |   |          |   |  |          |        |   |          |   |        |           |  |   |        |   |  |   |        |  
|Cummulative Gap ($s) |  | $                      | 27,898 |   |         | $ | (9,296  | )        |  | $ | 7,983    |   |  | $        | 38,838 |   |          | $ | 45,240 |           |  | $ | 49,530 |   |  | $ | 28,000 |  
|% of Total Assets     |  |                        | 7.8    | % |         |   | -2.6    | %        |  |   | 2.2      | % |  |          | 10.9   | % |          |   | 12.7   | %         |  |   | 13.9   | % |  |   | 7.9    | %
|Base Case Down 200 bp |  |                        |        |   |         |   |         |          |  |   |          |   |  |          |        |   |          |   |        |           |  |   |        |   |  |   |        |  
|Cummulative Gap ($s) |  | $                      | 43,034 |   |         | $ | 32.895  |          |  | $ | 27,332   |   |  | $        | 39,236 |   |          | $ | 45,577 |           |  | $ | 49,739 |   |  | $ | 28,000 |  
|% of Total Assets     |  |                        | 12.1   | % |         |   | 9.2     | %        |  |   | 7.7      | % |  |          | 11.0   | % |          |   | 12.8   | %         |  |   | 14.0   | % |  |   | 7.9    | %

The
Company utilizes an income simulation model to measure interest rate risk and to manage interest rate sensitivity. The Company believes that income simulation modeling may enable the Company to better estimate the possible effects on net interest
income due to changing market interest rates. Other key model parameters include: estimated prepayment rates on the Companys loan, mortgage-backed securities and investment portfolios; savings decay rate assumptions; and the repayment terms
and embedded options of the Companys borrowings.



19



---

The following table presents the simulated impact of a 100 and 200 basis
point upward or downward (parallel) shift in market interest rates on net interest income, return on average equity, return on average assets and the market value of portfolio equity at June 30, 2010. This analysis was done assuming that the
interest-earning assets will average approximately $303 million and $204 million over a projected twelve and twenty-four month period, respectively, for the estimated impact on change in net interest income, return on average equity and return on
average assets. The estimated changes in market value of equity were calculated using balance sheet levels at June 30, 2010. Actual future results could differ materially from our estimates primarily due to unknown future interest rate changes
and the level of prepayments on our investment and loan portfolios and future FDIC regular and special assessments.

Analysis of Sensitivity to Changes in Market Interest Rates



|                                      |  |                                                              |   |  |               |   |  |      |   |  |      |   |  |      |   |  |   |        |   |  |   |        |   |  |   |        |   |  |   |        |   |  |   |        |  
|------------------------------------- |  | ------------------------------------------------------------ | - |  | ------------- | - |  | ---- | - |  | ---- | - |  | ---- | - |  | - | ------ | - |  | - | ------ | - |  | - | ------ | - |  | - | ------ | - |  | - | ------ | -
|                                      |  | Twelve Month Forward Modeled Change in Market Interest Rates |  
|                                      |  | June 30, 2011                                                |   |  | June 30, 2010 |  
|Estimated impact on:                  |  | -200                                                         |   |  | -100          |   |  | 0    |   |  | +100 |   |  | +200 |   |  |   | -200   |   |  |   | -100   |   |  |   | 0      |   |  |   | +100   |   |  |   | +200   |  
|                                      |  |                                                              |   |  |               |   |  |      |   |  |      |   |  |      |   |  |   |        |   |  |   |        |   |  |   |        |   |  |   |        |   |  |   |        |  
|                                      |  |                                                              |   |  |               |   |  |      |   | 
|Change in net interest income         |  | -10.2                                                        | % |  | -8.1          | % |  |     |   |  | 8.5  | % |  | 15.8 | % |  |   | -13.9  | % |  |   | -4.5   | % |  |   |       |   |  |   | 4.3    | % |  |   | 10.5   | %
|Return on average equity              |  | 3.77                                                         | % |  | 4.00          | % |  | 5.12 | % |  | 6.31 | % |  | 7.24 | % |  |   | 3.17   | % |  |   | 4.48   | % |  |   | 5.10   | % |  |   | 5.69   | % |  |   | 6.52   | %
|Return on average assets              |  | 0.48                                                         | % |  | 0.52          | % |  | 0.67 | % |  | 0.84 | % |  | 0.98 | % |  |   | 0.29   | % |  |   | 0.42   | % |  |   | 0.48   | % |  |   | 0.53   | % |  |   | 0.61   | %
|                                      |  |                                                              |   |  |               |   |  |      |   | 
|Market value of equity (in thousands) |  |                                                              |   |  |               |   |  |      |   |  |      |   |  |      |   |  | $ | 24,192 |   |  | $ | 23,714 |   |  | $ | 23,806 |   |  | $ | 24,034 |   |  | $ | 22,183 |  

The
table below provides information about the Companys anticipated transactions comprised of firm loan commitments and other commitments, including undisbursed letters and lines of credit. The Company used no derivative financial instruments to
hedge such anticipated transactions as of June 30, 2010.



|                                               |  |                        |        |  
|---------------------------------------------- |  | ---------------------- | ------ | -
|Anticipated
Transactions                       | 
|                                               |  | (Dollars in Thousands) |       
|Undisbursed construction and development loans |  |                        |        |  
|Fixed rate                                     |  | $                      | 4,986  |  
|                                               |  |                        | 6.64   | %
|                                               | 
|Adjustable rate                                |  | $                      | 5,915  |  
|                                               |  |                        | 4.57   | %
|                                               | 
|Undisbursed lines of credit                    |  |                        |        |  
|Adjustable rate                                |  | $                      | 4,972  |  
|                                               |  |                        | 3.76   | %
|                                               | 
|Loan origination commitments                   |  |                        |        |  
|Fixed rate                                     |  | $                      | 608    |  
|                                               |  |                        | 6.50   | %
|                                               | 
|Adjustable rate                                |  | $                      | 540    |  
|                                               |  |                        | 4.44   | %
|Letters of credit                              |  |                        |        |  
|Adjustable rate                                |  | $                      | 430    |  
|                                               |  |                        | 4.25   | %
|                                               |  |                        |        |  
|                                               |  | $                      | 17,451 |  
|                                               |  |                        |        |  



20



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LOGO

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

WVS Financial Corp.

We have audited the accompanying consolidated balance sheet of WVS Financial Corp. and subsidiary as of June 30, 2010
and 2009, and the related consolidated statements of income, stockholders equity, and cash flows for each of the years in the three-year period ended June 30, 2010. These consolidated financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of WVS Financial Corp. and subsidiary as of June 30, 2010 and 2009, and the consolidated results of their operations and their cash flows for each of the three years in the
period ended June 30, 2010, in conformity with U.S. generally accepted accounting principles.

We have
also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), WVS Financial Corp. and subsidiarys internal control over financial reporting as of June 30, 2010, based on criteria
established in Internal Control  Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated September 14, 2010, expressed an unqualified opinion on the effectiveness of WVS
Financial Corporations internal control over financial reporting.

/s/ S. R. Snodgrass, A.C.

Wexford, PA

September 14, 2010

S.R. Snodgrass, A.C. * 2100 Corporate Drive, Suite 400 * Wexford, Pennsylvania 15090-8399 * Phone: (724) 934-0344 * Facsimile:
(724) 934-0345



21



---

LOGO

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

WVS Financial Corp.

We have audited WVS Financial Corp. and subsidiarys internal control over financial reporting as of June 30,
2010, based on criteria established in Internal Control  Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission. WVS Financial Corp. management is responsible for maintaining effective
internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report on Managements Assessment of Internal Control Over Financial Reporting. Our
responsibility is to express an opinion on the Companys internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of
internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such
other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A companys internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management
and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial
statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or
detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

In our opinion, WVS Financial Corp. maintained, in all material respects,
effective internal control over financial reporting as of June 30, 2010, based on criteria established in Internal Control  Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the Audit Report of WVS Financial Corp. and our report dated September 14, 2010, expressed an unqualified opinion.

/s/ S. R. Snodgrass, A.C.

Wexford, PA

September 14, 2010

S.R. Snodgrass, A.C. * 2100 Corporate Drive, Suite 400 * Wexford, Pennsylvania 15090-8399 * Phone: (724) 934-0344 * Facsimile:
(724) 934-0345



22



---

WVS FINANCIAL CORP.

CONSOLIDATED BALANCE SHEET

(In thousands, except per share data)



|                                                                                     |  |          |         |   |      |   |         |  
|------------------------------------------------------------------------------------ |  | -------- | ------- | - | ---- | - | ------- | -
|                                                                                     |  | June 30, |        
|                                                                                     |  | 2010     |         |   | 2009 |  
|ASSETS                                                                               |  |          |         |   |      |   |         |  
|Cash and due from banks                                                              |  | $        | 438     |   |      | $ | 522     |  
|Interest-earning demand deposits                                                     |  |          | 1,760   |   |      |   | 21,306  |  
|                                                                                     |  |          |         |   |      |   |         |  
|Total cash and cash equivalents                                                      |  |          | 2,198   |   |      |   | 21,828  |  
|Certificates of deposit                                                              |  |          | 8,605   |   |      |   | 24,719  |  
|Investment securities available for sale (amortized cost of $0 and $500)             |  |          |        |   |      |   | 493     |  
|Investment securities held to maturity (market value of $157,379 and $124,366)       |  |          | 153,193 |   |      |   | 123,128 |  
|Mortgage-backed securities available for sale (amortized cost of $2,019 and $2,062)  |  |          | 2,146   |   |      |   | 2,075   |  
|Mortgage-backed securities held to maturity (market value of $110,443 and $166,695)  |  |          | 114,986 |   |      |   | 174,129 |  
|Net loans receivable (allowance for loan losses of $645 and $662)                    |  |          | 56,315  |   |      |   | 58,148  |  
|Accrued interest receivable                                                          |  |          | 2,430   |   |      |   | 2,347   |  
|Federal Home Loan Bank stock, at cost                                                |  |          | 10,875  |   |      |   | 10,875  |  
|Premises and equipment                                                               |  |          | 679     |   |      |   | 692     |  
|Prepaid FDIC insurance premium                                                       |  |          | 855     |   |      |   |        |  
|Deferred tax assets (net)                                                            |  |          | 1,533   |   |      |   | 277     |  
|Other assets                                                                         |  |          | 853     |   |      |   | 723     |  
|                                                                                     |  |          |         |   |      |   |         |  
|                                                                                     |  |         
|TOTAL ASSETS                                                                         |  | $        | 354,668 |   |      | $ | 419,434 |  
|                                                                                     |  |          |         |   |      |   |         |  
|                                                                                     |  |         
|LIABILITIES                                                                          |  |          |         |   |      |   |         |  
|Deposits                                                                             |  | $        | 201,922 |   |      | $ | 146,315 |  
|Federal Home Loan Bank advances: long-term                                           |  |          | 109,500 |   |      |   | 130,079 |  
|FRB short-term borrowings                                                            |  |          |        |   |      |   | 108,800 |  
|Other short-term borrowings                                                          |  |          | 12,510  |   |      |   |        |  
|Accrued interest payable                                                             |  |          | 837     |   |      |   | 1,151   |  
|Other liabilities                                                                    |  |          | 2,104   |   |      |   | 1,966   |  
|                                                                                     |  |          |         |   |      |   |         |  
|TOTAL LIABILITIES                                                                    |  |          | 326,873 |   |      |   | 388,311 |  
|                                                                                     |  |          |         |   |      |   |         |  
|                                                                                     |  |         
|STOCKHOLDERS EQUITY                                                                 |  |          |         |   |      |   |         |  
|Preferred stock, no par value; 5,000,000 shares authorized; none outstanding         |  |          |        |   |      |   |        |  
|Common stock, par value $0.01; 10,000,000 shares authorized; 3,805,636 shares issued |  |          | 38      |   |      |   | 38      |  
|Additional paid-in capital                                                           |  |          | 21,415  |   |      |   | 21,392  |  
|Treasury stock (1,747,706 and 1,735,551 shares at cost)                              |  |          | (26,690 | ) |      |   | (26,531 | )
|Retained earnings - substantially restricted                                         |  |          | 35,270  |   |      |   | 36,220  |  
|Accumulated other comprehensive income (loss)                                        |  |          | (2,238  | ) |      |   | 4       |  
|                                                                                     |  |          |         |   |      |   |         |  
|TOTAL STOCKHOLDERS EQUITY                                                           |  |          | 27,795  |   |      |   | 31,123  |  
|                                                                                     |  |          |         |   |      |   |         |  
|                                                                                     |  |         
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                           |  | $        | 354,668 |   |      | $ | 419,434 |  
|                                                                                     |  |          |         |   |      |   |         |  

See accompanying notes to the consolidated financial statements.



23



---

WVS FINANCIAL CORP.

CONSOLIDATED STATEMENT OF INCOME

(In thousands, except per share data)



|                                                                        |  |                     |           |   |      |   |           |      |  |   |           |  
|----------------------------------------------------------------------- |  | ------------------- | --------- | - | ---- | - | --------- | ---- |  | - | --------- | -
|                                                                        |  | Year Ended June 30, |          
|                                                                        |  | 2010                |           |   | 2009 |   |           | 2008 | 
|INTEREST AND DIVIDEND INCOME                                            |  |                     |           |   |      |   |           |      |  |   |           |  
|Loans                                                                   |  | $                   | 3,956     |   |      | $ | 4,050     |      |  | $ | 4,298     |  
|Investment securities                                                   |  |                     | 5,624     |   |      |   | 6,764     |      |  |   | 10,341    |  
|Mortgage-backed securities                                              |  |                     | 2,094     |   |      |   | 5,762     |      |  |   | 8,518     |  
|Certificates of deposit                                                 |  |                     | 406       |   |      |   | 723       |      |  |   | 87        |  
|Interest-earning demand deposits                                        |  |                     | 3         |   |      |   | 2         |      |  |   | 4         |  
|Federal Home Loan Bank stock                                            |  |                     |          |   |      |   | 137       |      |  |   | 433       |  
|                                                                        |  |                     |           |   |      |   |           |      |  |   |           |  
|Total interest and dividend income                                      |  |                     | 12,083    |   |      |   | 17,438    |      |  |   | 23,681    |  
|                                                                        |  |                     |           |   |      |   |           |      |  |   |           |  
|                                                                        |  |                     |          
|INTEREST EXPENSE                                                        |  |                     |           |   |      |   |           |      |  |   |           |  
|Deposits                                                                |  |                     | 1,251     |   |      |   | 2,164     |      |  |   | 3,927     |  
|Federal Home Loan Bank advances                                         |  |                     | 7,077     |   |      |   | 7,530     |      |  |   | 9,299     |  
|FRB short-term borrowings                                               |  |                     | 142       |   |      |   | 299       |      |  |   | 72        |  
|Other short-term borrowings                                             |  |                     | 11        |   |      |   | 318       |      |  |   | 1,845     |  
|                                                                        |  |                     |           |   |      |   |           |      |  |   |           |  
|Total interest expense                                                  |  |                     | 8,481     |   |      |   | 10,311    |      |  |   | 15,143    |  
|                                                                        |  |                     |           |   |      |   |           |      |  |   |           |  
|                                                                        |  |                     |          
|NET INTEREST INCOME                                                     |  |                     | 3,602     |   |      |   | 7,127     |      |  |   | 8,538     |  
|Recovery for loan losses                                                |  |                     | (11       | ) |      |   | (294      | )    |  |   | (123      | )
|                                                                        |  |                     |           |   |      |   |           |      |  |   |           |  
|NET INTEREST INCOME AFTER RECOVERY FOR LOAN LOSSES                      |  |                     | 3,613     |   |      |   | 7,421     |      |  |   | 8,661     |  
|                                                                        |  |                     |           |   |      |   |           |      |  |   |           |  
|                                                                        |  |                     |          
|NONINTEREST INCOME                                                      |  |                     |           |   |      |   |           |      |  |   |           |  
|Service charges on deposits                                             |  |                     | 278       |   |      |   | 318       |      |  |   | 325       |  
|Gains on trading assets                                                 |  |                     | 16        |   |      |   |          |      |  |   |          |  
|Investment securities gains                                             |  |                     | 1         |   |      |   |          |      |  |   | 7         |  
|Other than temporary impairment losses                                  |  |                     | (3,712    | ) |      |   |          |      |  |   |          |  
|Portion of loss recognized in other comprehensive income (before taxes) |  |                     | 3,518     |   |      |   |          |      |  |   |          |  
|                                                                        |  |                     |           |   |      |   |           |      |  |   |           |  
|Net impairment loss recognized in earnings                              |  |                     | (194      | ) |      |   |          |      |  |   |          |  
|Other                                                                   |  |                     | 269       |   |      |   | 286       |      |  |   | 265       |  
|                                                                        |  |                     |           |   |      |   |           |      |  |   |           |  
|Total noninterest income                                                |  |                     | 370       |   |      |   | 604       |      |  |   | 597       |  
|                                                                        |  |                     |           |   |      |   |           |      |  |   |           |  
|                                                                        |  |                     |          
|NONINTEREST EXPENSE                                                     |  |                     |           |   |      |   |           |      |  |   |           |  
|Salaries and employee benefits                                          |  |                     | 1,945     |   |      |   | 2,084     |      |  |   | 2,090     |  
|Occupancy and equipment                                                 |  |                     | 322       |   |      |   | 332       |      |  |   | 351       |  
|Data processing                                                         |  |                     | 243       |   |      |   | 248       |      |  |   | 252       |  
|Correspondent bank charges                                              |  |                     | 93        |   |      |   | 97        |      |  |   | 103       |  
|Deposit insurance premium                                               |  |                     | 343       |   |      |   | 202       |      |  |   | 18        |  
|Other                                                                   |  |                     | 678       |   |      |   | 832       |      |  |   | 822       |  
|                                                                        |  |                     |           |   |      |   |           |      |  |   |           |  
|Total noninterest expense                                               |  |                     | 3,624     |   |      |   | 3,795     |      |  |   | 3,636     |  
|                                                                        |  |                     |           |   |      |   |           |      |  |   |           |  
|                                                                        |  |                     |          
|Income before income taxes                                              |  |                     | 359       |   |      |   | 4,230     |      |  |   | 5,622     |  
|                                                                        |  |                     |          
|Income tax expense (benefit)                                            |  |                     | (13       | ) |      |   | 1,352     |      |  |   | 1,850     |  
|                                                                        |  |                     |           |   |      |   |           |      |  |   |           |  
|                                                                        |  |                     |          
|NET INCOME                                                              |  | $                   | 372       |   |      | $ | 2,878     |      |  | $ | 3,772     |  
|                                                                        |  |                     |           |   |      |   |           |      |  |   |           |  
|                                                                        |  |                     |          
|EARNINGS PER SHARE:                                                     |  |                     |           |   |      |   |           |      |  |   |           |  
|Basic                                                                   |  | $                   | 0.18      |   |      | $ | 1.35      |      |  | $ | 1.67      |  
|Diluted                                                                 |  |                     | 0.18      |   |      |   | 1.35      |      |  |   | 1.67      |  
|                                                                        |  |                     |          
|AVERAGE SHARES OUTSTANDING:                                             |  |                     |           |   |      |   |           |      |  |   |           |  
|Basic                                                                   |  |                     | 2,066,335 |   |      |   | 2,133,234 |      |  |   | 2,252,604 |  
|Diluted                                                                 |  |                     | 2,066,335 |   |      |   | 2,133,308 |      |  |   | 2,252,906 |  

See
accompanying notes to the consolidated financial statements.



