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| x                                                                                                                                                                                                                                                                          | Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                       |
| For the fiscal year ended SEPTEMBER 30, 2009                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                       |
| -or-                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                       |                                                                                                |
| o                                                                                                                                                                                                                                                                          | Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934       |
|                                                                                                                                                                                                                                                                       |
| For the transition period from                                       to |

| PENNSYLVANIA(State or other jurisdiction of incorporation or organization) | 68-0593604(IRS Employer Identification No.) |
|----------------------------------------------------------------------------|---------------------------------------------|

|   |  1834 OREGON AVENUE                  |   |  19145      |   |
|--------|------------------------------------------------|--------|------------------|--------|
|   |  PHILADELPHIA, PENNSYLVANIA               |   |  (Zip Code) |   |
|   |  (Address of Principal Executive Offices) |   |             |   |

|                                           |   |                                            |
|------------------------------------------------|--------|-------------------------------------------------|
|  Title of Each Class            |   |  Name of Each Exchange on Which Registered |
|                                           |   |                                            |
|  Common Stock (par value $0.01 per share) |   |  The Nasdaq Stock Market, LLC              |

|                                                                                                    |                                         |                                 |
|---------------------------------------------------------------------------------------------------------|----------------------------------------------|--------------------------------------|
|  Large Accelerated Filer  o                                                              |                                         |  Accelerated Filer  o |
|  Non-Accelerated Filer  o (Do not check if a smaller reporting company)   |  Smaller Reporting Company  x |

| 1. | Portions of the Definitive Proxy Statement for the 2010 Annual Meeting of Shareholders are incorporated by reference in Part III. |
|----|----------------------------------------------------------------------------------------------------------------------------------------|

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| PART I   | Page                                                                                                               |
|----------|--------------------------------------------------------------------------------------------------------------------|
|     |                                                                                                               |   |
| Item 1.  | Business                                                                                                           | 1 |
|     |                                                                                                               |   |
| Item 1A. | Risk Factors                                                                                                       | 37 |
|     |                                                                                                               |   |
| Item 1B. | Unresolved Staff Comments                                                                                          | 37 |
|     |                                                                                                               |   |
| Item 2.  | Properties                                                                                                         | 38 |
|     |                                                                                                               |   |
| Item 3.  | Legal Proceedings                                                                                                  | 38 |
|     |                                                                                                               |   |
| Item 4.  | Submission of Matters to a Vote of Security Holders                                                                | 38 |
|     |                                                                                                               |
| PART II  |                                                                                                               |
|     |                                                                                                               |   |
| Item 5.  | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 39 |
|     |                                                                                                               |   |
| Item 6.  | Selected Financial Data                                                                                            | 41 |
|     |                                                                                                               |   |
| Item 7.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations                        | 43 |
|     |                                                                                                               |   |
| Item 8.  | Financial Statements and Supplementary Data                                                                        | 58 |
|     |                                                                                                               |   |
| Item 9.  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                               | 101 |
|     |                                                                                                               |   |
| Item 9A. | Controls and Procedures                                                                                            | 101 |
|     |                                                                                                               |   |
| Item 9B. | Other Information                                                                                                  | 102 |
|     |                                                                                                               |
| PART III |                                                                                                               |
|     |                                                                                                               |   |
| Item 10. | Directors, Executive Officers and Corporate Governance                                                             | 102 |
|     |                                                                                                               |   |
| Item 11. | Executive Compensation                                                                                             | 102 |
|     |                                                                                                               |   |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                     | 102 |
|     |                                                                                                               |   |
| Item 13. | Certain Relationships and Related Transactions and Director Independence                                           | 103 |
|     |                                                                                                               |   |
| Item 14. | Principal Accounting Fees and Services                                                                             | 103 |
|     |                                                                                                               |
| PART IV  |                                                                                                               |
|     |                                                                                                               |   |
| Item 15. | Exhibits and Financial Statement Schedules                                                                         | 103 |
|     |                                                                                                               |   |
|     | Signatures                                                                                                         |   |

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|                                          |   | September 30,                       |    |
|-----------------------------------------------|--------|-------------------------------------|---------|
|                                          |   | 2009                                |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                          |   | Amount                              |    |   | % |   |   | Amount |   |   | % |   |   | Amount |   |   | % |   |   | Amount |   |   | % |   |   | Amount |   |   | % |   |
|                                          |   |                                |    |
|                                          |   |    (Dollars in thousands) |    |
|                                          |   |                                |    |
| Real estate loans:                            |   |                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential(1)            |   | $                                   | 201,396 |   |   |   | 75.98 | % |   | $ | 191,344 |   |   |   | 74.02 | % |   | $ | 159,945 |   |   |   | 67.85 | % |   | $ | 155,454 |   |   |   | 60.69 | % |   | $ | 135,394 |   |   |   | 67.22 | % |
| Multi-family residential                      |   |                                | 4,178   |   |   |   | 1.58 | % |   |   | 2,801 |   |   |   | 1.08 | % |   |   | 4,362 |   |   |   | 1.85 | % |   |   | 5,074 |   |   |   | 1.98 | % |   |   | 2,541 |   |   |   | 1.26 | % |
| Commercial real estate                        |   |                                | 19,907  |   |   |   | 7.51 | % |   |   | 20,518 |   |   |   | 7.94 | % |   |   | 18,019 |   |   |   | 7.64 | % |   |   | 11,339 |   |   |   | 4.42 | % |   |   | 9,875 |   |   |   | 4.90 | % |
| Construction and land development             |   |                                | 36,764  |   |   |   | 13.87 | % |   |   | 42,634 |   |   |   | 16.49 | % |   |   | 52,429 |   |   |   | 22.24 | % |   |   | 82,800 |   |   |   | 32.33 | % |   |   | 52,093 |   |   |   | 25.86 | % |
| Total real estate loans                       |   |                                | 262,245 |   |   |   | 98.94 | % |   |   | 257,297 |   |   |   | 99.53 | % |   |   | 234,755 |   |   |   | 99.58 | % |   |   | 254,667 |   |   |   | 99.42 | % |   |   | 199,903 |   |   |   | 99.24 | % |
| Commercial business                           |   |                                | 2,232   |   |   |   | 0.84 | % |   |   | 465 |   |   |   | 0.18 | % |   |   | 155 |   |   |   | 0.07 | % |   |   | 234 |   |   |   | 0.09 | % |   |   | 188 |   |   |   | 0.09 | % |
| Consumer                                      |   |                                | 586     |   |   |   | 0.22 | % |   |   | 739 |   |   |   | 0.29 | % |   |   | 832 |   |   |   | 0.35 | % |   |   | 1,239 |   |   |   | 0.49 | % |   |   | 1,347 |   |   |   | 0.67 | % |
| Total loans                                   |   |                                | 265,063 |   |   |   | 100.00 | % |   |   | 258,501 |   |   |   | 100.00 | % |   |   | 235,742 |   |   |   | 100.00 | % |   |   | 256,140 |   |   |   | 100.00 | % |   |   | 201,438 |   |   |   | 100.00 | % |
| Less:                                         |   |                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Undisbursed portion of loans in  process |   |                                | 6,281   |   |   |   |   |   |   |   | 13,515 |   |   |   |   |   |   |   | 15,897 |   |   |   |   |   |   |   | 36,257 |   |   |   |   |   |   |   | 25,824 |   |   |   |   |   |
| Deferred loan fees                            |   |                                | (644    | ) |   |   |   |   |   |   | (574 | ) |   |   |   |   |   |   | (315 | ) |   |   |   |   |   |   | (153 | ) |   |   |   |   |   |   | (35 | ) |   |   |   |   |
| Allowance for loan losses                     |   |                                | 2,732   |   |   |   |   |   |   |   | 1,591 |   |   |   |   |   |   |   | 1,011 |   |   |   |   |   |   |   | 618 |   |   |   |   |   |   |   | 558 |   |   |   |   |   |
| Net loans                                     |   | $                                   | 256,694 |   |   |   |   |   |   | $ | 243,969 |   |   |   |   |   |   | $ | 219,149 |   |   |   |   |   |   | $ | 219,418 |   |   |   |   |   |   | $ | 175,091 |   |   |   |   |   |

----

| (1)   | Includes home equity loans and lines of credit of $12.6 million and $9.4 million, respectively, as of September 30, 2009. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------|

|                                        |   | One-to-Four          |    |   |         |   |   |        |   |   | Construction |   |   |       |   |   |     |   |   |   |   |
|---------------------------------------------|--------|----------------------|---------|--------|--------------|--------|--------|-------------|--------|--------|--------------|--------|--------|------------|--------|--------|----------|--------|--------|--------|--------|
|                                        |   | Family               |    |   | Multi-family |   |   | Commercial  |   |   | and Land     |   |   | Commercial |   |   |     |   |   |   |   |
|                                        |   | Residential          |    |   | Residential  |   |   | Real Estate |   |   | Development  |   |   | Business   |   |   | Consumer |   |   | Total  |   |
|                                        |   |  (In Thousands) |    |
| Amounts due after September 30, 2009 in:    |   |                 |    |
|  One year or less                      |   | $                    | 3,437   |   |         | $      | -      |        |   | $      | 257          |   |   | $          | 31,860 |   |     | $      | 271    |   |   | $ | 87 |   |   | $ | 35,912 |   |
|  After one year through two years      |   |                 | 3,700   |   |         |   | -      |        |   |   | 1,919        |   |   |       | 1,927  |   |     |   | 76     |   |   |   | 92 |   |   |   | 7,714 |   |
|  After two years through three years   |   |                 | 2,031   |   |         |   | 21     |        |   |   | 491          |   |   |       | -      |   |     |   | -      |   |   |   | 60 |   |   |   | 2,603 |   |
|  After three years through five years  |   |                 | 10,607  |   |         |   | 267    |        |   |   | 936          |   |   |       | 2,977  |   |     |   | 160    |   |   |   | 234 |   |   |   | 15,181 |   |
|  After five years through ten years    |   |                 | 38,464  |   |         |   | 1,575  |        |   |   | 14,264       |   |   |       | -      |   |     |   | 727    |   |   |   | 82 |   |   |   | 55,112 |   |
|  After ten years through fifteen years |   |                 | 95,514  |   |         |   | 2,267  |        |   |   | 1,827        |   |   |       | -      |   |     |   | 856    |   |   |   | 31 |   |   |   | 100,495 |   |
|  After fifteen years                   |   |                 | 47,643  |   |         |   | 48     |        |   |   | 213          |   |   |       | -      |   |     |   | 142    |   |   |   | - |   |   |   | 48,046 |   |
| Total                                       |   | $                    | 201,396 |   |         | $      | 4,178  |        |   | $      | 19,907       |   |   | $          | 36,764 |   |     | $      | 2,232  |   |   | $ | 586 |   |   | $ | 265,063 |   |

----

|                                       |   |           |    |   | Floating or     |   |   |   |   |
|--------------------------------------------|--------|----------------|---------|--------|-----------------|--------|--------|--------|--------|
|                                       |   | Fixed-Rate     |    |   | Adjustable-Rate |   |   | Total  |   |
|         |   | (In Thousands) |    |
|                                       |   |           |    |   |            |   |   |   |   |
| One- to four-family residential (1)        |   | $              | 186,380 |   |            | $      | 11,579 |   |   | $ | 197,959 |   |
| Multi-family residential                   |   |           | 4,178   |   |            |   | -      |   |   |   | 4,178 |   |
| Commercial real estate                     |   |           | 17,499  |   |            |   | 2,151  |   |   |   | 19,650 |   |
| Construction and land development          |   |           | 500     |   |            |   | 4,403  |   |   |   | 4,903 |   |
| Commercial business                        |   |           | 1,886   |   |            |   | 76     |   |   |   | 1,962 |   |
| Consumer                                   |   |           | 449     |   |            |   | 50     |   |   |   | 499 |   |
|  Total                                |   | $              | 210,892 |   |            | $      | 18,259 |   |   | $ | 229,151 |   |

| (1)  | Includes home equity loans and lines of credit. |
|-----------|-------------------------------------------------|

----

|                                                                |   | Year Ended September 30, |
|---------------------------------------------------------------------|--------|--------------------------|
|                                                           |   | 2009                     |   |   | 2008 |   |
|                                                                |   |  (In Thousands)     |   |
| Loan originations:                                                  |   |                     |   |
| One- to four-family residential                                     |   | $                        | 46,296 |   |   | $ | 51,289 |   |
| Multi-family residential                                            |   |                     | 459 |   |   |   | - |   |
| Commercial real estate                                              |   |                     | 1,855 |   |   |   | 3,124 |   |
| Construction and land development                                   |   |                     | 15,399 |   |   |   | 15,933 |   |
| Commercial business                                                 |   |                     | 4,551 |   |   |   | 5,464 |   |
| Consumer                                                            |   |                     | 493 |   |   |   | 773 |   |
| Total loan originations                                             |   |                     | 69,053 |   |   |   | 76,583 |   |
| Loans purchased                                                     |   |                     | - |   |   |   | - |   |
|      Total loans originated & acquired |   |                     | 69,053 |   |   |   | 76,583 |   |
| Loans sold                                                          |   |                     | - |   |   |   | - |   |
| Loans transferred to real estate owned                              |   |                     | 3,142 |   |   |   | 1,651 |   |
| Loan principal repayments                                           |   |                     | 51,868 |   |   |   | 49,281 |   |
| Total loans sold and principal repayments                           |   |                     | 55,010 |   |   |   | 50,932 |   |
| (Decrease) or increase due to other items, net (1)                  |   |                     | (1,318 | ) |   |   | (831 | ) |
| Net increase in loan portfolio                                      |   | $                        | 12,725 |   |   | $ | 24,820 |   |

----

|   | (1) | Other items consist of loans in process, deferred fees and the allowance for loan losses. The 2009 balance consisted primarily of the $1.4 million loan loss provision offset by an $85,000 amortization of deferred loan fee income. The 2008 balance consisted primarily of the $1.1 million loan loss provision offset by a $253,000 amortization ofdeferred loan fee income. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                |   |  September 30, 2009      |   |   | September 30, 2008    |   |
|-------------------------------------|--------|-------------------------------|--------|--------|-----------------------|--------|
|                                |   | 30-89                    |   |   | 90 or More Days  |   |   | 30-89  |   |   | 90 or More Days  |   |
|                                |   | Days Overdue                  |   |   |   Overdue        |   |   | Days Overdue |   |   | Overdue |   |
|                                |   | Number                        |   |   | Principal             |   |   | Number |   |   | Principal |   |   | Number |   |   | Principal |   |   | Number |   |   |  Principal |   |
|                                |   | of Loans                      |   |   | Balance               |   |   | of Loans |   |   | Balance |   |   | of Loans |   |   | Balance |   |   | of Loans |   |   | Balance |   |
|                                |   |   (Dollars in thousands) |   |
|                                |   |                          |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential     |   |                          | 18     |   |                  | $      | 2,257 |   |   |   | 10 |   |   | $ | 851 |   |   |   | 11 |   |   | $ | 838 |   |   |   | 4 |   |   | $ | 152 |   |
| Multi-family residential            |   |                          | -      |   |                  |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial real estate              |   |                          | 5      |   |                  |   | 852 |   |   |   | 2 |   |   |   | 491 |   |   |   | 2 |   |   |   | 315 |   |   |   | 1 |   |   |   | 244 |   |
| Construction and land development   |   |                          | 1      |   |                  |   | 273 |   |   |   | 1 |   |   |   | 640 |   |   |   | 1 |   |   |   | 3,000 |   |   |   | - |   |   |   | - |   |
| Commercial business                 |   |                          | -      |   |                  |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Consumer                            |   |                          | 2      |   |                  |   | 52 |   |   |   | - |   |   |   | - |   |   |   | 1 |   |   |   | 6 |   |   |   | - |   |   |   | - |   |
| Total delinquent loans              |   |                          | 26     |   |                  | $      | 3,434 |   |   |   | 13 |   |   | $ | 1,982 |   |   |   | 15 |   |   | $ | 4,159 |   |   |   | 5 |   |   | $ | 396 |   |
| Delinquent loans to total net loans |   |                          | 1.34   | %      |                  |   |   |   |   |   | 0.77 | % |   |   |   |   |   |   | 1.70 | % |   |   |   |   |   |   | 0.16 | % |   |   |   |   |
| Delinquent loans to total loans     |   |                          | 1.30   | %      |                  |   |   |   |   |   | 0.75 | % |   |   |   |   |   |   | 1.61 | % |   |   |   |   |   |   | 0.15 | % |   |   |   |   |

