##### Table of Contents



UNITED STATES


SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



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(Mark One)x
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934For the quarterly
period ended March 31, 2004ORo
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934For
the transition period from

to


Commission File Number 1-14154GA FINANCIAL, INC.

(Exact name of registrant as specified in its charter)

DELAWARE
    
    25-1780835(State or other jurisdiction of
    
    (IRS Employer Identification No.)incorporation or organization)4750 Clairton Boulevard
    
    15236Pittsburgh, Pennsylvania
    
    (Zip Code)(Address of principal executive offices)


(412) 882-9946
(Registrants telephone number, including area code)

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



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

Indicate by check mark whether the registrant is an accelerated filer (as
defined in rule 12b-2 of the Exchange Act).
þ  Yes
o  No

APPLICABLE ONLY TO CORPORATE ISSUERS:

5,101,892
shares of common stock, par value $0.01 per share, were outstanding
at April 30, 2004.





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##### Table of Contents



GA Financial, Inc.

Form 10-Q

March 31, 2004

Contents






PAGEPART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsConsolidated Statements of Financial Condition
    
    
    1Consolidated Statements of Income and Comprehensive Income
    
    
    2Consolidated Statement of Shareholders Equity
    
    
    3Consolidated Statements of Cash Flows
    
    
    4Notes to the Consolidated Financial Statements
    
    
    5Item 2.
    
    Managements Discussion and
Analysis of Financial Condition and Results of Operations
    
    
    8Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    13Item 4.
    
    Controls and Procedures
    
    
    13PART II.
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    14Item 2.
    
    Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities
    
    
    14Item 3.
    
    Defaults Upon Senior Securities
    
    
    14Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    14Item 5.
    
    Other Information
    
    
    14Item 6.
    
    Exhibits and Reports on Form 8-K
    
    
    14SIGNATURES
    
    
    15CertificationCertificationCertificationCertification






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##### Table of Contents








PART I. FINANCIAL INFORMATION




Item 1. Financial Statements




Consolidated Statements of Financial Condition
GA Financial, Inc.

(Unaudited)March 31,
    
    December 31,(Dollars in thousands, except per share amounts)
    2004
    2003ASSETSCash (including interest-bearing deposits of $10,620 and $12,850)
    
    $
    15,659
    
    
    $
    17,281Available for sale securities, at fair value
    
    
    307,711
    
    
    
    302,715Held to maturity securities, at cost (fair value of $2,013 and $3,043)
    
    
    1,998
    
    
    
    2,994Total securities
    
    
    309,709
    
    
    
    305,709Loans (net of deferred fees of $21 and $6)
    
    
    533,323
    
    
    
    523,813Allowance for loan losses
    
    
    (4,866
    )
    
    
    (4,672
    )Net loans
    
    
    528,457
    
    
    
    519,141Accrued interest receivable on securities
    
    
    1,974
    
    
    
    1,740Accrued interest receivable on loans
    
    
    2,149
    
    
    
    2,152Federal Home Loan Bank stock
    
    
    15,121
    
    
    
    14,833Premises and equipment, net
    
    
    6,393
    
    
    
    6,592Foreclosed assets
    
    
    480
    
    
    
    131Securities sold, not settled
    
    
    186
    
    
    
    254Prepaid expenses and other assets
    
    
    23,926
    
    
    
    22,441Total assets
    
    $
    904,054
    
    
    $
    890,274LIABILITIESNoninterest-bearing deposits
    
    $
    37,656
    
    
    $
    34,312Interest-bearing deposits
    
    
    490,573
    
    
    
    500,745Total deposits
    
    
    528,229
    
    
    
    535,057Borrowed funds
    
    
    265,850
    
    
    
    250,725Advances from customers for taxes, insurance, and other
    
    
    3,023
    
    
    
    3,467Accrued interest payable
    
    
    2,916
    
    
    
    1,753Other liabilities
    
    
    6,562
    
    
    
    3,530Total liabilities
    
    
    806,580
    
    
    
    794,532SHAREHOLDERS EQUITYPreferred stock ($0.01 par value); 1,000,000 shares authorized; 0 shares issued
    
    
    
    
    
    
    Common stock ($0.01 par value); 23,000,000 shares authorized; 8,900,000 shares issued
    
    
    89
    
    
    
    89Additional paid-in capital
    
    
    87,674
    
    
    
    87,746Retained earnings, substantially restricted
    
    
    72,630
    
    
    
    73,120Accumulated other comprehensive income, net of tax
    
    
    4,495
    
    
    
    3,217Unearned employee stock ownership plan (ESOP) shares
    
    
    (2,050
    )
    
    
    (2,050
    )Unearned stock-based compensation plan (SCP) shares
    
    
    (519
    )
    
    
    (395
    )Treasury stock, at cost (3,853,033 shares and 3,920,773 shares)
    
    
    (64,845
    )
    
    
    (65,985
    )Total shareholders equity
    
    
    97,474
    
    
    
    95,742Total liabilities and shareholders equity
    
    $
    904,054
    
    
    $
    890,274


The accompanying notes are an integral part of the consolidated financial statements.

1



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##### Table of Contents






Consolidated Statements of Income and Comprehensive Income
GA Financial, Inc.

(Unaudited)Three Months EndedMarch 31,(Dollars in thousands, except per share amounts)2004
    
    2003INTEREST INCOMELoans
    
    $
    7,894
    
    
    $
    7,927Securities:Taxable interest
    
    
    2,598
    
    
    
    3,055Nontaxable interest
    
    
    553
    
    
    
    633Dividends
    
    
    173
    
    
    
    239Interest-bearing deposits
    
    
    17
    
    
    
    78Total interest income
    
    
    11,235
    
    
    
    11,932INTEREST EXPENSEInterest-bearing deposits
    
    
    2,705
    
    
    
    3,665Borrowed funds
    
    
    2,593
    
    
    
    2,592Other
    
    
    
    
    
    
    9Total interest expense
    
    
    5,298
    
    
    
    6,266Net interest income
    
    
    5,937
    
    
    
    5,666Provision for loan losses
    
    
    434
    
    
    
    378Net interest income after provision for loan losses
    
    
    5,503
    
    
    
    5,288NONINTEREST INCOMEService fees
    
    
    596
    
    
    
    551Net gain on sales of available for sale securities
    
    
    355
    
    
    
    403Net gain on held for trading securities
    
    
    
    
    
    
    2Gain on sales of education loans held for sale
    
    
    
    
    
    
    123Earnings on bank owned life insurance
    
    
    198
    
    
    
    148Other
    
    
    98
    
    
    
    74Total noninterest income
    
    
    1,247
    
    
    
    1,301NONINTEREST EXPENSECompensation and employee benefits
    
    
    2,511
    
    
    
    2,314Occupancy
    
    
    440
    
    
    
    438Furniture and equipment
    
    
    453
    
    
    
    408Marketing
    
    
    121
    
    
    
    109Deposit insurance premiums
    
    
    21
    
    
    
    22Merger related
    
    
    133
    
    
    