24



---

WVS FINANCIAL CORP.

CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY

(In thousands, except per share data)



|                                                                                                   |  |             |    |                          |   |               |  |   |                                          |   |  |                                            |        |   |       |   |        |   |  |   |        |  
|-------------------------------------------------------------------------------------------------- |  | ----------- | -- | ------------------------ | - | ------------- |  | - | ---------------------------------------- | - |  | ------------------------------------------ | ------ | - | ----- | - | ------ | - |  | - | ------ | -
|                                                                                                   |  | CommonStock |    | AdditionalPaid-InCapital |   | TreasuryStock |  |   | RetainedEarnings-SubstantiallyRestricted |   |  | AccumulatedOtherComprehensiveIncome (Loss) |        |   | Total |  
|                                                                                                   |  |             |    |                          |   |              
|Balance June 30, 2007                                                                              |  | $           | 38 |                          | $ | 21,136        |  | $ | (22,286                                  | ) |  | $                                          | 32,382 |   |       | $ | 23     |   |  | $ | 31,293 |  
|                                                                                                   |  |             |    |                          |   |              
|Net income                                                                                         |  |             |    |                          |   |               |  |   |                                          |   |  |                                            | 3,772  |   |       |   |        |   |  |   | 3,772  |  
|Other comprehensive income:                                                                        |  |             |    |                          |   |               |  |   |                                          |   |  |                                            |        |   |       |   |        |   |  |   |        |  
|Unrealized holding gain on securities, net of income tax effect of $21                             |  |             |    |                          |   |               |  |   |                                          |   |  |                                            |        |   |       |   | 41     |   |  |   | 41     |  
|                                                                                                   |  |             |    |                          |   |               |  |   |                                          |   |  |                                            |        |   |       |   |        |   |  |   |        |  
|Comprehensive income                                                                               |  |             |    |                          |   |               |  |   |                                          |   |  |                                            |        |   |       |   |        |   |  |   | 3,813  |  
|Exercise of stock options (15,300)                                                                 |  |             |    |                          |   | 235           |  |   |                                          |   |  |                                            |        |   |       |   |        |   |  |   | 235    |  
|Purchase of treasury stock (107,376)                                                               |  |             |    |                          |   |               |  |   | (1,755                                   | ) |  |                                            |        |   |       |   |        |   |  |   | (1,755 | )
|Cash dividends declared ($0.64 per share)                                                          |  |             |    |                          |   |               |  |   |                                          |   |  |                                            | (1,442 | ) |       |   |        |   |  |   | (1,442 | )
|Other, net                                                                                         |  |             |    |                          |   | 4             |  |   |                                          |   |  |                                            |        |   |       |   |        |   |  |   | 4      |  
|                                                                                                   |  |             |    |                          |   |               |  |   |                                          |   |  |                                            |        |   |       |   |        |   |  |   |        |  
|                                                                                                   |  |             |    |                          |   |              
|Balance June 30, 2008                                                                              |  |             | 38 |                          |   | 21,375        |  |   | (24,041                                  | ) |  |                                            | 34,712 |   |       |   | 64     |   |  |   | 32,148 |  
|                                                                                                   |  |             |    |                          |   |              
|Net income                                                                                         |  |             |    |                          |   |               |  |   |                                          |   |  |                                            | 2,878  |   |       |   |        |   |  |   | 2,878  |  
|Other comprehensive income:                                                                        |  |             |    |                          |   |               |  |   |                                          |   |  |                                            |        |   |       |   |        |   |  |   |        |  
|Unrealized holding loss on securities, net of income tax effect of ($31)                           |  |             |    |                          |   |               |  |   |                                          |   |  |                                            |        |   |       |   | (60    | ) |  |   | (60    | )
|                                                                                                   |  |             |    |                          |   |               |  |   |                                          |   |  |                                            |        |   |       |   |        |   |  |   |        |  
|Comprehensive income                                                                               |  |             |    |                          |   |               |  |   |                                          |   |  |                                            |        |   |       |   |        |   |  |   | 2,818  |  
|Expense of stock options awarded                                                                   |  |             |   |                          |   | 16            |  |   |                                          |   |  |                                            |        |   |       |   |        |   |  |   | 16     |  
|Purchase of treasury stock (156,694)                                                               |  |             |    |                          |   |               |  |   | (2,490                                   | ) |  |                                            |        |   |       |   |        |   |  |   | (2,490 | )
|Cash dividends declared ($0.64 per share)                                                          |  |             |    |                          |   |               |  |   |                                          |   |  |                                            | (1,370 | ) |       |   |        |   |  |   | (1,370 | )
|Other, net                                                                                         |  |             |    |                          |   | 1             |  |   |                                          |   |  |                                            |        |   |       |   |        |   |  |   | 1      |  
|                                                                                                   |  |             |    |                          |   |               |  |   |                                          |   |  |                                            |        |   |       |   |        |   |  |   |        |  
|                                                                                                   |  |             |    |                          |   |              
|Balance June 30, 2009                                                                              |  |             | 38 |                          |   | 21,392        |  |   | (26,531                                  | ) |  |                                            | 36,220 |   |       |   | 4      |   |  |   | 31,123 |  
|                                                                                                   |  |             |    |                          |   |              
|Net income                                                                                         |  |             |    |                          |   |               |  |   |                                          |   |  |                                            | 372    |   |       |   |        |   |  |   | 372    |  
|Other comprehensive loss:                                                                          |  |             |    |                          |   |               |  |   |                                          |   |  |                                            |        |   |       |   |        |   |  |   |        |  
|Non-credit unrealized holding losses on securities with OTTI, net of income tax effect of ($1,197) |  |             |    |                          |   |               |  |   |                                          |   |  |                                            |        |   |       |   | (2,321 | ) |  |   | (2,321 | )
|Unrealized holding gain on securities, net of income tax effect of $41                             |  |             |    |                          |   |               |  |   |                                          |   |  |                                            |        |   |       |   | 79     |   |  |   | 79     |  
|                                                                                                   |  |             |    |                          |   |               |  |   |                                          |   |  |                                            |        |   |       |   |        |   |  |   |        |  
|Comprehensive loss                                                                                 |  |             |    |                          |   |               |  |   |                                          |   |  |                                            |        |   |       |   |        |   |  |   | (1,870 | )
|Expense of stock options awarded                                                                   |  |             |   |                          |   | 23            |  |   |                                          |   |  |                                            |        |   |       |   |        |   |  |   | 23     |  
|Purchase of treasury stock (12,155)                                                                |  |             |    |                          |   |               |  |   | (159                                     | ) |  |                                            |        |   |       |   |        |   |  |   | (159   | )
|Cash dividends declared ($0.64 per share)                                                          |  |             |    |                          |   |               |  |   |                                          |   |  |                                            | (1,322 | ) |       |   |        |   |  |   | (1,322 | )
|                                                                                                   |  |             |    |                          |   |               |  |   |                                          |   |  |                                            |        |   |       |   |        |   |  |   |        |  
|                                                                                                   |  |             |    |                          |   |              
|Balance June 30, 2010                                                                              |  | $           | 38 |                          | $ | 21,415        |  | $ | (26,690                                  | ) |  | $                                          | 35,270 |   |       | $ | (2,238 | ) |  | $ | 27,795 |  
|                                                                                                   |  |             |    |                          |   |               |  |   |                                          |   |  |                                            |        |   |       |   |        |   |  |   |        |  

See accompanying notes to the consolidated financial statements.



25



---

WVS FINANCIAL CORP.

CONSOLIDATED STATEMENT OF CASH FLOWS

(In thousands)



|                                                                                  |  |                     |          |   |      |   |          |      |  |   |          |  
|--------------------------------------------------------------------------------- |  | ------------------- | -------- | - | ---- | - | -------- | ---- |  | - | -------- | -
|                                                                                  |  | Year Ended June 30, |         
|                                                                                  |  | 2010                |          |   | 2009 |   |          | 2008 | 
|OPERATING ACTIVITIES                                                              |  |                     |          |   |      |   |          |      |  |   |          |  
|Net income                                                                        |  | $                   | 372      |   |      | $ | 2,878    |      |  | $ | 3,772    |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                     |          |   |      |   |          |      |  |   |          |  
|Recovery for loan losses                                                          |  |                     | (11      | ) |      |   | (294     | )    |  |   | (123     | )
|Net impairment loss recognized in earnings                                        |  |                     | 194      |   |      |   |         |      |  |   |         |  
|Depreciation                                                                      |  |                     | 103      |   |      |   | 104      |      |  |   | 124      |  
|Investment securities gains                                                       |  |                     | (1       | ) |      |   |         |      |  |   | (7       | )
|Accretion of discounts, premiums, and deferred loan fees                          |  |                     | 1,563    |   |      |   | (610     | )    |  |   | (1,180   | )
|Trading gains                                                                     |  |                     | (16      | ) |      |   |         |      |  |   |         |  
|Purchase of trading securities                                                    |  |                     | (1,975   | ) |      |   |         |      |  |   |         |  
|Proceeds from sale of trading securities                                          |  |                     | 1,991    |   |      |   |         |      |  |   |         |  
|Deferred income taxes                                                             |  |                     | (101     | ) |      |   | 504      |      |  |   | (70      | )
|(Increase) decrease in accrued interest receivable                                |  |                     | (83      | ) |      |   | (230     | )    |  |   | 1,597    |  
|Decrease in accrued interest payable                                              |  |                     | (314     | ) |      |   | (388     | )    |  |   | (130     | )
|Increase (decrease) in deferred director compensation payable                     |  |                     | 10       |   |      |   | (797     | )    |  |   | 302      |  
|Increase in prepaid federal deposit insurance                                     |  |                     | (855     | ) |      |   |         |      |  |   |         |  
|Other, net                                                                        |  |                     | 23       |   |      |   | (246     | )    |  |   | (68      | )
|                                                                                  |  |                     |          |   |      |   |          |      |  |   |          |  
|Net cash provided by operating activities                                         |  |                     | 900      |   |      |   | 921      |      |  |   | 4,217    |  
|                                                                                  |  |                     |          |   |      |   |          |      |  |   |          |  
|                                                                                  |  |                     |         
|INVESTING ACTIVITIES                                                              |  |                     |          |   |      |   |          |      |  |   |          |  
|Available for sale:                                                               |  |                     |          |   |      |   |          |      |  |   |          |  
|Purchase of investment and mortgage-backed securities                             |  |                     |         |   |      |   |         |      |  |   | (157,231 | )
|Proceeds from repayments of investment and mortgage-backed securities             |  |                     | 42       |   |      |   | 7,541    |      |  |   | 158,664  |  
|Proceeds from sales of investment and mortgage-backed securities                  |  |                     | 501      |   |      |   | ,        |      |  |   | 326      |  
|Held to maturity:                                                                 |  |                     |          |   |      |   |          |      |  |   |          |  
|Purchase of investment securities                                                 |  |                     | (112,021 | ) |      |   | (223,521 | )    |  |   | (72,990  | )
|Purchase of mortgage-backed securities                                            |  |                     | (15,451  | ) |      |   |         |      |  |   | (117,630 | )
|Proceeds from repayments of investment                                            |  |                     | 80,430   |   |      |   | 221,167  |      |  |   | 155,558  |  
|Proceeds from repayments of mortgage-backed securities                            |  |                     | 70,935   |   |      |   | 39,992   |      |  |   | 23,262   |  
|Purchase of certificates of deposit                                               |  |                     | (9,755   | ) |      |   | (27,111  | )    |  |   | (9,401   | )
|Maturities/redemptions of certificates of deposit                                 |  |                     | 25,855   |   |      |   | 11,770   |      |  |   |         |  
|Net decrease (increase) in net loans receivable                                   |  |                     | 1,767    |   |      |   | (1,400   | )    |  |   | 3,962    |  
|Purchase of Federal Home Loan Bank stock                                          |  |                     |         |   |      |   | (13,242  | )    |  |   | (19,504  | )
|Redemption of Federal Home Loan Bank stock                                        |  |                     |         |   |      |   | 9,298    |      |  |   | 18,913   |  
|Acquisition of premises and equipment                                             |  |                     | (90      | ) |      |   | (29      | )    |  |   | (77      | )
|Other, net                                                                        |  |                     |         |   |      |   |         |      |  |   | 2        |  
|                                                                                  |  |                     |          |   |      |   |          |      |  |   |          |  
|Net cash provided by (used for) investing activities                              |  |                     | 42,213   |   |      |   | 24,465   |      |  |   | (16,146  | )
|                                                                                  |  |                     |          |   |      |   |          |      |  |   |          |  
|                                                                                  |  |                     |         
|FINANCING ACTIVITIES                                                              |  |                     |          |   |      |   |          |      |  |   |          |  
|Net increase (decrease) in deposits                                               |  |                     | 55,607   |   |      |   | (4,224   | )    |  |   | (8,608   | )
|Net (decrease) increase in Federal Reserve Bank short-term borrowings             |  |                     | (108,800 | ) |      |   | 28,200   |      |  |   | 80,600   |  
|Net increase (decrease) in other short-term borrowings                            |  |                     | 12,510   |   |      |   | (20,000  | )    |  |   | (62,950  | )
|Proceeds from Federal Home Loan Bank long-term advances                           |  |                     |         |   |      |   |         |      |  |   | 10,000   |  
|Repayments of Federal Home Loan Bank long-term advances                           |  |                     | (20,579  | ) |      |   | (5,500   | )    |  |   | (5,000   | )
|Net proceeds from exercise of stock options                                       |  |                     |         |   |      |   |         |      |  |   | 235      |  
|Cash dividends paid                                                               |  |                     | (1,322   | ) |      |   | (1,370   | )    |  |   | (1,442   | )
|Purchase of treasury stock                                                        |  |                     | (159     | ) |      |   | (2,490   | )    |  |   | (1,755   | )
|                                                                                  |  |                     |          |   |      |   |          |      |  |   |          |  
|Net cash (used for) provided by financing activities                              |  |                     | (62,743  | ) |      |   | (5,384   | )    |  |   | 11,080   |  
|                                                                                  |  |                     |          |   |      |   |          |      |  |   |          |  
|                                                                                  |  |                     |         
|(Decrease) Increase in cash and cash equivalents                                  |  |                     | (19,630  | ) |      |   | 20,002   |      |  |   | (849     | )
|                                                                                  |  |                     |         
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                    |  |                     | 21,828   |   |      |   | 1,826    |      |  |   | 2,675    |  
|                                                                                  |  |                     |          |   |      |   |          |      |  |   |          |  
|                                                                                  |  |                     |         
|CASH AND CASH EQUIVALENTS AT END OF YEAR                                          |  | $                   | 2,198    |   |      | $ | 21,828   |      |  | $ | 1,826    |  
|                                                                                  |  |                     |          |   |      |   |          |      |  |   |          |  
|                                                                                  |  |                     |         
|SUPPLEMENTAL CASH FLOW INFORMATION                                                |  |                     |          |   |      |   |          |      |  |   |          |  
|Cash paid during the year for:                                                    |  |                     |          |   |      |   |          |      |  |   |          |  
|Interest                                                                          |  | $                   | 8,795    |   |      | $ | 10,699   |      |  | $ | 15,273   |  
|Taxes                                                                             |  |                     | 69       |   |      |   | 1,266    |      |  |   | 1,902    |  
|Non cash item                                                                     |  |                     |          |   |      |   |          |      |  |   |          |  
|Due to Federal Reserve Bank                                                       |  |                     | 1,130    |   |      |   | 824      |      |  |   | 1,221    |  

See
accompanying notes to the consolidated financial statements.



26



---

WVS FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)



|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------

Organization

WVS Financial Corp. (WVS or the Company) is a Pennsylvania-chartered unitary bank holding company
which owns 100 percent of the common stock of West View Savings Bank (West View or the Savings Bank). The operating results of the Company depend primarily upon the operating results of the Savings Bank and, to a lesser
extent, income from interest-earning assets such as investment securities.

West View is a
Pennsylvania-chartered, FDIC-insured stock savings bank conducting business from six offices in the North Hills suburbs of Pittsburgh. The Savings Banks principal sources of revenue originate from its portfolio of residential real estate and
commercial mortgage loans as well as income from investment and mortgage-backed securities.

The Company is
supervised by the Board of Governors of the Federal Reserve System, while the Savings Bank is subject to regulation and supervision by the Federal Deposit Insurance Corporation (FDIC) and the Pennsylvania Department of Banking.

Basis of Presentation

The consolidated financial statements include the accounts of WVS and its wholly owned subsidiary, West View. All
intercompany transactions have been eliminated in consolidation. The accounting and reporting policies of WVS and West View conform to U.S. generally accepted accounting principles. The Companys fiscal year-end for financial reporting is
June 30. For regulatory and income tax reporting purposes, WVS reports on a December 31 calendar year basis.

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect
the reported amounts of assets and liabilities as of the balance sheet date and revenues and expenses for that period. Actual results could differ significantly from those estimates.

Investment and Mortgage-Backed Securities

Investment securities are classified at the time of purchase as securities held to maturity or securities available for
sale based on managements ability and intent. Debt and mortgage-backed securities acquired with the ability and intent to hold to maturity are stated at cost adjusted for amortization of premium and accretion of discount, which are computed
using the level-yield method and recognized as adjustments of interest income. Amortization rates for mortgage-backed securities are periodically adjusted to reflect changes in the prepayment speeds of the underlying mortgages. Certain other debt,
equity, and mortgage-backed securities have been classified as available for sale to serve principally as a source of liquidity. Unrealized holding gains and losses for available-for-sale securities are reported as a separate component of
stockholders equity, net of tax, until realized. Realized securities gains and losses are computed using the specific identification method. Interest and dividends on investment and mortgage-backed securities are recognized as income when
earned.

Common stock of the Federal Home Loan Bank (the FHLB) represents ownership in an
institution, which is wholly owned by other financial institutions. This equity security is accounted for at cost and reported separately on the accompanying Consolidated Balance Sheet.



27



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
|-- | ------------------------------------------------------

Investment and Mortgage-Backed Securities (Continued)



Management systematically evaluates investment securities for
other-than-temporary declines in fair value on at least a quarterly basis. This analysis requires management to consider various factors, which include: (1) duration and magnitude of the decline in value; (2) the credit rating of the
issuer or issuers; (3) structure of the security; and (4) the Companys intent to sell the security or whether its more likely than not that the Company would be required to sell the security before its anticipated recovery in market
value.

