##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20429
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2011
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 0-29709
 HARLEYSVILLE SAVINGS FINANCIAL CORPORATION
  Pennsylvania
    
    23-3028464(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 (Address of principal executive offices) (Zip Code)
 (Registrants telephone number, including area code)
 (Former name, former address and former fiscal year, if changed since last report)
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ
 o þ




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##### 



HARLEYSVILLE SAVINGS FINANCIAL CORPORATION
 Index
 PAGE(S)Part I FINANCIAL INFORMATIONItem 1. Financial StatementsUnaudited Consolidated Statements of Financial Condition as of March 31, 2011, and September 30, 2010
    
    
    1Unaudited Consolidated Statements of Income for the Three and Six Months Ended March 31, 2011 and 2010
    
    
    2Unaudited Consolidated Statements of Comprehensive Income for the Three and Six Months Ended March 31, 2011 and 2010
    
    
    3Unaudited Consolidated Statements of Stockholders Equity for the Six Months Ended March 31, 2011 and 2010
    
    
    4Unaudited Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2011 and 2010
    
    
    5Notes to Unaudited Consolidated Financial Statements
    
    
    6 - 26Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    26 - 30Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    30 - 31Item 4. Controls and Procedures
    
    
    32Part II OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    33Item 1A. Risk Factors
    
    
    33Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    33Item 3. Defaults upon Senior Securities
    
    
    33Item 4. (Removed and Reserved)
    
    
    33Item 5. Other Information
    
    
    33Item 6. Exhibits
    
    
    33Signatures
    
    
    34Exhibit 31.1Exhibit 31.2Exhibit 32.0




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##### Table of Contents



Harleysville Savings Financial Corporation
 
 Unaudited Consolidated Statements of Financial Condition
 March 31,
    
    
    September 30,(In thousands, except share data)
    
    2011
    
    
    2010AssetsCash and amounts due from depository institutions
    
    $
    4,476
    
    
    $
    4,052Interest bearing deposits
    
    
    19,484
    
    
    
    16,138Total cash and cash equivalents
    
    
    23,960
    
    
    
    20,190Investments and mortgage-backed securities:Available for sale (amortized cost  March 31, $10,774; September 30,
$21,401)
    
    
    10,860
    
    
    
    21,413Held to maturity (fair value  March 31, $275,116; September 30, $264,448)
    
    
    271,744
    
    
    
    256,088Loans receivable (net of allowance for loan losses March 31, $2,795; September 30, $2,504)
    
    
    501,180
    
    
    
    510,093Accrued interest receivable
    
    
    3,167
    
    
    
    3,210Federal Home Loan Bank stock  at cost
    
    
    14,526
    
    
    
    16,096Foreclosed real estate
    
    
    372
    
    
    
    186Office properties and equipment, net
    
    
    12,070
    
    
    
    12,158Prepaid expenses and other assets
    
    
    18,599
    
    
    
    17,706TOTAL ASSETS
    
    $
    856,478
    
    
    $
    857,140Liabilities and Stockholders EquityLiabilities:Deposits
    
    $
    531,272
    
    
    $
    528,100Long-term debt
    
    
    263,632
    
    
    
    272,047Accrued interest payable
    
    
    1,333
    
    
    
    1,407Advances from borrowers for taxes and insurance
    
    
    4,450
    
    
    
    1,247Accounts payable and accrued expenses
    
    
    782
    
    
    
    988Total liabilities
    
    
    801,469
    
    
    
    803,789Commitments and contingenciesStockholders equity:Preferred Stock: $.01 par value;
7,500,000 shares authorized; none issued
    
    
    
    
    
    
    Common stock: $.01 par value; 15,000,000 shares authorized;
3,921,177 shares issued; outstanding March 31, 2011 3,731,574 shares
September 30, 2010 3,687,409 shares
    
    
    39
    
    
    
    39Additional paid-in capital
    
    
    8,224
    
    
    
    8,126Treasury
stock, at cost (March 31, 2011, 189,603 shares; September 30, 2010, 233,768 shares)
    
    
    (2,777
    )
    
    
    (3,383
    )Retained earnings  partially restricted
    
    
    49,466
    
    
    
    48,562Accumulated other comprehensive income
    
    
    57
    
    
    
    7Total stockholders equity
    
    
    55,009
    
    
    
    53,351TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    856,478
    
    
    $
    857,140
 See notes to unaudited consolidated financial statements.
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Harleysville Savings Financial Corporation
 
 Unaudited Consolidated Statements of Income
 For the Three Months Ended
    
    
    For the Six Months EndedMarch 31,
    
    
    March 31,(In thousands, except per share data)
    
    2011
    
    
    2010
    
    
    2011
    
    
    2010Interest Income:Interest on mortgage loans
    
    $
    4,688
    
    
    $
    4,992
    
    
    $
    9,491
    
    
    $
    10,076Interest on commercial loans
    
    
    1,246
    
    
    
    976
    
    
    
    2,482
    
    
    
    1,915Interest on mortgage-backed securities
    
    
    1,329
    
    
    
    1,772
    
    
    
    2,734
    
    
    
    3,677Interest on consumer and other loans
    
    
    1,008
    
    
    
    1,090
    
    
    
    2,060
    
    
    
    2,227Interest on other taxable investments
    
    
    803
    
    
    
    851
    
    
    
    1,534
    
    
    
    1,760Interest on tax-exempt investments
    
    
    216
    
    
    
    262
    
    
    
    419
    
    
    
    543Dividends on investment securities
    
    
    1
    
    
    
    1
    
    
    
    2
    
    
    
    2Total interest income
    
    
    9,291
    
    
    
    9,944
    
    
    
    18,722
    
    
    
    20,200Interest Expense:Interest on deposits
    
    
    1,895
    
    
    
    2,273
    
    
    
    3,912
    
    
    
    4,808Interest on borrowings
    
    
    2,869
    
    
    
    3,152
    
    
    
    5,827
    
    
    
    6,486Total interest expense
    
    
    4,764
    
    
    
    5,425
    
    
    
    9,739
    
    
    
    11,294Net Interest Income
    
    
    4,527
    
    
    
    4,519
    
    
    
    8,983
    
    
    
    8,906Provision for loan losses
    
    
    175
    
    
    
    150
    
    
    
    325
    
    
    
    300Net Interest Income after Provision for Loan Losses
    
    
    4,352
    
    
    
    4,369
    
    
    
    8,658
    
    
    
    8,606Other Income:Customer service fees
    
    
    127
    
    
    
    152
    
    
    
    264
    
    
    
    313Income on bank-owned life insurance
    
    
    121
    
    
    
    121
    
    
    