    Other
    
    
    1,067
    
    
    
    1,012Total noninterest expense
    
    
    4,746
    
    
    
    4,303Income before provision for income taxes
    
    
    2,004
    
    
    
    2,286Provision for income taxes
    
    
    558
    
    
    
    549Net income
    
    $
    1,446
    
    
    $
    1,737OTHER COMPREHENSIVE INCOMEUnrealized holding gains (losses) on available for sale securities, net of tax
    
    $
    1,497
    
    
    $
    (209
    )Reclassification adjustment for net gains included in net income
    
    
    (219
    )
    
    
    (235
    )Other comprehensive income (loss)
    
    
    1,278
    
    
    
    (444
    )Comprehensive income
    
    $
    2,724
    
    
    $
    1,293EARNINGS PER SHAREBasic
    
    $
    0.30
    
    
    $
    0.36Diluted
    
    $
    0.29
    
    
    $
    0.35AVERAGE SHARES OUTSTANDINGBasic
    
    
    4,800,365
    
    
    
    4,830,752Diluted
    
    
    4,985,727
    
    
    
    5,017,157


The accompanying notes are an integral part of the consolidated financial statements.

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Consolidated Statement of Shareholders Equity (Unaudited)
GA Financial, Inc.

AccumulatedOther
    
    
    
    
    
    
    
    
    
    
    
    
    
    TotalAdditional
    
    
    
    
    
    Compre-
    
    Unearned
    
    Unearned
    
    
    
    
    
    Share-Common
    
    Paid-
    
    Retained
    
    hensive
    
    ESOP
    
    SCP
    
    Treasury
    
    holders'(Dollars in thousands, except per share amounts)
    
    Stock
    
    in Capital
    
    Earnings
    
    Income
    
    Shares
    
    Shares
    
    Stock
    
    EquityBalance at December 31, 2003
    
    $
    89
    
    
    $
    87,746
    
    
    $
    73,120
    
    
    $
    3,217
    
    
    $
    (2,050
    )
    
    $
    (395
    )
    
    $
    (65,985
    )
    
    $
    95,742Net income
    
    
    
    
    
    
    
    
    
    
    1,446
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,446Other comprehensive income, net of
tax1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,278
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,278Cash dividends paid ($0.20 per share)
    
    
    
    
    
    
    
    
    
    
    (967
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (967
    )Cash dividends declared ($0.20 per share)
    
    
    
    
    
    
    
    
    
    
    (969
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (969
    )Stock repurchased
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    SCP, net of tax:Stock options exercised
    
    
    
    
    
    
    (165
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,060
    
    
    
    895Stock awards granted
    
    
    
    
    
    
    93
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (174
    )
    
    
    86
    
    
    
    5Stock awards forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    (6
    )
    
    
    Stock awards expensed
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44
    
    
    
    
    
    
    
    44Balance at March 31, 2004
    
    $
    89
    
    
    $
    87,674
    
    
    $
    72,630
    
    
    $
    4,495
    
    
    $
    (2,050
    )
    
    $
    (519
    )
    
    $
    (64,845
    )
    
    $
    97,474


1  Other comprehensive income for the three months ended March 31, 2004 is net of a tax provision of $751.

The accompanying notes are an integral part of the consolidated financial statements.

3



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Consolidated Statements of Cash Flows
GA Financial, Inc.

(Unaudited)Three Months EndedMarch 31,(Dollars in thousands)
    
    2004
    
    2003OPERATING ACTIVITIESNet income
    
    $
    1,446
    
    
    $
    1,737Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:Provision for loan losses
    
    
    434
    
    
    
    378Depreciation
    
    
    223
    
    
    
    222Net gain on disposal of premises and equipment
    
    
    
    
    
    
    (9
    )Net premium amortization on securities
    
    
    757
    
    
    
    1,183(Accretion) amortization of net deferred loan fees
    
    
    (15
    )
    
    
    123Amortization of intangibles
    
    
    
    
    
    
    42Net gain on held for trading securities
    
    
    
    
    
    
    (2
    )Net gain on sales of available for sale securities
    
    
    (355
    )
    
    
    (403
    )Gain on sales of education loans held for sale
    
    
    
    
    
    
    (123
    )Net gain on sales of foreclosed assets
    
    
    (6
    )
    
    
    (14
    )Expense recognition of ESOP shares
    
    
    410
    
    
    
    317Expense recognition of SCP shares
    
    
    44
    
    
    
    57(Increase) decrease in accrued interest receivable
    
    
    (231
    )
    
    
    726Increase in bank owned life insurance
    
    
    (198
    )
    
    
    (148
    )Increase in prepaid expenses and other assets
    
    
    (1,287
    )
    
    
    (4,964
    )Net increase (decrease) in other liabilities
    
    
    903
    
    
    
    (1,580
    )Increase in accrued interest payable
    
    
    1,163
    
    
    
    1,175Net cash provided by (used in) operating activities
    
    
    3,288
    
    
    
    (1,283
    )INVESTING ACTIVITIESProceeds from sales of available for sale securities
    
    
    796
    
    
    
    24,911Repayments, calls, and maturities of available for sale securities
    
    
    17,141
    
    
    
    49,408Purchases of available for sale securities
    
    
    (21,243
    )
    
    
    (93,003
    )Maturities of held to maturity securities
    
    
    1,000
    
    
    
    Proceeds from sales of education loans held for sale
    
    
    
    
    
    
    16,356Funding of education loans held for sale
    
    
    
    
    
    
    (2,081
    )Purchases of loans
    
    
    (9,200
    )
    
    
    (18,415
    )Net (increase) decrease in loans
    
    
    (915
    )
    
    
    25,989Proceeds from sales of premises and equipment
    
    
    
    
    
    
    9Purchases of premises and equipment
    
    
    (24
    )
    
    
    (73
    )Proceeds from sales of foreclosed assets
    
    
    37
    
    
    
    25Purchases of FHLB stock
    
    
    (288
    )
    
    
    (377
    )Net cash (used in) provided by investing activities
    
    
    (12,696
    )
    
    
    2,749FINANCING ACTIVITIESNet (decrease) increase in noninterest and interest-bearing deposits
    
    
    (352
    )
    
    
    21,821Net decrease in certificates of deposit
    
    
    (6,476
    )
    
    
    (7,651
    )Payments on borrowed funds
    
    
    (213,050
    )
    
    
    (160,000
    )Proceeds from borrowed funds
    
    
    228,175
    
    
    
    160,000Cash dividends paid
    
    
    (967
    )
    
    
    (979
    )Net (decrease) increase in advances from customers for taxes, insurance, and other
    
    
    (444
    )
    
    
    42Purchases of treasury stock
    
    
    
    
    
    
    (4,502
    )Increase in other stock transactions
    
    
    900
    
    
    
    93Net cash provided by financing activities
    
    
    7,786
    
    
    
    8,824Net (decrease) increase in cash and cash equivalents
    
    
    (1,622
    )
    
    
    10,290Cash and cash equivalents at beginning of period
    
    
    17,281
    
    
    
    21,343Cash and cash equivalents at end of period
    
    $
    15,659
    
    
    $
    31,633


The accompanying notes are an integral part of the consolidated financial statements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
GA FINANCIAL, INC.