The Company retained an independent third party to assist it in the determination of a fair value for
each of its private-label CMOs. This valuation is meant to be a Level Three valuation as defined by ASC Topic 820, Fair Value Measurements and Disclosures. The valuation does not represent the actual terms or prices at which any
party could purchase the securities. There is currently no active secondary market for private-label CMOs and there can be no assurance that any secondary market for private-label CMOs will develop. We believe that the private-label CMO
portfolio had two Other Than Temporary Impairments at June 30, 2010.

The Company believes that the data
and assumptions used to determine the fair values are reasonable. The fair value calculations reflect relevant facts and market conditions. Events and conditions occurring after the valuation date could have a material effect on the private-label
CMO segments fair value.

Trading Securities

Trading securities are held for resale in anticipation of short-term (generally 90 days or less) fluctuations in market
prices. Trading securities are stated at fair value. Realized and unrealized gains and losses are included in noninterest income as investment securities gains.

Net Loans Receivable

Net loans receivable are reported at their principal amount, net of the allowance for loan losses and deferred loan fees.
Interest on mortgage, consumer, and commercial loans is recognized on the accrual method. The Companys general policy is to stop accruing interest on loans when, based upon relevant factors, the collection of principal or interest is doubtful,
regardless of the contractual status. Interest received on nonaccrual loans is recorded as income or applied against principal according to managements judgment as to the collectability of such principal.

Loan origination and commitment fees, and all incremental direct loan origination costs, are deferred and recognized over
the contractual remaining lives of the related loans on a level-yield basis.

Allowance for Loan Losses

The allowance for loan losses represents the amount which management estimates is adequate to provide
for probable losses inherent in its loan portfolio. The allowance method is used in providing for loan losses. Accordingly, all loan losses are charged to the allowance, and all recoveries are credited to it. The allowance for loan losses is
established through a provision for loan losses charged to operations. The provision for loan losses is based on managements periodic evaluation of individual loans, economic factors, past loan loss experience, changes in the composition and
volume of the portfolio, and other relevant factors. The estimates used in determining the adequacy of the allowance for loan losses, including the amounts and timing of future cash flows expected on impaired loans, are particularly susceptible to
changes in the near term.



28



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
|-- | ------------------------------------------------------

Allowance for Loan Losses (Continued)



Impaired loans are commercial and commercial real estate loans for which
it is probable the Company will not be able to collect all amounts due according to the contractual terms of the loan agreement. The Company individually evaluates such loans for impairment and does not aggregate loans by major risk classifications.
The definition of impaired loans is not the same as the definition of nonaccrual loans, although the two categories overlap. The Company may choose to place a loan on nonaccrual status due to payment delinquency or uncertain
collectability, while not classifying the loan as impaired if the loan is not a commercial or commercial real estate loan. Factors considered by management in determining impairment include payment status and collateral value. The amount of
impairment for these types of impaired loans is determined by the difference between the present value of the expected cash flows related to the loan, using the original interest rate, and its recorded value, or as a practical expedient in the case
of collateralized loans, the difference between the fair value of the collateral and the recorded amount of the loans. When foreclosure is probable, impairment is measured based on the fair value of the collateral.

Mortgage loans on one-to-four family properties and all consumer loans are large groups of smaller-balance homogeneous
loans and are measured for impairment collectively. Loans that experience insignificant payment delays, which are defined as 90 days or less, generally are not classified as impaired. Management determines the significance of payment delays on a
case-by-case basis taking into consideration all circumstances surrounding the loan and the borrower, including the length of the delay, the borrowers prior payment record, and the amount of shortfall in relation to the principal and interest
owed.

Real Estate Owned

Real estate owned acquired through foreclosure is carried at the lower of cost or fair value minus estimated costs to
sell. Costs relating to development and improvement of the property are capitalized, whereas costs of holding such real estate are expensed as incurred. Valuation allowances for estimated losses are provided when the carrying value of the real
estate acquired exceeds the fair value.

Premises and Equipment

Premises and equipment are stated at cost, less accumulated depreciation. Depreciation is principally computed on the
straight-line method over the estimated useful lives of the related assets, which range from 3 to 10 years for furniture and equipment and 25 to 50 years for building premises. Leasehold improvements are amortized over the shorter of their estimated
useful lives or their respective lease terms, which range from 7 to 15 years. Expenditures for maintenance and repairs are charged against income as incurred. Costs of major additions and improvements are capitalized.

Income Taxes

Deferred tax assets and liabilities are computed based on the difference between the financial statement and the income
tax basis of assets and liabilities using the enacted marginal tax rates. Deferred income taxes or benefits are based on the changes in the deferred tax asset or liability from period to period.

The Company files a consolidated federal income tax return. Deferred tax assets and liabilities are reflected at currently
enacted income tax rates applicable to the period in which such items are expected to be realized or settled. As changes in tax rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.



29



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
|-- | ------------------------------------------------------



Earnings Per Share

The Company provides dual presentation of basic and diluted earnings per share. Basic earnings per share are calculated by
dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share are calculated by dividing net income available to common stockholders, adjusted for the
effects of any dilutive securities, by the weighted-average number of common shares outstanding, adjusted for the effects of any dilutive securities.

Stock Options

The Company accounts for stock compensation based on the grant-date fair value of all share-based payment awards that are
expected to vest, including employee share options to be recognized as employee compensation expense over the requisite service period.

The Companys 2008 Stock Incentive Plan (the Plan), which was approved by shareholders in October 2008,
permits the grant of stock options or restricted shares to its directors and employees for up to 152,000 shares (up to 38,000 restricted shares may be issued). Option awards are generally granted with an exercise price equal to the market price of
the Companys stock at the date of grant; those option awards generally vest based on five years of continuous service and have ten-year contractual terms.

During the periods ended June 30, 2010, 2009, and 2008, the Company recorded $23 thousand, $16 thousand, and $0,
respectively, in compensation expense related to our share-based compensation awards. As of June 30, 2010, there was approximately $73 thousand of unrecognized compensation cost related to unvested share-based compensation awards granted in
fiscal 2009. That cost is expected to be recognized over the next four years.

For purposes of computing
results, the Company estimated the fair values of stock options using the Black-Scholes option-pricing model. The model requires the use of subjective assumptions that can materially affect fair value estimates. The fair value of each option is
amortized into compensation expense on a straight line basis between the grant date for the option and each vesting date. The fair value of each stock option granted was estimated using the following weighted-average assumptions:



|                                 |  |      |   |  |    |  |       |  
|-------------------------------- |  | ---- | - |  | -- |  | ----- | -
|Assumptions                      |  |      |   |  |    |  |       |  
|Volatility                       |  | 7.49 | % |  | to |  | 11.63 | %
|Interest Rates                   |  | 2.59 | % |  | to |  | 3.89  | %
|Dividend Yields                  |  | 3.94 | % |  | to |  | 4.02  | %
|Weighted Average Life (in years) |  | 4.00 |   |  | to |  | 4.33  |  

The Company had 96,535, 122,519 and 0 non-vested stock options outstanding at June 30, 2010, 2009 and 2008,
respectively. During the fiscal year ended June 2009, the Company issued 124,519 options. The weighted average fair value of each stock option issued in fiscal 2009 was $0.89.

Comprehensive Income

The Company is required to present comprehensive income and its components in a full set of general- purpose financial
statements for all periods presented. Other comprehensive income is composed exclusively of net unrealized holding gains (losses) on its available-for-sale securities portfolio, and the net non-credit component of Other-Than-Temporary Impairment on
its held-to-maturity CMO portfolio. The Company has elected to report the effects of its other comprehensive income as part of Note 3.



30



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
|-- | ------------------------------------------------------



Cash Flow Information

Cash and cash equivalents include cash and due from banks and interest-earning deposits with original maturities of 90
days or less.

Reclassification of Comparative Figures

Certain comparative amounts for prior years have been reclassified to conform to current-year presentations. Such
reclassifications did not affect net income or stockholders equity.

Recent Accounting Pronouncements

In October 2009, the Financial Accounting Standards Board (FASB) issued ASU 2009-15, Accounting
for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing. ASU 2009-15 amends Subtopic 470-20 to expand accounting and reporting guidance for own-share lending arrangements issued in contemplation of
convertible debt issuance. ASU 2009-15 is effective for fiscal years beginning on or after December 15, 2009 and interim periods within those fiscal years for arrangements outstanding as of the beginning of those fiscal years. The adoption of
this guidance did not have a significant impact on the Companys financial statements.

In
December 2009, the FASB issued ASU 2009-16, Accounting for Transfer of Financial Assets. ASU 2009-16 provides guidance to improve the relevance, representational faithfulness, and comparability of the information that an entity provides
in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferors continuing involvement, if any, in transferred financial assets.
ASU 2009-16 is effective for annual periods beginning after November 15, 2009 and for interim periods within those fiscal years. The adoption of this guidance did not have a material impact on the Companys financial position or results of
operation.

In December 2009, the FASB issued ASU 2009-17, Improvements to Financial Reporting by
Enterprises Involved with Variable Interest Entities. The objective of ASU 2009-17 is to improve financial reporting by enterprises involved with variable interest entities and to provide more relevant and reliable information to users of
financial statements. ASU 2009-17 is effective for annual periods beginning after November 15, 2009 and for interim periods within those fiscal years. The adoption of this guidance did not have a material impact on the Companys financial
position or results of operation.

In January 2010, the FASB issued ASU 2010-01, Equity (Topic 505):
Accounting for Distributions to Shareholders with Components of Stock and Cash  a consensus of the FASB Emerging Issues Task Force. ASU 2010-01 clarifies that the stock portion of a distribution to shareholders that allows them to elect to
receive cash or stock with a potential limitation on the total amount of cash that all shareholders can elect to receive in the aggregate is considered a share issuance that is reflected in EPS prospectively and is not a stock dividend. ASU 2010-01
is effective for interim and annual periods ending on or after December 15, 2009 and should be applied on a retrospective basis. The adoption of this guidance did not have a material impact on the Companys financial position.

In January 2010, the FASB issued ASU 2010-02, Consolidation (Topic 810): Accounting and reporting for Decreases in
Ownership of a Subsidiary  a Scope Clarification. ASU 2010-02 amends Subtopic 810-10 to address implementation issues related to changes in ownership provisions including clarifying the scope of the decrease in ownership and additional
disclosures. ASU 2010-02 is effective beginning in the period that an entity adopts Statement 160. If an entity has previously adopted Statement 160, ASU 2010-02 is effective beginning in the first interim or annual reporting period ending on or
after December 15, 2009 and should be applied retrospectively to the first period Statement 160 was adopted. The adoption of this guidance did not have a material impact on the Companys financial position or results of operation.



31



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
|-- | ------------------------------------------------------

Recent Accounting Pronouncements (Continued)



In January 2010, the FASB issued ASU 2010-04, Accounting for Various
Topics  Technical Corrections to SEC Paragraphs. ASU 2010-04 makes technical corrections to existing SEC guidance including the following topics: accounting for subsequent investments, termination of an interest rate swap, issuance of
financial statements - subsequent events, use of residential method to value acquired assets other than goodwill, adjustments in assets and liabilities for holding gains and losses, and selections of discount rate used for measuring defined benefit
obligation. ASU 2010-04 is effective January 15, 2010. The adoption of this guidance did not have a material impact on the Companys financial position or results of operation.

In January 2010, the FASB issued ASU 2010-05, Compensation  Stock Compensation (Topic 718): Escrowed Share
Arrangements and the Presumption of Compensation. ASU 2010-05 updates existing guidance to address the SEC staffs views on overcoming the presumption that for certain shareholders escrowed share arrangements represent compensation. ASU
2010-05 is effective January 15, 2010. The adoption of this guidance did not have a material impact on the Companys financial position.

In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving
Disclosures about Fair Value Measurements. ASU 2010-06 amends Subtopic 820-10 to clarify existing disclosures, require new disclosures, and includes conforming amendments to guidance on employers disclosures about postretirement benefit
plan assets. ASU 2010-06 is effective for interim and annual periods beginning after December 15, 2009, except for disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value
measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. The adoption of this guidance is not expected to have a significant impact on the Companys
financial statements.

In February 2010, the FASB issued ASU 2010-08, Technical Corrections to Various
Topics. ASU 2010-08 clarifies guidance on embedded derivatives and hedging. ASU 2010-08 is effective for interim and annual periods beginning after December 15, 2009. The adoption of this guidance did not have a material impact on the
Companys financial position.

In March 2010, the FASB issued ASU 2010-11, Derivatives and Hedging.
ASU 2010-11 provides clarification and related additional examples to improve financial reporting by resolving potential ambiguity about the breadth of the embedded credit derivative scope exception in ASC 815-15-15-8. ASU 2010-11 is effective at
the beginning of the first fiscal quarter beginning after June 15, 2010. The adoption of this guidance is not expected to have a significant impact on the Companys financial statements.

In April 2010, the FASB issued ASU 2010-18, Receivables (Topic 310): Effect of a Loan Modification When the Loan is a
Part of a Pool That is Accounted for as a Single Asset  a consensus of the FASB Emerging Issues Task Force. ASU 2010-18 clarifies the treatment for a modified loan that was acquired as part of a pool of assets. Refinancing or restructuring
the loan does not make it eligible for removal from the pool, the FASB said. The amendment will be effective for loans that are part of an asset pool and are modified during financial reporting periods that end July 15, 2010 or later and is not
expected to have a significant impact on the Companys financial statements.

In July 2010, FASB issued
ASU No. 2010-20, Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses.ASU 2010-20 is intended to



32



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
|-- | ------------------------------------------------------

Recent Accounting Pronouncements (Continued)



provide additional information to assist financial statement users in assessing an entitys credit risk exposures and evaluating the adequacy of its allowance for credit losses. The
disclosures as of the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010. The disclosures about activity that occurs during a reporting period are effective for interim and
annual reporting periods beginning on or after December 15, 2010. The amendments in ASU 2010-20 encourage, but do not require, comparative disclosures for earlier reporting periods that ended before initial adoption. However, an entity
should provide comparative disclosures for those reporting periods ending after initial adoption. The Company is currently evaluating the impact the adoption of this guidance will have on the Companys financial position or results of
operations.



|2. | EARNINGS PER SHARE
|-- | ------------------

The following table sets forth the computation of the weighted-average common shares used to calculate basic and diluted
earnings per share.



|                                                                                                         |  |            |   |  |            |   |  |            |  
|-------------------------------------------------------------------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
|                                                                                                         |  | 2010       |   |  | 2009       |   |  | 2008       |  
|                                                                                                         |  |            |  
|Weighted-average common shares issued                                                                    |  | 3,805,636  |   |  | 3,805,636  |   |  | 3,799,015  |  
|                                                                                                         |  |            |  
|Average treasury stock shares                                                                            |  | (1,739,301 | ) |  | (1,672,402 | ) |  | (1,546,411 | )
|                                                                                                         |  |            |   |  |            |   |  |            |  
|                                                                                                         |  |            |  
|Weighted-average common shares and common stock equivalents used to calculate basic earnings per share   |  | 2,066,335  |   |  | 2,133,234  |   |  | 2,252,604  |  
|                                                                                                         |  |            |  
|Additional common stock equivalents (stock options) used to calculate diluted earnings per share         |  |           |   |  | 74         |   |  | 302        |  
|                                                                                                         |  |            |   |  |            |   |  |            |  
|                                                                                                         |  |            |  
|Weighted-average common shares and common stock equivalents used to calculate diluted earnings per share |  | 2,066,335  |   |  | 2,133,308  |   |  | 2,252,906  |  
|                                                                                                         |  |            |   |  |            |   |  |            |  

There are no convertible securities that would affect the numerator in calculating basic and
diluted earnings per share; therefore, net income as presented on the Consolidated Statement of Income is used.

At June 30, 2010, there were 125,127 options with an exercise price ranging from $15.77 to $16.20 which were
anti-dilutive. At June 30, 2009, there were 124,519 options with an exercise price of $16.20 which were anti-dilutive. At June 30, 2008, there were no options which were anti-dilutive.