    244
    
    
    
    243Other income
    
    
    184
    
    
    
    185
    
    
    
    425
    
    
    
    404Total other income
    
    
    432
    
    
    
    458
    
    
    
    933
    
    
    
    960Other Expenses:Salaries and employee benefits
    
    
    1,895
    
    
    
    1,762
    
    
    
    3,624
    
    
    
    3,431Occupancy and equipment
    
    
    368
    
    
    
    336
    
    
    
    714
    
    
    
    629Deposit insurance premiums
    
    
    263
    
    
    
    226
    
    
    
    489
    
    
    
    453Data processing
    
    
    163
    
    
    
    169
    
    
    
    330
    
    
    
    322Other
    
    
    651
    
    
    
    737
    
    
    
    1,345
    
    
    
    1,465Total other expenses
    
    
    3,340
    
    
    
    3,230
    
    
    
    6,502
    
    
    
    6,300Income before Income Taxes
    
    
    1,444
    
    
    
    1,597
    
    
    
    3,089
    
    
    
    3,266Income tax expense
    
    
    350
    
    
    
    437
    
    
    
    779
    
    
    
    892Net Income
    
    $
    1,094
    
    
    $
    1,160
    
    
    $
    2,310
    
    
    $
    2,374Basic Earnings Per Share
    
    $
    0.29
    
    
    $
    0.32
    
    
    $
    0.62
    
    
    $
    0.65Diluted Earnings Per Share
    
    $
    0.29
    
    
    $
    0.32
    
    
    $
    0.62
    
    
    $
    0.65Dividends Per Share
    
    $
    0.19
    
    
    $
    0.19
    
    
    $
    0.38
    
    
    $
    0.38
 See notes to unaudited consolidated financial statements.
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Harleysville Savings Financial Corporation
 
 Unaudited Consolidated Statements of Comprehensive Income
 Three Months EndedMarch 31,(In thousands)
    
    2011
    
    
    2010Net Income
    
    $
    1,094
    
    
    $
    1,160Other Comprehensive IncomeUnrealized (loss) gain on securities available for sale, net of tax (benefit)
expense 2011, ($10); 2010, $28 and reclassifications
    
    
    (20
    )(1)
    
    
    56
    (1)Total Comprehensive Income
    
    $
    1,074
    
    
    $
    1,216
 2011
    
    
    2010(1) Disclosure of reclassification amount, net of tax for the three months ended:Net unrealized (loss) gain arising during the three months ended
    
    $
    (30
    )
    
    $
    84Reclassification adjustment for net losses (gains) included in net income
    
    
    
    
    
    
    (30
    )
    
    
    84Tax benefit (expense)
    
    
    10
    
    
    
    (28
    )Net unrealized (loss) gain on securities available for sale
    
    $
    (20
    )
    
    $
    56
 Six Months EndedMarch 31,(In thousands)
    
    2011
    
    
    2010Net Income
    
    $
    2,310
    
    
    $
    2,374Other Comprehensive IncomeUnrealized (loss) gain on securities available for sale, net of tax (benefit)
expense 2011, $25; 2010, $29 and reclassifications
    
    
    (50
    )(1)
    
    
    57
    (1)Total Comprehensive Income
    
    $
    2,260
    
    
    $
    2,431
 2011
    
    
    2010(1) Disclosure of reclassification amount, net of tax for the three months ended:Net unrealized gain arising during the three months ended
    
    $
    75
    
    
    $
    86Reclassification adjustment for net losses (gains) included in net income
    
    
    
    
    
    
    75
    
    
    
    86Tax expense
    
    
    (25
    )
    
    
    (29
    )Net unrealized gain on securities available for sale
    
    $
    50
    
    
    $
    57
 See notes to unaudited consolidated financial statements.
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Harleysville Savings Financial Corporation
 
 Unaudited Consolidated Statements of Stockholders Equity
 Common
    
    
    
    
    
    
    
    
    
    
    Retained
    
    
    AccumulatedStock
    
    
    
    
    
    
    Additional
    
    
    Earnings-
    
    
    Other
    
    
    
    
    
    
    TotalShares
    
    
    Common
    
    
    Paid-in
    
    
    Partially
    
    
    Comprehensive
    
    
    Treasury
    
    
    Stockholders(In thousands, except share and per share data)
    
    Outstanding
    
    
    Stock
    
    
    Capital
    
    
    Restricted
    
    
    (Loss) / Income
    
    
    Stock
    
    
    EquityBalance at October 1, 2010
    
    
    3,687,409
    
    
    $
    39
    
    
    $
    8,126
    
    
    $
    48,562
    
    
    $
    7
    
    
    $
    (3,383
    )
    
    $
    53,351Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,310
    
    
    
    
    
    
    
    
    
    
    
    2,310Dividends  $.38 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,406
    )
    
    
    
    
    
    
    
    
    
    
    (1,406
    )Stock option compensation
    
    
    
    
    
    
    
    
    
    
    103
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    103Treasury stock delivered under ESOP
    
    
    10,000
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    137
    
    
    
    147Treasury stock delivered under reinvestment plan
    
    
    20,380
    
    
    
    
    
    
    
    26
    
    
    
    
    
    
    
    
    
    
    
    280
    
    
    
    306Employee options exercised
    
    
    13,785
    
    
    
    
    
    
    
    (41
    )
    
    
    
    
    
    
    
    
    
    
    189
    
    
    
    148Change in unrealized holding gain on
available-for-sale securities, net of
reclassification and tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50
    
    
    
    
    
    
    
    50Balance at March 31, 2011
    
    
    3,731,574
    
    
    $
    39
    
    
    $
    8,224
    
    
    $
    49,466
    
    
    $
    57
    
    
    $
    (2,777
    )
    
    $
    55,009
 Common
    
    
    
    
    
    
    
    
    
    
    Retained
    
    
    AccumulatedStock
    
    
    
    
    
    
    Additional
    
    
    Earnings-
    
    
    Other
    
    
    
    
    
    
    TotalShares
    
    
    Common
    
    
    Paid-in
    
    
    Partially
    
    
    Comprehensive
    
    
    Treasury
    
    
    Stockholders(In thousands, except share and per share data)
    
    Outstanding
    
    
    Stock
    
    
    Capital
    
    
    Restricted
    
    
    (Loss) / Income
    
    
    Stock
    
    
    EquityBalance at October 1, 2009
    
    
    3,627,696
    
    
    $
    39
    
    
    $
    8,002
    
    
    $
    46,329
    
    
    $
    (29
    )
    
    $
    (4,202
    )
    
    $
    50,139Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,374
    
    
    
    
    
    
    
    
    
    
    