NOTE 1. ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements include the accounts of GA
Financial, Inc. (the Company) and its subsidiary, Great American Federal (the
Bank), and the Banks wholly owned subsidiaries, GA Financial
Strategies, LLC, Steel City Investments, Inc., and Great American Financial
Services, Inc. New Eagle Capital, Inc., an investment company and previous
subsidiary of the Company, was merged into the Company on
March 31, 2004. The
merger was treated as a tax-free reorganization. Intercompany accounts and
transactions have been eliminated in consolidation.

The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of income and expense during the
reporting period. Actual results could differ from those estimates.

In
the opinion of the management of the Company, the accompanying consolidated
financial statements include all normal recurring adjustments necessary for a
fair presentation of the financial position and results of operations for the
periods presented. Certain information and note disclosures normally included in
financial statements presented in accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted. It is suggested that the accompanying
consolidated financial statements be read in conjunction with the Companys 2003
Annual Report to Shareholders and Annual Report on Form 10-K.

Reclassifications

For
comparative purposes, reclassifications have been made to certain amounts
previously reported to conform with the current period presentation in the
consolidated financial statements.

Stock-Based Compensation

The Company has elected to follow Accounting Principles Board Opinion
No. 25, Accounting For Stock Issued to Employees (APB 25) and related
interpretations in accounting for the stock option component of the approved GA
Financial, Inc. 1996 Stock Based Incentive Plan. Because the Company accounts for
stock options using APB 25, no compensation expense was recorded in the financial
statements. Had compensation expense for stock options been determined based on
the fair value at the grant date consistent with the method of Statement of
Financial Accounting Standards (SFAS) No. 123  Accounting for Stock-Based
Compensation, the Companys net income and earnings per share would have been
reduced to the pro forma amounts indicated below:

Three Months EndedMarch 31,(Dollars in thousands, except per share amounts)
    
    
    
    
    
    2004
    
    2003Net income
    
    As reported
    
    $
    1,446
    
    
    $
    1,737Expense related to options granted, net of tax
    
    Pro forma
    
    
    (49
    )
    
    
    (51
    )Net income
    
    Pro forma
    
    
    1,397
    
    
    
    1,686Basic earnings per share
    
    As reported
    
    $
    0.30
    
    
    $
    0.36Pro forma
    
    
    0.29
    
    
    
    0.35Diluted earnings per share
    
    As reported
    
    $
    0.29
    
    
    $
    0.35Pro forma
    
    
    0.28
    
    
    
    0.34


NOTE 2. MERGER RELATED ACTIVITY

On
December 12, 2003, the Company announced the execution of a definitive
agreement with First Commonwealth Financial Corporation (First
Commonwealth). In the agreement, GA Financial, Inc. and Great American Federal will
be merged into First Commonwealth Financial Corporation and First Commonwealth
Bank, respectively. Under the terms of the agreement, the shareholders of the
Company can elect to receive $35.00 in cash or an equivalent value of First
Commonwealth common stock for each share owned, subject to proration as provided
in the definitive agreement to ensure that 40% of the aggregate merger
consideration will be paid in cash and 60% in First Commonwealth common
stock. The transaction was unanimously approved by the Board of Directors of both
organizations.

On
March 19, 2004, the Company announced a special meeting of
shareholders, called to vote on the proposed merger, would be held on May
24, 2004. The record date for shareholders entitled to notice of and to vote at
the special meeting was the close of business on April 15, 2004. If shareholder
approval is obtained and the other conditions to the merger are
satisfied, the
merger will be completed as of the close of business on
May 24, 2004. On April
1, 2004, the Company announced that all required regulatory approvals for the
merger had been received.

If the merger agreement is terminated under certain circumstances, the Company
will be required to pay a termination fee of approximately $7.3 million to First
Commonwealth and to reimburse the out-of-pocket expenses reasonably incurred by
First Commonwealth in connection with the negotiation, preparation, and
performance of the merger agreement. The Company must pay the termination fee to
First Commonwealth if First

5



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
GA FINANCIAL, INC.

Commonwealth terminates the merger agreement because the Companys Board of
Directors has withdrawn or modified its recommendation that stockholders approve
the merger agreement or recommends an alternative transaction with another
party, or if the Companys Board of Directors determines that it is required to
terminate the merger agreement to comply with its fiduciary duties after
receiving a superior acquisition proposal. The Company will also pay the
termination fee to First Commonwealth if either party terminates the merger
agreement because the stockholders of the Company did not approve the merger
agreement and the merger, an alternative acquisition proposal was pending at the time of the special
meeting, and a third party acquires the Company within 12 months after the date
of the special meeting. The Company incurred $133,000 in merger related expenses
for the three months ended March 31, 2004.

NOTE 3. SECURITIES

The amortized cost and estimated fair value of available for sale and held to
maturity securities are as follows:

2004March 31,
      
      
      
      Gross
      
      Gross(Dollars in thousands)
      
      Amortized
      
      Unrealized
      
      UnrealizedCost
      
      Gain
      
      Loss
      
      Fair
        ValueAvailable for Sale
          Securities:U.S. government and
          agency debt
      
      $
      36,234
      
      
      $
      148
      
      
      $
      (217
      )
      
      $
      36,165Mortgage-backed securities
      
      
      182,168
      
      
      
      2,362
      
      
      
      (563
      )
      
      
      183,967Collateralized mortgage
          obligations
      
      
      20,748
      
      
      
      379
      
      
      
      
      
      
      
      21,127Municipal obligations
      
      
      50,059
      
      
      
      1,940
      
      
      
      (11
      )
      
      
      51,988Corporate debt obligations
      
      
      4,993
      
      
      
      199
      
      
      
      
      
      
      
      5,192Marketable equity securities
      
      
      6,374
      
      
      
      2,919
      
      
      
      (21
      )
      
      
      9,272Total available for
          sale securities
      
      $
      300,576
      
      
      $
      7,947
      
      
      $
      (812
      )
      
      $
      307,711Held to Maturity
          Securities:Corporate debt obligations
      
      $
      1,998
      
      
      $
      15
      
      
      $
      
      
      
      $
      2,0132003December 31,
      
      
      
      Gross
      
      Gross(Dollars in thousands)
      
      Amortized
      
      Unrealized
      
      UnrealizedCost
      
      Gain
      
      Loss
      
      Fair
        ValueAvailable for Sale
          Securities:U.S. government and
          agency debt
      
      $
      32,476
      
      
      $
      30
      
      
      $
      (803
      )
      
      $
      31,703Mortgage-backed securities
      
      
      182,685
      
      
      
      2,287
      
      
      
      (1,147
      )
      
      
      183,825Collateralized mortgage
          obligations
      
      
      18,882
      
      
      
      385
      
      
      
      (32
      )
      
      
      19,235Municipal obligations
      
      
      51,905
      
      
      
      1,141
      
      
      
      (98
      )
      
      
      52,948Corporate debt obligations
      
      
      4,992
      
      
      
      267
      
      
      
      
      
      
      
      5,259Marketable equity securities
      
      
      6,669
      
      
      
      3,109
      
      
      
      (33
      )
      
      
      9,745Total available for
          sale securities
      
      $
      297,609
      
      
      $
      7,219
      
      
      $
      (2,113
      )
      
      $
      302,715Held to Maturity
          Securities:Corporate debt obligations
      
      $
      2,994
      
      
      $
      49
      
      
      $
      
      
      
      $
      3,043


6



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
GA FINANCIAL, INC.