33



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|3. | COMPREHENSIVE INCOME
|-- | --------------------

Other comprehensive income primarily reflects changes in net unrealized gains (losses) on available-for-sale securities
and the net non-credit component of OTTI on the Companys held-to-maturity CMO portfolio. Total comprehensive income for the years ended June 30 is summarized as follows:



|                                                                        |  |      |        |   |      |   |       |      |  |   |      
|----------------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ----- | ---- |  | - | -----
|                                                                        |  | 2010 |        |   | 2009 |   |       | 2008
|                                                                        |  |      |       
|Net Income                                                              |  | $    | 372    |   |      | $ | 2,878 |      |  | $ | 3,772
|Other comprehensive income (loss):                                      |  |      |        |   |      |   |       |      |  |   |      
|Unrealized gains (losses) on available-for-sale securities without OTTI |  |      | 119    |   |      |   | (91   | )    |  |   | 55   
|Unrealized losses on held-to-maturity securities with OTTI              |  |      | (3,518 | ) |      |   |      |      |  |   |     
|Reclassification adjustment for gains included in net income            |  |      | 1      |   |      |   |      |      |  |   | 7    
|                                                                        |  |      |        |   |      |   |       |      |  |   |      
|Other comprehensive (loss) income before tax                            |  |      | (3,398 | ) |      |   | (91   | )    |  |   | 62   
|Income tax effect related to other comprehensive (loss) income          |  |      | (1,156 | ) |      |   | (31   | )    |  |   | 21   
|                                                                        |  |      |        |   |      |   |       |      |  |   |      
|Other comprehensive (loss) income, net of tax                           |  |      | (2,242 | ) |      |   | (60   | )    |  |   | 41   
|                                                                        |  |      |        |   |      |   |       |      |  |   |      
|Comprehensive income (loss)                                             |  | $    | (1,870 | ) |      | $ | 2,818 |      |  | $ | 3,813
|                                                                        |  |      |        |   |      |   |       |      |  |   |      



|4. | INVESTMENT SECURITIES
|-- | ---------------------

The amortized cost and fair values of investments are as follows:



|                                                 |  |               |         |                      |   |                       |  |   |           |   |  |   |        
|------------------------------------------------ |  | ------------- | ------- | -------------------- | - | --------------------- |  | - | --------- | - |  | - | -------
|                                                 |  | AmortizedCost |         | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | FairValue
|HELD TO MATURITY                                 |  |               |         |                      |   |                       |  |   |           |   |  |   |        
|U.S. government agency securities                |  | $             | 55,002  |                      | $ | 403                   |  | $ | (5        | ) |  | $ | 55,400 
|Corporate debt securities                        |  |               | 83,710  |                      |   | 3,090                 |  |   | (6        | ) |  |   | 86,794 
|Foreign debt securities(1)                       |  |               | 9,711   |                      |   | 482                   |  |   |          |   |  |   | 10,193 
|Obligations of states and political Subdivisions |  |               | 4,770   |                      |   | 222                   |  |   |          |   |  |   | 4,992  
|                                                 |  |               |         |                      |   |                       |  |   |           |   |  |   |        
|                                                 |  |               |         |                     
|Total                                            |  | $             | 153,193 |                      | $ | 4,197                 |  | $ | (11       | ) |  | $ | 157,379
|                                                 |  |               |         |                      |   |                       |  |   |           |   |  |   |        



| | (1) | U.S. dollar-denominated investment-grade corporate bonds of large foreign issuers.
| | --- | ----------------------------------------------------------------------------------



34



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|4. | INVESTMENT SECURITIES (Continued)
|-- | ---------------------------------





|                                                 |  |               |         |                 |   |                  |  |   |           |   |  |   |        
|------------------------------------------------ |  | ------------- | ------- | --------------- | - | ---------------- |  | - | --------- | - |  | - | -------
|                                                 |  | AmortizedCost |         | UnrealizedGains |   | UnrealizedLosses |  |   | FairValue
|2009                                             |  |               |         |                 |   |                  |  |   |           |   |  |   |        
|AVAILABLE FOR SALE                               |  |               |         |                 |   |                  |  |   |           |   |  |   |        
|Equity securities                                |  | $             | 500     |                 | $ |                 |  | $ | (7        | ) |  | $ | 493    
|                                                 |  |               |         |                 |   |                  |  |   |           |   |  |   |        
|                                                 |  |               |         |                
|Total                                            |  | $             | 500     |                 | $ |                 |  | $ | (7        | ) |  | $ | 493    
|                                                 |  |               |         |                 |   |                  |  |   |           |   |  |   |        
|                                                 |  |               |         |                
|HELD TO MATURITY                                 |  |               |         |                 |   |                  |  |   |           |   |  |   |        
|U.S. government agency securities                |  | $             | 32,937  |                 | $ | 387              |  | $ | (74       | ) |  | $ | 33,250 
|Corporate debt securities                        |  |               | 74,065  |                 |   | 783              |  |   | (193      | ) |  |   | 74,655 
|Foreign debt securities(1)                       |  |               | 8,168   |                 |   | 36               |  |   | (29       | ) |  |   | 8,175  
|Obligations of states and political subdivisions |  |               | 7,958   |                 |   | 328              |  |   |          |   |  |   | 8,286  
|                                                 |  |               |         |                 |   |                  |  |   |           |   |  |   |        
|                                                 |  |               |         |                
|Total                                            |  | $             | 123,128 |                 | $ | 1,534            |  | $ | (296      | ) |  | $ | 124,366
|                                                 |  |               |         |                 |   |                  |  |   |           |   |  |   |        



| | (1) | U.S. dollar-denominated investment-grade corporate bonds of large foreign issuers.
| | --- | ----------------------------------------------------------------------------------

In 2010, 2009, and 2008, the Company recorded realized investment security gains of $1, $0, and $7. Proceeds from sales
of investment securities during 2010, 2009, and 2008 were $501, $0, and $326.

The amortized cost and fair
values of debt securities at June 30, 2010, by contractual maturity, are shown below. Expected maturities may differ from the contractual maturities because issuers may have the right to call securities prior to their final maturities.



|                 |  |                       |        |                                |   |                                |  |                     |        |       |   |        |  |   |        
|---------------- |  | --------------------- | ------ | ------------------------------ | - | ------------------------------ |  | ------------------- | ------ | ----- | - | ------ |  | - | -------
|                 |  | Due inone yearor less |        | Due afterone throughfive
years |   | Due afterfive throughten
years |  | Due afterten 
years |        | Total
|HELD TO MATURITY |  |                       |        |                                |   |                                |  |                     |        |       |   |        |  |   |        
|Amortized cost   |  | $                     | 45,237 |                                | $ | 44,539                         |  | $                   | 32,579 |       | $ | 30,838 |  | $ | 153,193
|Fair value       |  |                       | 45,542 |                                |   | 47,173                         |  |                     | 33,415 |       |   | 31,249 |  |   | 157,379

Investment securities with amortized costs of $28,734 and $118,593 and fair values of $29,002 and $119,817 at
June 30, 2010 and 2009, respectively, were pledged to secure public deposits, repurchase agreements, and for other purposes as required by law.



35



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|5. | MORTGAGE-BACKED SECURITIES
|-- | --------------------------

The amortized cost and fair values of mortgage-backed securities are as follows:



|                                                      |  |               |         |                      |   |                       |  |   |           |   |  |   |        
|----------------------------------------------------- |  | ------------- | ------- | -------------------- | - | --------------------- |  | - | --------- | - |  | - | -------
|                                                      |  | AmortizedCost |         | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | FairValue
|2010                                                  |  |               |         |                      |   |                       |  |   |           |   |  |   |        
|AVAILABLE FOR SALE                                    |  |               |         |                      |   |                       |  |   |           |   |  |   |        
|                                                      |  |               |         |                     
|Government National Mortgage Association certificates |  | $             | 2,019   |                      | $ | 127                   |  | $ |          |   |  | $ | 2,146  
|                                                      |  |               |         |                      |   |                       |  |   |           |   |  |   |        
|                                                      |  |               |         |                     
|Total                                                 |  | $             | 2,019   |                      | $ | 127                   |  | $ |          |   |  | $ | 2,146  
|                                                      |  |               |         |                      |   |                       |  |   |           |   |  |   |        
|                                                      |  |               |         |                     
|HELD TO MATURITY                                      |  |               |         |                      |   |                       |  |   |           |   |  |   |        
|                                                      |  |               |         |                     
|Collateralized mortgage obligations:                  |  |               |         |                      |   |                       |  |   |           |   |  |   |        
|Agency                                                |  | $             | 70,899  |                      | $ | 71                    |  | $ | (376      | ) |  | $ | 70,594 
|Other                                                 |  |               | 44,087  |                      |   |                      |  |   | (4,238    | ) |  |   | 39,849 
|                                                      |  |               |         |                      |   |                       |  |   |           |   |  |   |        
|                                                      |  |               |         |                     
|Total                                                 |  | $             | 114,986 |                      | $ | 71                    |  | $ | (4,614    | ) |  | $ | 110,443
|                                                      |  |               |         |                      |   |                       |  |   |           |   |  |   |        
|                                                      |  |               |         |                     
|                                                      |  | AmortizedCost |         | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | FairValue
|2009                                                  |  |               |         |                      |   |                       |  |   |           |   |  |   |        
|AVAILABLE FOR SALE                                    |  |               |         |                      |   |                       |  |   |           |   |  |   |        
|                                                      |  |               |         |                     
|Government National Mortgage Association certificates |  | $             | 2,062   |                      | $ | 13                    |  | $ |          |   |  | $ | 2,075  
|                                                      |  |               |         |                      |   |                       |  |   |           |   |  |   |        
|                                                      |  |               |         |                     
|Total                                                 |  | $             | 2,062   |                      | $ | 13                    |  | $ |          |   |  | $ | 2,075  
|                                                      |  |               |         |                      |   |                       |  |   |           |   |  |   |        
|                                                      |  |               |         |                     
|HELD TO MATURITY                                      |  |               |         |                      |   |                       |  |   |           |   |  |   |        
|                                                      |  |               |         |                     
|Collateralized mortgage obligations:                  |  |               |         |                      |   |                       |  |   |           |   |  |   |        
|Agency                                                |  | $             | 117,133 |                      | $ | 72                    |  | $ | (1,298    | ) |  | $ | 115,907
|Other                                                 |  |               | 56,996  |                      |   |                      |  |   | (6,208    | ) |  |   | 50,788 
|                                                      |  |               |         |                      |   |                       |  |   |           |   |  |   |        
|                                                      |  |               |         |                     
|Total                                                 |  | $             | 174,129 |                      | $ | 72                    |  | $ | (7,506    | ) |  | $ | 166,695
|                                                      |  |               |         |                      |   |                       |  |   |           |   |  |   |        



36



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|5. | MORTGAGE-BACKED SECURITIES (Continued)
|-- | --------------------------------------



The amortized cost and fair value of mortgage-backed securities at
June 30, 2010, by contractual maturity, are shown below. Expected maturities may differ from the contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.



|                   |  |                        |   |                                 |   |                                |  |                    |   |       |   |         |  |   |        
|------------------ |  | ---------------------- | - | ------------------------------- | - | ------------------------------ |  | ------------------ | - | ----- | - | ------- |  | - | -------
|                   |  | Due inone 
yearor less |   | Due afterone 
throughfive years |   | Due afterfive throughten years |  | Due afterten years |   | Total
|AVAILABLE FOR SALE |  |                        |   |                                 |   |                                |  |                    |   |       |   |         |  |   |        
|Amortized cost     |  | $                      |  |                                 | $ |                               |  | $                  |  |       | $ | 2,019   |  | $ | 2,019  
|Fair value         |  |                        |  |                                 |   |                               |  |                    |  |       |   | 2,146   |  |   | 2,146  
|                   |  |                        |   |                                 |  
|HELD TO MATURITY   |  |                        |   |                                 |   |                                |  |                    |   |       |   |         |  |   |        
|Amortized cost     |  | $                      |  |                                 | $ |                               |  | $                  |  |       | $ | 114,986 |  | $ | 114,986
|Fair value         |  |                        |  |                                 |   |                               |  |                    |  |       |   | 110,443 |  |   | 110,443

At
June 30, 2010 and 2009, mortgage-backed securities with an amortized cost of $81,384 and $132,806 and fair values of $80,758 and $130,343, were pledged to secure borrowings with the Federal Home Loan Bank and the Federal Reserve Bank of
Cleveland.



|6. | UNREALIZED LOSSES ON SECURITIES
|-- | -------------------------------

The following table shows the Companys gross unrealized losses and fair value, aggregated by category and length of
time that the individual securities have been in a continuous unrealized loss position, at June 30, 2010 and 2009.



|                                     |  |                         |        |                       |                          |      |           |       |                       |        |  |           |        |                       |  |   |        |  |   |        |  
|------------------------------------ |  | ----------------------- | ------ | --------------------- | ------------------------ | ---- | --------- | ----- | --------------------- | ------ |  | --------- | ------ | --------------------- |  | - | ------ |  | - | ------ | -
|                                     |  | 2010                    |       
|                                     |  | Less Than Twelve Months |        |                       | Twelve Months or Greater |      |           | Total |                      
|                                     |  | FairValue               |        | GrossUnrealizedLosses |                          |      | FairValue |       | GrossUnrealizedLosses |        |  | FairValue |        | GrossUnrealizedLosses | 
|                                     |  |                         |        |                       |                          |     
|U.S. government agencies securities  |  | $                       |       |                       | $                        |     |           |       | $                     | 404    |  | $         | (5     | )                     |  | $ | 404    |  | $ | (5     | )
|Corporate debt securities            |  |                         | 3,893  |                       |                          | (6   | )         |       |                       |       |  |           |       |                       |  |   | 3,893  |  |   | (6     | )
|Collateralized mortgage obligations: |  |                         |        |                       |                          |      |           |       |                       |        |  |           |        |                       |  |   |        |  |   |        |  
|Agency                               |  |                         | 15,607 |                       |                          | (116 | )         |       |                       | 33,065 |  |           | (260   | )                     |  |   | 48,672 |  |   | (376   | )
|Other                                |  |                         |       |                       |                          |     |           |       |                       | 39,849 |  |           | (4,238 | )                     |  |   | 39,849 |  |   | (4,238 | )
|                                     |  |                         |        |                       |                          |      |           |       |                       |        |  |           |        |                       |  |   |        |  |   |        |  
|                                     |  |                         |        |                       |                          |     
|Total                                |  | $                       | 19,500 |                       | $                        | (122 | )         |       | $                     | 73,318 |  | $         | (4,503 | )                     |  | $ | 92,818 |  | $ | (4,625 | )
|                                     |  |                         |        |                       |                          |      |           |       |                       |        |  |           |        |                       |  |   |        |  |   |        |  



37



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|6. | UNREALIZED LOSSES ON SECURITIES (Continued)
|-- | -------------------------------------------



|                                     |  |                         |        |                       |                          |      |           |       |                       |         |  |           |        |                       |  |   |         |  |   |        |  
|------------------------------------ |  | ----------------------- | ------ | --------------------- | ------------------------ | ---- | --------- | ----- | --------------------- | ------- |  | --------- | ------ | --------------------- |  | - | ------- |  | - | ------ | -
|                                     |  | 2009                    |       
|                                     |  | Less Than Twelve Months |        |                       | Twelve Months or Greater |      |           | Total |                      
|                                     |  | FairValue               |        | GrossUnrealizedLosses |                          |      | FairValue |       | GrossUnrealizedLosses |         |  | FairValue |        | GrossUnrealizedLosses | 
|                                     |  |                         |        |                       |                          |     
|U.S. government agencies securities  |  | $                       | 2,447  |                       | $                        | (74  | )         |       | $                     |        |  | $         |       |                       |  | $ | 2,447   |  | $ | (74    | )
|Corporate debt securities            |  |                         | 20,893 |                       |                          | (193 | )         |       |                       |        |  |           |       |                       |  |   | 20,893  |  |   | (193   | )
|Foreign equity securities(1)         |  |                         | 1,977  |                       |                          | (29  | )         |       |                       |        |  |           |       |                       |  |   | 1,977   |  |   | (29    | )
|Equity securities                    |  |                         |       |                       |                          |     |           |       |                       | 493     |  |           | (7     | )                     |  |   | 493     |  |   | (7     | )
|Collateralized mortgage obligations: |  |                         |        |                       |                          |      |           |       |                       |         |  |           |        |                       |  |   |         |  |   |        |  
|Agency                               |  |                         | 40,693 |                       |                          | (490 | )         |       |                       | 66,078  |  |           | (808   | )                     |  |   | 106,771 |  |   | (1,298 | )
|Other                                |  |                         |       |                       |                          |     |           |       |                       | 50,788  |  |           | (6,208 | )                     |  |   | 50,788  |  |   | (6,208 | )
|                                     |  |                         |        |                       |                          |      |           |       |                       |         |  |           |        |                       |  |   |         |  |   |        |  
|                                     |  |                         |        |                       |                          |     
|Total                                |  | $                       | 66,010 |                       | $                        | (786 | )         |       | $                     | 117,359 |  | $         | (7,023 | )                     |  | $ | 183,369 |  | $ | (7,809 | )
|                                     |  |                         |        |                       |                          |      |           |       |                       |         |  |           |        |                       |  |   |         |  |   |        |  



| | (1) | U.S. dollar-denominated investment-grade corporate bonds of large foreign issuers.
| | --- | ----------------------------------------------------------------------------------

In accordance with ASC Topic 820, revisions were made to the recognition and reporting requirements for
Other-Than-Temporary-Impairments (OTTI) of debt securities classified as available-for-sale and held-to-maturity.

For debt securities, the ability and intent to hold provision was eliminated, and impairment is now
considered to be other than temporary if an entity (1) intends to sell the security, (2) more likely than not will be required to sell the security before recovering its amortized cost basis, or (3) does not expect to recover the
securitys entire amortized cost basis (even if the entity does not intend to sell the security). In addition, the probability standard relating to the collectability of cash flows was eliminated, and impairment is now considered to be other
than temporary if the present value of cash flows expected to be collected from the debt security is less than the amortized cost basis of the security (any such shortfall is referred to as a credit loss).

The Company evaluates outstanding available-for-sale and held-to-maturity securities in an unrealized loss position
(i.e., impaired securities) for OTTI on a quarterly basis. In doing so, the Company considers many factors including, but not limited to: the credit ratings assigned to the securities by the Nationally Recognized Statistical Rating Organizations
(NRSROs); other indicators of the credit quality of the issuer; the strength of the provider of any guarantees; the length of time and extent that fair value has been less than amortized cost; and whether the Company has the intent to sell the
security or more likely than not will be required to sell the security before its anticipated recovery. In the case of its private label residential MBS, the Company also considers prepayment speeds, the historical and projected performance of the
underlying loans and the credit support provided by the subordinate securities. These evaluations are inherently subjective and consider a number of quantitative and qualitative factors.

The following table presents a roll-forward of the credit loss component of the amortized cost of mortgage-backed
securities that we have written down for OTTI and the credit component of the loss that is recognized in earnings. The beginning balance represents the credit loss component for mortgage-backed securities for which OTTI occurred prior to adoption of
the guidance of ASC Topic 320-10-69. OTTI recognized in earnings for credit impaired mortgage-back securities is presented as additions in two



38



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|6. | UNREALIZED LOSSES ON SECURITIES (Continued)
|-- | -------------------------------------------



components based upon whether the current period is the first time the mortgage-backed security was credit-impaired (initial credit impairment) or is not the first time the mortgage-backed
security was credit impaired (subsequent credit impairments). The credit loss component is reduced if we sell, intend to sell or believe that we will be required to sell previously credit-impaired mortgage-backed securities. Additionally, the credit
loss component is reduced if we receive cash flows in excess of what we expected to receive over the remaining life of the credit impaired mortgage-backed securities, the security matures or is fully written down. Changes in the credit loss
component of credit impaired mortgage-backed securities were as follows for the twelve month period ended June 30, 2010:



|                                                                                   |  |                                  |    
|---------------------------------------------------------------------------------- |  | -------------------------------- | ---
|                                                                                   |  | Twelve 
MonthsEndedJune 30, 2010
|                                                                                   |  | (In thousands)                  
|                                                                                   | 
|Beginning balance                                                                  |  | $                                |   
|Initial credit impairment                                                          |  |                                  | 194
|Subsequent credit impairment                                                       |  |                                  |   
|Reductions for amounts recognized in earnings due to intent or requirement to sell |  |                                  |   
|Reductions for securities sold                                                     |  |                                  |   
|Reduction for increase in cash flows expected to be collected                      |  |                                  |   
|                                                                                   |  |                                  |    
|Ending Balance                                                                     |  | $                                | 194
|                                                                                   |  |                                  |    

A summary of investment gains and
losses recognized in income during the twelve month period ended June 30, 2010 are as follows:



|                                    |  |                                  |    
|----------------------------------- |  | -------------------------------- | ---
|                                    |  | Twelve 
MonthsEndedJune 30, 2010
|                                    |  | (In thousands)                  
|                                    | 
|Available for sale securities       |  |                                  |    
|Realized gains                      |  | $                                | 1  
|Realized losses                     |  |                                  |   
|Other than temporary impairment     |  |                                  |   
|                                    |  |                                  |    
|Total available-for-sale securities |  | $                                | 1  
|                                    |  |                                  |    
|                                    | 
|                                    |  | Twelve MonthsEndedJune 30,
2010 
|                                    |  | (In thousands)                  
|                                    | 
|Held-to maturity securities         |  |                                  |    
|Realized gains                      |  | $                                |   
|Realized losses                     |  |                                  |   
|Other than temporary impairment     |  |                                  | 194
|                                    |  |                                  |    
|Total held-to-maturity securities   |  | $                                | 194
|                                    |  |                                  |    



39



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|6. | UNREALIZED LOSSES ON SECURITIES (Continued)
|-- | -------------------------------------------



During the twelve months ended June 30, 2010, the Company recorded
a $194 thousand credit impairment charge and a $2.3 million non-credit unrealized holding loss (net of income tax effect of $1.2 million) to accumulated other Comprehensive Income.