----

|                                                                         |   | September 30,          |   |
|------------------------------------------------------------------------------|--------|------------------------|--------|
|                                                                         |   | 2009                   |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                         |   | (Dollars in thousands) |   |
| Non-accruing loans:                                                          |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential                                              |   | $                      | -      |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Multi-family residential                                                     |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial real estate                                                       |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Construction and land development                                            |   |                   | 640    |   |   |   | 3,640 |   |   |   | 2,022 |   |   |   | - |   |   |   | - |   |
| Commercial business                                                          |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Consumer                                                                     |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total non-accruing loans                                                     |   |                   | 640    |   |   |   | 3,640 |   |   |   | 2,022 |   |   |   | - |   |   |   | - |   |
| Accruing loans 90 days or more past due:                                     |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One- to four-family residential                                              |   |                   | 851    |   |   |   | 152 |   |   |   | 502 |   |   |   | 151 |   |   |   | 240 |   |
| Multi-family residential                                                     |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial real estate                                                       |   |                   | 491    |   |   |   | 244 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Construction                                                                 |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial business                                                          |   |                   |   |   |   |   |   |   |   |   | 69 |   |   |   | - |   |   |   | - |   |
| Consumer                                                                     |   |                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total accruing loans 90 days or more past due                                |   |                   | 1,342  |   |   |   | 396 |   |   |   | 571 |   |   |   | 151 |   |   |   | 240 |   |
| Total non-performing loans(1)                                                |   |                   | 1,982  |   |   |   | 4,036 |   |   |   | 2,593 |   |   |   | 151 |   |   |   | 240 |   |
| Real estate owned, net(2)                                                    |   |                   | 3,622  |   |   |   | 1,488 |   |   |   | - |   |   |   | - |   |   |   | 360 |   |
| Total non-performing assets                                                  |   | $                      | 5,604  |   |   | $ | 5,524 |   |   | $ | 2,593 |   |   | $ | 151 |   |   | $ | 600 |   |
|  Total non-performing loans as a percentage of loans, net               |   |                   | 0.77   | % |   |   | 1.65 | % |   |   | 1.18 | % |   |   | 0.07 | % |   |   | 0.14 | % |
|  Total non-performing loans as a  percentage of total assets  |   |                   | 0.39   | %  |   |   | 0.82 | %  |   |   | 0.55 | %  |   |   | 0.03 | %  |   |   | 0.05 | %  |
|  Total non-performing assets as a  percentage of total assets |   |                   | 1.09   | %  |   |   | 1.13 | %  |   |   | 0.55 | %  |   |   | 0.03 | %  |   |   | 0.13 | %  |

|   | (1) | Non-performing loans consist of non-accruing loans plus accruing loans 90 days or more past due.         |
|--------|-----|----------------------------------------------------------------------------------------------------------|
|   | (2) | Real estate owned balances are shown net of related loss allowances and consist solely of real property. |

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|                                                                                           |   |                                   |         |    |   |   |        |    |   |   |        |    |   |   |         |    |   |   |         |    |
|------------------------------------------------------------------------------------------------|--------|----------------------------------------|--------------|---------|--------|--------|-------------|---------|--------|--------|-------------|---------|--------|--------|--------------|---------|--------|--------|--------------|---------|
|                                                                                           |   | At or For the Year Ended September 30, |         |
|                                                                                           |   |                                   |         |    |   |   |        |    |   |   |        |    |   |   |         |
|                                                                                           |   | 2009                                   |         |    | 2008   |   |        | 2007    |   |   | 2006        |    |   | 2005   |         |
|                                                                                           |   | (Dollars in thousands)                 |         |
| Total loans outstanding at end of period                                                       |   | $                                      | 265,063      |    |   | $      | 258,501     |    |   | $      | 235,742     |    |   | $      | 256,140      |    |   | $      | 201,438      |    |
| Average loans outstanding                                                                      |   |                                   | 253,278      |    |   |   | 227,662     |    |   |   | 221,262     |    |   |   | 197,913      |    |   |   | 163,166      |    |
| Allowance for loan losses, beginning of period                                                 |   |                                   | 1,591        |    |   |   | 1,011       |    |   |   | 618         |    |   |   | 558          |    |   |   | 558          |    |
| Provision for loan losses                                                                      |   |                                   | 1,403        |    |   |   | 1,084       |    |   |   | 395         |    |   |   | 60           |    |   |   | -            |    |
| Charge-offs:                                                                                   |   |                                   |         |    |   |   |        |    |   |   |        |    |   |   |         |    |   |   |         |    |
| One- to four-family residential                                                                |   |                                   | 45           |    |   |   | -           |    |   |   | 2           |    |   |   | -            |    |   |   | -            |    |
| Multi-family residential and commercial real estate                                            |   |                                   | -            |    |   |   | -           |    |   |   | -           |    |   |   | -            |    |   |   | -            |    |
| Construction                                                                                   |   |                                   | 217          |    |   |   | 504         |    |   |   | -           |    |   |   | -            |    |   |   | -            |    |
| Commercial business                                                                            |   |                                   |         |    |   |   |        |    |   |   | -           |    |   |   | -            |    |   |   | -            |    |
| Consumer                                                                                       |   |                                   | -            |    |   |   | -           |    |   |   | -           |    |   |   | -            |    |   |   | -            |    |
|     Total charge-offs                                                      |   |                                   | 262          |    |   |   | 504         |    |   |   | 2           |    |   |   | -            |    |   |   | -            |    |
| Recoveries on loans previously charged off                                                     |   |                                   | -            |    |   |   | -           |    |   |   | -           |    |   |   | -            |    |   |   | -            |    |
| Allowance for loan losses, end of period                                                       |   | $                                      | 2,732        |    |   | $      | 1,591       |    |   | $      | 1,011       |    |   | $      | 618          |    |   | $      | 558          |    |
|                                                                                           |   |                                   |         |    |   |   |        |    |   |   |        |    |   |   |         |    |   |   |         |    |
|  Allowance for loan losses as a percent of total loans                                    |   |                                   |  1.03   | %  |   |   |  0.62  | %  |   |   |  0.43  | %  |   |   |  0.24   | %  |   |   |  0.28   | %  |
| Allowance for loan losses as a percent of non-performing loans                                 |   |                                   |  137.77 | %  |   |   |  39.42 | %  |   |   |  38.97 | %  |   |   |  409.66 | %  |   |   |  223.47 | %  |
| Ratio of net charge-offs during the period to average loans outstanding during the period |   |                                   | 0.10         | %  |   |   | 0.22        | %  |   |   | *           |    |   |   |  *      |    |   |   | *            |    |

| *  Not meaningful |   |   |   |   |   |
|-----------------------------|--------|--------|--------|--------|--------|

----

|                              |      |                   |   |     |   |   |      |   |   |     |   |   |      |   |   |     |   |   |      |   |   |     |   |   |      |   |   |     |   |   |
|-----------------------------------|-----------|------------------------|--------|----------|--------|--------|-----------|--------|--------|----------|--------|--------|-----------|--------|--------|----------|--------|--------|-----------|--------|--------|----------|--------|--------|-----------|--------|--------|----------|--------|--------|
|                              |      | September 30,          |   |
|                              |      | 2009                   |   |     | 2008   |   |      | 2007   |   |     | 2006   |   |      | 2005   |   |
|                              |      |                   |   |     | Loan   |   |      |   |   |     | Loan   |   |      |   |   |     | Loan   |   |      |   |   |     | Loan   |   |      |   |   |     | Loan   |   |
|                              |      |                   |   | Category |   |   |      |   |   | Category |   |   |      |   |   | Category |   |   |      |   |   | Category |   |   |      |   |   | Category |   |
|                              | Amount    |                   |   | as a %   |   |   | Amount    |   |   | as a %   |   |   | Amount    |   |   | as a %   |   |   | Amount    |   |   | as a %   |   |   | Amount    |   |   | as a %   |   |
|                              | of        |                   |   | of Total |   |   | of        |   |   | of Total |   |   | of        |   |   | of Total |   |   | of        |   |   | of Total |   |   | of        |   |   | of Total |   |
|                              | Allowance |                   |   | Loans    |   |   | Allowance |   |   | Loans    |   |   | Allowance |   |   | Loans    |   |   | Allowance |   |   | Loans    |   |   | Allowance |   |   | Loans    |   |
|                              |      |                   |   |     |   |   |      |   |   |     |   |   |      |   |   |     |   |   |      |   |   |     |   |   |      |   |   |     |   |
|                              |      | (Dollars in thousands) |   |
| One- to four-family residential   |      | $                      | 403    |     |   |   | 75.98     | %      |   | $        | 155    |   |      |   | 74.02  | %        |   | $      | 186       |   |   |     | 67.85  | %      |      | $      | 148    |     |   |   | 60.69 | % |   | $ | 163 |   |   |   | 67.22 | % |
| Multi-family residential          |      |                   | 7      |     |   |   | 1.58      | %      |   |     | 4      |   |      |   | 1.08   | %        |   |   | 22        |   |   |     | 1.85   | %      |      |   | 23     |     |   |   | 1.98 | % |   |   | 13 |   |   |   | 1.26 | % |
| Commercial real estate            |      |                   | 193    |     |   |   | 7.51      | %      |   |     | 106    |   |      |   | 7.94   | %        |   |   | 179       |   |   |     | 7.64   | %      |      |   | 102    |     |   |   | 4.42 | % |   |   | 98 |   |   |   | 4.90 | % |
| Construction and land development |      |                   | 2,114  |     |   |   | 13.87     | %      |   |     | 1,323  |   |      |   | 16.49  | %        |   |   | 610       |   |   |     | 22.24  | %      |      |   | 343    |     |   |   | 32.33 | % |   |   | 227 |   |   |   | 25.86 | % |
| Commercial business               |      |                   | 7      |     |   |   | 0.84      | %      |   |     | 1      |   |      |   | 0.18   | %        |   |   | 12        |   |   |     | 0.07   | %      |      |   | 2      |     |   |   | 0.09 | % |   |   | 2 |   |   |   | 0.09 | % |
| Consumer                          |      |                   | 1      |     |   |   | 0.22      | %      |   |     | 2      |   |      |   | 0.29   | %        |   |   | 2         |   |   |     | 0.35   | %      |      |   | -      |     |   |   | 0.49 | % |   |   | 1 |   |   |   | 0.67 | % |
| Unallocated                       |      |                   | 7      |     |   |   | -         |   |   |     | -      |   |      |   | -      |     |   |   | -         |   |   |     | -      |   |      |   | -      |     |   |   | - |   |   |   | 54 |   |   |   | - |   |
| Total allowance for loan losses   |      | $                      | 2,732  |     |   |   | 100.00    | %      |   | $        | 1,591  |   |      |   | 100.00 | %        |   | $      | 1,011     |   |   |     | 100.00 | %      |      | $      | 618    |     |   |   | 100.00 | % |   | $ | 558 |   |   |   | 100.00 | % |

----

----

|                                                  |   | September 30,  |    |
|-------------------------------------------------------|--------|----------------|---------|
|                                                  |   | 2009           |    |   | 2008 |   |
|                                                  |   | Amortized      |    |   | Market |   |   | Amortized |   |   | Market |   |
|                                                  |   | Cost           |    |   | Value |   |   | Cost |   |   | Value |   |
|                                                  |   |           |    |   |   |   |   |   |   |   |   |   |
|                                                  |   | (In Thousands) |    |
| Mortgage-backed securities - U.S. Government agencies |   | $              | 84,892  |   |   | $ | 88,444 |   |   | $ | 78,359 |   |   | $ | 78,230 |   |
| Mortgage backed securities - Non-agency               |   |           | 10,325  |   |   |   | 7,767 |   |   |   | 15,048 |   |   |   | 13,765 |   |
| U.S. Governnment and agency obligations               |   |           | 125,923 |   |   |   | 126,141 |   |   |   | 123,572 |   |   |   | 121,183 |   |
| Municipal obligations                                 |   |           | 1,970   |   |   |   | 1,976 |   |   |   | 2,450 |   |   |   | 2,434 |   |
| Total debt securities                                 |   |           | 223,110 |   |   |   | 224,328 |   |   |   | 219,429 |   |   |   | 215,612 |   |
| FHLB stock                                            |   |           | 3,545   |   |   |   | 3,545 |   |   |   | 2,620 |   |   |   | 2,620 |   |
| FHLMC stock                                           |   |           | 16      |   |   |   | 47 |   |   |   | 26 |   |   |   | 45 |   |
| FNMA stock                                            |   |           | -       |   |   |   | - |   |   |   | 1 |   |   |   | 1 |   |
| Mutual funds                                          |   |           | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total investment and mortgage-backed securities       |   | $              | 226,671 |   |   | $ | 227,920 |   |   | $ | 222,076 |   |   | $ | 218,278 |   |