NOTE 4. LOANS

Loans consist of the following:

March 31,
    
    December 31,(Dollars in thousands)
    
    2004
    
    2003Loan Balances:Mortgage Loans:Residential
    
    $
    213,784
    
    
    $
    208,536Multi-family
    
    
    21,621
    
    
    
    20,421Commercial real estate
    
    
    133,899
    
    
    
    121,426Commercial and residential
construction and
development1
    
    
    42,875
    
    
    
    53,452Total mortgage loans
    
    
    412,179
    
    
    
    403,835Consumer Loans:Home equity
    
    
    83,754
    
    
    
    83,939Unsecured personal
    
    
    3,128
    
    
    
    3,399Loans on deposit accounts
    
    
    430
    
    
    
    475Automobile
    
    
    125
    
    
    
    137Total consumer loans
    
    
    87,437
    
    
    
    87,950Commercial Business Loans:Secured business
    
    
    26,838
    
    
    
    24,944Unsecured business
    
    
    6,890
    
    
    
    7,090Total commercial business loans
    
    
    33,728
    
    
    
    32,034Net deferred fees
    
    
    (21
    )
    
    
    (6
    )Total loans
    
    
    533,323
    
    
    
    523,813Less:Allowance for loan losses
    
    
    (4,866
    )
    
    
    (4,672
    )Net loans
    
    $
    528,457
    
    
    $
    519,141




---

| |  | 1 Amounts for March 31, 2004 and December 31, 2003 are net of available funds for
disbursement of $23.0 million and $25.2 million, respectively.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------

The
Company purchased, from local correspondent lenders, approximately $9.2
million and $18.4 million, for the three months ended
March 31, 2004 and
2003, respectively, of residential loans collateralized by single-family
properties located primarily inside its market area.

At
March 31, 2004 and December 31, 2003, the Company had $816,000 and $1.1
million in nonperforming loans. The decrease in nonperforming loans was due
primarily to foreclosure proceedings on residential properties, resulting in a
transfer of nonperforming loans to foreclosed assets. Additionally, the remaining
nonperforming loans at March 31, 2004 as consistent with
December 31, 2003, were
primarily comprised of residential mortgages and consumer home equity loans.
Also, the Company had $480,000 and $131,000 of foreclosed assets at March 31,2004
and December 31,2003, respectively.

The following is a summary of activity in the allowance for loan losses for
the three months ended March 31,2004:

(Dollars in thousands)Allowance for Loan Losses:Balance at December 31, 2003
    
    $
    4,672Charge-offs
    
    
    (251
    )Recoveries
    
    
    11Net charge-offs
    
    
    (240
    )Provision for loan losses
    
    
    434Balance at March 31, 2004
    
    $
    4,866


The following table sets forth information regarding the Companys
nonperforming assets for the dates indicated:

March 31,
    
    December 31,(Dollars in thousands)

    2004

    2003Nonperforming Assets:Nonperforming loans
    
    $
    816
    
    
    $
    1,084Foreclosed assets
    
    
    480
    
    
    
    131Total nonperforming assets
    
    $
    1,296
    
    
    $
    1,215Nonperforming loans to loans
    
    
    0.15
    %
    
    
    0.21
    %Nonperforming assets to assets
    
    
    0.14
    
    
    
    0.14Allowance for loan losses to loans
    
    
    0.91
    
    
    
    0.89Allowance for loan losses to
nonperforming assets
    
    
    375.46
    
    
    
    384.53


NOTE 5. SUPPLEMENTARY CASH FLOW INFORMATION

Cash
paid for the three months ended March 31, for interest and income
taxes, was approximately $4.1 million and $150,000, respectively
in 2004, and $5.1
million and $120,000, respectively in 2003.

Noncash investing activity consisted of securities sold not settled which
totaled $186,000 and $254,000 at March 31, 2004 and
December 31, 2003, respectively. The Company transferred $380,000 and $60,000 of loans to foreclosed
assets during the three months ended March 31, 2004 and
2003, respectively. Noncash
financing activity during the three months ended March 31, 2004 included $969,000
of cash dividends declared.

NOTE 6. EARNINGS PER SHARE

Basic earnings per share (EPS) is computed by dividing income available to
common shareholders by the weighted average number of common shares outstanding
for the period. Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock or resulted in the issuance of common stock that then shared
in the earnings of the Company.

The calculation of basic and diluted earnings per share follows:

Three Months Ended(Dollars in thousands, except per share amounts)
    
    March 31,2004
    
    2003Basic Earnings Per Share:Net income
    
    $
    1,446
    
    
    $
    1,737Basic average shares outstanding
    
    
    4,800,365
    
    
    
    4,830,752Basic earnings per share
    
    $
    0.30
    
    
    $
    0.36Diluted Earnings Per Share:Net income
    
    $
    1,446
    
    
    $
    1,737Basic average shares outstanding
    
    
    4,800,365
    
    
    
    4,830,752Effect of Dilutive Securities:Shares issuable upon exercise of
outstanding stock options and
stock awards
    
    
    185,362
    
    
    
    186,405Diluted average shares outstanding
    
    
    4,985,727
    
    
    
    5,017,157Diluted earnings per share
    
    $
    0.29
    
    
    $
    0.35


7



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
GA FINANCIAL, INC.

NOTE 7. GUARANTEES

The Company issues standby letters of credit in the normal course of
business. Standby letters of credit are conditional commitments issued to
guarantee the performance of a customer to a third party. Standby letters of
credit generally are contingent upon the failure of the customer to perform
according to the terms of the underlying contract with the third
party. The
Company is required to perform under a standby letter of credit when drawn upon
by the guaranteed third party in the case of nonperformance by the Companys
customer. The credit risk associated with standby letters of credit is
essentially the same as that involved in extending loans to customers and is
subject to normal credit policies. Collateral may be obtained based on
managements credit assessment of the customer. The maximum potential amount of future payments the Company could
be required to make under these standby letters of credit at
March 31, 2004 was
$4.9 million. No liability has been recognized by the Company for these
obligations. There are no recourse provisions that would enable the Company to
recover any amounts from third parties.

NOTE 8. SUBSEQUENT EVENTS

On
April 1, 2004, the Company announced the Board of Directors declared a cash
dividend on March 30, 2004, of $0.20 per share to shareholders of record on April
30, 2004, payable on May 12, 2004.