    2,374Dividends  $.38 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,382
    )
    
    
    
    
    
    
    
    
    
    
    (1,382
    )Stock option compensation
    
    
    
    
    
    
    
    
    
    
    81
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    81Treasury stock purchase
    
    
    (5,659
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (77
    )
    
    
    (77
    )Treasury stock delivered under ESOP
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    137
    
    
    
    137Treasury stock delivered under reinvestment plan
    
    
    20,939
    
    
    
    
    
    
    
    (6
    )
    
    
    
    
    
    
    
    
    
    
    286
    
    
    
    280Employee options exercised
    
    
    7,916
    
    
    
    
    
    
    
    (38
    )
    
    
    
    
    
    
    
    
    
    
    109
    
    
    
    71Change in unrealized holding loss
on available-for-sale securities, net of
reclassification and tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    57
    
    
    
    
    
    
    
    57Balance at March 31, 2010
    
    
    3,660,892
    
    
    $
    39
    
    
    $
    8,039
    
    
    $
    47,321
    
    
    $
    28
    
    
    $
    (3,747
    )
    
    $
    51,680
 See notes to unaudited consolidated financial statements.
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##### Table of Contents



Harleysville Savings Financial Corporation
 
 Unaudited Consolidated Statements of Cash Flows
 Six Months Ended March 31,(In thousands)
    
    2011
    
    
    2010Operating Activities:Net Income
    
    $
    2,310
    
    
    $
    2,374Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation
    
    
    309
    
    
    
    259Provision for loan losses
    
    
    325
    
    
    
    300Loss on sale of foreclosed real estate
    
    
    
    
    
    
    159Amortization of deferred loan fees
    
    
    126
    
    
    
    58Net (accretion) amortization of premiums and discounts
    
    
    (86
    )
    
    
    65Increase in cash surrender value of bank owned life insurance
    
    
    (244
    )
    
    
    (243
    )Compensation charge on stock options
    
    
    103
    
    
    
    81Changes in assets and liabilities which provided (used) cash:Decrease in accounts payable and accrued expenses
    
    
    (206
    )
    
    
    (489
    )Increase in prepaid expenses and other assets
    
    
    (649
    )
    
    
    (3,277
    )Decrease in accrued interest receivable
    
    
    43
    
    
    
    108Decrease in accrued interest payable
    
    
    (74
    )
    
    
    (149
    )Net cash provided by (used in) operating activities
    
    
    1,957
    
    
    
    (754
    )Investing Activities:Purchase of mortgage-backed securities held to maturity
    
    
    (36,930
    )
    
    
    (1,571
    )Purchase of investment securities held to maturity
    
    
    (39,228
    )
    
    
    (50,953
    )Purchase of investment securities available-for-sale
    
    
    (33,114
    )
    
    
    (30,900
    )Net redemption FHLB stock
    
    
    1,570
    
    
    
    Proceeds from the redemption of investment securities available-for-sale
    
    
    43,717
    
    
    
    33,780Proceeds from maturities of investment securities held to maturity
    
    
    36,665
    
    
    
    40,429Proceeds from sale of foreclosed real estate
    
    
    
    
    
    
    588Principal collected on mortgage-backed securities held to maturity
    
    
    23,923
    
    
    
    22,125Principal collected on long term loans
    
    
    60,948
    
    
    
    55,161Long term loans originated or acquired
    
    
    (52,672
    )
    
    
    (68,623
    )Purchases of premises and equipment
    
    
    (221
    )
    
    
    (1,894
    )Net cash provided by (used in) investing activities
    
    
    4,658
    
    
    
    (1,858
    )Financing Activities:Net increase in demand deposits, NOW accounts
and savings accounts
    
    
    9,196
    
    
    
    44,219Net decrease in certificates of deposit
    
    
    (6,024
    )
    
    
    (19,246
    )Cash dividends
    
    
    (1,090
    )
    
    
    (1,102
    )Repayment of long-term debt
    
    
    (8,415
    )
    
    
    (18,648
    )Acquisition of treasury stock
    
    
    
    
    
    
    (77
    )Treasury stock delivered under employee stock plans
    
    
    285
    
    
    
    208Net increase in advances from borrowers for taxes and insurance
    
    
    3,203
    
    
    
    3,039Net cash (used in) provided by financing activities
    
    
    (2,845
    )
    
    
    8,393INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    3,770
    
    
    
    5,781CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
    
    
    20,190
    
    
    
    9,442CASH AND CASH EQUIVALENTS AT END OF YEAR
    
    $
    23,960
    
    
    $
    15,223Supplemental Disclosure of Cash Flow InformationCash paid during the period for:Interest (credited and paid)
    
    $
    9,813
    
    
    $
    11,444Income taxes
    
    
    1,020
    
    
    
    925Foreclosed real estate acquired in settlement of loans
    
    
    186
    
    
    
    Securities purchased and not settled
    
    $
    
    
    
    $
    2,800
 See notes to consolidated financial statements.
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##### Table of Contents



Harleysville Savings Financial Corporation
 
 Notes to Unaudited Consolidated Financial Statements
 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   Use of Estimates in Preparation of Consolidated Financial Statements
  Reclassifications
  Subsequent Events
   page -6-




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##### Table of Contents



Recent Accounting Pronouncements Transfers and Servicing (Topic 860)  Accounting for Transfers of Financial Assets. Accounting for Transfers of Financial Assets-an amendment of FASB Statement No. 140
 Consolidations (Topic 810)  Improvements to
Financial Reporting by Enterprises Involved with Variable Interest Entities Amendments to FASB Interpretation No.
46(R)
 Fair Value Measurements and Disclosures (Topic 820): Improving
Disclosures about Fair Value Measurements.
 
    
    A reporting entity to disclose separately the amounts of significant transfers in and
out of Level 1 and Level 2 fair value measurements and describe the reasons for the
transfers; and
 
    
    In the reconciliation for fair value measurements using significant unobservable inputs,
a reporting entity should present separately information about purchases, sales, issuances,
and settlements.
  