----

|                             |   | Amounts at September 30, 2009 Which Mature In |   |
|----------------------------------|--------|-----------------------------------------------|--------|
|                             |   |                                          |   |   |   |   |   | Over One |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                             |   |                                          |   |   | Weighted |   |   | Year |   |   | Weighted |   |   | Over Five |   |   | Weighted |   |   | Over |   |   | Weighted |   |
|                             |   | One Year                                      |   |   | Average |   |   | Through |   |   | Average |   |   | Through |   |   | Average |   |   | Ten |   |   | Average |   |
|                             |   | or Less                                       |   |   | Yield |   |   | Five Years |   |   | Yield |   |   | Ten Years |   |   | Yield |   |   | Years |   |   | Yield |   |
|                             |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                             |   | (Dollars in Thousands)                        |   |
|                             |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bonds and other debt securities: |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. gov and agency obligations  |   | $                                             | 2,000  |   |   |   | 4.70 | % |   | $ | - |   |   |   | - |   |   | $ | 42,491 |   |   |   | 4.58 | % |   | $ | 81,432 |   |   |   | 5.01 | % |
| Municipal obligations            |   |                                          | -      |   |   |   | - |   |   |   | 790 |   |   |   | 3.19 | % |   |   | 1,180 |   |   |   | 3.86 | % |   |   | - |   |   |   | - |   |
| Mortgage-backed securities       |   |                                          | 1,250  |   |   |   | 4.54 | % |   |   | 695 |   |   |   | 6.76 | % |   |   | - |   |   |   | - |   |   |   | 93,272 |   |   |   | 5.74 | % |
| Total                            |   | $                                             | 3,250  |   |   |   | 4.64 | % |   | $ | 1,485 |   |   |   | 4.86 | % |   | $ | 43,671 |   |   |   | 4.56 | % |   | $ | 174,704 |   |   |   | 5.40 | % |

|                             |   | September 30,  |   |
|----------------------------------|--------|----------------|--------|
|                             |   | 2009           |   |   | 2008 |   |
|                             |   | (In Thousands) |   |
| Agency                           |   | $              | 84,892 |   |   | $ | 78,359 |   |
| Non-agency                       |   |           | 10,325 |   |   |   | 15,048 |   |
| Total mortgage-backed securities |   | $              | 95,217 |   |   | $ | 93,407 |   |

|                                              |   |                                  |    |   |   |   |
|---------------------------------------------------|--------|---------------------------------------|---------|--------|--------|--------|
|                                              |   | At or For theYear Ended September 30, |    |
|                                              |   |                                  |    |   |   |   |
|                                              |   | 2009                                  |    |   | 2008   |   |
|                                              |   | (Dollars in Thousands)                |    |
| Mortgage-backed securities at beginning of period |   | $                                     | 93,407  |   |   | $      | 54,026 |   |
| Purchases                                         |   |                                  | 17,717  |   |   |   | 23,324 |   |
| Securities acquired through redemption in kind    |   |                                  | -       |   |   |   | 24,755 |   |
| Other than temporary impairment of securities     |   |                                  | (3,272  | )      |   |   | (726 | ) |
| Maturities and repayments                         |   |                                  | (15,103 | )      |   |   | (8,270 | ) |
| Adoption of FASB ASC 320-10                       |   |                                  | 1,148   |   |   |   | - |   |
| Amortizations of premiums and discounts, net      |   |                                  | 1,320   |   |   |   | 298 |   |
| Mortgage-backed securities at end of period       |   | $                                     | 95,217  |   |   | $      | 93,407 |   |
| Weighted average yield at end of period           |   |                                  | 5.73    | %      |   |   | 6.06 | % |

----

|                       |   |                   |    |   |   |   |   |   |   |   |    |   |
|----------------------------|--------|------------------------|---------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
|                       |   | September 30,          |    |
|                       |   | 2009                   |    |   | 2008   |   |
|                       |   | Amount                 |    |   | %      |   |   | Amount |   |   | %       |   |
|                       |   | (Dollars in thousands) |    |
| Certificate accounts:      |   |                   |    |   |   |   |   |   |   |   |    |   |
| 1.00% - 1.99%              |   | $                      | 37,235  |   |   |   | 8.61   | %      |   | $      | -       |   |   |   | - |   |
| 2.00% - 2.99%              |   |                   | 88,146  |   |   |   | 20.39  | %      |   |   | 6,509   |   |   |   | 1.73 | % |
| 3.00% - 3.99%              |   |                   | 69,530  |   |   |   | 16.08  | %      |   |   | 58,617  |   |   |   | 15.56 | % |
| 4.00% - 4.99%              |   |                   | 34,353  |   |   |   | 7.95   | %      |   |   | 89,650  |   |   |   | 23.79 | % |
| 5.00% - 5.99%              |   |                   | 30,924  |   |   |   | 7.15   | %      |   |   | 60,314  |   |   |   | 16.00 | % |
| Total certificate accounts |   |                   | 260,188 |   |   |   | 60.18  | %      |   |   | 215,090 |   |   |   | 57.08 | % |
| Transaction accounts:      |   |                   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |
|                       |   |                   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |
| Savings                    |   |                   | 66,968  |   |   |   | 15.49  | %      |   |   | 67,921  |   |   |   | 18.03 | % |
| Checking:                  |   |                   |    |   |   |   |   |   |   |   |    |   |   |   |   |   |
| Interest bearing           |   |                   | 27,311  |   |   |   | 6.32   | %      |   |   | 25,403  |   |   |   | 6.74 | % |
| Non-interest bearing       |   |                   | 2,558   |   |   |   | 0.59   | %      |   |   | 1,932   |   |   |   | 0.51 | % |
| Money market               |   |                   | 75,349  |   |   |   | 17.42  | %      |   |   | 66,484  |   |   |   | 17.64 | % |
| Total transaction accounts |   |                   | 172,186 |   |   |   | 39.82  | %      |   |   | 161,740 |   |   |   | 42.92 | % |
| Total deposits             |   | $                      | 432,374 |   |   |   | 100.00 | %      |   | $      | 376,830 |   |   |   | 100.00 | % |

----

|                                                |                   |                           |    |   |            |   |   |             |   |   |            |   |   |            |    |   |             |   |
|-----------------------------------------------------|------------------------|--------------------------------|---------|--------|-----------------|--------|--------|------------------|--------|--------|-----------------|--------|--------|-----------------|---------|--------|------------------|--------|
|                                                |                   |  Year Ended September 30, |    |
|                                                |                   |  2009                     |    |   |  2008      |   |
|                                                |                   | Average Balance                |    |   | InterestExpense |   |   | Average RatePaid |   |   | Average Balance |   |   | InterestExpense |    |   | Average RatePaid |   |
|                                                | (Dollars in Thousands) |                           |
| Savings                                             |                   | $                              | 65,392  |   |            | $      | 1,532  |             |   |   | 2.34            | %      |   | $               | 66,636  |   |             | $      | 1,681 |   |   |   | 2.52 | % |
| Interest-bearing checking and money market accounts |                   |                           | 96,806  |   |            |   | 1,863  |             |   |   | 1.92            | %      |   |            | 92,418  |   |             |   | 2,793 |   |   |   | 3.02 | % |
| Certificate accounts                                |                   |                           | 247,791 |   |            |   | 8,585  |             |   |   | 3.46            | %      |   |            | 204,981 |   |             |   | 8,922 |   |   |   | 4.35 | % |
| Total interest-bearing deposits                     |                   |                           | 409,989 |   |            | $      | 11,980 |             |   |   | 2.92            | %      |   |            | 364,035 |   |             | $      | 13,396 |   |   |   | 3.68 | % |
|                                                |                   |                           |    |   |            |   |   |             |   |   |            |   |   |            |    |   |             |   |   |   |   |   |   |   |
| Non-interest bearing deposits                       |                   |                           | 3,409   |   |            |   |   |             |   |   |            |   |   |            | 4,824   |   |             |   |   |   |   |   |   |   |
| Total deposits                                      |                   | $                              | 413,398 |   |            |   |   |             |   |   | 2.90            | %      |   | $               | 368,859 |   |             |   |   |   |   |   | 3.63 | % |

|                       |   |                           |     |   |   |   |
|----------------------------|--------|--------------------------------|----------|--------|--------|--------|
|                       |   |  Year Ended September 30, |     |
|                       |   | 2009                           |     |   | 2008   |   |
|                       |   |  (In Thousands)           |     |
| Deposits made              |   | $                              | 528,953  |   |   | $      | 497,527 |   |
| Withdrawals                |   |                           | (480,442 | )      |   |   | (482,786 | ) |
| Interest credited          |   |                           | 7,033    |   |   |   | 8,051 |   |
| Total increase in deposits |   | $                              | 55,544   |   |   | $      | 22,792 |   |

|                       |   |                                                                              |    |   |   |   |   |   |   |   |       |   |   |   |   |
|----------------------------|--------|-----------------------------------------------------------------------------------|---------|--------|--------|--------|--------|--------|--------|--------|------------|--------|--------|--------|--------|
|                       |   |  Balance at September 30, 2009Maturing in the 12 Months Ending September 30, |    |
| Certificates of Deposit    |   | 2010                                                                              |    |   | 2011   |   |   | 2012   |   |   | Thereafter |   |   | Total  |   |
|                       |   |  (In Thousands)                                                              |    |
| 1.00% - 1.99%              |   | $                                                                                 | 34,070  |   |   | $      | 3,165  |   |   | $      | -          |   |   | $      | -      |   |   | $ | 37,235 |   |
| 2.00% - 2.99%              |   |                                                                              | 68,205  |   |   |   | 17,292 |   |   |   | 2,635      |   |   |   | 13     |   |   |   | 88,145 |   |
| 3.00% - 3.99%              |   |                                                                              | 52,450  |   |   |   | 7,411  |   |   |   | 1,677      |   |   |   | 7,992  |   |   |   | 69,530 |   |
| 4.00% - 4.99%              |   |                                                                              | 12,995  |   |   |   | 9,867  |   |   |   | 851        |   |   |   | 10,640 |   |   |   | 34,353 |   |
| 5.00% - 5.99%              |   |                                                                              | 469     |   |   |   | 13,167 |   |   |   | 11,616     |   |   |   | 5,673  |   |   |   | 30,925 |   |
| Total certificate accounts |   | $                                                                                 | 168,189 |   |   | $      | 50,902 |   |   | $      | 16,779     |   |   | $      | 24,318 |   |   | $ | 260,188 |   |

----

|                                                            |   |                   |   |   |             |   |
|-----------------------------------------------------------------|--------|------------------------|--------|--------|------------------|--------|
| Quarter Ending:                                                 |   | Amount                 |   |   | WeightedAvg Rate |   |
|                                                            |   | (Dollars in Thousands) |   |
| December 31, 2009                                               |   | $                      | 28,789 |   |             |   | 3.23 | % |
| March 31, 2010                                                  |   |                   | 15,381 |   |             |   | 2.37 | % |
| June 30, 2010                                                   |   |                   | 11,490 |   |             |   | 2.10 | % |
| September 30, 2010                                              |   |                   | 4,184  |   |             |   | 2.66 | % |
| After September 30, 2010                                        |   |                   | 32,034 |   |             |   | 3.81 | % |
| Total certificates of deposit with balances of $100,000 or more |   | $                      | 91,878 |   |             |   | 3.12 | % |

|                                                          |   | September 30,          |   |
|---------------------------------------------------------------|--------|------------------------|--------|
|                                                          |   | 2009                   |   | 2008 |   |
|                                                          |   | (Dollars in Thousands) |   |
| FHLB advances:                                                |   |                   |   |   |   |   |   |
| Average balance outstanding                                   |   | $                      | 24,243 |   | $ | 27,638 |   |
| Maximum amount outstanding at any month-end during the period |   |                   | 47,694 |   |   | 33,705 |   |
| Balance outstanding at end of period                          |   |                   | 19,659 |   |   | 31,701 |   |
| Average interest rate during the period                       |   |                   | 3.53   | % |   | 4.55 | % |
| Weighted average interest rate at end of period               |   |                   | 4.35   | % |   | 3.98 | % |

----

----

|   | ● | banking or managing or controlling banks and other subsidiaries authorized under the Bank Holding Company Act; and |
|--------|---------|--------------------------------------------------------------------------------------------------------------------|

|   | ● | any Bank Holding Company Act activity the Federal Reserve Board has determined to be so closely related that it is incidental to banking or managing or controlling banks. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | ● | investing in the stock of one or more financial institution subsidiaries; |
|--------|---------|---------------------------------------------------------------------------|

|   | ● | acquiring one or more additional financial institution subsidiaries into a subsidiary of the holding company; |
|--------|---------|---------------------------------------------------------------------------------------------------------------|

|   | ● | merging with or acquiring another holding company, one of whose subsidiaries is a financial institution subsidiary; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------|

|   | ● | investing in a corporation the capital stock of which is available for purchase by a savings bank under federal law or under the Pennsylvania Banking Code; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | engaging in such activities as are permitted, by statute or regulation, to a holding company of a federally chartered insured mutual institution under federal law; and |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | engaging in such other activities as may be permitted by the Pennsylvania Department of Banking. |
|--------|---------|--------------------------------------------------------------------------------------------------|

----

|   | ● | the Federal Deposit Insurance Corporation determines the activity or investment does not pose a significant risk of loss to the Deposit Insurance Fund; and |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Prudential Savings Bank meets all applicable capital requirements. |
|--------|---------|--------------------------------------------------------------------|

----

----

|  Capital Category         |   | TotalRisk-Based Capital |   | Tier 1Risk-Based Capital |   | Tier 1Leverage Capital |
|--------------------------------|--------|-------------------------|--------|--------------------------|--------|------------------------|
| Well capitalized               |   | 10% or more             |   | 6% or more               |   | 5% or more             |
| Adequately capitalized         |   | 8% or more              |   | 4% or more               |   | 4% or more             |
| Undercapitalized               |   | Less than 8%            |   | Less than 4%             |   | Less than 4%           |
| Significantly undercapitalized |   | Less than 6%            |   | Less than 3%             |   | Less than 3%           |

----

|                                            |   |                         |   |   |              |   |   |                 |   |   |              |   |   | To Be            |   |
|-------------------------------------------------|--------|------------------------------|--------|--------|-------------------|--------|--------|----------------------|--------|--------|-------------------|--------|--------|------------------|--------|
|                                            |   |                         |   |   |              |   |   |                 |   |   |              |   |   | Well Capitalized |   |
|                                            |   |                         |   |   |              |   |   |                 |   |   |              |   |   | Under Prompt     |   |
|                                            |   |                         |   |   |              |   |   | Required for Capital |   |   | Corrective Action |   |
|                                            |   | Actual                       |   |   | Adequacy Purposes |   |   | Provisions           |   |
|                                            |   | Amount                       |   |   | Ratio             |   |   | Amount               |   |   | Ratio             |   |   | Amount           |   |   | Ratio |   |
|                                            |   |  (Dollars in thousands) |   |
|                                            |   |                         |   |   |              |   |   |                 |   |   |              |   |   |             |   |   |   |   |   |   |   |   |   |   |
| Tier 1 capital (to average assets) Company      |   | $                            | 56,248 |   |              |   | 10.86  | %                    |   | $      | 20,709            |   |   |             | 4.0    | % |   |   | N/A |   |   |   | N/A |   |
| Bank                                            |   |                         | 51,712 |   |              |   | 9.99   |                 |   |   | 20,709            |   |   |             | 4.0    |   |   | $ | 25,886 |   |   |   | 5.0 | % |
| Tier 1 capital (to risk-weighted assets)Company |   |                         | 56,248 |   |              |   | 24.59  |                 |   |   | 9,150             |   |   |             | 4.0    |   |   |   | N/A |   |   |   | N/A |   |
| Bank                                            |   |                         | 51,712 |   |              |   | 22.61  |                 |   |   | 9,150             |   |   |             | 4.0    |   |   |   | 13,724 |   |   |   | 6.0 |   |
| Total capital (to risk-weighted assets)Company  |   |                         | 58,990 |   |              |   | 25.79  |                 |   |   | 18,299            |   |   |             | 8.0    |   |   |   | N/A |   |   |   | N/A |   |
| Bank                                            |   |                         | 54,454 |   |              |   | 23.81  |                 |   |   | 18,299            |   |   |             | 8.0    |   |   |   | 22,874 |   |   |   | 10.0 |   |

----

----

----

----

|     |          |
|----------|---------------|
| Item 1A. | Risk Factors. |

|     |                       |
|----------|----------------------------|
| Item 1B. | Unresolved Staff Comments. |