ITEM 2.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (UNAUDITED)
GA FINANCIAL, INC.

This discussion should be read in conjunction with the consolidated financial
statements, notes, and tables included in this report.

OVERVIEW

GA
Financial, Inc. (the Company) was incorporated in
December  1995, and is the
holding company for Great American Federal (the Bank), a community bank and
the Companys principal subsidiary. The Bank has three wholly owned
subsidiaries; GA Financial Strategies, LLC, which provides wealth management
services, Steel City Investments, Inc., which holds and manages investment
securities, and Great American Financial Services, Inc., currently
inactive. New
Eagle Capital, Inc., an investment company and previous subsidiary of the
Company, was merged into the Company on March 31, 2004. The merger was treated as a
tax-free reorganization.

In
1996, the Bank completed its conversion from a federally chartered mutual
savings and loan association to a stock form of ownership and,
simultaneously, the Company issued 8,900,000 shares of common stock, utilizing a
portion of the net proceeds to acquire all of the outstanding stock of the Bank.

On
December 12, 2003, the Company announced the execution of a definitive
agreement whereby the Company and the Bank will be merged into First
Commonwealth Financial Corporation (First Commonwealth) and First Commonwealth
Bank, respectively. Under the terms of the agreement, the shareholders of the
Company can elect to receive $35.00 in cash or an equivalent value of First
Commonwealth common stock for each share owned, subject to proration as provided
in the definitive agreement to ensure that 40% of the aggregate merger
consideration will be paid in cash and 60% in First Commonwealth common stock.
The transaction was unanimously approved by the Board of Directors of both
organizations. On March 19, 2004, the Company announced a special meeting of
shareholders, called to vote on the proposed merger, would be held on May
24, 2004. The record date for shareholders entitled to notice of and to vote at
the special meeting was the close of business on April 15, 2004. If shareholder approval is obtained and
the other conditions to the merger are satisfied, the merger will be completed as
of the close of business on May 24, 2004. On April 1, 2004, the Company announced
that all required regulatory approvals for the merger had been received. Further
discussion of the merger appears under  Note 2. Merger Related
Activity located
in the  Notes to the Consolidated Financial Statements.

The Company currently transacts banking activities through Great American
Federal. The Bank, serving customers for over 85 years, operates its administrative
office in Whitehall, Pennsylvania and 12 community offices in Allegheny County
located in southwestern Pennsylvania. Through these office locations, the Bank
offers a broad array of consumer and commercial loan, deposit, and wealth
management products and services. In addition to conducting community banking
activities, the Bank invests in various marketable securities. The Company also
invests in various marketable securities as well as marketable equity
securities.

The Companys results of operations are dependent primarily on net interest
income, which is the difference between the interest income earned on
interest-earning assets, such as loans and securities, and the interest expense
incurred on interest-bearing liabilities, such as deposits and
borrowed funds. The
Company also generates noninterest income, such as service fees, gains on the sale
of securities and education loans, earnings on bank owned life
insurance, wealth
management fees, and other miscellaneous noninterest income. The
Companys operating expenses consist primarily of compensation and employee
benefits, occupancy, furniture and equipment, marketing, and other general and
administrative expenses. The Companys results of operations are also
significantly affected by general economic and competitive
conditions, particularly changes in market interest rates, government
policies, and actions of regulatory agencies.

Certain critical accounting policies affect the more significant judgments and
estimates used in the preparation of the consolidated financial
statements. The
Companys most critical accounting policy

8



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##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
GA FINANCIAL, INC.

relates
to the Companys allowance for loan losses, which reflects the estimated
losses resulting from the inability of the Companys borrowers to make required
loan payments. If the financial condition of the Companys borrowers were to
deteriorate, resulting in an impairment of their ability to make
payments, the
Companys estimates would be updated, and additional provisions for loan losses
may be required.

Further discussion of the estimates used in determining the allowance for loan
losses appears under Managements Discussion and Analysis of Financial
Condition and Results of Operations  Allowance for Loan
Losses on page 7 and
in the  Notes to the Consolidated Financial Statements, Note 1. Accounting
Policies  Allowance for Loan Losses located on pages 22 and 23 of the
Companys 2003 Annual Report to Shareholders.

AVAILABLE INFORMATION

The
Company makes available, free of charge, copies of its annual reports on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form
8-K, and any
amendments to those reports filed or furnished pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 (the Exchange Act) as soon as
reasonably practicable after the Company electronically files such material
with, or furnishes it to, the Securities and Exchange Commission
(SEC). This
information is available free of charge via the Companys Internet website at
www.greatamericanfederal.com. Information on the Companys Internet website is
not incorporated into this Form 10-Q or the Companys other securities filings
and is not a part of them.

REVIEW OF CONSOLIDATED
FINANCIAL CONDITION AT MARCH 31, 2004 AND DECEMBER 31, 2003

Assets

The
Companys total assets were $904.1 million at
March 31, 2004, an increase of
$13.8 million or 1.5% compared to total assets of $890.3 million at December
31, 2003.

Total
loans increased $9.5 million or 1.8% to $533.3 million at March 31, 2004
primarily due to increases in commercial real estate and residential
loans, which
were partially offset by a decrease in commercial and residential construction
and development loans. The overall growth in the loan portfolio is consistent
with the Companys continued strategy to enhance the commercial loan portfolio.

Total securities increased $4.0 million or 1.3% primarily due to additional
purchases of securities and the reinvestment of funds from loan repayments in
addition to an increase in the available for sale securities net unrealized
gain.

Prepaid expenses and other assets increased $1.5 million or 6.6% primarily due
to timing differences between the funding and recording of loans.

Liabilities

Total
liabilities were $806.6 million at March 31, 2004, an increase of $12.0
million or 1.5% compared to total liabilities of $794.5 million at December
31, 2003.

Borrowed funds increased $15.1 million or 6.0% to $265.9 million. The increase
was primarily related to short-term borrowings, which were utilized to fund loans
and purchase securities.

Total deposits decreased $6.8 million or 1.3% to $528.2 million. The decrease
was primarily from interest-bearing deposits, in particular certificates of
deposit. This decrease was partially offset by an increase in noninterest-bearing
deposits. This activity is consistent with the Companys strategic focus on
restructuring the deposit mix from time deposits to lower cost transaction
deposits evidenced by the Companys continued promotion of its free checking
account product.

Other
liabilities increased $3.0 million or 85.9% to $6.6 million. This
increase was primarily due to the declaration of the dividend for the first
quarter of 2004, which was recorded on March 30, 2004, and an increase in the
deferred tax liability recorded due to the Companys higher net unrealized gain
on the available for sale securities portfolio.

Shareholders Equity

Shareholders
equity increased $1.7 million or 1.8% to $97.5 million at March
31, 2004. This increase was primarily due to net income of
$1.4 million, and an
increase in accumulated other comprehensive income of
$1.3 million. Also
contributing to the increase in shareholders equity was a reduction in treasury
stock of $1.1 million related to the exercise of stock options and grant of
stock awards. This increase was partially offset by the payment of $967,000 in
dividends for the fourth quarter of 2003 and the declaration of $969,000 in
dividends for the first quarter of 2004, which were recorded on
March 30, 2004 and
are payable on May 12, 2004.