In the case of its private label residential MBS that exhibit adverse risk characteristics, the Company employs models to
determine the cash flows that it is likely to collect from the securities. These models consider borrower characteristics and the particular attributes of the loans underlying the securities, in conjunction with assumptions about future changes in
home prices and interest rates, to predict the likelihood a loan will default and the impact on default frequency, loss severity and remaining credit enhancement. A significant input to these models is the forecast of future housing price changes
for the relevant states and metropolitan statistical areas, which are based upon an assessment of the various housing markets. In general, since the ultimate receipt of contractual payments on these securities will depend upon the credit and
prepayment performance of the underlying loans and, if needed, the credit enhancements for the senior securities owned by the Company, the Company uses these models to assess whether the credit enhancement associated with each security is sufficient
to protect against likely losses of principal and interest on the underlying mortgage loans. The development of the modeling assumptions requires significant judgment.

In conjunction with our adoption of ASC Topic 820 effective June 30, 2009, the Company retained an independent third
party to assist it with the private label CMO portfolio OTTI assessment. The independent third party utilized certain assumptions for producing the cash flow analyses used in the OTTI assessment. Key assumptions would include interest rates,
expected market participant spreads and discount rates, housing prices, projected future delinquency levels and assumed loss rates on any liquidated collateral.

The Company reviewed the independent third partys assumptions used in the June 30, 2010 OTTI process. Based on
the results of this review, the Company deemed the independent third partys assumptions to be reasonable and adopted them. However, different assumptions could produce materially different results, which could impact the Companys
conclusions as to whether an impairment is considered other-than-temporary and the magnitude of the credit loss. Management believes that two private-label CMOs in the portfolio had an Other Than Temporary Impairment at June 30, 2010.

If the Company intends to sell an impaired debt security, or more likely than not will be required to sell the
security before recovery of its amortized cost basis, the impairment is other-than-temporary and is recognized currently in earnings in an amount equal to the entire difference between fair value and amortized cost. The Company does not anticipate
selling its private-label CMO portfolio, nor does Management believe that the Company will be required to sell these securities before recovery of this amortized cost basis.

In instances in which the Company determines that a credit loss exists but the Company does not intend to sell the
security and it is not more likely than not that the Company will be required to sell the security before the anticipated recovery of its remaining amortized cost basis, the OTTI is separated into (1) the amount of the total impairment related
to the credit loss and (2) the amount of the total impairment related to all other factors (i.e., the noncredit portion). The amount of the total OTTI related to the credit loss is recognized in earnings and the amount of the total OTTI related
to all other factors is recognized in accumulated other comprehensive loss. The total OTTI is presented in the Statement of Income with an offset for the amount of the total OTTI that is recognized in accumulated other comprehensive loss. Absent the
intent or requirement to sell a security, if a credit loss does not exist, any impairment is considered to be temporary.



40



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|6. | UNREALIZED LOSSES ON SECURITIES (Continued)
|-- | -------------------------------------------



Regardless of whether an OTTI is recognized in its entirety in earnings
or if the credit portion is recognized in earnings and the noncredit portion is recognized in other comprehensive income (loss), the estimation of fair values has a significant impact on the amount(s) of any impairment that is recorded.

The noncredit portion of any OTTI losses on securities classified as available-for-sale is adjusted to fair value with an
offsetting adjustment to the carrying value of the security. The fair value adjustment could increase or decrease the carrying value of the security. All of the Companys private-label CMOs were originally, and continue to be classified, as
held to maturity.

In periods subsequent to the recognition of an OTTI loss, the other-than-temporarily
impaired debt security is accounted for as if it had been purchased on the measurement date of the OTTI at an amount equal to the previous amortized cost basis less the credit-related OTTI recognized in earnings. For debt securities for which
credit-related OTTI is recognized in earnings, the difference between the new cost basis and the cash flows expected to be collected is accreted into interest income over the remaining life of the security in a prospective manner based on the amount
and timing of future estimated cash flows.

The Company has investments in 36 positions that are impaired at
June 30, 2010, including 10 positions in private-label collateralized mortgage obligations. Based on its analysis, management has concluded that two private-label CMOs are other-than-temporarily impaired, while the remaining securities
portfolio has experienced unrealized losses and a decrease in fair value due to interest rate volatility, illiquidity in the marketplace, or credit deterioration in the U.S. mortgage markets.



41



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|7. | NET LOANS RECEIVABLE
|-- | --------------------

Major classifications of loans are summarized as follows:



|                                              |  |      |        |      |   |       
|--------------------------------------------- |  | ---- | ------ | ---- | - | ------
|                                              |  | 2010 |        | 2009
|                                              |  |     
|First mortgage loans:                         |  |      |        |      |   |       
|1 - 4 family dwellings                        |  | $    | 17,247 |      | $ | 14,989
|Construction                                  |  |      | 25,618 |      |   | 23,581
|Land acquisition and development              |  |      | 3,060  |      |   | 1,440 
|Multi-family dwellings                        |  |      | 5,636  |      |   | 5,070 
|Commercial                                    |  |      | 7,635  |      |   | 9,179 
|                                              |  |      |        |      |   |       
|                                              |  |      | 59,196 |      |   | 54,259
|                                              |  |      |        |      |   |       
|Consumer loans:                               |  |      |        |      |   |       
|Home equity                                   |  |      | 2,190  |      |   | 5,808 
|Home equity lines of credit                   |  |      | 2,676  |      |   | 2,605 
|Other                                         |  |      | 280    |      |   | 1,034 
|                                              |  |      |        |      |   |       
|                                              |  |      | 5,146  |      |   | 9,447 
|                                              |  |      |        |      |   |       
|                                              |  |     
|Commercial loans                              |  |      | 3,585  |      |   | 4,102 
|                                              |  |      |        |      |   |       
|                                              |  |     
|Less:                                         |  |      |        |      |   |       
|Undisbursed construction and land development |  |      | 10,901 |      |   | 8,896 
|Net deferred loan fees                        |  |      | 66     |      |   | 102   
|Allowance for loan losses                     |  |      | 645    |      |   | 662   
|                                              |  |      |        |      |   |       
|                                              |  |      | 11,612 |      |   | 9,660 
|                                              |  |      |        |      |   |       
|                                              |  |     
|Net loans receivable                          |  | $    | 56,315 |      | $ | 58,148
|                                              |  |      |        |      |   |       

The Companys primary business
activity is with customers located within its local trade area of Northern Allegheny and Southern Butler counties. The Company has concentrated its lending efforts by granting residential and construction mortgage loans to customers throughout its
immediate trade area. The Company also selectively funds and participates in commercial and residential mortgage loans outside of its immediate trade area, provided such loans meet the Companys credit policy guidelines. At June 30, 2010
and 2009, the Company had approximately $18 million and $16 million, respectively, of outstanding loans for land development and construction in the local trade area. Although the Company had a diversified loan portfolio at June 30, 2010 and
2009, loans outstanding to individuals and businesses are dependent upon the local economic conditions in its immediate trade area.

Total nonaccrual loans and troubled debt restructurings and the related interest income recognized for the years ended
June 30 are as follows:



|                                                |  |      |       |      |   |      |  |   |      
|----------------------------------------------- |  | ---- | ----- | ---- | - | ---- |  | - | -----
|                                                |  | 2010 |       | 2009 |   | 2008
|                                                |  |      |      
|Principal outstanding                           |  | $    | 1,666 |      | $ | 953  |  | $ | 1,582
|                                                |  |      |       |      |   |      |  |   |      
|Interest income that would have been recognized |  |      | 114   |      |   | 77   |  |   | 117  
|Interest income recognized                      |  |      | 36    |      |   | 51   |  |   | 70   
|                                                |  |      |       |      |   |      |  |   |      
|                                                |  |      |      
|Interest income foregone                        |  | $    | 78    |      | $ | 26   |  | $ | 47   
|                                                |  |      |       |      |   |      |  |   |      



42



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|7. | NET LOANS RECEIVABLE (Continued)
|-- | --------------------------------



The following table is a summary of the loans considered to be impaired
as of June 30:



|                                              |  |      |     |      |   |      |  |   |    
|--------------------------------------------- |  | ---- | --- | ---- | - | ---- |  | - | ---
|                                              |  | 2010 |     | 2009 |   | 2008
|Impaired loans with an allocated allowance    |  | $    |    |      | $ | 6    |  | $ | 972
|Impaired loans without an allocated allowance |  |      |    |      |   |     |  |   |   
|                                              |  |      |     |      |   |      |  |   |    
|Total impaired loans                          |  | $    |    |      | $ | 6    |  | $ | 972
|                                              |  |      |     |      |   |      |  |   |    
|Allocated allowance on impaired loans         |  | $    |    |      | $ | 6    |  | $ | 340
|Average impaired loans                        |  |      | 215 |      |   | 972  |  |   | 972
|Income recognized on impaired loans           |  |      | 38  |      |   | 114  |  |   | 34 

Certain
officers, directors, and their associates were customers of, and had transactions with, the Company in the ordinary course of business. A summary of loan activity for those directors, executive officers, and their associates with aggregate loan
balances outstanding of at least $60,000 during the years ended June 30 are as follows:



|                         |  |      |        |   |      |   |       |  
|------------------------ |  | ---- | ------ | - | ---- | - | ----- | -
|                         |  | 2010 |        |   | 2009 |  
|                         |  |     
|Balance, July 1          |  | $    | 2,270  |   |      | $ | 2,384 |  
|Additions                |  |      | 118    |   |      |   | 29    |  
|Amounts collected        |  |      | (169   | ) |      |   | (143  | )
|Other  Director retired |  |      | (2,219 | ) |      |   |      |  
|                         |  |      |        |   |      |   |       |  
|                         |  |     
|Balance, June 30         |  | $    |       |   |      | $ | 2,270 |  
|                         |  |      |        |   |      |   |       |  



|8. | ALLOWANCE FOR LOAN LOSSES
|-- | -------------------------

Changes in the allowance for loan losses are as follows:



|                         |  |      |     |   |      |   |      |      |  |   |      |  
|------------------------ |  | ---- | --- | - | ---- | - | ---- | ---- |  | - | ---- | -
|                         |  | 2010 |     |   | 2009 |   |      | 2008 | 
|                         |  |      |    
|Balance, July 1          |  | $    | 662 |   |      | $ | 956  |      |  | $ | 986  |  
|Add:                     |  |      |     |   |      |   |      |      |  |   |      |  
|Recovery for loan losses |  |      | (11 | ) |      |   | (294 | )    |  |   | (123 | )
|Recoveries               |  |      |    |   |      |   |     |      |  |   | 93   |  
|Less:                    |  |      |     |   |      |   |      |      |  |   |      |  
|Loans charged off        |  |      | 6   |   |      |   |     |      |  |   |     |  
|                         |  |      |     |   |      |   |      |      |  |   |      |  
|                         |  |      |    
|Balance, June 30         |  | $    | 645 |   |      | $ | 662  |      |  | $ | 956  |  
|                         |  |      |     |   |      |   |      |      |  |   |      |  



43



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|9. | ACCRUED INTEREST RECEIVABLE
|-- | ---------------------------

Accrued interest receivable consists of the following:



|                                          |  |      |       |      |   |      
|----------------------------------------- |  | ---- | ----- | ---- | - | -----
|                                          |  | 2010 |       | 2009
|                                          |  |     
|Investment and mortgage-backed securities |  | $    | 2,168 |      | $ | 1,977
|Loans receivable                          |  |      | 262   |      |   | 370  
|                                          |  |      |       |      |   |      
|                                          |  |     
|Total                                     |  | $    | 2,430 |      | $ | 2,347
|                                          |  |      |       |      |   |      



|10. | FEDERAL HOME LOAN BANK STOCK
|--- | ----------------------------

The Savings Bank is a member of the FHLB System. As a member, West View maintains an investment in the capital stock of
the FHLB of Pittsburgh in an amount not less than 0.75 percent of the outstanding unused FHLB borrowing capacity and 4.75 percent of its outstanding FHLB borrowings, as calculated throughout the year.



|11. | PREMISES AND EQUIPMENT
|--- | ----------------------

Major classifications of premises and equipment are summarized as follows:



|                                   |  |      |       |      |   |      
|---------------------------------- |  | ---- | ----- | ---- | - | -----
|                                   |  | 2010 |       | 2009
|                                   |  |     
|Land and improvements              |  | $    | 246   |      | $ | 246  
|Buildings and improvements         |  |      | 2,046 |      |   | 2,019
|Furniture, fixtures, and equipment |  |      | 885   |      |   | 1,050
|                                   |  |      |       |      |   |      
|                                   |  |      | 3,177 |      |   | 3,315
|Less accumulated depreciation      |  |      | 2,498 |      |   | 2,623
|                                   |  |      |       |      |   |      
|Total                              |  | $    | 679   |      | $ | 692  
|                                   |  |      |       |      |   |      

Depreciation charged to operations was
$103, $104, and $124, for the years ended June 30, 2010, 2009, and 2008, respectively.



44



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|12. | DEPOSITS
|--- | --------

Deposit accounts are summarized as follows:



|                                                      |  |        |         |                     |       |   |        |   |                     |  |       |  
|----------------------------------------------------- |  | ------ | ------- | ------------------- | ----- | - | ------ | - | ------------------- |  | ----- | -
|                                                      |  | 2010   |         |                     | 2009  |  
|                                                      |  | Amount |         | Percent ofPortfolio |       |   | Amount |   | Percent ofPortfolio | 
|                                                      |  |        |         |                    
|Non-interest-earning checking                         |  | $      | 14,828  |                     | 7.3   | % |        | $ | 13,095              |  | 8.9   | %
|Interest-earning checking                             |  |        | 18,792  |                     | 9.3   |   |        |   | 17,743              |  | 12.1  |  
|Savings accounts                                      |  |        | 35,137  |                     | 17.4  |   |        |   | 32,686              |  | 22.3  |  
|Money market accounts                                 |  |        | 22,797  |                     | 11.3  |   |        |   | 24,485              |  | 16.7  |  
|Advance payments by borrowers for taxes and insurance |  |        | 744     |                     | 0.4   |   |        |   | 841                 |  | 0.6   |  
|                                                      |  |        |         |                     |       |   |        |   |                     |  |       |  
|                                                      |  |        | 92,298  |                     | 45.7  |   |        |   | 88,850              |  | 60.6  |  
|                                                      |  |        |         |                     |       |   |        |   |                     |  |       |  
|Savings certificates:                                 |  |        |         |                     |       |   |        |   |                     |  |       |  
|2.00% or less                                         |  |        | 98,006  |                     | 48.5  |   |        |   | 26,477              |  | 18.1  |  
|2.01 - 4.00%                                          |  |        | 8,596   |                     | 4.3   |   |        |   | 25,146              |  | 17.2  |  
|4.01 - 6.00%                                          |  |        | 2,977   |                     | 1.5   |   |        |   | 5,782               |  | 4.0   |  
|6.01 - 6.95%                                          |  |        | 45      |                     | 0.0   |   |        |   | 60                  |  | 0.1   |  
|                                                      |  |        |         |                     |       |   |        |   |                     |  |       |  
|                                                      |  |        | 109,624 |                     | 54.3  |   |        |   | 57,465              |  | 39.4  |  
|                                                      |  |        |         |                     |       |   |        |   |                     |  |       |  
|                                                      |  |        |         |                    
|Total                                                 |  | $      | 201,922 |                     | 100.0 | % |        | $ | 146,315             |  | 100.0 | %
|                                                      |  |        |         |                     |       |   |        |   |                     |  |       |  

The maturities of savings certificates at June 30, 2010, are summarized as follows:



|                                         |  |   |        
|---------------------------------------- |  | - | -------
|Within one year                          |  | $ | 97,309 
|Beyond one year but within two years     |  |   | 5,112  
|Beyond two years but within three years  |  |   | 2,488  
|Beyond three years but within four years |  |   | 1,873  
|Beyond four years but within five years  |  |   | 2,129  
|Beyond five years                        |  |   | 713    
|                                         |  |   |        
|                                         | 
|Total                                    |  | $ | 109,624
|                                         |  |   |        

Savings certificates with balances of
$100,000 or more amounted to $64,375 and $8,509 on June 30, 2010 and 2009, respectively.

At June 30,
2010, the Savings Bank had outstanding $49,518 of certificates issued through the CDARS One-Way Buy Program. CDARS CDs totaling $43,000 reprice on a monthly basis at LIBOR plus 14 basis points and mature on April 7, 2011. The remaining $6,518
of the CDARS CDs mature on April 14, 2011 and carry a fixed rate of interest at 0.60%.

At June 30,
2010, the Savings Bank also had $5,820 of other brokered CDs, which carried fixed rates of interest ranging from 0.30% to 0.60% with various maturities through April 7, 2011.