----

|          |       |
|---------------|------------|
| Item 2.  | Properties |

|   Description/Address                                            |   |   Leased/Owned |   | Date ofLeaseExpiration |   | Net BookValueof Property |   |   | Amount ofDeposits |   |
|-----------------------------------------------------------------------|--------|---------------------|--------|------------------------|--------|--------------------------|--------|--------|-------------------|--------|
|                                                                  |   |                |   |                   |   | (In Thousands)           |   |
| Main Office1834 Oregon AvenuePhiladelphia, PA 19145-4725              |   | Owned               |   | N/A                    |   | $                        | 473    |   |              | $      | 215,445 |   |
|                                                                  |   |                |   |                   |   |                     |   |   |              |   |   |   |
| Snyder Branch2101 South 19th StreetPhiladelphia, PA 19145-3709        |   | Owned               |   | N/A                    |   |                     | 6      |   |              |   | 24,588 |   |
|                                                                  |   |                |   |                   |   |                     |   |   |              |   |   |   |
| Center City Branch112 South 19th StreetPhiladelphia, PA 19103-4667    |   | Owned               |   | N/A                    |   |                     | 18     |   |              |   | 41,105 |   |
|                                                                  |   |                |   |                   |   |                     |   |   |              |   |   |   |
| Broad Street Branch1722 South Broad StreetPhiladelphia, PA 19145-2388 |   | Owned               |   | N/A                    |   |                     | 227    |   |              |   | 54,339 |   |
|                                                                  |   |                |   |                   |   |                     |   |   |              |   |   |   |
| Pennsport Branch238A Moore StreetPhiladelphia, PA 19148-1925          |   | Owned               |   | N/A                    |   |                     | 55     |   |              |   | 44,672 |   |
|                                                                  |   |                |   |                   |   |                     |   |   |              |   |   |   |
| Drexel Hill Branch601 Morgan AvenueDrexel Hill, PA 19026-3105         |   | Owned               |   | N/A                    |   |                     | 89     |   |              |   | 39,911 |   |
|                                                                  |   |                |   |                   |   |                     |   |   |              |   |   |   |
| Old City Branch28 North 3rd StreetPhiladelphia, PA 19106-2108         |   | Leased              |   | May 2012               |   |                     | 371    |   |              |   | 12,314 |   |

|    |
|---------|
| Item 3. | Legal Proceedings |

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

----

| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
|---------|--------------------------------------------------------------------------------------------------------------------|

|                           |   | Period Ending |   |
|--------------------------------|--------|---------------|--------|
| Index                          |   | 03/30/05      |   |   | 09/30/05 |   |   | 09/30/06 |   |   | 09/30/07 |   |   | 09/30/08 |   |   | 09/30/09 |   |
| Prudential Bancorp, Inc. of PA |   | $             | 100.00 |   |   | $ | 121.75 |   |   | $ | 135.95 |   |   | $ | 129.51 |   |   | $ | 106.91 |   |   | $ | 108.77 |   |
| NASDAQ Composite               |   |          | 100.00 |   |   |   | 107.28 |   |   |   | 112.60 |   |   |   | 134.69 |   |   |   | 104.30 |   |   |   | 105.82 |   |
| SNL MHC Thrift Index           |   |          | 100.00 |   |   |   | 104.06 |   |   |   | 132.49 |   |   |   | 140.14 |   |   |   | 143.69 |   |   |   | 119.98 |   |
| SNL Thrift Index               |   |          | 100.00 |   |   |   | 102.32 |   |   |   | 119.11 |   |   |   | 108.70 |   |   |   | 55.99 |   |   |   | 42.88 |   |

----

----

|                         |   |        |   |   | Cashdividendsper share |   |
|------------------------------|--------|-------------|--------|--------|------------------------|--------|
|                         |   | Stock Price |   |   |                   |
| Quarter ended:               |   | High        |   |   | Low                    |   |   |   |
| September 30, 2009           |   | $           | 12.20  |   |                   | $      | 10.00 |   |   | $ | 0.05 |   |
| June 30, 2009                |   |        | 12.51  |   |                   |   | 11.40 |   |   |   | 0.05 |   |
| March 31, 2009               |   |        | 11.77  |   |                   |   | 9.59 |   |   |   | 0.05 |   |
| December  31, 2008 |   |        | 10.59  |   |                   |   | 7.50 |   |   |   | 0.05 |   |

|                         |   |        |   |   | Cashdividendsper share |   |
|------------------------------|--------|-------------|--------|--------|------------------------|--------|
|                         |   | Stock Price |   |   |                   |
| Quarter ended:               |   | High        |   |   | Low                    |   |   |   |
| September 30, 2008           |   | $           | 11.49  |   |                   | $      | 10.00 |   |   | $ | 0.05 |   |
| June 30, 2008                |   |        | 12.49  |   |                   |   | 10.05 |   |   |   | 0.05 |   |
| March 31, 2008               |   |        | 13.00  |   |                   |   | 11.40 |   |   |   | 0.05 |   |
| December  31, 2007 |   |        | 13.50  |   |                   |   | 12.20 |   |   |   | 0.05 |   |

----

| Item 6. | Selected Financial Data |
|---------|-------------------------|

|                                                                                   |   | At September 30,               |       |
|----------------------------------------------------------------------------------------|--------|--------------------------------|------------|
|                                                                                   |   | 2009                           |       |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                                   |   |                           |       |   | (1) |   |   | (1) |   |   |   |   |   |   |   |
|                                                                                   |   |                           |       |
| Selected Financial and Other Data:                                                     |   |                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                                                           |   | $                              | 514,761    |   |   | $ | 489,537 |   |   | $ | 474,399 |   |   | $ | 472,381 |   |   | $ | 446,592 |   |
| Cash and cash equivalents                                                              |   |                           | 13,669     |   |   |   | 9,454 |   |   |   | 12,269 |   |   |   | 13,428 |   |   |   | 26,815 |   |
| Investment and mortgage-backed securities:                                             |   |                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Held-to-maturity                                                           |   |                           | 160,126    |   |   |   | 163,303 |   |   |   | 180,316 |   |   |   | 182,444 |   |   |   | 196,668 |   |
|   Available-for-sale                                                         |   |                           | 62,407     |   |   |   | 55,106 |   |   |   | 46,892 |   |   |   | 43,362 |   |   |   | 38,584 |   |
| Loans receivable, net                                                                  |   |                           | 256,694    |   |   |   | 243,969 |   |   |   | 219,149 |   |   |   | 219,418 |   |   |   | 175,091 |   |
| Deposits                                                                               |   |                           | 432,374    |   |   |   | 376,830 |   |   |   | 354,038 |   |   |   | 347,292 |   |   |   | 336,468 |   |
| FHLB advances                                                                          |   |                           | 19,659     |   |   |   | 31,701 |   |   |   | 33,743 |   |   |   | 31,784 |   |   |   | 13,823 |   |
| Total equity, substantially restricted                                                 |   |                           | 55,857     |   |   |   | 68,487 |   |   |   | 80,558 |   |   |   | 87,448 |   |   |   | 90,825 |   |
| Banking offices                                                                        |   |                           | 7          |   |   |   | 7 |   |   |   | 7 |   |   |   | 6 |   |   |   | 6 |   |
|                                                                                   |   |  Year Ended September 30, |       |
|                                                                                   |   | 2009                           |       |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                                   |   |                           |       |   |   | (1) |   |   | (1) |   |   |   |   |   |   |   |   |   |
|                                                                                   |   | (Dollars in Thousands)         |       |
| Selected Operating Data:                                                               |   |                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total interest income                                                                  |   | $                              | 27,386     |   |   | $ | 26,408 |   |   | $ | 26,907 |   |   | $ | 24,542 |   |   | $ | 21,077 |   |
| Total interest expense                                                                 |   |                           | 12,942     |   |   |   | 14,654 |   |   |   | 14,784 |   |   |   | 11,935 |   |   |   | 9,297 |   |
| Net interest income                                                                    |   |                           | 14,444     |   |   |   | 11,754 |   |   |   | 12,123 |   |   |   | 12,607 |   |   |   | 11,780 |   |
| Provision for loan losses                                                              |   |                           | 1,403      |   |   |   | 1,084 |   |   |   | 395 |   |   |   | 60 |   |   |   | -- |   |
| Net interest income after provision for loan losses                               |   |                           | 13,041     |   |   |   | 10,670 |   |   |   | 11,728 |   |   |   | 12,547 |   |   |   | 11,780 |   |
| Total non-interest income (charges)                                                    |   |                           | (2,452     | ) |   |   | (5,285 | ) |   |   | 1,046 |   |   |   | 938 |   |   |   | 567 |   |
| Total non-interest expense                                                             |   |                           | 11,065     |   |   |   | 8,753 |   |   |   | 7,973 |   |   |   | 7,875 |   |   |   | 7,069 |   |
| (Loss) income before income taxes                                                      |   |                           | ( 476 | ) |   |   | (3,368 | ) |   |   | 4,801 |   |   |   | 5,610 |   |   |   | 5,278 |   |
| Income taxes                                                                           |   |                           | 350        |   |   |   | 762 |   |   |   | 1,393 |   |   |   | 1,773 |   |   |   | 1,886 |   |
| Net (loss) income                                                                      |   | $                              | ( 826 | ) |   | $ | (4,130 | ) |   | $ | 3,408 |   |   | $ | 3,837 |   |   | $ | 3,392 |   |
| Basic (loss) earnings per share (2)                                                    |   | $                              | (0.08      | ) |   | $ | (0.38 | ) |   | $ | 0.30 |   |   | $ | 0.32 |   |   | $ | 0.15 |   |
| Diluted (loss) earnings per share (2)                                                  |   | $                              | (0.08      | )  |   | $ | (0.38 | )  |   | $ | 0.30 |   |   | $ | 0.32 |   |   | $ | 0.15 |   |
|                                                                                   |   |                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selected Operating Ratios(3):                                                          |   |                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average yield earned on interest-earning assets                                        |   |                           | 5.64       | % |   |   | 5.75 | % |   |   | 5.92 | % |   |   | 5.58 | % |   |   | 5.03 | % |
| Average rate paid on interest-bearing liabilities                                      |   |                           | 2.95       |   |   |   | 3.73 |   |   |   | 3.93 |   |   |   | 3.34 |   |   |   | 2.64 |   |
| Average interest rate spread(4)                                                        |   |                           | 2.69       |   |   |   | 2.02 |   |   |   | 1.99 |   |   |   | 2.24 |   |   |   | 2.39 |   |
| Net interest margin(4)                                                                 |   |                           | 2.97       |   |   |   | 2.56 |   |   |   | 2.67 |   |   |   | 2.87 |   |   |   | 2.81 |   |
| Average interest-earning assets to average  interest-bearing liabilities     |   |                           | 110.64     |   |   |   | 116.77 |   |   |   | 120.64 |   |   |   | 122.94 |   |   |   | 118.81 |   |
| Net interest income after provision  for loan losses to non-interest expense |   |                           | 117.86     |   |   |   | 121.60 |   |   |   | 147.10 |   |   |   | 159.33 |   |   |   | 166.64 |   |
| Total non-interest expense to average assets                                           |   |                           | 2.17       |   |   |   | 1.88 |   |   |   | 1.70 |   |   |   | 1.73 |   |   |   | 1.64 |   |
| Efficiency ratio(5)                                                                    |   |                           | 92.27      |   |   |   | 135.31 |   |   |   | 60.54 |   |   |   | 58.14 |   |   |   | 57.25 |   |
| Return on average assets                                                               |   |                           | (0.16      | ) |   |   | (0.89 | ) |   |   | 0.72 |   |   |   | 0.84 |   |   |   | 0.79 |   |
| Return on average equity                                                               |   |                           | (1.32      | ) |   |   | (5.12 | ) |   |   | 4.01 |   |   |   | 4.26 |   |   |   | 4.26 |   |
| Average equity to average assets                                                       |   |                           | 12.28      |   |   |   | 15.86 |   |   |   | 18.06 |   |   |   | 19.82 |   |   |   | 15.30 |   |
|                                                                                   |   |                           |       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                   |   |                           |       |   |   |   |   |   |   |   |   |   |   | (Footnotes on next page) |   |

----

|                                                                |   | At or For theYear Ended September 30, |   |
|---------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                |   | 2009                                  |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                |   |                                  |   |   | (1) |   |   | (1) |   |   |   |   |   |   |   |
| Asset Quality Ratios(6):                                            |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-performing loans as a percent of total loans receivable(7) |   |                                  | 0.77   | % |   |   | 1.65 | % |   |   | 1.18 | % |   |   | 0.07 | % |   |   | 0.14 | % |
| Non-performing assets as a percent of total assets(7)               |   |                                  | 1.09   |   |   |   | 1.13 |   |   |   | 0.55 |   |   |   | 0.03 |   |   |   | 0.13 |   |
| Allowance for loan losses as a percent of non-performing loans |   |                                  | 137.77 |   |   |   |  39.42 |   |   |   |  38.97 |   |   |   | 409.66 |   |   |   | 233.47 |   |
| Net charge-offs to average loans receivable                         |   |                                  | 0.10   |   |   |   | 0.21 |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |
|                                                                |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital Ratios(6):                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 leverage ratioCompany                                        |   |                                  | 10.86  | %        |   |   | 14.49 |   |   |   | 16.99 | %        |   |   | 18.64 | %        |   |   | 20.98 | % |
| Bank                                                                |   |                                  | 9.99   |   |   |   | 13.14 |   |   |   | 15.43 |   |   |   | 14.74 |   |   |   | 14.55 |   |
| Tier 1 risk-based capital ratioCompany                              |   |                                  | 24.59  | %       |   |   | 31.2 | %        |   |   | 37.69 | %        |   |   | 39.23 | %        |   |   | 48.54 | % |
| Bank                                                                |   |                                  | 22.61  |   |   |   | 28.7 |   |   |   | 34.02 |   |   |   | 31.12 |   |   |   | 34.71 |   |
| Total risk-based capital ratioCompany                               |   |                                  | 25.79  | %        |   |   | 31.92 | %        |   |   | 38.24 | %        |   |   | 39.68 | %        |   |   | 48.98 | % |
| Bank                                                                |   |                                  | 23.81  |   |   |   | 29.46 |   |   |   | 34.57 |   |   |   | 31.56 |   |   |   | 35.16 |   |

----

| (1) | See note 17 – Financial Statement Restatement to our Consolidated Financial Statements for a discussion of the 2008 adjustments. Amounts for 2007 have been adjusted in a consistent manner. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Due to the timing of the Bank’s reorganization into the mutual holding company form and the completion of the Company’s initial public offering on March 29, 2005, earnings per share for the year ended September 30, 2005 is for the six month period ended September 30, 2005. There were no shares of common stock of the Company outstanding prior to the reorganization on March 29, 2005. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | With the exception of end of period ratios, all ratios are based on average monthly balances during the indicated periods. |
|-----|----------------------------------------------------------------------------------------------------------------------------|

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

| (5) | The efficiency ratio represents the ratio of non-interest expense divided by the sum of net interest income and non-interest income. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Asset quality ratios and capital ratios are end of period ratios, except for net charge-offs to average loans receivable. |
|-----|---------------------------------------------------------------------------------------------------------------------------|

| (7) | Non-performing assets consist of non-performing loans and real estate owned. Non-performing loans consist of all loans 90 days or more past due and loans in excess of 90 days delinquent and still accruing interest. It is our policy to cease accruing interest on all loans, other than single-family residential mortgage loans, 90 days or more past due. Real estate owned consists of real estate acquired throughforeclosure and real estate acquired by acceptance of a deed-in-lieu of foreclosure. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|---------|---------------------------------------------------------------------------------------------|

----

| ● | Levels of past due, classified and non-accrual loans, troubled debt restructurings and modifications |
|---------|------------------------------------------------------------------------------------------------------|

| ● | Nature and volume of loans |
|---------|----------------------------|

| ● | Changes in lending policies and procedures, underwriting standards, collections, charge-offs and recoveries and for commercial loans, the level of loans being approved with exceptions to lending policy |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | Experience, ability and depth of management and staff |
|---------|-------------------------------------------------------|

| ● | National and local economic and business conditions, including various market segments |
|---------|----------------------------------------------------------------------------------------|

| ● | Quality of the Company’s loan review system and degree of Board oversight |
|---------|---------------------------------------------------------------------------------|

| ● | Concentrations of credit and changes in levels of such concentrations |
|---------|-----------------------------------------------------------------------|

| ● | Effect of external factors on the level of estimated credit losses in the current portfolio |
|---------|---------------------------------------------------------------------------------------------|