    
    For purposes of reporting fair value measurement for each class of assets and
liabilities, a reporting entity needs to use judgment in determining the appropriate
classes of assets and liabilities; and
 
    
    A reporting entity should provide disclosures about the valuation techniques and inputs
used to measure fair value for both recurring and nonrecurring fair value measurements.
  page -7-




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##### Table of Contents



Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables
and the Allowance for Credit Losses,
   ending beginning
 ASU 2011  01 Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in
Update No. 2010-20.
 A Creditors Determination of Whether a Restructuring is a Troubled Debt Restructuring Receivables
  page -8-




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##### Table of Contents



2. INVESTMENT AND MORTGAGE-BACKED SECURITIES
  Available for sale securities:
 March 31, 2011Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    Fair(In Thousands)
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueEquity securities
    
    $
    355
    
    
    $
    72
    
    
    $
    (31
    )
    
    $
    396Collateralized mortgage obligations
    
    
    785
    
    
    
    45
    
    
    
    
    
    
    
    830U.S. Government money market funds
    
    
    9,634
    
    
    
    
    
    
    
    
    
    
    
    9,634Total Available for Sale Securities
    
    $
    10,774
    
    
    $
    117
    
    
    $
    (31
    )
    
    $
    10,860
 September 30, 2010Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    Fair(In Thousands)
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueEquity securities
    
    $
    355
    
    
    $
    42
    
    
    $
    (54
    )
    
    $
    343Collateralized mortgage obligations
    
    
    785
    
    
    
    24
    
    
    
    
    
    
    
    809U.S. Government money market funds
    
    
    20,261
    
    
    
    
    
    
    
    
    
    
    
    20,261Total Available for Sale Securities
    
    $
    21,401
    
    
    $
    66
    
    
    $
    (54
    )
    
    $
    21,413
 Held to maturity securities:
 March 31, 2011Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    Fair(In Thousands)
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueMortgage-backed securities- U.S.
Government
Sponsored Enterprises (GSEs)
    
    $
    118,632
    
    
    $
    5,559
    
    
    $
    (48
    )
    
    $
    124,143Collateralized mortgage obligations
    
    
    25,224
    
    
    
    199
    
    
    
    (4
    )
    
    
    25,419Municipal bonds
    
    
    20,067
    
    
    
    487
    
    
    
    (110
    )
    
    
    20,444U.S. Government Agencies
    
    
    107,821
    
    
    
    198
    
    
    
    (2,909
    )
    
    
    105,110Total Held to Maturity Securities
    
    $
    271,744
    
    
    $
    6,443
    
    
    $
    (3,071
    )
    
    $
    275,116
 September 30, 2010Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    Fair(In Thousands)
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueMortgage-backed securities- U.S.
Government
Sponsored Enterprises (GSEs)
    
    $
    110,732
    
    
    $
    6,755
    
    
    $
    
    
    
    $
    117,487Collateralized mortgage obligations
    
    
    20,087
    
    
    
    193
    
    
    
    (37
    )
    
    
    20,243Municipal bonds
    
    
    16,462
    
    
    
    773
    
    
    
    (47
    )
    
    
    17,188U.S. Government Agencies
    
    
    108,807
    
    
    
    768
    
    
    
    (45
    )
    
    
    109,530Total Held to Maturity Securities
    
    $
    256,088
    
    
    $
    8,489
    
    
    $
    (129
    )
    
    $
    264,448
  page -9-




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##### Table of Contents



TotalLess than 12 Months
    
    
    12 Months or Longer
    
    
    
    
    
    
    TotalUnrealized
    
    
    
    
    
    
    Unrealized
    
    
    Total
    
    
    Unrealized(In Thousands)
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    LossesCollateralized mortgage obligations
    
    $
    7,571
    
    
    $
    (4
    )
    
    $
    
    
    
    $
    
    
    
    $
    7,571
    
    
    $
    (4
    )Municipal bonds
    
    
    2,944
    
    
    
    (23
    )
    
    
    1,451
    
    
    
    (87
    )
    
    
    4,395
    
    
    
    (110
    )U.S. Government Agencies and GSEs
    
    
    102,496
    
    
    
    (2,957
    )
    
    
    
    
    
    
    
    
    
    
    102,496
    
    
    
    (2,957
    )Subtotal debt securities
    
    
    113,011
    
    
    
    (2,984
    )
    
    
    1,451
    
    
    
    (87
    )
    
    
    114,462
    
    
    
    (3,071
    )Equity securities
    
    
    24
    
    
    
    
    
    
    
    181
    
    
    
    (31
    )
    
    
    205
    
    
    
    (31
    )Total temporarily impaired securities
    
    $
    113,035
    
    
    $
    (2,984
    )
    
    $
    1,632
    
    
    $
    (118
    )
    
    $
    114,667
    
    
    $
    (3,102
    )
    TotalLess than 12 Months
    
    
    12 Months or Longer
    
    
    
    
    
    
    TotalUnrealized
    
    
    
    
    
    
    Unrealized
    
    
    Total
    
    
    Unrealized(In Thousands)
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    LossesCollateralized mortgage obligations
    
    $
    8,262
    
    
    $
    (4
    )
    
    $
    1,530
    
    
    $
    (33
    )
    
    $
    9,792
    
    
    $
    (37
    )Municipal bonds
    
    
    378
    
    
    
    
    
    
    
    1,494
    
    
    
    (47
    )
    
    
    1,872
    
    
    
    (47
    )U.S. Government Agencies and GSEs
    
    
    6,955
    
    
    
    (45
    )
    
    
    
    
    
    
    
    
    
    
    6,955
    
    
    
    (45
    )Subtotal debt securities
    
    
    15,595
    
    
    
    (49
    )
    
    
    3,024
    
    
    
    (80
    )
    
    
    18,619
    
    
    
    (129
    )Equity Securities
    
    
    55
    
    
    
    (3
    )
    
    
    160
    
    
    
    (51
    )
    
    
    215
    
    
    
    (54
    )Total temporarily impaired securities
    
    $
    15,650
    
    
    $
    (52
    )
    
    $
    3,184
    
    
    $
    (131
    )
    
    $
    18,834
    
    
    $
    (183
    )
  page -10-




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##### Table of Contents



March 31, 2011Amortized(In Thousands)
    
    Cost
    
    
    Fair ValueAvailable for sale:Due in one year or less
    
    $
    785
    
    
    $
    830Due after one year through five years
    
    
    
    
    
    
    Due after five years through ten years
    
    
    
    
    
    
    Due after ten years
    
    
    
    
    
    
    Total
    
    $
    785
    
    
    $
    830Held to maturity:Due in one year or less
    
    $
    138,568
    
    
    $
    136,400Due after one year through five years
    
    
    117,678
    
    
    
    123,117Due after five years through ten years
    
    
    14,672
    
    
    
    14,658Due after ten years
    
    
    826
    
    
    
    941Total
    
    $
    271,744
    
    
    $
    275,116
  3. LOANS RECEIVABLE
  (In Thousands)
    
    March 31, 2011
    
    
    September 30, 2010Residential Mortgages
    
    $
    332,219
    
    
    $
    339,874Construction
    
    
    6,129
    
    
    
    4,752Home Equity
    
    
    85,958
    
    
    