45



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|12. | DEPOSITS (Continued)
|--- | --------------------



Interest expense by deposit category for the years ended June 30 is
as follows:



|                                                      |  |      |       |      |   |       |  |   |      
|----------------------------------------------------- |  | ---- | ----- | ---- | - | ----- |  | - | -----
|                                                      |  | 2010 |       | 2009 |   | 2008 
|                                                      |  |      |      
|Interest-earning checking accounts                    |  | $    | 8     |      | $ | 9     |  | $ | 10   
|Savings accounts                                      |  |      | 117   |      |   | 196   |  |   | 217  
|Money market accounts                                 |  |      | 83    |      |   | 251   |  |   | 633  
|Savings certificates                                  |  |      | 1,034 |      |   | 1,697 |  |   | 3,056
|Advance payments by borrowers for taxes and insurance |  |      | 9     |      |   | 11    |  |   | 11   
|                                                      |  |      |       |      |   |       |  |   |      
|                                                      |  |      |      
|Total                                                 |  | $    | 1,251 |      | $ | 2,164 |  | $ | 3,927
|                                                      |  |      |       |      |   |       |  |   |      



|13. | FEDERAL HOME LOAN BANK ADVANCES
|--- | -------------------------------

The following table presents contractual maturities of FHLB long-term advances as of June 30:



|            |  |                |  |                   |  |                   |                           |  |      |   |  |      |   |  |      |         |      |   |        
|----------- |  | -------------- |  | ----------------- |  | ----------------- | ------------------------- |  | ---- | - |  | ---- | - |  | ---- | ------- | ---- | - | -------
|            |  | Maturity range |  | Weighted-
average |  |                   | Stated interestrate range |  |      |   |  |     
|Description |  | from           |  | to                |  | interest rate (1) |                           |  | from |   |  | to   |   |  | 2010 |         | 2009
|            |  |                |  |                   |  |                   |                          
|Convertible |  | 09/22/10       |  | 07/27/17          |  | 5.32              | %                         |  | 4.26 | % |  | 6.10 | % |  | $    | 109,500 |      | $ | 129,500
|Fixed rate  |  | 05/03/10       |  | 05/03/10          |  | 3.53              |                           |  | 3.53 |   |  | 3.53 |   |  |      |        |      |   | 579    
|            |  |                |  |                   |  |                   |                           |  |      |   |  |      |   |  |      |         |      |   |        
|            |  |                |  |                   |  |                   |                          
|Total       |  |                |  |                   |  |                   |                           |  |      |   |  |      |   |  | $    | 109,500 |      | $ | 130,079
|            |  |                |  |                   |  |                   |                           |  |      |   |  |      |   |  |      |         |      |   |        



| | (1) | For fiscal year ended 2010.
| | --- | ---------------------------

Maturities of FHLB long-term advances at June 30, 2010, are summarized as follows:



|                                           |  |        |         |                              |      |  
|------------------------------------------ |  | ------ | ------- | ---------------------------- | ---- | -
|Maturing During Fiscal Year Ended June 30: |  | Amount |         | Weighted-AverageInterestRate |     
|                                           |  |       
|2011                                       |  | $      | 87,000  |                              | 5.45 | %
|2012                                       |  |        | 5,000   |                              | 5.03 |  
|2013                                       |  |        |        |                              |     |  
|2014                                       |  |        | 5,000   |                              | 5.41 |  
|2015                                       |  |        |        |                              |     |  
|2016 and thereafter                        |  |        | 12,500  |                              | 4.44 |  
|                                           |  |        |         |                              |      |  
|                                           |  |       
|Total                                      |  | $      | 109,500 |                              | 5.32 | %
|                                           |  |        |         |                              |      |  

The terms of the convertible advances reset to the three-month London Interbank
Offered Rate (LIBOR) and have various spreads and call dates ranging from three months to seven years. The FHLB has the right to convert from a fixed rate to a predetermined floating rate on its conversion date or quarterly thereafter.
Should the advance be converted, the Company has the right to pay off the advance without penalty. The FHLB advances are secured by the Companys FHLB stock, investment securities and loans are subject to substantial prepayment penalties.



46



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|13. | FEDERAL HOME LOAN BANK ADVANCES (Continued)
|--- | -------------------------------------------



The Company also utilized revolving and short-term FHLB advances.
Short-term FHLB advances generally mature within 90 days, while revolving FHLB advances may be repaid by the Company without penalty. The following table presents information regarding such advances as of June 30:



|                                                       |  |      |        |   |      |   |        |  
|------------------------------------------------------ |  | ---- | ------ | - | ---- | - | ------ | -
|                                                       |  | 2010 |        |   | 2009 |  
|                                                       |  |     
|FHLB revolving and short-term advances: Ending balance |  | $    |       |   |      | $ |       |  
|Average balance during the year                        |  |      | 2,037  |   |      |   | 18,350 |  
|Maximum month-end balance during the year              |  |      | 10,000 |   |      |   | 85,070 |  
|Average interest rate during the year                  |  |      | 0.29   | % |      |   | 1.14   | %
|Weighted-average rate at year-end                      |  |      |       | % |      |   |       | %

At
June 30, 2010, the Company had remaining borrowing capacity with the FHLB of approximately $26.7 million.

The FHLB advances are secured by the Companys FHLB stock, loans, and investment and mortgage-backed securities held
in safekeeping at the FHLB. FHLB advances are subject to substantial prepayment penalties.



|14. | OTHER BORROWINGS
|--- | ----------------

Other borrowings include securities sold under agreements to repurchase with securities brokers and Federal Reserve
borrowings. These borrowings generally mature within 1 to 90 days from the transaction date and qualifying collateral has been delivered. The Company pledged investment securities with a carrying value of $13,380 and $0 at June 30, 2010 and
2009, respectively, as collateral for the repurchase agreements. The Company pledged investment securities with a carrying value of $0 and $90,191, at June 30, 2010 and 2009, respectively, as collateral for the Federal Reserve borrowings as
explained in Notes 4 and 5. The following tables present information regarding other borrowings as of June 30:

OTHER SHORT-TERM BORROWINGS



|                                           |  |      |        |   |      |   |         |  
|------------------------------------------ |  | ---- | ------ | - | ---- | - | ------- | -
|                                           |  | 2010 |        |   | 2009 |  
|                                           |  |     
|Ending balance                             |  | $    | 12,510 |   |      | $ |        |  
|Average balance during the year            |  |      | 3,259  |   |      |   | 18,603  |  
|Maximum month-end balance during the year  |  |      | 12,510 |   |      |   | 85,776  |  
|Average interest rate during the year      |  |      | 0.34   | % |      |   | 1.71    | %
|Weighted-average rate at year-end          |  |      | 0.36   | % |      |   |        | %
|                                           |  |     
|FEDERAL RESERVE BANK SHORT-TERM BORROWINGS |  |      |        |   |      |   |         |  
|                                           |  |     
|                                           |  | 2010 |        |   | 2009 |  
|                                           |  |     
|Ending balance                             |  | $    |       |   |      | $ | 108,800 |  
|Average balance during the year            |  |      | 52,401 |   |      |   | 72,826  |  
|Maximum month-end balance during the year  |  |      | 77,400 |   |      |   | 131,500 |  
|Average interest rate during the year      |  |      | 0.27   | % |      |   | 0.41    | %
|Weighted-average rate at year-end          |  |      |       | % |      |   | 0.25    | %



47



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|15. | COMMITMENTS AND CONTINGENT LIABILITIES
|--- | --------------------------------------

Loan Commitments

In the normal course of business, there are various commitments that are not reflected in the Savings Banks
financial statements. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the Consolidated Balance Sheet. The Banks exposure to credit loss in the event of
nonperformance by the other parties to the financial instruments is represented by the contractual amounts as disclosed. Losses, if any, are charged to the allowance for loan losses. Management minimizes its exposure to credit loss under these
commitments by subjecting them to credit approval, review procedures, and collateral requirements, as deemed necessary. Various loan commitments totaling $17,451 and $17,506 at June 30, 2010 and 2009, respectively, represent financial
instruments with off-balance sheet risk. The commitments outstanding at June 30, 2010, contractually mature in less than one year.

Loan commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized
in the Consolidated Balance Sheet. The same credit policies are used in making commitments and conditional obligations as for on-balance sheet instruments. Generally, collateral, usually in the form of real estate, is required to support financial
instruments with credit risk.

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the loan agreement. These commitments are composed primarily of the undisbursed portion of construction and land development loans (Note 7), residential, commercial real estate, and consumer loan
originations.

The exposure to loss under these commitments is limited by subjecting them to credit approval
and monitoring procedures. Substantially all commitments to extend credit are contingent upon customers maintaining specific credit standards at the time of the loan funding. Management assesses the credit risk associated with certain commitments to
extend credit in determining the level of the allowance for loan losses.

Litigation

The Company is involved with various legal actions arising in the ordinary course of business. Management believes the
outcome of these matters will have no material effect on the consolidated operations or financial condition of WVS.



|16. | REGULATORY CAPITAL
|--- | ------------------

Federal regulations require the Company and Savings Bank to maintain minimum amounts of capital. Specifically, each is
required to maintain certain minimum dollar amounts and ratios of Total and Tier I Capital to Risk-Weighted Assets and of Tier I Capital to Average Total Assets.

In addition to the capital requirements, the Federal Deposit Insurance Corporation Improvement Act (FDICIA)
established five capital categories ranging from well capitalized to critically undercapitalized. Should any institution fail to meet the requirements to be considered adequately capitalized, it would become subject to a series of increasingly
restrictive regulatory actions.

As of June 30, 2010 and 2009, the FDIC categorized the Savings Bank as
well capitalized under the regulatory framework for prompt corrective action. To be classified as a well capitalized financial institution, Total Risk-Based, Tier 1 Risk-Based, and Tier 1 Leverage Capital Ratios must be at least 10 percent, 6
percent, and 5 percent, respectively.



48



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|16. | REGULATORY CAPITAL (Continued)
|--- | ------------------------------



The Companys and Savings Banks actual capital ratios are
presented in the following tables, which show that both met all regulatory capital requirements.



|                                         |  |               |        |       |           |   |        |   |        |  |       |  
|---------------------------------------- |  | ------------- | ------ | ----- | --------- | - | ------ | - | ------ |  | ----- | -
|                                         |  | June 30, 2010 |       
|                                         |  | WVS           |        |       | West View |  
|                                         |  | Amount        |        | Ratio |           |   | Amount |   | Ratio  | 
|                                         |  |               |        |      
|Total Capital (to Risk-Weighted Assets)  |  |               |        |       |           |   |        |   |        |  |       |  
|                                         |  |               |        |      
|Actual                                   |  | $             | 30,711 |       | 14.41     | % |        | $ | 28,929 |  | 13.59 | %
|To Be Well Capitalized                   |  |               | 21,306 |       | 10.00     |   |        |   | 21,279 |  | 10.00 |  
|For Capital Adequacy Purposes            |  |               | 17,044 |       | 8.00      |   |        |   | 17,024 |  | 8.00  |  
|                                         |  |               |        |      
|Tier I Capital (to Risk-Weighted Assets) |  |               |        |       |           |   |        |   |        |  |       |  
|                                         |  |               |        |      
|Actual                                   |  | $             | 30,033 |       | 14.10     | % |        | $ | 28,251 |  | 13.28 | %
|To Be Well Capitalized                   |  |               | 12,783 |       | 6.00      |   |        |   | 12,768 |  | 6.00  |  
|For Capital Adequacy Purposes            |  |               | 8,522  |       | 4.00      |   |        |   | 8,512  |  | 4.00  |  
|                                         |  |               |        |      
|Tier I Capital (to Average Total Assets) |  |               |        |       |           |   |        |   |        |  |       |  
|                                         |  |               |        |      
|Actual                                   |  | $             | 30,033 |       | 8.21      | % |        | $ | 28,251 |  | 7.72  | %
|To Be Well Capitalized                   |  |               | 18,299 |       | 5.00      |   |        |   | 18,296 |  | 5.00  |  
|For Capital Adequacy Purposes            |  |               | 14,639 |       | 4.00      |   |        |   | 14,637 |  | 4.00  |  
|                                         | 
|                                         |  | June 30, 2009 |       
|                                         |  | WVS           |        |       | West View |  
|                                         |  | Amount        |        | Ratio |           |   | Amount |   | Ratio  | 
|                                         |  |               |        |      
|Total Capital (to Risk-Weighted Assets)  |  |               |        |       |           |   |        |   |        |  |       |  
|                                         |  |               |        |      
|Actual                                   |  | $             | 31,818 |       | 14.50     | % |        | $ | 30,448 |  | 13.88 | %
|To Be Well Capitalized                   |  |               | 21,941 |       | 10.00     |   |        |   | 21,936 |  | 10.00 |  
|For Capital Adequacy Purposes            |  |               | 17,552 |       | 8.00      |   |        |   | 17,549 |  | 8.00  |  
|                                         |  |               |        |      
|Tier I Capital (to Risk-Weighted Assets) |  |               |        |       |           |   |        |   |        |  |       |  
|                                         |  |               |        |      
|Actual                                   |  | $             | 31,114 |       | 14.18     | % |        | $ | 29,744 |  | 13.56 | %
|To Be Well Capitalized                   |  |               | 13,164 |       | 6.00      |   |        |   | 13,162 |  | 6.00  |  
|For Capital Adequacy Purposes            |  |               | 8,776  |       | 4.00      |   |        |   | 8,775  |  | 4.00  |  
|                                         |  |               |        |      
|Tier I Capital (to Average Total Assets) |  |               |        |       |           |   |        |   |        |  |       |  
|                                         |  |               |        |      
|Actual                                   |  | $             | 31,114 |       | 7.35      | % |        | $ | 29,744 |  | 7.03  | %
|To Be Well Capitalized                   |  |               | 21,173 |       | 5.00      |   |        |   | 21,162 |  | 5.00  |  
|For Capital Adequacy Purposes            |  |               | 16,938 |       | 4.00      |   |        |   | 16,930 |  | 4.00  |  

Prior to the enactment of the Small Business Job Protection Act, the Company accumulated approximately $3.9 million of
retained earnings, which represent allocations of income to bad debt deductions for tax purposes only. Since there is no amount that represents the accumulated bad debt reserves subsequent to 1987, no provision for federal income tax has been made
for such amount. If any portion of this amount is used other than to absorb loan losses (which is not anticipated), the amount will be subject to federal income tax at the current corporate rate.



49



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|17. | STOCK BENEFIT PLANS
|--- | -------------------

Stock Option Plan

The Company maintains a Stock Option Plan for the directors, officers, and employees. The stock options typically have an
expiration term of ten years, subject to certain extensions and early terminations. The per share exercise price of an incentive stock option shall at a minimum equal the fair market value of a share of common stock on the date the option is
granted. The per share exercise price of a compensatory stock option granted shall at least equal the greater of par value or 85 percent of the fair market value of a share of common stock on the date the option is granted. Proceeds from the
exercise of the stock options are credited to common stock for the aggregate par value and the excess is credited to paid-in capital.

The following table presents information related to the outstanding options:



|                           |  |                                      |   |  |                        |   |  |                               |      
|-------------------------- |  | ------------------------------------ | - |  | ---------------------- | - |  | ----------------------------- | -----
|                           |  | Officers 
andEmployeesStockOptions |   |  | DirectorsStockOptions |   |  | Weighted-AverageExercisePrice
|                           |  |                                      |  
|Outstanding, June 30, 2007 |  | 12,294                               |   |  | 3,614                  |   |  | $                             | 15.39
|                           |  |                                      |  
|Granted                    |  |                                     |   |  |                       |   |  |                               |      
|Exercised                  |  | (12,294                              | ) |  | (3,006                 | ) |  |                               |      
|Forfeited                  |  |                                     |   |  |                       |   |  |                               |      
|                           |  |                                      |   |  |                        |   |  |                               |      
|                           |  |                                      |  
|Outstanding, June 30, 2008 |  |                                     |   |  | 608                    |   |  | $                             | 15.77
|                           |  |                                      |  
|Granted                    |  | 87,019                               |   |  | 37,500                 |   |  |                               | 16.20
|Exercised                  |  |                                     |   |  |                       |   |  |                               |      
|Forfeited                  |  |                                     |   |  |                       |   |  |                               |      
|                           |  |                                      |   |  |                        |   |  |                               |      
|                           |  |                                      |  
|Outstanding, June 30, 2009 |  | 87,019                               |   |  | 38,108                 |   |  | $                             | 16.20
|                           |  |                                      |  
|Granted                    |  |                                     |   |  |                       |   |  |                               |      
|Exercised                  |  |                                     |   |  |                       |   |  |                               |      
|Forfeited                  |  |                                     |   |  |                       |   |  |                               |      
|                           |  |                                      |   |  |                        |   |  |                               |      
|                           |  |                                      |  
|Outstanding, June 30, 2010 |  | 87,019                               |   |  | 38,108                 |   |  | $                             | 16.20
|                           |  |                                      |   |  |                        |   |  |                               |      
|                           |  |                                      |  
|Exercisable at year-end    |  | 20,484                               |   |  | 8,108                  |   |  | $                             | 16.10
|                           |  |                                      |   |  |                        |   |  |                               |      
|                           |  |                                      |  
|Available for future grant |  | 26,981                               |   |  | 500                    |   |  |                               |      
|                           |  |                                      |   |  |                        |   |  |                               |      

At June 30, 2010, for officers and employees there were 87,019 options
outstanding with a weighted-average exercise price of $16.20, and a weighted-average remaining contractual life of 8.49 years. There were 20,484 options exercisable with a weighted-average price of $16.20.

There were also 38,108 options outstanding for directors with a weighted-average exercise price of $16.19, and a
weighted-average remaining contractual life of 8.14 years. There were 8,108 options exercisable with a weighted-average price of $16.19.



50



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|17. | STOCK BENEFIT PLANS (Continued)
|--- | -------------------------------



Recognition and Retention Plans (RRP)

The Company previously maintained an RRP for substantially all officers, employees, and directors of the Company.

An aggregate of 300,000 shares of common stock of WVS was acquired at conversion for future issuance under
these plans, of which 60,000 shares are subject to the RRP for directors and 240,000 shares are subject to the RRP for officers and key employees.

The RRP expired during 2004, and all unissued shares were retired. RRP costs are accrued to operations and added back to
stockholders equity over a four- to ten-year vesting period. Net compensation expense attributed to the RRPs amounted to $0, $1, and $1 for the years ended June 30, 2010, 2009, and 2008, respectively.

Employee Stock Ownership Plan (ESOP)

WVS maintains an ESOP for the benefit of officers and Savings Bank employees who have met certain eligibility requirements
related to age and length of service. Compensation expense for the ESOP was $60, $100, and $113 for the years ended June 30, 2010, 2009, and 2008, respectively. Total ESOP shares as of June 30, 2010 and 2009, were 242,035 and 237,475,
respectively.



|18. | DIRECTOR, OFFICER, AND EMPLOYEE BENEFITS
|--- | ----------------------------------------

Profit Sharing Plan

The Company maintains a non-contributory profit sharing 401(k) plan (the Plan) for its officers and employees
who have met the age and length of service requirements. The Plan is a defined contribution plan with the contributions based on a percentage of salaries of the Plan participants. The Company made no contributions to the Plan for the three years
ended June 30, 2010, 2009, and 2008.

Directors Deferred Compensation Plan

The Company maintains a deferred compensation plan (the Plan) for directors who elect to defer all or a
portion of their directors fees. Deferred fees are paid to the participants in installments commencing in the year following the year the individual is no longer a member of the Board of Directors.

The Plan allows for the deferred amounts to be paid in shares of common stock at the prevailing market price on the date
of distribution. For fiscal years ended June 30, 2010, 2009, and 2008, 17,842, 17,842, and 17,842 shares, respectively, were held by the Plan.