----

----

----

----

----

|                                         |      | Total          |   |   | Amount of Commitment Expiration - Per Period |   |
|----------------------------------------------|-----------|----------------|--------|--------|----------------------------------------------|--------|
|                                         |      | Amounts        |   |   | To                                           |   |   | 1-3 |   |   | 4-5 |   |   | After 5 |   |
|                                         | Committed |           |   | 1 Year |                                         |   | Years |   |   | Years |   |   | Years |   |
|                                         |      | (In Thousands) |   |
| Letters of credit                            |      | $              | 621    |   |                                         | $      | 95 |   |   | $ | 526 |   |   | $ | - |   |   | $ | - |   |
| Lines of credit (1)                          |      |           | 7,660  |   |                                         |   | - |   |   |   | - |   |   |   | - |   |   |   | 7,660 |   |
| Undisbursed portions of loans in process (2) |      |           | 6,281  |   |                                         |   | 3,833 |   |   |   | 922 |   |   |   | 1,526 |   |   |   | - |   |
| Commitments to originate loans               |      |           | 11,039 |   |                                         |   | 11,039 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|    Total commitments          |      | $              | 25,601 |   |                                         | $      | 14,967 |   |   | $ | 1,448 |   |   | $ | 1,526 |   |   | $ | 7,660 |   |

----

| (1) | The majority of available lines of credit are for home equity loans. |
|-----|----------------------------------------------------------------------|

| (2) | Includes participation interests sold to other financial institutions totaling $871,000; Prudential Savings Bank will fund such amount and be reimbursed by the participants. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                            |   |           |    |   | Payments Due By Period |   |
|-------------------------------------------------|--------|----------------|---------|--------|------------------------|--------|
|                                            |   |           |    |   | To                     |   |   | 1-3 |   |   | 4-5 |   |   | After 5 |   |
|                                            | Total  |           |    | 1 Year |                   |   | Years |   |   | Years |   |   | Years |   |
|                                            |   | (In Thousands) |    |
| Certificates of deposit                         |   | $              | 260,188 |   |                   | $      | 168,189 |   |   | $ | 67,680 |   |   | $ | 24,319 |   |   | $ | - |   |
| FHLB advances(1)                                |   |           | 19,659  |   |                   |   | 6,044 |   |   |   | 13,109 |   |   |   | 166 |   |   |   | 340 |   |
|    Total long-term debt          |   |           | 279,847 |   |                   |   | 174,233 |   |   |   | 80,789 |   |   |   | 24,485 |   |   |   | 340 |   |
| Advances from borrowers for taxes and insurance |   |           | 1,214   |   |                   |   | 1,214 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Operating lease obligations                     |   |           | 183     |   |                   |   | 76 |   |   |   | 107 |   |   |   | - |   |   |   | - |   |
|    Total contractual obligations |   | $              | 281,244 |   |                   | $      | 175,523 |   |   | $ | 80,896 |   |   | $ | 24,485 |   |   | $ | 340 |   |
|                                            |   |           |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| (1) | Does not include interest due annually on FHLB advances. |
|-----|----------------------------------------------------------|

----

|                                                                    |   | Year Ended September 30, |    |
|-------------------------------------------------------------------------|--------|--------------------------|---------|
|                                                                    |   | 2009                     |    |   | 2008 |   |
|                                                                    |   |                     |    |   |   |   |   | Average |   |   |   |   |   |   |   |   | Average |   |
|                                                                    |   | Average                  |    |   |   |   |   | Yield/ |   |   | Average |   |   |   |   |   | Yield/ |   |
|                                                                    |   | Balance                  |    |   | Interest |   |   | Rate(1) |   |   | Balance |   |   | Interest |   |   | Rate |   |
|                                                                    |   | (Dollars in Thousands)   |    |
| Interest-earning assets:                                                |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment securities                                                   |   | $                        | 126,922 |   |   | $ | 6,189 |   |   |   | 4.88 | % |   | $ | 157,917 |   |   | $ | 8,128 |   |   |   | 5.15 | % |
| Mortgage-backed securities                                              |   |                     | 92,676  |   |   |   | 5,907 |   |   |   | 6.37 | % |   |   | 66,254 |   |   |   | 3,780 |   |   |   | 5.71 | % |
| Loans receivable(1)                                                     |   |                     | 253,278 |   |   |   | 15,168 |   |   |   | 5.99 | % |   |   | 227,661 |   |   |   | 14,349 |   |   |   | 6.30 | % |
| Other interest-earning assets                                           |   |                     | 12,783  |   |   |   | 122 |   |   |   | 0.95 | % |   |   | 7,483 |   |   |   | 151 |   |   |   | 2.02 | % |
| Total interest-earning assets                                           |   |                     | 485,659 |   |   |   | 27,386 |   |   |   | 5.64 | % |   |   | 459,315 |   |   |   | 26,408 |   |   |   | 5.75 | % |
| Non-interest-earning assets                                             |   |                     | 23,572  |   |   |   |   |   |   |   |   |   |   |   | 18,162 |   |   |   |   |   |   |   |   |   |
| Total assets                                                            |   | $                        | 509,231 |   |   |   |   |   |   |   |   |   |   | $ | 477,477 |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                           |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings accounts                                                        |   | $                        | 65,392  |   |   | $ | 1,525 |   |   |   | 2.33 | % |   | $ | 66,636 |   |   | $ | 1,673 |   |   |   | 2.51 | % |
| Checking & money market accounts                                    |   |                     | 96,806  |   |   |   | 1,863 |   |   |   | 1.92 | % |   |   | 92,418 |   |   |   | 2,793 |   |   |   | 3.02 | % |
| Certificate accounts                                                    |   |                     | 247,791 |   |   |   | 8,585 |   |   |   | 3.46 | % |   |   | 204,981 |   |   |   | 8,922 |   |   |   | 4.35 | % |
| Total deposits                                                          |   |                     | 409,989 |   |   |   | 11,973 |   |   |   | 2.92 | % |   |   | 364,035 |   |   |   | 13,388 |   |   |   | 3.68 | % |
| FHLB advances                                                           |   |                     | 27,243  |   |   |   | 962 |   |   |   | 3.53 | % |   |   | 27,638 |   |   |   | 1,258 |   |   |   | 4.55 | % |
| Real estate tax escrow accounts                                         |   |                     | 1,740   |   |   |   | 7 |   |   |   | 0.40 | % |   |   | 1,688 |   |   |   | 8 |   |   |   | 0.47 | % |
| Other interest-bearing liabilities                                      |   |                     | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total interest-bearing liabilities                                      |   |                     | 438,972 |   |   |   | 12,942 |   |   |   | 2.95 | % |   |   | 393,361 |   |   |   | 14,654 |   |   |   | 3.73 | % |
| Non-interest-bearing liabilities                                        |   |                     | 7,712   |   |   |   |   |   |   |   |   |   |   |   | 8,378 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                       |   |                     | 446,684 |   |   |   |   |   |   |   |   |   |   |   | 401,739 |   |   |   |   |   |   |   |   |   |
| Stockholders’ Equity                                              |   |                     | 62,547  |   |   |   |   |   |   |   |   |   |   |   | 75,738 |   |   |   |   |   |   |   |   |   |
| Total liabilities and Stockholders’ Equity                        |   | $                        | 509,231 |   |   |   |   |   |   |   |   |   |   | $ | 477,477 |   |   |   |   |   |   |   |   |   |
|  Net interest-earning assets                                       |   | $                        | 46,687  |   |   |   |   |   |   |   |   |   |   | $ | 65,954 |   |   |   |   |   |   |   |   |   |
|                                                                    |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Net interest income; interest rate spread                         |   |                     |    |   |   | $ | 14,444 |   |   |   | 2.69 | % |   |   |   |   |   | $ | 11,754 |   |   |   | 2.02 | % |
|  Net interest margin (2)                                           |   |                     |    |   |   |   |   |   |   |   | 2.97 | % |   |   |   |   |   |   |   |   |   |   | 2.56 | % |
|                                                                    |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average interest-earning assets to average interest-bearing liabilities |   |                     |    |   |   |   |   |   |   |   | 110.64 | % |   |   |   |   |   |   |   |   |   |   | 116.77 | % |

----

| (1) | Includes nonaccrual loans during the respective periods. Calculated net of deferred fees and discounts, loans in process and allowance for loan losses. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Equals net interest income divided by average interest-earning assets. |
|-----|------------------------------------------------------------------------|

----

|                                        |   | 2009 vs. 2008              |   |
|---------------------------------------------|--------|----------------------------|--------|
|                                        |   | Increase (Decrease) Due to |   |   |   |   |
|                                        |   | Rate                       |   |   | Volume |   |   | Rate/ |   |   | Total Increase |   |
|                                        |   | Volume                     |   |   | (Decrease) |   |
|                                        |   | (In Thousands)             |   |
| Interest income:                            |   |                       |   |   |   |   |   |   |   |   |   |   |
| Investment securities                       |   | $                          | (428   | ) |   | $ | (1,595 | ) |   | $ | 84 |   |   | $ | (1,939 | ) |
| Mortgage-backed securities                  |   |                       | 443    |   |   |   | 1,507 |   |   |   | 177 |   |   |   | 2,127 |   |
| Loans receivable, net                       |   |                       | (715   | ) |   |   | 1,614 |   |   |   | (80 | ) |   |   | 819 |   |
| Other interest-earning assets               |   |                       | (80    | ) |   |   | 107 |   |   |   | (56 | ) |   |   | (29 | ) |
| Total interest-earning assets               |   |                       | (780   | ) |   |   | 1,633 |   |   |   | 125 |   |   |   | 978 |   |
| Interest expense:                           |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings accounts                            |   |                       | (119   | ) |   |   | (31 | ) |   |   | 2 |   |   |   | (148 | ) |
| Checking accounts                           |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (interest-bearing and non-interest bearing) |   |                       | (1,014 | ) |   |   | 133 |   |   |   | (49 | ) |   |   | (930 | ) |
| Certificate accounts                        |   |                       | (1,820 | ) |   |   | 1,863 |   |   |   | (380 | ) |   |   | (337 | ) |
| Total deposits                              |   |                       | (2,953 | ) |   |   | 1,965 |   |   |   | (427 | ) |   |   | (1,415 | ) |
| FHLB advances                               |   |                       | (282   | ) |   |   | (18 | ) |   |   | 4 |   |   |   | (296 | ) |
| Other interest-bearing liabilities          |   |                       | (1     | ) |   |   | - |   |   |   | - |   |   |   | (1 | ) |
| Total interest-bearing liabilities          |   |                       | (3,236 | ) |   |   | 1,947 |   |   |   | (423 | ) |   |   | (1,712 | ) |
| Increase (decrease) in net interest income  |   | $                          | 2,456  |   |   | $ | (314 | ) |   | $ | 548 |   |   | $ | 2,690 |   |

----

----

----

----

----

|                                                                                                                          |   |                   |   |   | More than |   |    | More than  |   |   | More than  |   |   |      |    |   |   |   |
|-------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|--------|-----------|--------|---------|------------|--------|--------|------------|--------|--------|-----------|---------|--------|--------|--------|
|                                                                                                                          |   | 3 Months               |   |   | 3 Months  |   |    | 1 Year     |   |   | 3 Years    |   |   | More than |    |   | Total  |   |
|                                                                                                                          |   | or Less                |   |   | to 1 Year |   |    | to 3 Years |   |   | to 5 Years |   |   | 5 Years   |    |   | Amount |   |
|                                                                                                                          |   |                   |   |   |      |   |    |       |   |   |       |   |   |      |    |   |   |   |
|                                                                                                                          |   | (Dollars in Thousands) |   |
| Interest-earning assets(1):                                                                                                   |   |                   |   |   |      |   |    |       |   |   |       |   |   |      |    |   |   |   |
| Investment and mortgage-backed securities                                                                                     |   | $                      | 15,696 |   |      | $      | 27,515  |       |   | $      | 20,403     |   |   | $         | 18,247  |   |   | $      | 141,264 |   |   | $ | 223,125 |   |
| Loans receivable(2)                                                                                                           |   |                   | 47,880 |   |      |   | 46,807  |       |   |   | 82,876     |   |   |      | 41,769  |   |   |   | 39,450 |   |   |   | 258,782 |   |
| Other interest earning assets (3)                                                                                             |   |                   | 13,126 |   |      |   | -       |       |   |   | -          |   |   |      | -       |   |   |   | - |   |   |   | 13,126 |   |
|     Total interest-earning assets                                                                         |   | $                      | 76,702 |   |      | $      | 74,322  |       |   | $      | 103,279    |   |   | $         | 60,016  |   |   | $      | 180,714 |   |   | $ | 495,033 |   |
|                                                                                                                          |   |                   |   |   |      |   |    |       |   |   |       |   |   |      |    |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                                                                 |   |                   |   |   |      |   |    |       |   |   |       |   |   |      |    |   |   |   |   |   |   |   |   |   |
| Savings accounts                                                                                                              |   |                   | 636    |   |      |   | 97      |       |   |   | 39,993     |   |   |      | 13,331  |   |   |   | 13,331 |   |   |   | 67,388 |   |
| Checking & money market accounts                                                                                          |   |                   | -      |   |      |   | 37,675  |       |   |   | 53,635     |   |   |      | 5,320   |   |   |   | 5,320 |   |   |   | 101,950 |   |
| Certificate accounts                                                                                                          |   |                   | 66,424 |   |      |   | 101,765 |       |   |   | 67,681     |   |   |      | 24,319  |   |   |   | - |   |   |   | 260,189 |   |
| FHLB advances                                                                                                                 |   |                   | 6,027  |   |      |   | 13,080  |       |   |   | 206        |   |   |      | 6       |   |   |   | 340 |   |   |   | 19,659 |   |
| Real estate tax escrow accounts                                                                                               |   |                   | 1,214  |   |      |   | -       |       |   |   | -          |   |   |      | -       |   |   |   | - |   |   |   | 1,214 |   |
| Other interest-bearing liabilities                                                                                            |   |                   |   |   |      |   |    |       |   |   |       |   |   |      |    |   |   |   |   |   |   |   |   |   |
|     Total interest-bearing Liabilities                                                                    |   | $                      | 74,301 |   |      | $      | 152,617 |       |   | $      | 161,515    |   |   | $         | 42,976  |   |   | $      | 18,991 |   |   | $ | 450,400 |   |
|                                                                                                                          |   |                   |   |   |      |   |    |       |   |   |       |   |   |      |    |   |   |   |   |   |   |   |   |   |
| Interest-earning assets less interest-bearing liabilities                                                                |   | $                      | 2,401  |   |      | ($     | 78,295  | )          |   | ($     | 58,236     | )      |   | $         | 17,040  |   |   | $      | 161,723 |   |   | $ | 44,633 |   |
|                                                                                                                          |   |                   |   |   |      |   |    |       |   |   |       |   |   |      |    |   |   |   |   |   |   |   |   |   |
| Cumulative interest-rate sensitivity gap(4)                                                                              |   | $                      | 2,401  |   |      | ($     | 75,894  | )          |   | ($     | 134,130    | )      |   | ($        | 117,090 | )      |   | $      | 44,633 |   |   |   |   |   |
|                                                                                                                          |   |                   |   |   |      |   |    |       |   |   |       |   |   |      |    |   |   |   |   |   |   |   |   |   |
| Cumulative interest-rate gap as a percentage of total assets at September 30, 2009                                       |   |                   | 0.47   | %      |      |   | -14.74  | %          |   |   | -26.06     | %      |   |      | -22.75  | %      |   |   | 8.67 | % |   |   |   |   |
|                                                                                                                          |   |                   |   |   |      |   |    |       |   |   |       |   |   |      |    |   |   |   |   |   |   |   |   |   |
| Cumulative interest-earning assets as a percentage of cumulative interest-bearing liabilities at September 30, 2009 |   |                   | 103.23 | %      |      |   | 66.55   | %          |   |   | 65.47      | %      |   |      | 72.86   | %      |   |   | 109.91 | % |   |   |   |   |

| (1) | Interest-earning assets are included in the period in which the balances are expected to be redeployed and/or repriced as a result of anticipated prepayments, scheduled rate adjustments and contractual maturities. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | For purposes of the gap analysis, loans receivable includes non-performing loans, gross of the allowance for loan losses, undisbursed loan funds, unamortized discounts and deferred loan fees. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Includes FHLB stock. |
|-----|----------------------|

| (4) | Interest-rate sensitivity gap represents the difference between total interest-earning assets and total interest-bearing liabilities. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------|