    90,511Commercial Mortgages
    
    
    79,203
    
    
    
    75,450Commercial Business Loans
    
    
    6,442
    
    
    
    4,327Consumer Non-Real Estate
    
    
    1,125
    
    
    
    1,980Total
    
    
    511,076
    
    
    
    516,894Undisbursed portion of loans in process
    
    
    (6,129
    )
    
    
    (3,426
    )Deferred loan fees
    
    
    (972
    )
    
    
    (871
    )Allowance for loan losses
    
    
    (2,795
    )
    
    
    (2,504
    )Loans Receivable  net
    
    $
    501,180
    
    
    $
    510,093
   page -11-




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page -12-




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##### Table of Contents



page -13-




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##### Table of Contents



March 31, 2011
 Special(In Thousands)
    
    Pass
    
    
    Mention
    
    
    Substandard
    
    
    Doubtful
    
    
    TotalResidential Mortgages
    
    $
    329,425
    
    
    $
    
    
    
    $
    2,428
    
    
    $
    366
    
    
    $
    332,219Construction
    
    
    6,129
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,129Home Equity
    
    
    85,746
    
    
    
    
    
    
    
    147
    
    
    
    65
    
    
    
    85,958Commercial Mortgages
    
    
    76,760
    
    
    
    2,211
    
    
    
    
    
    
    
    232
    
    
    
    79,203Commercial Business Loans
    
    
    6,342
    
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    6,442Consumer Non-Real Estate
    
    
    1,120
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    1,125Total
    
    $
    505,522
    
    
    $
    2,311
    
    
    $
    2,575
    
    
    $
    668
    
    
    $
    511,076
  Special(In Thousands)
    
    Pass
    
    
    Mention
    
    
    Substandard
    
    
    Doubtful
    
    
    TotalResidential Mortgages
    
    $
    330,283
    
    
    $
    
    
    
    $
    1,974
    
    
    $
    641
    
    
    $
    332,898Construction
    
    
    5,420
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,420Home Equity
    
    
    88,759
    
    
    
    
    
    
    
    103
    
    
    
    65
    
    
    
    88,927Commercial Mortgages
    
    
    76,096
    
    
    
    2,214
    
    
    
    
    
    
    
    312
    
    
    
    78,622Commercial Business Loans
    
    
    6,498
    
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    6,598Consumer Non-Real Estate
    
    
    1,194
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    1,200Total
    
    $
    508,250
    
    
    $
    2,314
    
    
    $
    2,077
    
    
    $
    1,024
    
    
    $
    513,665
  page -14-




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##### Table of Contents



March 31, 2011
 Unpaid
    
    
    
    
    
    
    Average
    
    
    InterestRecorded
    
    
    Principal
    
    
    Related
    
    
    Recorded
    
    
    Income(In Thousands)
    
    Investment
    
    
    Balance
    
    
    Allowance
    
    
    Investment
    
    
    RecognizedWith no related allowance
recorded:Residential Mortgages
    
    $
    1,130
    
    
    $
    1,130
    
    
    $
    
    
    
    $
    846
    
    
    $
    9Construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Home Equity
    
    
    65
    
    
    
    65
    
    
    
    
    
    
    
    65
    
    
    
    Commercial Mortgages
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Commercial Business Loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consumer NonReal Estate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    With an allowance recorded:Residential Mortgages
    
    $
    1,664
    
    
    $
    1,664
    
    
    $
    (317
    )
    
    $
    1,653
    
    
    $
    2Construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Home Equity
    
    
    147
    
    
    
    147
    
    
    
    (147
    )
    
    
    118
    
    
    
    Commercial Mortgages
    
    
    232
    
    
    
    232
    
    
    
    (105
    )
    
    
    259
    
    
    
    Commercial Business Loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consumer NonReal Estate
    
    
    5
    
    
    
    5
    
    
    
    (5
    )
    
    
    5
    
    
    
    Total:Residential Mortgages
    
    $
    2,794
    
    
    $
    2,794
    
    
    $
    (317
    )
    
    $
    2,499
    
    
    $
    11Construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Home Equity
    
    
    212
    
    
    
    212
    
    
    
    (147
    )
    
    
    183
    
    
    
    Commercial Mortgages
    
    
    232
    
    
    
    232
    
    
    
    (105
    )
    
    
    259
    
    
    
    Commercial Business Loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consumer NonReal Estate
    
    
    5
    
    
    
    5
    
    
    
    (5
    )
    
    
    5
    
    
    
    
  page -15-




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##### Table of Contents



Unpaid
    
    
    
    
    
    
    Average
    
    
    InterestRecorded
    
    
    Principal
    
    
    Related
    
    
    Recorded
    
    
    Income(In Thousands)
    
    Investment
    
    
    Balance
    
    
    Allowance
    
    
    Investment
    
    
    RecognizedWith no related allowance
recorded:Residential Mortgages
    
    $
    1,047
    
    
    $
    1,047
    
    
    $
    
    
    
    $
    1,050
    
    
    $
    10Construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Home Equity
    
    
    65
    
    
    
    65
    
    
    
    
    
    
    
    65
    
    
    
    Commercial Mortgages
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Commercial Business Loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consumer Non-Real Estate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    With an allowance recorded:Residential Mortgages
    
    $
    1,568
    
    
    $
    1,568
    
    
    $
    (269
    )
    
    $
    1,568
    
    
    $
    2Construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Home Equity
    
    
    103
    
    
    
    103
    
    
    
    (103
    )
    
    
    104
    
    
    
    Commercial Mortgages
    
    
    312
    
    
    
    312
    
    
    
    (127
    )
    
    
    312
    
    
    
    Commercial Business Loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consumer Non-Real Estate
    
    
    6
    
    
    
    6
    
    
    
    (6
    )
    
    
    6
    
    
    
    Total:Residential Mortgages
    
    $
    2,615
    
    
    $
    2,615
    
    
    $
    (269
    )
    
    $
    2,618
    
    
    $
    12Construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Home Equity
    
    
    168
    
    
    
    168
    
    
    
    (103
    )
    
    
    169
    
    
    
    Commercial Mortgages
    
    
    312
    
    
    
    312
    
    
    
    (127
    )
    
    
    312
    
    
    
    Commercial Business Loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consumer Non-Real Estate
    
    
    6
    
    
    
    6
    
    
    
    (6
    )
    
    
    6
    
    
    
    
  page -16-




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##### Table of Contents



March 31, 2011
 LoansReceivableGreater
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    > 90 Days30-89 Days Past
    
    
    than 90
    
    
    Total
    
    
    
    
    