51



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|19. | INCOME TAXES
|--- | ------------

The provision for income taxes consists of:



|                   |  |      |      |   |      |   |       |  |   |       |  
|------------------ |  | ---- | ---- | - | ---- | - | ----- |  | - | ----- | -
|                   |  | 2010 |      |   | 2009 |   | 2008  | 
|                   |  |      |     
|Currently payable: |  |      |      |   |      |   |       |  |   |       |  
|Federal            |  | $    | 81   |   |      | $ | 739   |  | $ | 1,767 |  
|State              |  |      | 7    |   |      |   | 109   |  |   | 153   |  
|                   |  |      |      |   |      |   |       |  |   |       |  
|                   |  |      | 88   |   |      |   | 848   |  |   | 1,920 |  
|Deferred           |  |      | (101 | ) |      |   | 504   |  |   | (70   | )
|                   |  |      |      |   |      |   |       |  |   |       |  
|                   |  |      |     
|Total              |  | $    | (13  | ) |      | $ | 1,352 |  | $ | 1,850 |  
|                   |  |      |      |   |      |   |       |  |   |       |  

In addition to income taxes applicable to income before taxes in the consolidated income
statement, the following income tax amounts were recorded to stockholders equity during the years ended June 30:



|                                                     |  |      |       |   |      |   |      |  |   |     |  
|---------------------------------------------------- |  | ---- | ----- | - | ---- | - | ---- |  | - | --- | -
|                                                     |  | 2010 |       |   | 2009 |   | 2008 | 
|Net unrealized gain on securities available for sale |  | $    | (41   | ) |      | $ | 31   |  | $ | (21 | )
|Net non-credit losses on securities with OTTI        |  |      | 1,197 |   |      |   |     |  |   |    |  
|                                                     |  |      |       |   |      |   |      |  |   |     |  
|                                                     |  |      |      
|                                                     |  | $    | 1,156 |   |      | $ | 31   |  | $ | (21 | )
|                                                     |  |      |       |   |      |   |      |  |   |     |  

The following temporary differences gave rise to the net deferred tax assets at
June 30:



|                                                     |  |      |       |      |   |    
|---------------------------------------------------- |  | ---- | ----- | ---- | - | ---
|                                                     |  | 2010 |       | 2009
|                                                     |  |     
|Deferred tax assets:                                 |  |      |       |      |   |    
|Allowance for loan losses                            |  | $    | 188   |      | $ | 193
|Deferred compensation                                |  |      | 172   |      |   | 164
|Reserve for uncollected interest                     |  |      | 39    |      |   | 16 
|Reserve for off-balance sheet commitments            |  |      | 11    |      |   | 14 
|OTTI other impairment                                |  |      | 1,197 |      |   |   
|OTTI credit impairment                               |  |      | 66    |      |   |   
|Other                                                |  |      | 43    |      |   | 63 
|                                                     |  |      |       |      |   |    
|Total gross deferred tax assets                      |  |      | 1,716 |      |   | 450
|                                                     |  |      |       |      |   |    
|                                                     |  |     
|Deferred tax liabilities:                            |  |      |       |      |   |    
|Net unrealized gain on securities available for sale |  |      | 43    |      |   | 2  
|Deferred origination fees, net                       |  |      | 127   |      |   | 144
|Depreciation reserve                                 |  |      | 22    |      |   | 36 
|Other                                                |  |      | 1     |      |   | 1  
|                                                     |  |      |       |      |   |    
|Total gross deferred tax liabilities                 |  |      | 193   |      |   | 183
|                                                     |  |      |       |      |   |    
|                                                     |  |     
|Net deferred tax assets                              |  | $    | 1,523 |      | $ | 267
|                                                     |  |      |       |      |   |    

No valuation allowance was established
at June 30, 2010 and 2009, in view of the Companys ability to carryback to taxes paid in previous years, future anticipated taxable income, which is evidenced by the Companys earnings potential, and deferred tax liabilities at
June 30.



52



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|19. | INCOME TAXES (Continued)
|--- | ------------------------



The Company and its subsidiary file a consolidated federal income tax
return. Prior to 1996, the Savings Bank was permitted under the Internal Revenue Code to establish a tax reserve for bad debts, and to make annual additions within specified limitations which may have been deducted in arriving at its taxable income.
Subsequent to 1995, the Savings Banks bad debt deduction may be computed using an amount based on its actual loss experience (the experience method).

The Small Business Job Protection Act of 1996, adopted in August 1996, generally (1) repealed the provision of the
Code which authorized use of the percentage of taxable income method by qualifying savings institutions to determine deductions for bad debts, effective for taxable years beginning after 1995, and (2) required that a savings institution
recapture for tax purposes (i.e. take into income) over a six-year period its applicable excess reserves. For a savings institution such as West View which is a small bank, as defined in the Code, generally this is the excess of the
balance of its bad debt reserves as of the close of its last taxable year beginning before January 1, 1996, over the balance of such reserves as of the close of its last taxable year beginning before January 1, 1988. Any recapture would be
suspended for any tax year that began after December 31, 1995, and before January 1, 1998 (thus a maximum of two years), in which a savings institution originated an amount of residential loans which was not less than the average of the
principal amount of such loans made by a savings institution during its six most recent taxable years beginning before January 1, 1996. The amount of tax bad debt reserves subject to recapture was approximately $1.2 million, which was
recaptured ratably over a six-year period ending December 31, 2003. In accordance with FASB No. 109, deferred income taxes have previously been provided on this amount, therefore no financial statement expense has been recorded as a result
of this recapture. The Companys supplemental bad debt reserve of approximately $3.8 million is not subject to recapture.

Under FASB Interpretation No. 48, the Company prescribes a recognition threshold and a measurement attribute for the
financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not (MLTN)
that the tax position would be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the MLTN threshold is measured at the largest amount of benefit that
is greater than fifty percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the MLTN threshold should be recognized in the first subsequent financial reporting period in which that threshold is met.
Previously recognized tax positions that no longer meet the MLTN threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. Guidance is also provided on the accounting for and
disclosure of unrecognized tax benefits, interest and penalties.



53



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|19. | INCOME TAXES (Continued)
|--- | ------------------------



The following is a reconciliation between the actual provision for
income taxes and the amount of income taxes which would have been provided at federal statutory rates for the years ended June 30:



|                                             |  |        |      |   |                  |       |    |        |   |       |                  |  |      |        |  |   |                  |   |  |      |  
|-------------------------------------------- |  | ------ | ---- | - | ---------------- | ----- | -- | ------ | - | ----- | ---------------- |  | ---- | ------ |  | - | ---------------- | - |  | ---- | -
|                                             |  | 2010   |      |   | 2009             |       |    | 2008   |  
|                                             |  | Amount |      |   | % ofPretaxIncome |       |    | Amount |   |       | % ofPretaxIncome |  |      | Amount |  |   | % ofPretaxIncome |  
|                                             |  |        |      |   |                  |      
|Provision at statutory rate                  |  | $      | 122  |   |                  | 34.0  | %  |        | $ | 1,438 |                  |  | 34.0 | %      |  | $ | 1,911            |   |  | 34.0 | %
|State income tax, net of federal tax benefit |  |        | 5    |   |                  | 1.4   |    |        |   | 72    |                  |  | 1.7  |        |  |   | 101              |   |  | 1.8  |  
|Tax exempt income                            |  |        | (119 | ) |                  | (33.1 | )  |        |   | (145  | )                |  | (3.4 | )      |  |   | (163             | ) |  | (2.9 | )
|Other, net                                   |  |        | (21  | ) |                  | (5.8  | )  |        |   | (13   | )                |  | (0.3 | )      |  |   | 1                |   |  |     |  
|                                             |  |        |      |   |                  |       |    |        |   |       |                  |  |      |        |  |   |                  |   |  |      |  
|                                             |  |        |      |   |                  |      
|Actual tax expense and effective rate        |  | $      | (13  | ) |                  | (3.6  | )% |        | $ | 1,352 |                  |  | 32.0 | %      |  | $ | 1,850            |   |  | 32.9 | %
|                                             |  |        |      |   |                  |       |    |        |   |       |                  |  |      |        |  |   |                  |   |  |      |  

The Company is subject to the Pennsylvania Mutual Thrift Institutions Tax, which is
calculated at 11.5 percent of earnings.



|20. | REGULATORY MATTERS
|--- | ------------------

Cash and Due From Banks

The Federal Reserve requires the Savings Bank to maintain certain reserve balances. The required reserves are computed by
applying prescribed ratios to the Savings Banks average deposit transaction account balances. As of June 30, 2010 and 2009, the Savings Bank had required reserves of $611 and $560, respectively. The required reserves are held in the form
of vault cash and an interest-bearing depository balance maintained directly with the Federal Reserve.

Loans

Federal law prohibits the Company from borrowing from the Savings Bank unless the loans are secured by
specific obligations. Further, such secured loans are limited in amount to 10 percent of the Savings Banks capital surplus.

Dividend Restrictions

The Savings Bank is subject to the Pennsylvania Banking Code, which restricts the availability of surplus for dividend
purposes. At June 30, 2010, surplus funds of $3,363 were not available for dividends.



54



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|21. | FAIR VALUE MEASUREMENTS
|--- | -----------------------

The Company adopted FASB ASC Topic 820 Fair Value Measurement and Disclosures effective July 1,
2008, which provides a frame work for measuring fair value under generally accepted accounting procedures. FASB ASC Topic 820 establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimizes the use
of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:



|           |  |                                                                                                                                                                                                                                                                                                                                                                                              
|---------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Level I:   |  | Quoted prices are available in active markets for identical assets or liabilities as of the reported date.                                                                                                                                                                                                                                                                                   
|           | 
|Level II:  |  | Pricing inputs are other than the quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of
these assets and liabilities includes items for which quoted prices are available but traded less frequently and items that are fair-valued using other financial instruments, the parameters of which can be directly observed.
|           | 
|Level III: |  | Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets and are measured using
managements best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.                                                                           

The following tables present the assets reported on the consolidated balance sheet at their fair value as of June 30,
2010 and June 30, 2009, by level within the fair value hierarchy. As required by FASB ASC Topic 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value
measurement.



|                                                                                         |  |               |     |          |   |           |  |       |       |  |   |       
|---------------------------------------------------------------------------------------- |  | ------------- | --- | -------- | - | --------- |  | ----- | ----- |  | - | ------
|                                                                                         |  | June 30, 2010
|                                                                                         |  | Level I       |     | Level II |   | Level III |  | Total
|Assets Measured on a Recurring Basis:                                                    |  |               |     |          |   |           |  |       |       |  |   |       
|Mortgage-backed securities available for sale: GNMA certificates                         |  | $             |    |          | $ | 2,146     |  | $     |      |  | $ | 2,146 
|Mortgage-backed securities held to maturity: Collateralized mortgage obligations - other |  |               |    |          |   |          |  |       | 9,935 |  |   | 9,935 
|                                                                                         |  |               |     |          |   |           |  |       |       |  |   |       
|Total                                                                                    |  | $             |    |          | $ | 2,146     |  | $     | 9,935 |  | $ | 12,081
|                                                                                         |  |               |     |          |   |           |  |       |       |  |   |       
|                                                                                         | 
|                                                                                         |  | June 30, 2009
|                                                                                         |  | Level I       |     | Level II |   | Level III |  | Total
|Assets Measured on a Recurring Basis:                                                    |  |               |     |          |   |           |  |       |       |  |   |       
|Investment securities available for sale: Equity securities                              |  | $             | 493 |          | $ |          |  | $     |      |  | $ | 493   
|Mortgage-backed securities available for sale: GNMA certificates                         |  |               |    |          |   | 2,075     |  |       |      |  |   | 2,075 
|                                                                                         |  |               |     |          |   |           |  |       |       |  |   |       
|Total                                                                                    |  | $             | 493 |          | $ | 2,075     |  | $     |      |  | $ | 2,568 
|                                                                                         |  |               |     |          |   |           |  |       |       |  |   |       



55



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|21. | FAIR VALUE MEASUREMENTS (Continued)
|--- | -----------------------------------



Fair values for securities available for sale are determined by
obtaining quoted prices on nationally recognized securities exchanges or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities,
but rather by relying on the securities relationship to other benchmark quoted securities.

The following
table represents the changes in the Level III fair-value category for the twelve month period ended June 30, 2010. The Company classifies financial instruments in Level III of the fair-value hierarchy when there is reliance on at least one
significant unobservable input to the valuation model. In addition to these unobservable inputs, the valuation model for Level III financial instruments typically also rely on a number of inputs that are readily observable, either directly or
indirectly.

Fair value measurements using significant unobservable inputs (Level III)



|                                                   |  |                                                                     |        |  
|-------------------------------------------------- |  | ------------------------------------------------------------------- | ------ | -
|                                                   |  | Private-labelMortgage-backedsecuritiesHeld-to-maturityJune 30, 2010 |       
|Beginning balance  July 1, 2009                   |  | $                                                                   |       |  
|Total net realized/unrealized losses               |  |                                                                     |        |  
|Included in earnings                               |  |                                                                     |        |  
|Net realized losses on securities held-to-maturity |  |                                                                     | (194   | )
|Included in other comprehensive income             |  |                                                                     | (3,518 | )
|Transfers into Level III                           |  |                                                                     | 13,647 |  
|                                                   |  |                                                                     |        |  
|Ending balance  June 30, 2010                     |  |                                                                     | 9,935  |  
|                                                   |  |                                                                     |        |  

The Company had no assets or liabilities reported on the consolidated balance sheet at their
fair value on a nonrecurring basis as of June 30, 2010 or June 30, 2009.



|22. | FAIR VALUE OF FINANCIAL INSTRUMENTS
|--- | -----------------------------------

The carrying amounts and estimated fair values at June 30 are as follows:



|                                           |  |                |  |           |         |                |   |           |  |   |         |  | 
|------------------------------------------ |  | -------------- |  | --------- | ------- | -------------- | - | --------- |  | - | ------- |  | 
|                                           |  | 2010           |  | 2009     
|                                           |  | CarryingAmount |  | FairValue |         | CarryingAmount |   | FairValue
|FINANCIAL ASSETS                           |  |                |  |           |         |                |   |           |  |   |        
|Cash and cash equivalents                  |  | $2,198         |  | $         | 2,198   |                | $ | 21,828    |  | $ | 21,828 
|Certificates of deposit                    |  | 8,605          |  |           | 8,605   |                |   | 24,719    |  |   | 24,719 
|Investment securities                      |  | 153,193        |  |           | 157,379 |                |   | 123,621   |  |   | 124,859
|Mortgage-backed securities                 |  | 117,132        |  |           | 112,589 |                |   | 176,204   |  |   | 168,770
|Net loans receivable                       |  | 56,315         |  |           | 60,403  |                |   | 58,148    |  |   | 61,292 
|Accrued interest receivable                |  | 2,430          |  |           | 2,430   |                |   | 2,347     |  |   | 2,347  
|FHLB stock                                 |  | 10,875         |  |           | 10,875  |                |   | 10,875    |  |   | 10,875 
|                                           |  |                |  |          
|FINANCIAL LIABILITIES                      |  |                |  |           |         |                |   |           |  |   |        
|Deposits                                   |  | $201,922       |  | $         | 202,275 |                | $ | 146,315   |  | $ | 146,711
|FHLB advances                              |  | 109,500        |  |           | 113,721 |                |   | 130,079   |  |   | 136,915
|Federal Reserve Bank short-term borrowings |  |               |  |           |        |                |   | 108,800   |  |   | 108,800
|Other short-term borrowings                |  | 12,510         |  |           | 12,510  |                |   |          |  |   |       
|Accrued interest payable                   |  | 837            |  |           | 837     |                |   | 1,151     |  |   | 1,151  



56



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|22. | FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)
|--- | -----------------------------------------------



Financial instruments are defined as cash, evidence of an ownership
interest in an entity, or a contract which creates an obligation or right to receive or deliver cash or another financial instrument from or to a second entity on potentially favorable or unfavorable terms.

Fair value is defined as the amount at which a financial instrument could be exchanged in a current transaction between
willing parties, other than in a forced or liquidation sale. If a quoted market price is available for a financial instrument, the estimated fair value would be calculated based upon the market price per trading unit of the instrument.

If no readily available market exists, the fair value estimates for financial instruments should be based upon
managements judgment regarding current economic conditions, interest rate risk, expected cash flows, future estimated losses, and other factors, as determined through various option pricing formulas or simulation modeling. As many of these
assumptions result from judgments made by management based upon estimates, which are inherently uncertain, the resulting estimated values may not be indicative of the amount realizable in the sale of a particular financial instrument. In addition,
changes in the assumptions on which the estimated values are based may have a significant impact on the resulting estimated values.

As certain assets and liabilities, such as deferred tax assets, premises and equipment, and many other operational
elements of WVS, are not considered financial instruments, but have value, this estimated fair value of financial instruments would not represent the full market value of WVS.

Estimated fair values have been determined by WVS using the best available data, as generally provided in internal Savings
Bank reports and regulatory reports, using an estimation methodology suitable for each category of financial instruments. The estimation methodologies used are as follows:

Cash and Cash Equivalents, Certificates of Deposit, Accrued Interest Receivable and Payable, and Other Borrowings

The fair value approximates the current book value.

Investment Securities, Mortgage-Backed Securities, and FHLB Stock

The fair value of investment and mortgage-backed securities is equal to the available quoted market price. If no quoted
market price is available, fair value is estimated using the quoted market price for similar securities. Since the FHLB stock is not actively traded on a secondary market and held exclusively by member financial institutions, the estimated fair
market value approximates the carrying amount.

Net Loans Receivable and Deposits

Fair value for consumer mortgage loans is estimated using market quotes or discounting contractual cash flows for
prepayment estimates. Discount rates were obtained from secondary market sources, adjusted to reflect differences in servicing, credit, and other characteristics.

The estimated fair values for consumer, fixed-rate commercial, and multi-family real estate loans are estimated by
discounting contractual cash flows for prepayment estimates. Discount rates are based upon rates generally charged for such loans with similar credit characteristics.

The estimated fair value for nonperforming loans is the appraised value of the underlying collateral adjusted for
estimated credit risk.



57



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|22. | FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)
|--- | -----------------------------------------------

Net Loans Receivable and Deposits (Continued)



Demand, savings, and money market deposit accounts are reported at book
value. The fair value of certificates of deposit is based upon the discounted value of the contractual cash flows. The discount rate is estimated using average market rates for deposits with similar average terms.

FHLB Advances

The fair values of fixed-rate advances are estimated using discounted cash flows, based on current incremental borrowing
rates for similar types of borrowing arrangements. The carrying amount on variable rate advances approximates their fair value.

Commitments to Extend Credit

These financial instruments are generally not subject to sale, and estimated fair values are not readily available. The
carrying value, represented by the net deferred fee arising from the unrecognized commitment, and the fair value, determined by discounting the remaining contractual fee over the term of the commitment using fees currently charged to enter into
similar agreements with similar credit risk, is not considered material for disclosure. The contractual amounts of unfunded commitments are presented in Note 15 to these financial statements.