----

| Change in       |   |                   |   |   | NPV as % of Portfolio |   |
|-----------------|--------|------------------------|--------|--------|-----------------------|--------|
| Interest Rates  |   | Net Portfolio Value    |   |   | Value of Assets       |   |
| In Basis Points |   |                   |   |   |                  |   |   |   |   |   |   |   |   |   |   |
| (Rate Shock)    |   | Amount                 |   |   | $ Change              |   |   | % Change |   |   | NPV Ratio |   |   | Change |   |
|            |   |                   |   |   |                  |   |   |   |   |   |   |   |   |   |   |
|            |   | (Dollars in Thousands) |   |
|            |   |                   |   |   |                  |   |   |   |   |   |   |   |   |   |   |
| 300             |   | $                      | 10,808 |   |                  | $      | (51,276 | ) |   |   | -82.59 | % |   |   | 2.39 | % |   |   | -9.51 | % |
| 200             |   | $                      | 27,154 |   |                  | $      | (34,930 | ) |   |   | -56.26 | % |   |   | 5.72 | % |   |   | -6.18 | % |
| 100             |   | $                      | 45,017 |   |                  | $      | (17,067 | ) |   |   | -27.49 | % |   |   | 9.03 | % |   |   | -2.87 | % |
| Static          |   | $                      | 62,084 |   |                  |   | --- |   |   |   | --- |   |   |   | 11.90 | % |   |   | --- |   |
| (100)           |   | $                      | 65,451 |   |                  | $      | 3,367 |   |   |   | 5.42 | % |   |   | 12.32 | % |   |   | 0.42 | % |
| (200)           |   | $                      | 66,750 |   |                  | $      | 4,666 |   |   |   | 7.52 | % |   |   | 12.44 | % |   |   | 0.54 | % |
| (300)           |   | $                      | 70,664 |   |                  | $      | 8,580 |   |   |   | 13.82 | % |   |   | 13.04 | % |   |   | 1.14 | % |

----

|  Item 8. | Financial Statements and Supplementary Data |
|---------------|---------------------------------------------|

----

----

|                                                    |
|---------------------------------------------------------|
| PRUDENTIAL BANCORP, INC. OF PENNSYLVANIA AND SUBSIDIARY |
|                                                    |
| CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION          |

|                                                                                                                                                            |   |                   |    |   |                         |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|--------|------------------------------|--------|
|                                                                                                                                                            |   | September 30,          |    |
|                                                                                                                                                            |   | 2009                   |    |   | 2008(as restated seeNote 17) |   |
|                                                                                                                                                            |   | (Dollars in Thousands) |    |
| ASSETS                                                                                                                                                          |   |                   |    |   |                         |   |
|                                                                                                                                                            |   |                   |    |   |                         |   |
| Cash and amounts due from depository institutions                                                                                                               |   | $                      | 4,088   |   |                         | $      | 4,318 |   |
| Interest-bearing deposits                                                                                                                                       |   |                   | 9,581   |   |                         |   | 5,136 |   |
|                                                                                                                                                            |   |                   |    |   |                         |   |   |   |
| Total cash and cash equivalents                                                                                                                                 |   |                   | 13,669  |   |                         |   | 9,454 |   |
|                                                                                                                                                            |   |                   |    |   |                         |   |   |   |
| Investment and mortgage-backed securities held to maturity (fair value—September 30, 2009, $161,968; September 30, 2008, $160,552)                        |   |                   | 160,126 |   |                         |   | 163,303 |   |
| Investment and mortgage-backed securities available for sale (amortized cost—September 30, 2009, $63,000; September 30, 2008, $56,152)                    |   |                   | 62,407  |   |                         |   | 55,106 |   |
| Loans receivable—net of allowance for loan losses (September 30, 2009, $2,732; September 30, 2008, $1,591)                                                |   |                   | 256,694 |   |                         |   | 243,969 |   |
| Accrued interest receivable:                                                                                                                                    |   |                   |    |   |                         |   |   |   |
| Loans receivable                                                                                                                                                |   |                   | 1,419   |   |                         |   | 1,291 |   |
| Mortgage-backed securities                                                                                                                                      |   |                   | 390     |   |                         |   | 393 |   |
| Investment securities                                                                                                                                           |   |                   | 1,496   |   |                         |   | 1,493 |   |
| Real estate owned                                                                                                                                               |   |                   | 3,622   |   |                         |   | 1,488 |   |
| Federal Home Loan Bank stock—at cost                                                                                                                      |   |                   | 3,545   |   |                         |   | 2,620 |   |
| Office properties and equipment—net                                                                                                                       |   |                   | 1,992   |   |                         |   | 2,182 |   |
| Bank owned life insurance                                                                                                                                       |   |                   | 5,786   |   |                         |   | 5,577 |   |
| Prepaid expenses and other assets                                                                                                                               |   |                   | 1,272   |   |                         |   | 1,570 |   |
| Deferred income taxes, net                                                                                                                                      |   |                   | 2,343   |   |                         |   | 1,091 |   |
|                                                                                                                                                            |   |                   |    |   |                         |   |   |   |
| TOTAL ASSETS                                                                                                                                                    |   | $                      | 514,761 |   |                         | $      | 489,537 |   |
|                                                                                                                                                            |   |                   |    |   |                         |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                      |   |                   |    |   |                         |   |   |   |
|                                                                                                                                                            |   |                   |    |   |                         |   |   |   |
| LIABILITIES:                                                                                                                                                    |   |                   |    |   |                         |   |   |   |
| Deposits:                                                                                                                                                       |   |                   |    |   |                         |   |   |   |
| Noninterest-bearing                                                                                                                                             |   | $                      | 2,848   |   |                         | $      | 4,327 |   |
| Interest-bearing                                                                                                                                                |   |                   | 429,526 |   |                         |   | 372,503 |   |
| Total deposits                                                                                                                                                  |   |                   | 432,374 |   |                         |   | 376,830 |   |
| Advances from Federal Home Loan Bank                                                                                                                            |   |                   | 19,659  |   |                         |   | 31,701 |   |
| Accrued interest payable                                                                                                                                        |   |                   | 3,463   |   |                         |   | 3,471 |   |
| Advances from borrowers for taxes and insurance                                                                                                                 |   |                   | 1,214   |   |                         |   | 1,348 |   |
| Accounts payable and accrued expenses                                                                                                                           |   |                   | 1,703   |   |                         |   | 7,169 |   |
| Accrued dividend payable                                                                                                                                        |   |                   | 491     |   |                         |   | 531 |   |
|                                                                                                                                                            |   |                   |    |   |                         |   |   |   |
| Total liabilities                                                                                                                                               |   |                   | 458,904 |   |                         |   | 421,050 |   |
|                                                                                                                                                            |   |                   |    |   |                         |   |   |   |
| COMMITMENTS AND CONTINGENCIES (Note 12)                                                                                                                         |   |                   |    |   |                         |   |   |   |
|                                                                                                                                                            |   |                   |    |   |                         |   |   |   |
| STOCKHOLDERS’ EQUITY:                                                                                                                                     |   |                   |    |   |                         |   |   |   |
| Preferred stock, $.01 par value, 10,000,000 shares authorized; none issued                                                                                      |   |                   | -       |   |                         |   | - |   |
| Common stock, $.01 par value, 40,000,000 shares authorized; issued 12,563,750; outstanding - 10,331,866 at September 30, 2009: 11,069,866 at September 30, 2008 |   |                   | 126     |   |                         |   | 126 |   |
| Additional paid-in capital                                                                                                                                      |   |                   | 52,938  |   |                         |   | 54,925 |   |
| Unearned ESOP shares                                                                                                                                            |   |                   | (3,457  | )      |                         |   | (3,680 | ) |
| Treasury stock, at cost: 2,231,884 shares at September 30, 2009; 1,493,884 shares at September 30, 2008                                                         |   |                   | (28,652 | )      |                         |   | (19,481 | ) |
| Retained earnings (substantially restricted)                                                                                                                    |   |                   | 35,293  |   |                         |   | 37,288 |   |
| Accumulated other comprehensive loss                                                                                                                            |   |                   | (391    | )      |                         |   | (691 | ) |
|                                                                                                                                                            |   |                   |    |   |                         |   |   |   |
| Total stockholders’ equity                                                                                                                                |   |                   | 55,857  |   |                         |   | 68,487 |   |
|                                                                                                                                                            |   |                   |    |   |                         |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                |   | $                      | 514,761 |   |                         | $      | 489,537 |   |

----

|                                                    |
|---------------------------------------------------------|
| PRUDENTIAL BANCORP, INC. OF PENNSYLVANIA AND SUBSIDIARY |
|                                                    |
| CONSOLIDATED STATEMENTS OF OPERATIONS                   |

|                                                                   |   |                                            |   |   |                         |   |
|------------------------------------------------------------------------|--------|-------------------------------------------------|--------|--------|------------------------------|--------|
|                                                                   |   | Years Ended September 30,                       |   |
|                                                                   |   | 2009                                            |   |   | 2008(as restated seeNote 17) |   |
|                                                                   |   |                                            |   |
|                                                                   |   | (Dollars in Thousands Except Per Share Amounts) |   |
|                                                                   |   |                                            |   |
| INTEREST INCOME:                                                       |   |                                            |   |   |                         |   |
| Interest and fees on loans                                             |   | $                                               | 15,168 |   |                         | $      | 14,349 |   |
| Interest on mortgage-backed securities                                 |   |                                            | 5,907  |   |                         |   | 3,780 |   |
| Interest and dividends on investments                                  |   |                                            | 6,311  |   |                         |   | 8,279 |   |
|                                                                   |   |                                            |   |   |                         |   |   |   |
| Total interest income                                                  |   |                                            | 27,386 |   |                         |   | 26,408 |   |
|                                                                   |   |                                            |   |   |                         |   |   |   |
| INTEREST EXPENSE:                                                      |   |                                            |   |   |                         |   |   |   |
| Interest on deposits                                                   |   |                                            | 11,980 |   |                         |   | 13,396 |   |
| Interest on borrowings                                                 |   |                                            | 962    |   |                         |   | 1,258 |   |
|                                                                   |   |                                            |   |   |                         |   |   |   |
| Total interest expense                                                 |   |                                            | 12,942 |   |                         |   | 14,654 |   |
|                                                                   |   |                                            |   |   |                         |   |   |   |
| NET INTEREST INCOME                                                    |   |                                            | 14,444 |   |                         |   | 11,754 |   |
|                                                                   |   |                                            |   |   |                         |   |   |   |
| PROVISION FOR LOAN LOSSES                                              |   |                                            | 1,403  |   |                         |   | 1,084 |   |
|                                                                   |   |                                            |   |   |                         |   |   |   |
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                    |   |                                            | 13,041 |   |                         |   | 10,670 |   |
|                                                                   |   |                                            |   |   |                         |   |   |   |
| NON-INTEREST INCOME:                                                   |   |                                            |   |   |                         |   |   |   |
| Fees and other service charges                                         |   |                                            | 491    |   |                         |   | 539 |   |
| Loss on redemption of investment securities                            |   |                                            | -      |   |                         |   | (4,016 | ) |
|                                                                   |   |                                            |   |   |                         |   |   |   |
| Total other-than-temporary impairment losses                           |   |                                            | (4,983 | )      |                         |   | (2,218 | ) |
| Portion of loss recognized in other comprehensive income, before taxes |   |                                            | 1,702  |   |                         |   | - |   |
| Net impairment losses recognized in earnings                           |   |                                            | (3,281 | )      |                         |   | (2,218 | ) |
|                                                                   |   |                                            |   |   |                         |   |   |   |
| Other                                                                  |   |                                            | 338    |   |                         |   | 410 |   |
|                                                                   |   |                                            |   |   |                         |   |   |   |
| Total non-interest income (charges)                                    |   |                                            | (2,452 | )      |                         |   | (5,285 | ) |
|                                                                   |   |                                            |   |   |                         |   |   |   |
| NON-INTEREST EXPENSES:                                                 |   |                                            |   |   |                         |   |   |   |
| Salaries and employee benefits                                         |   |                                            | 4,609  |   |                         |   | 4,320 |   |
| Data processing                                                        |   |                                            | 552    |   |                         |   | 505 |   |
| Professional services                                                  |   |                                            | 714    |   |                         |   | 586 |   |
| Office occupancy                                                       |   |                                            | 421    |   |                         |   | 382 |   |
| Depreciation                                                           |   |                                            | 328    |   |                         |   | 336 |   |
| Payroll taxes                                                          |   |                                            | 262    |   |                         |   | 264 |   |
| Director compensation                                                  |   |                                            | 260    |   |                         |   | 258 |   |
| FDIC Insurance Premiums                                                |   |                                            | 928    |   |                         |   | 46 |   |
| Real estate owned expense                                              |   |                                            | 889    |   |                         |   | 290 |   |
| Other                                                                  |   |                                            | 2,102  |   |                         |   | 1,766 |   |
|                                                                   |   |                                            |   |   |                         |   |   |   |
| Total non-interest expenses                                            |   |                                            | 11,065 |   |                         |   | 8,753 |   |
|                                                                   |   |                                            |   |   |                         |   |   |   |
| LOSS BEFORE INCOME TAXES                                               |   |                                            | (476   | )      |                         |   | (3,368 | ) |
|                                                                   |   |                                            |   |   |                         |   |   |   |
| INCOME TAXES:                                                          |   |                                            |   |   |                         |   |   |   |
| Current                                                                |   |                                            | 1,625  |   |                         |   | 1,128 |   |
| Deferred benefit                                                       |   |                                            | (1,275 | )      |                         |   | (366 | ) |
|                                                                   |   |                                            |   |   |                         |   |   |   |
| Total                                                                  |   |                                            | 350    |   |                         |   | 762 |   |
|                                                                   |   |                                            |   |   |                         |   |   |   |
| NET LOSS                                                               |   | $                                               | (826   | )      |                         | $      | (4,130 | ) |
|                                                                   |   |                                            |   |   |                         |   |   |   |
| BASIC LOSS PER SHARE                                                   |   | $                                               | (0.08  | )      |                         | $      | (0.38 | ) |
|                                                                   |   |                                            |   |   |                         |   |   |   |
| DILUTED LOSS PER SHARE                                                 |   | $                                               | (0.08  | )      |                         | $      | (0.38 | ) |
|                                                                   |   |                                            |   |   |                         |   |   |   |
| DIVIDENDS PER SHARE                                                    |   | $                                               | 0.20   |   |                         | $      | 0.20 |   |
|                                                                   |   |                                            |   |   |                         |   |   |   |