    
    Total Loans
    
    
    and(In Thousands)
    
    Due
    
    
    Days
    
    
    Past Due
    
    
    Current
    
    
    Receivables
    
    
    AccruingResidential Mortgages
    
    $
    4,448
    
    
    $
    2,962
    
    
    $
    7,410
    
    
    $
    324,809
    
    
    $
    332,219
    
    
    $
    380Construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,129
    
    
    
    6,129
    
    
    
    Home Equity
    
    
    10
    
    
    
    44
    
    
    
    54
    
    
    
    85,904
    
    
    
    85,958
    
    
    
    44Commercial Mortgages
    
    
    2,009
    
    
    
    232
    
    
    
    2,241
    
    
    
    76,962
    
    
    
    79,203
    
    
    
    Commercial Business
Loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,442
    
    
    
    6,442
    
    
    
    Consumer NonReal
Estate
    
    
    64
    
    
    
    5
    
    
    
    69
    
    
    
    1,056
    
    
    
    1,125
    
    
    
    Total
    
    $
    6,531
    
    
    $
    3,243
    
    
    $
    9,774
    
    
    $
    501,302
    
    
    $
    511,076
    
    
    $
    424
  LoansReceivableGreater
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    > 90 Days30-89 Days Past
    
    
    than 90
    
    
    Total
    
    
    
    
    
    
    Total Loans
    
    
    and(In Thousands)
    
    Due
    
    
    Days
    
    
    Past Due
    
    
    Current
    
    
    Receivables
    
    
    AccruingResidential Mortgages
    
    $
    2,691
    
    
    $
    2,447
    
    
    $
    5,138
    
    
    $
    327,760
    
    
    $
    332,898
    
    
    $
    380Construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,420
    
    
    
    5,420
    
    
    
    Home Equity
    
    
    57
    
    
    
    12
    
    
    
    69
    
    
    
    88,858
    
    
    
    88,927
    
    
    
    12Commercial Mortgages
    
    
    
    
    
    
    312
    
    
    
    312
    
    
    
    78,310
    
    
    
    78,622
    
    
    
    Commercial Business Loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,598
    
    
    
    6,598
    
    
    
    Consumer Non-Real Estate
    
    
    31
    
    
    
    6
    
    
    
    37
    
    
    
    1,163
    
    
    
    1,200
    
    
    
    Total
    
    $
    2,779
    
    
    $
    2,777
    
    
    $
    5,556
    
    
    $
    508,109
    
    
    $
    513,665
    
    
    $
    392
  page -17-




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##### Table of Contents



At and for the Three-Months Ended March 31, 2011Commercial
    

    
    ConsumerResidential
    

    
    
    

    
    Home
    

    
    Commercial
    

    
    Business
    

    
    Non-RealMortgages
    

    
    Construction
    

    
    Equity
    

    
    Mortgages
    

    
    Loans
    

    
    Estate
    

    
    Unallocated
    

    
    TotalsBeginning Balance, December 31, 2010

    
    $
    947
    

    
    $
    8
    

    
    $
    457
    

    
    $
    983
    

    
    $
    130
    

    
    $
    10
    

    
    $
    104
    

    
    $
    2,639Charge-offs

    
    
    (15
    )

    
    
    
    

    
    
    
    

    
    
    
    

    
    
    
    

    
    
    (6
    )

    
    
    
    

    
    
    (21
    )Recoveries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    2Provisions
    
    
    60
    
    
    
    1
    
    
    
    43
    
    
    
    (23
    )
    
    
    (13
    )
    
    
    4
    
    
    
    103
    
    
    
    175Ending balance, March 31, 2011
    
    $
    992
    
    
    $
    9
    
    
    $
    500
    
    
    $
    960
    
    
    $
    117
    
    
    $
    10
    
    
    $
    207
    
    
    $
    2,795Ending balance:Individually evaluated for
impairment
    
    $
    317
    
    
    $
    
    
    
    $
    147
    
    
    $
    105
    
    
    $
    
    
    
    $
    5
    
    
    $
    
    
    
    $
    574Ending balance:Collectively evaluated for
impairment
    
    $
    675
    
    
    $
    9
    
    
    $
    353
    
    
    $
    855
    
    
    $
    117
    
    
    $
    5
    
    
    $
    207
    
    
    $
    2,221Loans:Ending balance:
    
    $
    332,219
    
    
    $
    6,129
    
    
    $
    85,958
    
    
    $
    79,203
    
    
    $
    6,442
    
    
    $
    1,125
    
    
    $
    
    
    
    $
    511,076Ending balance:Individually evaluated for
impairment
    
    $
    2,794
    
    
    $
    
    
    
    $
    212
    
    
    $
    232
    
    
    $
    
    
    
    $
    5
    
    
    $
    
    
    
    $
    3,243Ending balance:Collectively evaluated for
impairment
    
    $
    329,425
    
    
    $
    6,129
    
    
    $
    85,746
    
    
    $
    78,971
    
    
    $
    6,442
    
    
    $
    1,120
    
    
    $
    
    
    
    $
    507,833
  page -18-




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##### Table of Contents



(In Thousands)March 31,
    
    
    December 31,2011
    
    
    2010Residential Mortgages
    
    $
    2,582
    
    
    $
    2,392Construction
    
    
    
    
    
    
    Home Equity
    
    
    
    
    
    
    Commercial Mortgages
    
    
    232
    
    
    
    312Commercial Business Loans
    
    
    
    
    
    
    Consumer Non-Real Estate
    
    
    5
    
    
    
    6Total
    
    $
    2,819
    
    
    $
    2,710
 4. Federal Home Loan Bank Stock
    5. DEPOSITS
  (In Thousands)March 31,
    
    
    September 31,2011
    
    
    2010Non-interest bearing checking accounts
    
    $
    18,171
    
    
    $
    17,015Now accounts
    
    
    28,000
    
    
    
    21,320Interest bearing checking accounts
    
    
    35,527
    
    
    
    32,577Money market deposit accounts
    
    
    134,216
    
    
    
    136,079Passbook and club accounts
    
    
    4,012
    
    
    
    3,739Certificate of deposits
    
    
    311,346
    
    
    
    317,370Total Deposits
    
    $
    531,272
    
    
    $
    528,100
   page -19-




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6. COMMITMENTS
  (In thousands)Letters of credit
    
    $
    405Commitments to originate loans
    
    
    23,265Unused portion of home equity lines of credits
    
    
    55,095Unused portion of commercial lines of credits
    
    
    6,641Undisbursed portion of construction loans in process
    
    
    2,933Total
    
    $
    88,339
  7. EARNINGS PER SHARE
  For the Three Months Ended
    
    
    For the Six Months EndedMarch 31,
    
    
    March 31,2011
    
    
    2010
    
    
    2011
    
    
    2010Basic
    
    
    3,723,236
    
    
    