Average Balance Sheet and Net Interest Analysis

The following table sets forth certain information relating to the Companys
average balance sheet and reflects the weighted average yield on assets and
weighted average cost of liabilities for the periods indicated. Such yields and
costs are derived by dividing income or expense by the average balance of assets
or liabilities, respectively, for the periods presented.

9



---



##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)GA FINANCIAL, INC.

Three
        Months EndedMarch 31,2004
      
      2003Weighted
      
      
      WeightedAverage
      
      
      
      
      
      AverageAverage
      
      
      
      Yield/
      
      Average
      
      
      
      Yield/(Dollars
        in thousands)
      
      Balance
      
      Interest
      
      Cost
      
      Balance
      
      Interest
      
      CostASSETSInterest-Earning
          Assets:Deposits
      
      $
      11,038
      
      
      $
      17
      
      
      
      0.62
      %
      
      $
      27,459
      
      
      $
      78
      
      
      
      1.14
      %Securities1, 2
      
      
      302,286
      
      
      
      3,613
      
      
      
      4.78
      
      
      
      321,702
      
      
      
      4,200
      
      
      
      5.22Loans, net3
      
      
      523,694
      
      
      
      7,894
      
      
      
      6.03
      
      
      
      467,422
      
      
      
      7,927
      
      
      
      6.78FHLB stock
      
      
      14,562
      
      
      
      36
      
      
      
      0.99
      
      
      
      12,333
      
      
      
      99
      
      
      
      3.21Total interest-earning
          assets
      
      
      851,580
      
      
      
      11,560
      
      
      
      5.43
      
      
      
      828,916
      
      
      
      12,304
      
      
      
      5.94Noninterest-earning
          assets
      
      
      38,600
      
      
      
      
      
      
      
      
      
      
      
      34,375Total assets
      
      $
      890,180
      
      
      
      
      
      
      
      
      
      
      $
      863,291LIABILITIES AND
          SHAREHOLDERS EQUITYInterest-Bearing
          Liabilities:Checking accounts
      
      $
      37,450
      
      
      $
      29
      
      
      
      0.31
      %
      
      $
      42,021
      
      
      $
      47
      
      
      
      0.45
      %Money market deposit
          accounts
      
      
      115,292
      
      
      
      449
      
      
      
      1.56
      
      
      
      75,169
      
      
      
      443
      
      
      
      2.36Savings accounts
      
      
      127,416
      
      
      
      241
      
      
      
      0.76
      
      
      
      151,377
      
      
      
      769
      
      
      
      2.03Certificates of deposit
      
      
      215,995
      
      
      
      1,986
      
      
      
      3.68
      
      
      
      229,960
      
      
      
      2,406
      
      
      
      4.19Total interest-bearing
          deposits
      
      
      496,153
      
      
      
      2,705
      
      
      
      2.18
      
      
      
      498,527
      
      
      
      3,665
      
      
      
      2.94Borrowed funds
      
      
      251,143
      
      
      
      2,593
      
      
      
      4.13
      
      
      
      221,575
      
      
      
      2,592
      
      
      
      4.68Other
      
      
      2,696
      
      
      
      
      
      
      
      
      
      
      
      2,183
      
      
      
      9
      
      
      
      1.65Total interest-bearing
          liabilities
      
      
      749,992
      
      
      
      5,298
      
      
      
      2.83
      
      
      
      722,285
      
      
      
      6,266
      
      
      
      3.47Noninterest-bearing
          deposits
      
      
      35,714
      
      
      
      
      
      
      
      
      
      
      
      31,648All other noninterest-bearing
          liabilities
      
      
      6,702
      
      
      
      
      
      
      
      
      
      
      
      9,185Total noninterest-bearing
          liabilities
      
      
      42,416
      
      
      
      
      
      
      
      
      
      
      
      40,833Shareholders
          equity
      
      
      97,772
      
      
      
      
      
      
      
      
      
      
      
      100,173Total liabilities and
          shareholders equity
      
      $
      890,180
      
      
      
      
      
      
      
      
      
      
      $
      863,291Net interest income
      
      
      
      
      
      $
      6,262
      
      
      
      
      
      
      
      
      
      
      $
      6,038Interest rate spread4
      
      
      
      
      
      
      
      
      
      
      2.60
      %
      
      
      
      
      
      
      
      
      
      
      2.47
      %Net interest margin5
      
      
      
      
      
      
      
      
      
      
      2.94
      %
      
      
      
      
      
      
      
      
      
      
      2.91
      %




---

|1 |  | Includes unamortized discounts and premiums.                                                                                                                           
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|2 |  | Includes municipal obligations; yield and interest are stated on a taxable
equivalent basis.                                                                           
| 
|3 |  | Amount is net of deferred fees, undisbursed funds, discounts and premiums,
estimated allowance for loan losses, and includes nonperforming loans.                      
| 
|4 |  | Interest rate spread represents the difference between the yield on
interest-earning assets and the cost of interest-bearing liabilities on a
taxable equivalent basis.
| 
|5 |  | Net interest margin represents net interest income on a taxable equivalent
basis divided by average interest-earning assets.                                           

10



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##### Table of Contents



MANAGEMENTS DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(UNAUDITED)
GA FINANCIAL, INC.

REVIEW OF CONSOLIDATED
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

Net Income

Net
income for the three months ended March 31, 2004 decreased $291,000 or
16.8% as compared to the three months ended March 31, 2003. Changes in the
components of net income are discussed herein.

Interest Income

Total interest income decreased $697,000 ($744,000 on a taxable equivalent
basis) or 5.8% to $11.2 million for the three months ended
March 31, 2004. This
was primarily the result of a decrease of 51 basis points in the average yield
on average interest-earning assets, which was partially offset by an increase of
$22.7 million in average interest-earning assets. Taxable equivalent interest on
securities decreased $587,000 or 14.0% due to a decrease in the average yield of
44 basis points and a decrease in the average balance of
$19.4 million. Interest
on FHLB stock decreased $63,000 or 63.6% from a decrease in the average yield of
222 basis points, which was partially offset by an increase in the average
balance of $2.2 million. Interest income on interest-earning deposits decreased
$61,000 or 78.2% due to a decrease in the average yield of 52 basis points and a
decrease in the average balance of $16.4 million. The decrease in
interest-earning deposits was primarily due to the movement of these funds into
higher yielding loans and securities. Interest income on loans decreased $33,000
or less than 1.0% due to a decrease in the average yield of 75 basis points
offset by an increase in the average balance of $56.3 million.