58



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|23. | PARENT COMPANY
|--- | --------------

Condensed financial information of WVS Financial Corp. is as follows:

CONDENSED BALANCE SHEET



|                                               |  |          |        |      |   |       
|---------------------------------------------- |  | -------- | ------ | ---- | - | ------
|                                               |  | June 30,
|                                               |  | 2010     |        | 2009
|ASSETS                                         |  |          |        |      |   |       
|Interest-earning deposits with subsidiary bank |  | $        | 1,730  |      | $ | 1,336 
|Investment in subsidiary bank                  |  |          | 26,013 |      |   | 29,753
|Accrued interest receivable and other assets   |  |          | 59     |      |   | 44    
|                                               |  |          |        |      |   |       
|                                               |  |         
|TOTAL ASSETS                                   |  | $        | 27,802 |      | $ | 31,133
|                                               |  |          |        |      |   |       
|                                               |  |         
|LIABILITIES AND STOCKHOLDERS EQUITY           |  |          |        |      |   |       
|Other liabilities                              |  | $        | 7      |      | $ | 10    
|Stockholders equity                           |  |          | 27,795 |      |   | 31,123
|                                               |  |          |        |      |   |       
|                                               |  |         
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY     |  | $        | 27,802 |      | $ | 31,133
|                                               |  |          |        |      |   |       

CONDENSED STATEMENT OF INCOME



|                                                             |  |                     |        |   |      |   |       |      |  |   |       |  
|------------------------------------------------------------ |  | ------------------- | ------ | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                                             |  | Year Ended June 30, |       
|                                                             |  | 2010                |        |   | 2009 |   |       | 2008 | 
|INCOME                                                       |  |                     |        |   |      |   |       |      |  |   |       |  
|Investment and mortgage-backed securities                    |  | $                   |       |   |      | $ | 3     |      |  | $ | 20    |  
|Certificates of deposit                                      |  |                     |       |   |      |   | 4     |      |  |   | 3     |  
|Dividend from subsidiary                                     |  |                     | 1,940  |   |      |   | 2,900 |      |  |   | 2,900 |  
|Investment securities gains, net                             |  |                     |       |   |      |   |      |      |  |   | 6     |  
|Interest-earning deposits with subsidiary bank               |  |                     | 5      |   |      |   | 13    |      |  |   | 42    |  
|                                                             |  |                     |        |   |      |   |       |      |  |   |       |  
|                                                             |  |                     |       
|Total income                                                 |  |                     | 1,945  |   |      |   | 2,920 |      |  |   | 2,971 |  
|                                                             |  |                     |        |   |      |   |       |      |  |   |       |  
|                                                             |  |                     |       
|OTHER OPERATING EXPENSE                                      |  |                     | 99     |   |      |   | 121   |      |  |   | 116   |  
|                                                             |  |                     |        |   |      |   |       |      |  |   |       |  
|                                                             |  |                     |       
|Income before equity in undistributed earnings of subsidiary |  |                     | 1,846  |   |      |   | 2,799 |      |  |   | 2,855 |  
|Equity in undistributed earnings of subsidiary               |  |                     | (1,498 | ) |      |   | 77    |      |  |   | 895   |  
|                                                             |  |                     |        |   |      |   |       |      |  |   |       |  
|                                                             |  |                     |       
|Income before income taxes                                   |  |                     | 348    |   |      |   | 2,876 |      |  |   | 3,750 |  
|Income tax benefit                                           |  |                     | (24    | ) |      |   | (2    | )    |  |   | (22   | )
|                                                             |  |                     |        |   |      |   |       |      |  |   |       |  
|                                                             |  |                     |       
|NET INCOME                                                   |  | $                   | 372    |   |      | $ | 2,878 |      |  | $ | 3,772 |  
|                                                             |  |                     |        |   |      |   |       |      |  |   |       |  



59



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|23. | PARENT COMPANY (Continued)
|--- | --------------------------



|                                                                                  |  |                     |        |   |      |   |        |      |  |   |        |  
|--------------------------------------------------------------------------------- |  | ------------------- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                                                  |  | Year Ended June 30, |       
|                                                                                  |  | 2010                |        |   | 2009 |   |        | 2008 | 
|OPERATING ACTIVITIES                                                              |  |                     |        |   |      |   |        |      |  |   |        |  
|Net income                                                                        |  | $                   | 372    |   |      | $ | 2,878  |      |  | $ | 3,772  |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                     |        |   |      |   |        |      |  |   |        |  
|Equity in undistributed earnings of subsidiary                                    |  |                     | 1,498  |   |      |   | (77    | )    |  |   | (895   | )
|Investment securities gains                                                       |  |                     |       |   |      |   |       |      |  |   | (6     | )
|Other, net                                                                        |  |                     | 5      |   |      |   | (2     | )    |  |   | (14    | )
|                                                                                  |  |                     |        |   |      |   |        |      |  |   |        |  
|Net cash provided by operating activities                                         |  |                     | 1,875  |   |      |   | 2,799  |      |  |   | 2,857  |  
|                                                                                  |  |                     |        |   |      |   |        |      |  |   |        |  
|                                                                                  |  |                     |       
|INVESTING ACTIVITIES                                                              |  |                     |        |   |      |   |        |      |  |   |        |  
|Available for sale:                                                               |  |                     |        |   |      |   |        |      |  |   |        |  
|Purchase of investment and mortgage-backed securities                             |  |                     |       |   |      |   |       |      |  |   | (4,556 | )
|Proceeds from repayments of investment and mortgage-backed securities             |  |                     |       |   |      |   | 500    |      |  |   | 6,070  |  
|Proceeds from sales of investment securities                                      |  |                     |       |   |      |   |       |      |  |   | 61     |  
|Held to maturity:                                                                 |  |                     |        |   |      |   |        |      |  |   |        |  
|Purchases of investment and mortgage-backed securities                            |  |                     |       |   |      |   | (697   | )    |  |   |       |  
|Proceeds from repayments of investment and mortgage-backed securities             |  |                     |       |   |      |   | 700    |      |  |   |       |  
|Purchases of certificates of deposit                                              |  |                     |       |   |      |   | (198   | )    |  |   | (198   | )
|Maturities of certificates of deposit                                             |  |                     |       |   |      |   | 396    |      |  |   |       |  
|                                                                                  |  |                     |        |   |      |   |        |      |  |   |        |  
|Net cash provided by investing activities                                         |  |                     |       |   |      |   | 701    |      |  |   | 1,377  |  
|                                                                                  |  |                     |        |   |      |   |        |      |  |   |        |  
|                                                                                  |  |                     |       
|FINANCING ACTIVITIES                                                              |  |                     |        |   |      |   |        |      |  |   |        |  
|Net proceeds from exercise of stock options                                       |  |                     |       |   |      |   |       |      |  |   | 235    |  
|Cash dividends paid                                                               |  |                     | (1,322 | ) |      |   | (1,370 | )    |  |   | (1,442 | )
|Purchases of treasury stock                                                       |  |                     | (159   | ) |      |   | (2,490 | )    |  |   | (1,755 | )
|                                                                                  |  |                     |        |   |      |   |        |      |  |   |        |  
|Net cash used for financing activities                                            |  |                     | (1,481 | ) |      |   | (3,860 | )    |  |   | (2,962 | )
|                                                                                  |  |                     |        |   |      |   |        |      |  |   |        |  
|                                                                                  |  |                     |       
|Increase (decrease) in cash and cash equivalents                                  |  |                     | 394    |   |      |   | (360   | )    |  |   | 1,272  |  
|                                                                                  |  |                     |       
|CASH AND CASH EQUIVALENTS BEGINNING OF YEAR                                       |  |                     | 1,336  |   |      |   | 1,696  |      |  |   | 424    |  
|                                                                                  |  |                     |        |   |      |   |        |      |  |   |        |  
|                                                                                  |  |                     |       
|CASH AND CASH EQUIVALENTS END OF YEAR                                             |  | $                   | 1,730  |   |      | $ | 1,336  |      |  | $ | 1,696  |  
|                                                                                  |  |                     |        |   |      |   |        |      |  |   |        |  



60



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|24. | SELECTED QUARTERLY FINANCIAL DATA (unaudited)
|--- | ---------------------------------------------



|                                                               |  |                    |           |              |   |           |           |  |   |           |   |  |   |           |  
|-------------------------------------------------------------- |  | ------------------ | --------- | ------------ | - | --------- | --------- |  | - | --------- | - |  | - | --------- | -
|                                                               |  | Three Months Ended |          
|                                                               |  | September2009      |           | December2009 |   |           | March2010 |  |   | June2010  |  
|Total interest and dividend income                             |  | $                  | 3,199     |              | $ | 3,078     |           |  | $ | 2,965     |   |  | $ | 2,841     |  
|Total interest expense                                         |  |                    | 2,213     |              |   | 2,160     |           |  |   | 2,074     |   |  |   | 2,034     |  
|                                                               |  |                    |           |              |   |           |           |  |   |           |   |  |   |           |  
|                                                               |  |                    |           |             
|Net interest income                                            |  |                    | 986       |              |   | 918       |           |  |   | 891       |   |  |   | 807       |  
|Provision (recovery) for loan losses                           |  |                    | 3         |              |   | (9        | )         |  |   | (4        | ) |  |   | (1        | )
|                                                               |  |                    |           |              |   |           |           |  |   |           |   |  |   |           |  
|                                                               |  |                    |           |             
|Net interest income after provision (recovery) for loan losses |  |                    | 983       |              |   | 927       |           |  |   | 895       |   |  |   | 808       |  
|                                                               |  |                    |           |             
|Total noninterest income                                       |  |                    | 153       |              |   | 133       |           |  |   | 39        |   |  |   | 45        |  
|Total noninterest expense                                      |  |                    | 910       |              |   | 926       |           |  |   | 880       |   |  |   | 908       |  
|                                                               |  |                    |           |              |   |           |           |  |   |           |   |  |   |           |  
|                                                               |  |                    |           |             
|Income (loss) before income taxes                              |  |                    | 226       |              |   | 134       |           |  |   | 54        |   |  |   | (55       | )
|Income taxes (benefit)                                         |  |                    | 55        |              |   | 1         |           |  |   | (20       | ) |  |   | (49       | )
|                                                               |  |                    |           |              |   |           |           |  |   |           |   |  |   |           |  
|                                                               |  |                    |           |             
|Net income (loss)                                              |  | $                  | 171       |              | $ | 133       |           |  | $ | 74        |   |  | $ | (6        | )
|                                                               |  |                    |           |              |   |           |           |  |   |           |   |  |   |           |  
|                                                               |  |                    |           |             
|Per share data:                                                |  |                    |           |              |   |           |           |  |   |           |   |  |   |           |  
|Net income                                                     |  |                    |           |              |   |           |           |  |   |           |   |  |   |           |  
|Basic                                                          |  | $                  | 0.08      |              | $ | 0.06      |           |  | $ | 0.04      |   |  | $ | 0.00      |  
|Diluted                                                        |  |                    | 0.08      |              |   | 0.06      |           |  |   | 0.04      |   |  |   | 0.00      |  
|Average shares outstanding                                     |  |                    |           |              |   |           |           |  |   |           |   |  |   |           |  
|Basic                                                          |  |                    | 2,070,085 |              |   | 2,068,932 |           |  |   | 2,065,027 |   |  |   | 2,061,208 |  
|Diluted                                                        |  |                    | 2,070,085 |              |   | 2,068,932 |           |  |   | 2,065,027 |   |  |   | 2,061,208 |  



61



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except per share data)



|24. | SELECTED QUARTERLY FINANCIAL DATA (unaudited) (Continued)
|--- | ---------------------------------------------------------



|                                                               |  |                    |           |   |          |   |           |  |      |           |  |   |           |  
|-------------------------------------------------------------- |  | ------------------ | --------- | - | -------- | - | --------- |  | ---- | --------- |  | - | --------- | -
|                                                               |  | Three Months Ended |          
|                                                               |  | September          |           |   | December |   | March     |  | June |          
|                                                               |  | 2008               |           |   | 2008     |   | 2009      |  | 2009 |          
|Total interest and dividend income                             |  | $                  | 4,884     |   |          | $ | 4,997     |  | $    | 3,944     |  | $ | 3,613     |  
|Total interest expense                                         |  |                    | 3,035     |   |          |   | 2,651     |  |      | 2,367     |  |   | 2,258     |  
|                                                               |  |                    |           |   |          |   |           |  |      |           |  |   |           |  
|                                                               |  |                    |           |  
|Net interest income                                            |  |                    | 1,849     |   |          |   | 2,346     |  |      | 1,577     |  |   | 1,355     |  
|(Recovery) provision for loan losses                           |  |                    | (6        | ) |          |   | 27        |  |      | 14        |  |   | (329      | )
|                                                               |  |                    |           |   |          |   |           |  |      |           |  |   |           |  
|                                                               |  |                    |           |  
|Net interest income after (recovery) provision for loan losses |  |                    | 1,855     |   |          |   | 2,319     |  |      | 1,563     |  |   | 1,684     |  
|                                                               |  |                    |           |  
|Total noninterest income                                       |  |                    | 167       |   |          |   | 156       |  |      | 141       |  |   | 140       |  
|Total noninterest expense                                      |  |                    | 973       |   |          |   | 962       |  |      | 832       |  |   | 1,028     |  
|                                                               |  |                    |           |   |          |   |           |  |      |           |  |   |           |  
|                                                               |  |                    |           |  
|Income before income taxes                                     |  |                    | 1,049     |   |          |   | 1,513     |  |      | 872       |  |   | 796       |  
|Income taxes                                                   |  |                    | 292       |   |          |   | 501       |  |      | 290       |  |   | 269       |  
|                                                               |  |                    |           |   |          |   |           |  |      |           |  |   |           |  
|                                                               |  |                    |           |  
|Net income                                                     |  | $                  | 757       |   |          | $ | 1,012     |  | $    | 582       |  | $ | 527       |  
|                                                               |  |                    |           |   |          |   |           |  |      |           |  |   |           |  
|                                                               |  |                    |           |  
|Per share data:                                                |  |                    |           |   |          |   |           |  |      |           |  |   |           |  
|Net income                                                     |  |                    |           |   |          |   |           |  |      |           |  |   |           |  
|Basic                                                          |  | $                  | 0.35      |   |          | $ | 0.47      |  | $    | 0.28      |  | $ | 0.25      |  
|Diluted                                                        |  |                    | 0.35      |   |          |   | 0.47      |  |      | 0.28      |  |   | 0.25      |  
|Average shares outstanding                                     |  |                    |           |   |          |   |           |  |      |           |  |   |           |  
|Basic                                                          |  |                    | 2,191,776 |   |          |   | 2,159,271 |  |      | 2,106,399 |  |   | 2,074,307 |  
|Diluted                                                        |  |                    | 2,191,783 |   |          |   | 2,159,587 |  |      | 2,106,399 |  |   | 2,074,307 |  



62



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COMMON STOCK MARKET PRICE AND DIVIDEND INFORMATION

WVS Financial Corp.s common stock is traded on the Nasdaq Global
MarketSMunder the symbol WVFC.

The following table sets forth the high and low market prices of a share of common stock, and cash dividends declared per
share, for the periods indicated.



|               |  |              |       |                |   |          |  |   |     
|-------------- |  | ------------ | ----- | -------------- | - | -------- |  | - | ----
|               |  | Market Price |       | Cash Dividends
|Quarter Ended  |  | High         |       | Low            |   | Declared
|June 2010      |  | $            | 14.25 |                | $ | 10.50    |  | $ | 0.16
|March 2010     |  |              | 14.55 |                |   | 13.96    |  |   | 0.16
|December 2009  |  |              | 15.66 |                |   | 14.25    |  |   | 0.16
|September 2009 |  |              | 16.40 |                |   | 14.62    |  |   | 0.16
|               |  |              |      
|June 2009      |  | $            | 17.45 |                | $ | 14.50    |  | $ | 0.16
|March 2009     |  |              | 16.50 |                |   | 14.80    |  |   | 0.16
|December 2008  |  |              | 17.26 |                |   | 15.87    |  |   | 0.16
|September 2008 |  |              | 16.40 |                |   | 15.80    |  |   | 0.16

There
were five Nasdaq Market Makers in the Companys common stock as of June 30, 2010: Citadel Securities LLC; UBS Securities LLC; Stifel Nicolaus & Co.; Knight Equity Markets, L.P. and E*Trade Capital Markets LLC.

According to the records of the Companys transfer agent, there were approximately 603 shareholders of record at
August 30, 2010. This does not include any persons or entities who hold their stock in nominee or street name through various brokerage firms.

Dividends are subject to determination and declaration by the Board of Directors, which takes into account the
Companys financial condition, statutory and regulatory restrictions, general economic condition and other factors.



63



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WVS FINANCIAL CORP.

CORPORATE INFORMATION



CORPORATE OFFICES

WVS FINANCIAL CORP.  WEST VIEW SAVINGS BANK

9001 Perry Highway Pittsburgh, PA 15237

412-364-1911



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|COMMON STOCK
The common stock of WVS Financial Corp. is traded on
The Nasdaq Global
MarketSMunder the symbol WVFC.
 TRANSFER AGENT & REGISTRAR
Registrar and Transfer Company
10 Commerce Drive
Cranford, NJ 07016
1-800-368-5948 
CORPORATE SECRETARY AND
INVESTOR RELATIONS
Pamela M. Gregio
412-364-1911 
SPECIAL COUNSEL
Elias, Matz, Tiernan & Herrick L.L.P.
Washington, DC 
WEST VIEW SAVINGS BANK
9001 Perry Highway
Pittsburgh, PA 15237
412-364-1911 
WEST VIEW OFFICE
456 Perry Highway
412-931-2171 
CRANBERRY OFFICE
20531 Perry Highway
412-931-6080/724-776-3480 
FRANKLIN PARK OFFICE
2566 Brandt School Road
724-935-7100 
BELLEVUE OFFICE
572 Lincoln Avenue
412-761-5595 
SHERWOOD OAKS OFFICE
Serving Sherwood Oaks
Cranberry Twp. 
LENDING DIVISION
2566 Brandt School Road
724-935-7400 |  | BOARD OF DIRECTORS 
David L. Aeberli
Funeral Director
McDonald-Aeberli Funeral Home, Inc. 
David J. Bursic
President and Chief Executive Officer
WVS Financial Corp. and
West View Savings Bank 
John W. Grace
President G &
R Investment Consultants, Inc.  Donald E.
Hook Chairman Emeritus
Pittsburgh Cut Flower Co. 
Jonathan D. Hoover
Senior Vice President
WVS Financial Corp. and
West View Savings Bank 
Lawrence M. Lehman
Sole Proprietor
Newton-Lehman Insurance Agency 
Margaret VonDerau
Former Senior Vice President
and Corporate Secretary
WVS Financial Corp. and
West View Savings Bank 
EXECUTIVE OFFICERS 
David L. Aeberli
Chairman 
David J. Bursic
President and
Chief Executive Officer 
Jonathan D. Hoover
Senior Vice President 
Bernard P. Lefke
Vice President of Savings 
Keith A. Simpson
Vice President, Treasurer and
Chief Accounting Officer

The members of the Board of Directors serve in that capacity for both the Company and the Savings Bank.



64