    3,654,047
    
    
    
    3,708,140
    
    
    
    3,643,583Diluted
    
    
    3,758,260
    
    
    
    3,670,280
    
    
    
    3,741,864
    
    
    
    3,658,087
 .
  page -20-




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8. LONG-TERM DEBT
  March 31,
    
    
    September 30,2011
    
    
    2010(In thousands)Weighted
    
    
    
    
    
    
    WeightedInterest
    
    
    
    
    
    
    InterestMaturing Period
    
    Amount
    
    
    Rate
    
    
    Amount
    
    
    Rate1 to 12 months
    
    $
    30,688
    
    
    
    4.43
    %
    
    $
    15,923
    
    
    
    4.37
    %13 to 24 months
    
    
    42,909
    
    
    
    4.34
    %
    
    
    54,440
    
    
    
    4.50
    %25 to 36 months
    
    
    52,651
    
    
    
    4.15
    %
    
    
    35,022
    
    
    
    4.03
    %37 to 48 months
    
    
    3,009
    
    
    
    3.58
    %
    
    
    28,729
    
    
    
    4.10
    %49 to 60 months
    
    
    15,000
    
    
    
    3.89
    %
    
    
    18,356
    
    
    
    3.83
    %61 to 72 months
    
    
    35,000
    
    
    
    4.86
    %
    
    
    10,000
    
    
    
    4.71
    %73 to 84 months
    
    
    55,000
    
    
    
    4.43
    %
    
    
    45,000
    
    
    
    4.52
    %85 to 120 months
    
    
    29,375
    
    
    
    4.05
    %
    
    
    64,577
    
    
    
    4.38
    %Total
    
    $
    263,632
    
    
    
    4.33
    %
    
    $
    272,047
    
    
    
    4.33
    %
  9. REGULATORY CAPITAL REQUIREMENTS
   page -21-




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##### Table of Contents



To Be Considered WellCapitalized UnderFor Capital
    
    
    Prompt CorrectiveActual
    
    
    Adequacy Purposes
    
    
    Action Provisions(Dollars in Thousands)
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    RatioAt March 31, 2011Tier 1 Capital (to assets)
    
    $
    54,973
    
    
    
    6.45
    %
    
    $
    34,112
    
    
    
    4.00
    %
    
    $
    42,641
    
    
    
    5.00
    %Tier 1 Capital (to risk weighted assets)
    
    
    54,973
    
    
    
    11.75
    %
    
    
    18,719
    
    
    
    4.00
    %
    
    
    28,079
    
    
    
    6.00
    %Total Capital (to risk weighted assets)
    
    
    57,786
    
    
    
    12.35
    %
    
    
    37,439
    
    
    
    8.00
    %
    
    
    46,799
    
    
    
    10.00
    %At September 30, 2010Tier 1 Capital (to assets)
    
    $
    53,330
    
    
    
    6.19
    %
    
    $
    34,440
    
    
    
    4.00
    %
    
    $
    43,050
    
    
    
    5.00
    %Tier 1 Capital (to risk weighted assets)
    
    
    55,330
    
    
    
    11.35
    %
    
    
    18,799
    
    
    
    4.00
    %
    
    
    28,199
    
    
    
    6.00
    %Total Capital (to risk weighted assets)
    
    
    55,834
    
    
    
    11.88
    %
    
    
    37,599
    
    
    
    8.00
    %
    
    
    46,999
    
    
    
    10.00
    %
 10. FAIR VALUE MEASUREMENTS AND DISCLOSURES
    page -22-




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(Level 1)
    
    
    (Level 2)Quoted Prices in
    
    
    Significant
    
    
    (Level 3)Active Markets
    
    
    Other
    
    
    SignificantMarch 31,
    
    
    for Identical
    
    
    Observable
    
    
    UnobservableDescription
    
    2011
    
    
    Assets
    
    
    Inputs
    
    
    InputsEquity securities
    
    $
    396
    
    
    $
    396
    
    
    $
    
    
    
    $
    U.S. Government money market funds
    
    
    9,634
    
    
    
    9,634
    
    
    
    
    
    
    
    Collateralized mortgage obligations
    
    
    830
    
    
    
    
    
    
    
    830
    
    
    
    Total available for sale securities
    
    $
    10,860
    
    
    $
    10,030
    
    
    $
    830
    
    
    $
    
 (Level 1)Quoted Prices in
    
    
    (Level 2)
    
    
    (Level 3)Active Markets
    
    
    Significant Other
    
    
    SignificantSeptember 30,
    
    
    for Identical
    
    
    Observable
    
    
    UnobservableDescription
    
    2010
    
    
    Assets
    
    
    Inputs
    
    
    InputsEquity securities
    
    $
    343
    
    
    $
    343
    
    
    $
    
    
    
    $
    U.S. Government money market funds
    
    
    20,261
    
    
    
    20,261
    
    
    
    
    
    
    
    Collateralized mortgage obligations
    
    
    809
    
    
    
    
    
    
    
    809
    
    
    
    Total available for sale securities
    
    $
    21,413
    
    
    $
    20,604
    
    
    $
    809
    
    
    $
    
   page -23-




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##### Table of Contents



(Level 1)Quoted Prices in
    
    
    (Level 2)
    
    
    (Level 3)Active Markets
    
    
    Significant Other
    
    
    SignificantMarch 31,
    
    
    for Identical
    
    
    Observable
    
    
    UnobservableDescription
    
    2011
    
    
    Assets
    
    
    Inputs
    
    
    InputsImpaired Loans
    
    $
    1,474
    
    
    $
    
    
    
    $
    
    
    
    $
    1,474
 (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Quoted Prices in
    
    
    Significant Other
    
    
    SignificantSeptember 30,
    
    
    Active Markets for
    
    
    Observable
    
    
    UnobservableDescription
    
    2010
    
    
    Identical Assets
    
    
    Inputs
    
    
    InputsImpaired Loans
    
    $
    186
    
    
    $
    
    
    
    $
    
    
    
    $
    186
  Cash and Cash Equivalents (Carried at Cost)
  Securities
  Loans Receivable (Carried at Cost)
   Federal Home Loan Bank Stock (Carried at Cost)
   page -24-




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##### Table of Contents



Accrued Interest Receivable and Payable (Carried at Cost)
  Deposit Liabilities (Carried at Cost)
  Borrowings (Carried at Cost)
  Off-Balance Sheet Financial Instruments (Disclosed at Cost)
     page -25-