Interest Expense

Total interest expense decreased $968,000 or 15.4% to $5.3 million for the
three months ended March 31, 2004. This was primarily the result of a decrease of
64 basis points in the average cost on average interest-bearing
liabilities, which was partially offset by an increase of $27.7 million in the
average balance. Interest expense on interest-bearing deposits decreased $960,000
or 26.2%. This was the result of a decrease in the average cost of 76 basis
points and a decrease in the average balance of $2.4 million. This activity is
consistent with the Companys strategic focus on restructuring deposit accounts
from time deposits to lower cost transaction deposits. Interest expense on
borrowed funds remained consistent due to a decrease in the average cost of 55
basis points, which was partially offset by an increase in the average balance of
$29.6 million.

Provision for Loan Losses

The
provision for loan losses for the three months ended March 31, 2004 was
$434,000 as compared to $378,000 for the three months ended
March 31, 2003. The
allowance for loan losses to loans and nonperforming assets was 0.91% and
375%, respectively at March 31, 2004, as compared to 0.89% and
385%, respectively at
December 31, 2003 and 0.85% and 173%, respectively, at
March 31, 2003. The current
period provision was primarily influenced by strong loan growth specifically in
commercial real estate and residential mortgage loans. Additionally, the provision
was affected by the charge-off of $149,000 related to four commercial business
loans to three borrowers. Based on the level of charge-offs, current risk ratings and
increase in outstandings during the three months ended March 31, 2004, the
Company recorded additional provision to maintain an appropriate level of
coverage. The provision during the three months ended March 31, 2003 was
influenced by a charge-off of $221,000 against the allowance for loan
losses. This charge-off was the result of certain information obtained by the
Company relating to a $1.3 million commercial real estate loan, which was
performing and classified as Special Mention at
December 31, 2002. Based on
subsequent information, the loan was downgraded to
Substandard and placed on
nonaccrual status at March 31, 2003. The loan was repaid during the fourth quarter
of 2003 and a full recovery to the allowance for loan losses for the total
charge-off of $221,000 occurred in December 2003.

Nonperforming
loans at March 31, 2004 were $816,000 as compared to $1.1 million
at December 31, 2003 and $2.2 million at March 31, 2003. The decrease in
nonperforming loans at March 31, 2004 was primarily due to foreclosure
proceedings on residential properties, resulting in a transfer of nonperforming
loans to foreclosed assets. Nonperforming loans for March 31, 2004 and December
31, 2003 were comprised primarily of residential mortgages and consumer home
equity loans, respectively. The higher level of nonperforming loans at March
31, 2003 was primarily due to the deterioration and classification of the
commercial real estate loan previously noted. The Company monitors all
nonperforming loans which could impact the provision for loan losses. The
allowance for loan losses is maintained at an amount management considers
appropriate to cover estimated losses on loans which are deemed probable based
on information currently known to management. While management believes the
Companys allowance for loan losses is sufficient to cover losses in its loan
portfolio at this time, no assurances can be given that the Companys level of
allowance for loan losses will be sufficient to cover future loan losses
incurred by the Company, or that future adjustments to the allowance for loan
losses will not be necessary if economic and other conditions differ
substantially from the economic and other conditions analyzed by management to
determine the current level of the allowance for loan losses.

Noninterest Income

Total noninterest income decreased $54,000 or 4.2% for the three months ended
March 31, 2004. The decrease was primarily due to a decline of $123,000 in gains
on the sale of the education loan portfolio, which was divested in
2003, and
$48,000 of net gains on sales of available for sale securities. This decrease was
partially offset by increases of $50,000 in earnings on bank owned life
insurance, $45,000 in service fees, and $24,000 in other noninterest income.

Noninterest Expense

Total noninterest expense increased $443,000 or 10.3% for the three months
ended March 31, 2004. The increase was related to $197,000 of compensation and
employee benefits expense of which $93,000 was related to the Companys Employee
Stock Ownership Plan for which compensation expense is recorded based on the
average fair value of the Companys stock and the number of shares earned and
committed to be released. Additionally, the Company incurred merger related
expenses of

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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (UNAUDITED)GA FINANCIAL, INC.

$133,000 in connection with the definitive agreement to merge GA
Financial, Inc. and Great American Federal into First Commonwealth Financial
Corporation and First Commonwealth Bank, respectively. Other increases in
noninterest expense during the three months ended March 31, 2004 compared to the
three months ended March 31, 2003 included $55,000 in other expense and $45,000
in furniture and equipment expense.

Provision for Income Taxes

The provision for income taxes increased $9,000 or 1.6% to $558,000 for the
three months ended March 31, 2004. The effective tax rate for the three months
ended March 31, 2004 was 27.8% as compared to 24.0% for the three months ended
March 31, 2003. The increase in the effective tax rate was primarily the result of
an increase in taxable income.

OTHER MATTERS

Liquidity Resources

The
Companys primary sources of funds are deposits, repayments of loans and
securities, sales, calls, and maturities of securities, and advances from the
FHLB. While scheduled maturities of securities and the amortization of loans are
predictable sources of funds, deposit flows and prepayments on
mortgages, and
mortgage-backed and related securities are greatly influenced by market interest
rates, economic conditions, and competition.

Liquidity can be analyzed by utilizing the Consolidated Statements of Cash
Flows. Net cash provided by operating activities was $3.3 million. Net cash used
in investing activities was $12.7 million. Net cash provided by financing
activities was $7.8 million. Overall, cash and cash equivalents decreased $1.6
million for the three months ended March 31, 2004.

Management believes the Company has sufficient liquidity to meet current
obligations to borrowers, depositors, debt holders, and others.

Capital Resources

The Company is not required to maintain any minimum level of
capital; however, the Bank is subject to various regulatory capital requirements
administered by the Office of Thrift Supervision (OTS).

At
March 31, 2004, the Bank had exceeded the OTS requirements for tier I core
(leverage), tier I risk-based, total risk-based, and tangible capital. The OTS
requires the Bank to maintain a minimum 4.00% tier I core (leverage) capital
ratio (expressed as a percentage of adjusted total assets), a minimum tier I risk-based capital ratio of 4.00% and a total risk-
based capital ratio of 8.00% (both expressed as a percentage of risk-weighted
assets, which includes off-balance sheet items), and a minimum tangible capital
ratio of 1.50% of tangible assets, as defined by the OTS. The well-capitalized
requirement for tier I core (leverage), tier I risk-based, and total risk-based
ratios is 5.00%, 6.00%, and 10.00%, respectively. The Bank has consistently
maintained all regulatory capital ratios at or above the well capitalized
standards with tier I core (leverage) at 9.10%, tier I
risk-based at 15.86%, total
risk-based at 16.98%, and tangible at 9.10% at March 31, 2004.

New Accounting Pronouncements

There were no new accounting pronouncements issued during the period which
would affect the Company.