----

|                                                                                             |
|--------------------------------------------------------------------------------------------------|
| PRUDENTIAL BANCORP, INC. OF PENNSYLVANIA AND SUBSIDIARY                                          |
|                                                                                             |
| CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (LOSS) |

|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|--------|--------------------------|--------|--------|--------------------|--------|--------|---------------|--------|--------|------------------|---------|--------|--------------------------------------------|--------|--------|--------------------------------|--------|--------|----------------------------|--------|
|                                                                                                                                               |   | CommonStock            |   |   | AdditionalPaid-InCapital |   |   | UnearnedESOPShares |   |   | TreasuryStock |   |   | RetainedEarnings |    |   | AccumulatedOtherComprehensiveIncome (Loss) |   |   | TotalStockholders’Equity |   |   | ComprehensiveIncome (Loss) |   |
|                                                                                                                                               |   | (Dollars in Thousands) |   |
|                                                                                                                                               |   |                   |   |
| BALANCE, OCTOBER 1, 2007                                                                                                                           |   | $                      | 126    |   |                     | $      | 54,880 |               |   | $      | (3,903        | )      |   | $                | (14,372 | )      |                                       | $      | 43,971 |                           |   | $      | 259                        |   |   | $ | 80,961 |   |   |   |   |
| (as originally stated)                                                                                                                             |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |
| Restatement - see Note 17                                                                                                                          |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   | (403   | )                              |   |   |                       |   |   |   | (403 | ) |   |   |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |
| BALANCE, OCTOBER 1, 2007                                                                                                                           |   |                   | 126    |   |                     |   | 54,880 |               |   |   | (3,903        | )      |   |             | (14,372 | )      |                                       |   | 43,568 |                           |   |   | 259                        |   |   |   | 80,558 |   |   |   |   |
| (as restated)                                                                                                                                      |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |
| Comprehensive income (loss):                                                                                                                       |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |
| Net loss (as restated)                                                                                                                             |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   | (4,130 | )                              |   |   |                       |   |   |   | (4,130 | ) |   |   | (4,130 | ) |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| Net unrealized holding loss on available for sale securities arising during the period, net of income tax benefit of $1,243                        |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   | (2,414                     | )      |   |   | (2,414 | ) |   |   | (2,414 | ) |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| Reclassification adjustment for other than temporary impairment net of tax of $754                                                                 |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   | 1,464                      |   |   |   | 1,464 |   |   |   | 1,464 |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| Comprehensive loss (as restated)                                                                                                                   |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   | $ | (5,080 | ) |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| Cash dividends ($0.20 per share)                                                                                                                   |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   | (2,150 | )                              |   |   |                       |   |   |   | (2,150 | ) |   |   |   |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| Treasury stock purchased (408,500 shares)                                                                                                          |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             | (5,109  | )      |                                       |   |   |                           |   |   |                       |   |   |   | (5,109 | ) |   |   |   |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| ESOP shares committed to be released (22,620 shares)                                                                                               |   |                   |   |   |                     |   | 45     |               |   |   | 223           |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   | 268 |   |   |   |   |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| BALANCE, SEPTEMBER 30, 2008                                                                                                                        |   |                   | 126    |   |                     |   | 54,925 |               |   |   | (3,680        | )      |   |             | (19,481 | )      |                                       |   | 37,288 |                           |   |   | (691                       | )      |   |   | 68,487 |   |   |   |   |   |
| (as re-stated)                                                                                                                                     |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| Cumulative adjustment related to the adoption of Accounting for Collateral Assignment Split-Dollar Agreement, net of tax                           |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   | (256   | )                              |   |   |                       |   |   |   | (256 | ) |   |   |   |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| Cumulative adjustment related to the adoption of Recognition and Presentation of other-than-temporary impaiment, net of income tax benefit of $390 |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   | 1,148  |                           |   |   | (758                       | )      |   |   | 390 |   |   |   |   |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| Comprehensive income (loss):                                                                                                                       |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                                                                           |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   | (826   | )                              |   |   |                       |   |   |   | (826 | ) |   |   | (826 | ) |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| Net unrealized holding loss on available for sale securities arising during the period, net of income tax benefit of $570                          |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   | (1,107                     | )      |   |   | (1,107 | ) |   |   | (1,107 | ) |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| Reclassification adjustment for other than temporary impairment recognized in earnings net of tax of $1,116                                        |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   | 2,165                      |   |   |   | 2,165 |   |   |   | 2,165 |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| Comprehensive income                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   | $ | 232 |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| Cash dividends ($0.20 per share)                                                                                                                   |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   | (2,061 | )                              |   |   |                       |   |   |   | (2,061 | ) |   |   |   |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| Treasury stock purchased (738,000 shares)                                                                                                          |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             | (9,171  | )      |                                       |   |   |                           |   |   |                       |   |   |   | (9,171 | ) |   |   |   |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| Execss tax benefit from stock compensation                                                                                                         |   |                   |   |   |                     |   | 111    |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   | 111 |   |   |   |   |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| Stock option expense                                                                                                                               |   |                   |   |   |                     |   | 159    |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   | 159 |   |   |   |   |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| Recognition and Retention Plan expense                                                                                                             |   |                   |   |   |                     |   | 185    |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   | 185 |   |   |   |   |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| Acquisition of restricted stock plan shares (226,148 shares)                                                                                       |   |                   |   |   |                     |   | (2,465 | )                  |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   | (2,465 | ) |   |   |   |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| ESOP shares committed to be released (22,620 shares)                                                                                               |   |                   |   |   |                     |   | 23     |               |   |   | 223           |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   | 246 |   |   |   |   |   |
|                                                                                                                                               |   |                   |   |   |                     |   |   |               |   |   |          |   |   |             |    |   |                                       |   |   |                           |   |   |                       |   |   |   |   |   |   |   |   |   |
| BALANCE, SEPTEMBER 30, 2009                                                                                                                        |   | $                      | 126    |   |                     | $      | 52,938 |               |   | $      | (3,457        | )      |   | $                | (28,652 | )      |                                       | $      | 35,293 |                           |   | $      | (391                       | )      |   | $ | 55,857 |   |   |   |   |   |

----

|                                                    |
|---------------------------------------------------------|
| PRUDENTIAL BANCORP, INC. OF PENNSYLVANIA AND SUBSIDIARY |
|                                                    |
| STATEMENTS OF CASH FLOWS                                |

|                                                                                      |   |                      |    |   |                         |   |
|-------------------------------------------------------------------------------------------|--------|---------------------------|---------|--------|------------------------------|--------|
|                                                                                      |   | Years Ended September 30, |    |
|                                                                                      |   | 2009                      |    |   | 2008(As restatedsee Note 17) |   |
|                                                                                      |   | (Dollars in Thousands)    |    |
| OPERATING ACTIVITIES:                                                                     |   |                      |    |   |                         |   |
| Net loss                                                                                  |   | $                         | (826    | )      |                         | $      | (4,130 | ) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |   |                      |    |   |                         |   |   |   |
| Provision for loan losses                                                                 |   |                      | 1,403   |   |                         |   | 1,084 |   |
| Depreciation                                                                              |   |                      | 328     |   |                         |   | 336 |   |
| Net accretion of premiums/discounts                                                       |   |                      | (1,324  | )      |                         |   | (307 | ) |
| Income from bank owned life insurance                                                     |   |                      | (209    | )      |                         |   | (201 | ) |
| Amortization of deferred loan fees                                                        |   |                      | (85     | )      |                         |   | (253 | ) |
| Compensation expense of ESOP                                                              |   |                      | 246     |   |                         |   | 268 |   |
| Impairment charge on investment and mortgage-backed securities                            |   |                      | 3,281   |   |                         |   | 2,218 |   |
| Impairment charge on real estate owned                                                    |   |                      | 1,008   |   |                         |   | 163 |   |
| Loss on redemption of investment securities                                               |   |                      | -       |   |                         |   | 4,016 |   |
| Share-based compensation expense                                                          |   |                      | 455     |   |                         |   | - |   |
| Deferred income tax benefit                                                               |   |                      | (1,275  | )      |                         |   | (366 | ) |
| Excess tax benefit related to stock compensation                                          |   |                      | (111    | )      |                         |   | - |   |
| Changes in assets and liabilities which (used) provided cash:                             |   |                      |    |   |                         |   |   |   |
| Accounts payable and accrued expenses                                                     |   |                      | (5,861  | )      |                         |   | 5,646 |   |
| Accrued interest payable                                                                  |   |                      | (8      | )      |                         |   | 603 |   |
| Prepaid expenses and other assets                                                         |   |                      | 298     |   |                         |   | 620 |   |
| Accrued interest receivable                                                               |   |                      | (128    | )      |                         |   | 387 |   |
| Net cash (used in) provided by operating activities                                       |   |                      | (2,808  | )      |                         |   | 10,084 |   |
| INVESTING ACTIVITIES:                                                                     |   |                      |    |   |                         |   |   |   |
| Purchase of investment and mortgage-backed securities held to maturity                    |   |                      | (95,987 | )      |                         |   | (82,919 | ) |
| Purchase of investment and mortgage-backed securities available for sale                  |   |                      | (17,717 | )      |                         |   | (25,324 | ) |
| Principal collected on loans                                                              |   |                      | 51,868  |   |                         |   | 49,281 |   |
| Principal payments received on investment and mortgage-backed securities:                 |   |                      |    |   |                         |   |   |   |
| Held-to-maturity                                                                          |   |                      | 99,304  |   |                         |   | 99,987 |   |
| Available for sale                                                                        |   |                      | 9,911   |   |                         |   | 4,969 |   |
| Loans originated or acquired                                                              |   |                      | (69,053 | )      |                         |   | (76,583 | ) |
| Net purchase of Federal Home Loan Bank stock                                              |   |                      | (925    | )      |                         |   | (223 | ) |
| Proceeds from redemption of investment available for sale                                 |   |                      | -       |   |                         |   | 4,367 |   |
| Purchases of equipment                                                                    |   |                      | (138    | )      |                         |   | (155 | ) |
| Net cash used in investing activities                                                     |   |                      | (22,737 | )      |                         |   | (26,600 | ) |
| FINANCING ACTIVITIES:                                                                     |   |                      |    |   |                         |   |   |   |
| Net increase (decrease) in demand deposits, NOW accounts, and savings accounts            |   |                      | 10,446  |   |                         |   | (1,732 | ) |
| Net increase in certificates of deposit                                                   |   |                      | 45,098  |   |                         |   | 24,524 |   |
| Net (repayment) borrowing with Federal Home Loan Bank                                     |   |                      | (12,042 | )      |                         |   | (2,042 | ) |
| (Decrease) increase in advances from borrowers for taxes and insurance                    |   |                      | (134    | )      |                         |   | 231 |   |
| Cash dividends paid                                                                       |   |                      | (2,083  | )      |                         |   | (2,171 | ) |
| Excess tax benefit related to stock compensation                                          |   |                      | 111     |   |                         |   | - |   |
| Acquisition of stock for Recognition and Retention Plan                                   |   |                      | (2,465  | )      |                         |   | - |   |
| Purchase of treasury stock                                                                |   |                      | (9,171  | )      |                         |   | (5,109 | ) |
| Net cash provided by financing activities                                                 |   |                      | 29,760  |   |                         |   | 13,701 |   |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                      |   |                      | 4,215   |   |                         |   | (2,815 | ) |
| CASH AND CASH EQUIVALENTS—Beginning of year                                         |   |                      | 9,454   |   |                         |   | 12,269 |   |
| CASH AND CASH EQUIVALENTS—End of year                                               |   | $                         | 13,669  |   |                         | $      | 9,454 |   |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                                        |   |                      |    |   |                         |   |   |   |
| Interest paid on deposits and advances from Federal                                       |   |                      |    |   |                         |   |   |   |
| Home Loan Bank                                                                            |   | $                         | 12,949  |   |                         | $      | 14,052 |   |
|                                                                                      |   |                      |    |   |                         |   |   |   |
| Income taxes paid                                                                         |   | $                         | 1,979   |   |                         | $      | 750 |   |
|                                                                                      |   |                      |    |   |                         |   |   |   |
| SUPPLEMENTAL DISCLOSURES OF NONCASH ITEMS:                                                |   |                      |    |   |                         |   |   |   |
| Real estate acquired in settlement of loans                                               |   | $                         | 3,142   |   |                         | $      | 1,651 |   |
|                                                                                      |   |                      |    |   |                         |   |   |   |
| Mortgage-backed securities received through redemption in kind                            |   | $                         | -       |   |                         | $      | 24,755 |   |

----

----

| 1. | NATURE OF OPERATIONS AND BASIS OF PRESENTATION |
|----|------------------------------------------------|

| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|----|--------------------------------------------|

----

----

----

----

----

----

----

----

| 3. | EARNINGS PER SHARE |
|----|--------------------|

|   |                                                                    |   | Year Ended September 30,                     |       |
|--------|-------------------------------------------------------------------------|--------|----------------------------------------------|------------|
|   |                                                                    |   | 2009                                         |       |   | 2008 |   |
|   |                                                                    |   | (Dollars in thousands except per share data) |       |
|   |                                                                    |   | Basic                                        |       |   | Diluted |   |   | Basic |   |   | Diluted |   |
|   |                                                                    |   |                                         |       |   |   |   |   |   |   |   |   |   |
|   | Net loss                                                                |   | $                                            | (826       | ) |   | $ | (826 | ) |   | $ | (4,130 | ) |   | $ | (4,130 | ) |
|   |                                                                    |   |                                         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Weighted average shares outstanding                                     |   |                                         | 10,334,273 |   |   |   | 10,334,273 |   |   |   | 10,832,957 |   |   |   | 10,832,957 |   |
|   |                                                                    |   |                                         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Effect of CSEs                                                          |   |                                         | -          |   |   |   | 115,895 |   |   |   | - |   |   |   | - |   |
|   |                                                                    |   |                                         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Adjusted weighted average shares used in earnings per share computation |   |                                         | 10,334,273 |   |   |   | 10,450,168 |   |   |   | 10,832,957 |   |   |   | 10,832,957 |   |
|   |                                                                    |   |                                         |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Loss per share - basic and diluted                                      |   | $                                            | (0.08      | ) |   | $ | (0.08 | ) |   | $ | (0.38 | ) |   | $ | (0.38 | ) |