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March 31, 2011
    
    
    September 30, 2010Carrying
    
    
    Estimated Fair
    
    
    Carrying
    
    
    Estimated Fair(In Thousands)
    
    Amount
    
    
    Value
    
    
    Amount
    
    
    ValueAssets:Cash and cash equivalents
    
    $
    23,960
    
    
    $
    23,960
    
    
    $
    20,190
    
    
    $
    20,190Securities held to maturity
    
    
    271,744
    
    
    
    275,116
    
    
    
    256,088
    
    
    
    264,448Securities available-for-sale
    
    
    10,860
    
    
    
    10,860
    
    
    
    21,413
    
    
    
    21,413Loans receivable  net
    
    
    501,180
    
    
    
    519,914
    
    
    
    510,093
    
    
    
    530,294Federal Home Loan Bank stock
    
    
    14,526
    
    
    
    14,526
    
    
    
    16,096
    
    
    
    16,096Accrued interest receivable
    
    
    3,167
    
    
    
    3,167
    
    
    
    3,210
    
    
    
    3,210Liabilities:Checking, passbook, club and NOW
deposit accounts
    
    
    85,710
    
    
    
    85,710
    
    
    
    74,651
    
    
    
    74,651Money Market deposit accounts
    
    
    134,216
    
    
    
    134,216
    
    
    
    136,079
    
    
    
    136,079Certificate of deposit accounts
    
    
    311,346
    
    
    
    320,146
    
    
    
    317,370
    
    
    
    325,881Borrowings
    
    
    263,632
    
    
    
    282,827
    
    
    
    272,047
    
    
    
    291,857Accrued interest payable
    
    
    1,333
    
    
    
    1,333
    
    
    
    1,407
    
    
    
    1,407Off balance sheet financial instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 Limitations
   
 Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
   page -26-




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##### Table of Contents



Critical Accounting Policies and Judgments
  Allowance for Loan Losses
 Analysis and Determination of the Allowance for Loan Losses
  Specific Allowance Required for Certain Impaired Loans
 General Valuation Allowance on Certain Identified Problem Loans
 General Valuation Allowance on the Remainder of the Loan Portfolio
  page -27-




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##### Table of Contents



Other-than-Temporary Impairment of Investment Securities
   Changes in Financial Position for the Six-Month Period Ended March 31, 2011
   Comparisons of Results of Operations for the Three Month and Six Month Period Ended March 31,
2011 with the Three Month and Six Month Period Ended March 31, 2010
 Net Income
  Net Interest Income
   page -28-




---



##### Table of Contents



Non-Interest Income
  Non-Interest Expenses
  Income Taxes
  Liquidity and Capital Recourses
     page -29-




---



##### Table of Contents



Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
       page -30-




---



##### Table of Contents



1 Year
    
    
    1 to 3
    
    
    3 to 5
    
    
    Over 5(In thousands)
    
    or less
    
    
    Years
    
    
    Years
    
    
    Years
    
    
    TotalInterest-earning assets:Mortgage loans
    
    $
    53,937
    
    
    $
    55,660
    
    
    $
    44,584
    
    
    $
    178,038
    
    
    $
    332,219Commercial loans
    
    
    36,883
    
    
    
    9,268
    
    
    
    25,247
    
    
    
    14,247
    
    
    
    85,645Mortgage-backed securities
    
    
    57,825
    
    
    
    44,298
    
    
    
    21,708
    
    
    
    20,855
    
    
    
    144,686Consumer and other loans
    
    
    65,794
    
    
    
    11,061
    
    
    
    5,217
    
    
    
    11,140
    
    
    
    93,212Investment securities and other investments
    
    
    60,901
    
    
    
    28,021
    
    
    
    46,839
    
    
    
    36,167
    
    
    
    171,928Total interest-earning assets
    
    
    275,340
    
    
    
    148,308
    
    
    
    143,595
    
    
    
    260,447
    
    
    
    827,690Interest-bearing liabilities:Passbook and Club accounts
    
    
    379
    
    
    
    
    
    
    
    
    
    
    
    3,633
    
    
    
    4,012NOW and checking accounts
    
    
    6,353
    
    
    
    
    
    
    
    
    
    
    
    57,174
    
    
    
    63,527Consumer Money Market Deposit accounts
    
    
    55,074
    
    
    
    
    
    
    
    
    
    
    
    56,718
    
    
    
    111,792Business Money Market Deposit accounts
    
    
    16,818
    
    
    
    
    
    
    
    
    
    
    
    5,606
    
    
    
    22,424Certificate accounts
    
    
    170,460
    
    
    
    95,636
    
    
    
    45,250
    
    
    
    
    
    
    
    311,346Borrowed money
    
    
    36,404
    
    
    
    93,369
    
    
    
    16,762
    
    
    
    117,097
    
    
    
    263,632Total interest-bearing liabilities
    
    
    285,488
    
    
    
    189,005
    
    
    
    62,012
    
    
    
    240,228
    
    
    
    776,733Repricing GAP during the period
    
    $
    (10,148
    )
    
    $
    (40,697
    )
    
    $
    81,583
    
    
    $
    20,219
    
    
    $
    50,957Cumulative GAP
    
    $
    (10,148
    )
    
    $
    (50,845
    )
    
    $
    30,738
    
    
    $
    50,957Ratio of GAP during the period to total assets
    
    
    -1.18
    %
    
    
    -4.75
    %
    
    
    9.53
    %
    
    
    2.36
    %Ratio of cumulative GAP to total assets
    
    
    -1.18
    %
    
    
    -5.94
    %
    
    
    3.59
    %
    
    
    5.95
    %
  page -31-




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##### Table of Contents



Item 4.
    
    Controls and Procedures
    page -32-




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##### Table of Contents



Part II OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk Factors
  
 Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3.
    
    Defaults upon Senior Securities
  
 Item 4.
    
    (Removed and Reserved)
 
 Item 5.
    
    Other information.
  
 Item 6.
    
    Exhibits and Reports on Form 8-K
 No.31.1
    
    
    Certification of Chief Executive Officer31.2
    
    
    Certification of Chief Operating and Finance Officer32.0
    
    
    Section 1350 Certification of Chief Executive Officer and Chief Operating and
Finance Officer
  page -33-




---



##### Table of Contents



Signatures
  HARLEYSVILLE SAVINGS FINANCIAL CORPORATIONDate: May 13, 2011
    By:
    /s/ Ronald B. GeibRonald B. GeibChief Executive OfficerDate: May 13, 2011
    By:
    /s/ Brendan J. McGillBrendan J. McGillExecutive Vice President
Chief Operating and Financial Officer  page -34-