Forward-Looking Statements

This report contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Exchange Act, as amended. The Company intends such forward-looking statements to
be covered by the safe harbor provisions for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995, and is
including this statement for purposes of these safe harbor
provisions. Forward-looking statements, which are based on certain assumptions and
describe future plans, strategies and expectations of the Company, are generally
identified by use of the words believe,
expect, intend, anticipate,
estimate, project,
or similar expressions. The
Companys ability to predict results or the actual effect of future plans or
strategies is inherently uncertain. Factors which could have a material adverse
effect on the operations of the Company include, but are not limited
to: changes
in interest rates, general economic conditions, legislative/regulatory
changes, monetary and fiscal policies of the U.S. government, including policies
of the Treasury Department and the Federal Reserve Board, the quality or
composition of the loan or security portfolios, demand for loan
products, deposit
flows, competition, demand for financial services in the
Companys market area, and
accounting principles and guidelines. These risks and uncertainties should be
considered in evaluating forward-looking statements and undue reliance should
not be placed on such statements.

Except
as required by applicable law and regulation, the Company does not
undertakeand specifically disclaims any obligationto publicly release the
result of any revisions which may be made to any forward-looking statements to
reflect events or circumstances after the date of such statements or to reflect
the occurrence of anticipated or unanticipated events.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
GA FINANCIAL, INC.

Management is responsible for monitoring and limiting the Companys exposure
to interest rate risk within established guidelines while maximizing net
interest income. The Company will continue to monitor its interest rate
sensitivity with the primary objective to prudently structure the balance sheet
so that movements of interest rates on assets and liabilities are highly
correlated and produce a reasonable net interest margin even in periods of
volatile interest rates.

The principal objective of the Companys interest rate risk management
function is to evaluate the interest rate risk included in certain balance sheet
accounts, determine the appropriate level of risk given the Companys business
strategy, operating environment, capital and liquidity requirements and
performance objectives, and manage the risk consistent with Board of Director
approved guidelines. Through such management, the Company monitors its interest
rate risk and seeks to reduce the vulnerability of its operations to changes in
interest rates. The Companys Board of Directors has established an
Asset/Liability Management Committee,which meets at least on a quarterly basis
and is responsible for reviewing the Companys asset/liability
policies, interest
rate risk position, and liquidity. The Asset Liability Management Committee
reviews trends in interest rates, the financial position of the
Company, the
Companys actual performance to budgeted performance, the Companys interest rate
position as measured by changes in its net interest income and net portfolio
value under certain interest rate scenarios,and the projected impact of such
interest rate scenarios on its earnings and capital. The extent of the movement
of interest rates is an uncertainty that could have a negative impact on the earnings of the Company.

In
recent years, the Company has utilized the following strategies to manage
interest rate risk: (1) purchasing adjustable interest rate and shorter term
fixed-rate mortgage-backed and related securities; (2) investing in shorter term
fixed-rate corporate debt and government agency bonds or in such types of bonds
with adjustable interest rates; (3) originating shorter term and adjustable
interest rate commercial, residential mortgage, and consumer loan
products; and (4)
emphasizing lower cost transaction deposits. To manage the interest rate risk of
the Company, the Board of Directors has also established parameters relating to
the types of loans the Company may originate/purchase and securities in which
the Company may invest and parameters relating to the types of deposits which
may be offered by the Company and rates which may be paid on such deposits.

Market risk is the risk of losses resulting from adverse changes in market
pricing and rates. The Companys market risk is primarily its interest rate risk
associated with its investing, lending, deposit, and borrowing
activities. Interest
rate risk arises when interest rates on assets change in a different time period
or in a different proportion from that of liabilities. Management actively
monitors its interest rate sensitivity position with the primary objective to
prudently structure the balance sheet so that movements of interest rates on
assets and liabilities are highly correlated and produce a reasonable net
interest margin even in periods of volatile interest rates. Interest rate risk is
considered by management to be the Companys most significant market risk that
could materially impact the Companys financial position or results of
operations.




ITEM 4. CONTROLS AND PROCEDURES
GA FINANCIAL, INC.

The
Companys management, including the Companys principal executive officer
and principal accounting and financial officer, have evaluated the effectiveness
of the Companys disclosure controls and procedures, as such term is defined in
Rule 13a-15(e) promulgated under the Exchange Act, as amended. Based upon their
evaluation, the principal executive officer and principal accounting and
financial officer concluded that, as of the end of the period covered by this
report, the Companys disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports
that the Company files or submits under the Exchange Act with the SEC (1) is
recorded, processed, summarized and reported within the time periods specified in
the SECs rules and forms, and (2) is accumulated and communicated to the
Companys management, including its principal executive and principal accounting
and financial officers, as appropriate to allow timely decisions regarding
required disclosure.

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PART II. OTHER INFORMATION
GA FINANCIAL, INC.




ITEM 1. LEGAL PROCEEDINGS

The Company is subject to a number of asserted and unasserted potential claims
encountered in the normal course of business. In the opinion of
management, after
consultation with legal counsel, the resolution of these claims will not have a
material adverse effect on the Companys financial position,
liquidity, or results
of operations.




ITEM 2. CHANGES IN SECURITIES, USE OF PROCEEDS
AND ISSUER PURCHASES OF EQUITY SECURITIES

None




ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None




ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS

None




ITEM 5. OTHER INFORMATION

None




ITEM 6. EXHIBITS AND
REPORTS ON FORM 8-K

(a) Exhibits:

2.1
    
    Agreement of Plan of Merger among First Commonwealth
Financial Corporation, First Commonwealth Bank, GA Financial, Inc.
and Great American Federal Savings and Loan Association,
dated December 11, 2003.(1)3.1
    
    Certificate of Incorporation of GA
Financial, Inc.(2)3.2
    
    Amended Bylaws of GA Financial,
Inc.(3)4.0
    
    Stock Certificate of GA Financial,
Inc.(2)11.0
    
    Computation of Earnings per Share. This is incorporated by reference to
Note 6. Earnings Per Share of the Notes to the Consolidated Financial
Statements.31.1
    
    Rule 13a-14(a)/15(d)-14(a) Chief Executive Officer Certification
(filed herewith).31.2
    
    Rule 13a-14(a)/15(d)-14(a) Chief Financial Officer Certification
(filed herewith).32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350,as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).32.2
    
    Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).




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|1 |  | Incorporated by reference into this document from the Current Report on
Form 8-K filed by First Commonwealth Financial Corporation (File No.
O-11242) on December 16, 2003, as Exhibit 2.1.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|2 |  | Incorporated by reference into this document from the Exhibits to Form S-1. Registration
Statement, filed on December 21, 1995, as amended, Registration No. 33-80715.                     
| 
|3 |  | Incorporated by reference into this document from the Companys Form 10-Q
filed on November 15, 1999.                                                                                      

(b) Reports on Form 8-K:

During the first quarter of 2004 the Company filed or furnished the following
Current Report on Form 8-K.



| | (1) |  | A report filed February 2, 2004 which included, under
Items 7 and 12, the
Companys press release announcing financial results for the quarter ended
and year ended December 31, 2003.
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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SIGNATURES
GA FINANCIAL, INC.

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

Date
    
    May 7, 2004GA Financial,Inc.(Registrant)By
    
    /s/ John M. KishJohn M. KishChairman of the Board and Chief Executive Officer(Principal Executive Officer)By
    
    /s/ James V. DioniseJames V. DioniseChief Financial Officer and Secretary(Principal Accounting and Financial Officer)


15