----

| 4. | INVESTMENT AND MORTGAGE-BACKED SECURITIES |
|----|-------------------------------------------|

|                                                             |   | September 30, 2009     |         |
|------------------------------------------------------------------|--------|------------------------|--------------|
|                                                             |   |                   |         |   | Gross |   |   | Gross |   |   |   |   |
|                                                             |   | Amortized              |         |   | Unrealized |   |   | Unrealized |   |   | Fair |   |
|                                                             |   | Cost                   |         |   | Gains |   |   | Losses |   |   | Value |   |
|                                                             |   | (Dollars in Thousands) |         |
| Securities Held to Maturity:                                     |   |                   |         |   |   |   |   |   |   |   |   |   |
| U.S. Government and agency obligations                           |   | $                      | 123,923      |   |   | $ | 881 |   |   | $ | (645 | ) |   | $ | 124,159 |   |
| Municipal obligations                                            |   |                   | 1,970        |   |   |   | 6 |   |   |   | - |   |   |   | 1,976 |   |
| Mortgage-backed securities - U.S. Government agencies            |   |                   | 34,233  |   |   |   | 1,600  |   |   |   | -  |   |   |   | 35,833  |   |
|                                                             |   |                   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total securities held to maturity                                |   | $                      | 160,126      |   |   | $ | 2,487 |   |   | $ | (645 | ) |   | $ | 161,968 |   |
|                                                             |   |                   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities Available for Sale:                                   |   |                   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government and agency obligations                           |   | $                      | 2,000        |   |   | $ | - |   |   | $ | (18 | ) |   | $ | 1,982 |   |
| Mortgage-backed securities - U.S.  Government agencies |   |                   | 50,659       |   |   |   | 2,009 |   |   |   | (57 | ) |   |   | 52,611 |   |
| Mortgage-backed securities - Non-agency                          |   |                   | 10,325       |   |   |   | 6 |   |   |   | (2,564 | ) |   |   | 7,767 |   |
| Total debt securities                                            |   |                   | 62,984       |   |   |   | 2,015 |   |   |   | (2,639 | ) |   |   | 62,360 |   |
|                                                             |   |                   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FHLMC preferred stock                                            |   |                   | 16           |   |   |   | 31 |   |   |   | - |   |   |   | 47 |   |
|                                                             |   |                   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total securities available for sale                              |   | $                      | 63,000       |   |   | $ | 2,046 |   |   | $ | (2,639 | ) |   | $ | 62,407 |   |

----

|                                                       |   | September 30, 2008     |    |
|------------------------------------------------------------|--------|------------------------|---------|
|                                                       |   |                   |    |   | Gross |   |   | Gross |   |   |   |   |
|                                                       |   | Amortized              |    |   | Unrealized |   |   | Unrealized |   |   | Fair |   |
|                                                       |   | Cost                   |    |   | Gains |   |   | Losses |   |   | Value |   |
|                                                       |   | (Dollars in Thousands) |    |
| Securities Held to Maturity:                               |   |                   |    |   |   |   |   |   |   |   |   |   |
| U.S. Government and agency obligations                     |   | $                      | 120,572 |   |   | $ | 112 |   |   | $ | (2,377 | ) |   | $ | 118,307 |   |
| Municipal obligations                                      |   |                   | 2,450   |   |   |   | - |   |   |   | (16 | ) |   |   | 2,434 |   |
| Mortgage-backed securities - U.S. Government agencies      |   |                   | 40,281  |   |   |   | 95 |   |   |   | (565 | ) |   |   | 39,811 |   |
|                                                       |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total securities held to maturity                          |   | $                      | 163,303 |   |   | $ | 207 |   |   | $ | (2,958 | ) |   | $ | 160,552 |   |
|                                                       |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities Available for Sale:                             |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government and agency obligations                     |   | $                      | 3,000   |   |   | $ | - |   |   | $ | (124 | ) |   | $ | 2,876 |   |
| Mortgage-backed securities - U.S. Government agencies |   |                   | 38,078  |   |   |   | 501 |   |   |   | (160 | ) |   |   | 38,419 |   |
| Mortgage-backed securities - Non-agency                    |   |                   | 15,048  |   |   |   | 32 |   |   |   | (1,315 | ) |   |   | 13,765 |   |
| Total debt securities                                      |   |                   | 56,126  |   |   |   | 533 |   |   |   | (1,599 | ) |   |   | 55,060 |   |
|                                                       |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FHLMC preferred stock                                      |   |                   | 26      |   |   |   | 19 |   |   |   | - |   |   |   | 45 |   |
| FNMA stock                                                 |   |                   |    |   |   |   | 1 |   |   |   | - |   |   |   | 1 |   |
|                                                       |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total securities available for sale                        |   | $                      | 56,152  |   |   | $ | 553 |   |   | $ | (1,599 | ) |   | $ | 55,106 |   |

----

|                                                  |   | Less than 12 months    |   |   | More than 12 months |   |   | Total      |   |
|-------------------------------------------------------|--------|------------------------|--------|--------|---------------------|--------|--------|------------|--------|
|                                                  |   | Gross                  |   |   |                |   |   | Gross      |   |   |   |   |   | Gross |   |   |   |   |
|                                                  |   | Unrealized             |   |   | Fair                |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |   | Fair |   |
|                                                  |   | Losses                 |   |   | Value               |   |   | Losses     |   |   | Value |   |   | Losses |   |   | Value |   |
|                                                  |   | (Dollars in Thousands) |   |
| Securities Held to Maturity:                          |   |                   |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |
| U.S. Government agency obligations                    |   | $                      | 643    |   |                | $      | 52,854 |       |   | $ | 2 |   |   | $ | 1,993 |   |   | $ | 645 |   |   | $ | 54,847 |   |
|                                                  |   |                   |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total securities held to maturity                     |   |                   | 643    |   |                |   | 52,854 |       |   |   | 2 |   |   |   | 1,993 |   |   |   | 645 |   |   |   | 54,847 |   |
|                                                  |   |                   |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities Available for Sale:                        |   |                   |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government agency obligations                    |   |                   | -      |   |                |   | -      |       |   |   | 18 |   |   |   | 1,982 |   |   |   | 18 |   |   |   | 1,982 |   |
| Mortgage-backed securities - U.S. Government agencies |   |                   | 48     |   |                |   | 2,886  |       |   |   | 9 |   |   |   | 400 |   |   |   | 57 |   |   |   | 3,286 |   |
| Mortgage-backed securities - Non-Agency               |   |                   | 1,310  |   |                |   | 2,757  |       |   |   | 1,254 |   |   |   | 4,381 |   |   |   | 2,564 |   |   |   | 7,138 |   |
|                                                  |   |                   |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total securities available for sale                   |   |                   | 1,358  |   |                |   | 5,643  |       |   |   | 1,281 |   |   |   | 6,763 |   |   |   | 2,639 |   |   |   | 12,406 |   |
|                                                  |   |                   |   |   |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                 |   | $                      | 2,001  |   |                | $      | 58,497 |       |   | $ | 1,283 |   |   | $ | 8,756 |   |   | $ | 3,284 |   |   | $ | 67,253 |   |

----

|                                                                                                                         |   | (Dollars in thousands) |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|
| Credit component of OTTI as of January 1, 2009                                                                               |   | $                      | 1,732  |   |
|                                                                                                                         |   |                   |   |   |
| Additions for credit-related OTTI charges on previously unimpaired securities                                                |   |                   | 637    |   |
|                                                                                                                         |   |                   |   |   |
| Additional increases as a result of impairment charges recognized on investments for which an OTTI was previously recognized |   |                   | 490    |   |
|                                                                                                                         |   |                   |   |   |
| Credit component of OTTI as of September 30, 2009                                                                            |   | $                      | 2,859  |   |

----

----

|   | With respect to the remainder of the securities in the non-agency MBS portfolio, the gross unrealized loss $888,000 and the market value is $4.0 million of the total portfolio of MBS available for sale of $60.4 million.  In the portfolio of unrealized losses, the securities are at least  “B” rated by at least one nationally recognized rating agency with the exception of one security for with a book valueof $24,000 with a “C” rating. As of September 30, 2009, with the exception of securities discussed above, there are no securities for which the Company currently believes it is not probable that it will collect all amounts due according to the contractual terms of the investment. Management concluded that an other-than-temporary impairment did not exist and the decline in value was attributed to the illiquidity in the financial markets.  Inaddition, the Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell these securities. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | The following table shows the gross unrealized losses and related fair values of the Company’s investment securities, aggregated by investment category and length of time that individual securities have been in a continuous loss position at September 30, 2008:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

|                                                       |   | Less than 12 months    |   |   | More than 12 months |   |    | Total      |   |
|------------------------------------------------------------|--------|------------------------|--------|--------|---------------------|--------|---------|------------|--------|
|                                                       |   | Gross                  |   |   |                |   |    | Gross      |   |   |   |   |   | Gross |   |   |   |   |
|                                                       |   | Unrealized             |   |   | Fair                |   |    | Unrealized |   |   | Fair |   |   | Unrealized |   |   | Fair |   |
|                                                       |   | Losses                 |   |   | Value               |   |    | Losses     |   |   | Value |   |   | Losses |   |   | Value |   |
|                                                       |   | (Dollars in Thousands) |   |
| Securities Held to Maturity:                               |   |                   |   |   |                |   |    |       |   |   |   |   |   |   |   |   |   |   |
| U.S. Government and agency obligations                     |   | $                      | 2,377  |   |                | $      | 99,203  |       |   | $ | - |   |   | $ | - |   |   | $ | 2,377 |   |   | $ | 99,203 |   |
| Municipal obligations                                      |   |                   | 9      |   |                |   | 1,280   |       |   |   | 7 |   |   |   | 343 |   |   |   | 16 |   |   |   | 1,623 |   |
| Mortgage-backed securities - U.S. Government agencies |   |                   | 308    |   |                |   | 23,803  |       |   |   | 257 |   |   |   | 5,778 |   |   |   | 565 |   |   |   | 29,581 |   |
|                                                       |   |                   |   |   |                |   |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total securities held to maturity                          |   |                   | 2,694  |   |                |   | 124,286 |       |   |   | 264 |   |   |   | 6,121 |   |   |   | 2,958 |   |   |   | 130,407 |   |
|                                                       |   |                   |   |   |                |   |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities Available for Sale:                             |   |                   |   |   |                |   |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government and agency obligations                     |   | $                      | 124    |   |                | $      | 2,876   |       |   | $ | - |   |   | $ | - |   |   | $ | 124 |   |   | $ | 2,876 |   |
| Mortgage-backed securities - U.S. Government agencies      |   |                   | 160    |   |                |   | 14,701  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities - Non-Agency                    |   |                   | 1,315  |   |                |   | 8,276   |       |   |   | - |   |   |   | - |   |   |   | 1,315 |   |   |   | 8,276 |   |
|                                                       |   |                   |   |   |                |   |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total securities available for sale                        |   |                   | 1,599  |   |                |   | 25,853  |       |   |   | - |   |   |   | - |   |   |   | 1,439 |   |   |   | 11,152 |   |
|                                                       |   |                   |   |   |                |   |    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                      |   | $                      | 4,293  |   |                | $      | 150,139 |       |   | $ | 264 |   |   | $ | 6,121 |   |   | $ | 4,397 |   |   | $ | 141,559 |   |

----

----

|   | The non-agency securities were acquired through the redemption in-kind of the Company’s investment in a mutual fund.  Of the securities acquired through the redemption in-kind, 94.5% of the securities are rated at investment grade.  All of the securities, including those below investment grade, as of September 30, 2008 were performingaccording to their contractual terms.  The unrealized loss on these debt securities related principally to the changes in market interest rates and a lack of liquidity currently in the financial markets. Management believed these unrealized losses are not other-than-temporary based upon Company’s analysis that the securities will perform in accordance with their terms, in addition to, the Company’s ability and intent to hold these investments for a period of time sufficient to allow forthe anticipated recovery of fair value, which may be maturity. The Company believed recovery of fair value is expected when market conditions have stabilized and that the Company would receive all contractual principal and interest payments related to those investments. The corporate debt securities have no identified credit issues as 96.1% having an “A” rating or higher. As management had the ability and intent to hold these debt securities until a forecasted recovery,  which may be maturity,the decline is not deemed to be other than temporary. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | The amortized cost and estimated fair value of U.S. agency and municipal obligations, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because of call provisions in the securities.  Mortgage-backed securities were not included as the contractual maturity is generally irrelevant due to the borrowers’ right to prepay without prepayment penalty.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

|                             |   | September 30, 2009     |    |
|----------------------------------|--------|------------------------|---------|
|                             |   | Held to Maturity       |    |   | Available for Sale |   |
|                             |   | Amortized              |    |   | Fair |   |   | Amortized |   |   | Fair |   |
|                             |   | Cost                   |    |   | Value |   |   | Cost |   |   | Value |   |
|                             |   | (Dollars in Thousands) |    |
| Due within one year              |   | $                      | 2,000   |   |   | $ | 2,048 |   |   | $ | - |   |   | $ | - |   |
| Due after one through five years |   |                   | 790     |   |   |   | 791 |   |   |   | - |   |   |   | - |   |
| Due after five through ten years |   |                   | 43,671  |   |   |   | 43,874 |   |   |   | - |   |   |   | - |   |
| Due after ten years              |   |                   | 79,432  |   |   |   | 79,422 |   |   |   | 2,000 |   |   |   | 1,983 |   |
|                             |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                            |   | $                      | 125,893 |   |   | $ | 126,135 |   |   | $ | 2,000 |   |   | $ | 1,983 |   |

|                             |   | September 30, 2008     |    |
|----------------------------------|--------|------------------------|---------|
|                             |   | Held to Maturity       |    |   | Available for Sale |   |
|                             |   | Amortized              |    |   | Fair |   |   | Amortized |   |   | Fair |   |
|                             |   | Cost                   |    |   | Value |   |   | Cost |   |   | Value |   |
|                             |   | (Dollars in Thousands) |    |
| Due within one year              |   | $                      | -       |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Due after one through five years |   |                   | 4,790   |   |   |   | 4,820 |   |   |   | - |   |   |   | - |   |
| Due after five through ten years |   |                   | 51,084  |   |   |   | 50,311 |   |   |   | 1,000 |   |   |   | 991 |   |
| Due after ten years              |   |                   | 67,148  |   |   |   | 65,610 |   |   |   | 2,000 |   |   |   | 1,885 |   |
|                             |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                            |   | $                      | 123,022 |   |   | $ | 120,741 |   |   | $ | 3,000 |   |   | $ | 2,876 |   |

----

| 5. | LOANS RECEIVABLE |
|----|------------------|

|   |                                                                          |   | September 30,          |    |
|--------|-------------------------------------------------------------------------------|--------|------------------------|---------|
|   |                                                                          |   | 2009                   |    |   | 2008 |   |
|   |                                                                          |   | (Dollars in thousands) |    |
|   | One-to-four family residential                                                |   | $                      | 201,396 |   |   | $ | 191,344 |   |
|   | Multi-family residential                                                      |   |                   | 4,178   |   |   |   | 2,801 |   |
|   | Commercial real estate                                                        |   |                   | 19,907  |   |   |   | 20,518 |   |
|   | Construction and land development                                             |   |                   | 36,764  |   |   |   | 42,634 |   |
|   | Commercial business                                                           |   |                   | 2,232   |   |   |   | 465 |   |
|   | Consumer                                                                      |   |                   | 586     |   |   |   | 739 |   |
|   |                                                                          |   |                   |    |   |   |   |   |   |
|   |            Total loans |   |                   | 265,063 |   |   |   | 258,501 |   |
|   |                                                                          |   |                   |    |   |   |   |   |   |
|   | Undisbursed portion of loans-in-process                                       |   |                   | (6,281  | ) |   |   | (13,515 | ) |
|   | Deferred loan fees                                                            |   |                   | 644     |   |   |   | 574 |   |
|   | Allowance for loan losses                                                     |   |                   | (2,732  | ) |   |   | (1,591 | ) |
|   |                                                                          |   |                   |    |   |   |   |   |   |
|   | Net                                                                           |   | $                      | 256,694 |   |   | $ | 243,969 |   |

|   |                            |   | Year Ended September 30, |   |
|--------|---------------------------------|--------|--------------------------|--------|
|   |                            |   | 2009                     |   |   | 2008 |   |
|   |                            |   | (Dollars in Thousands)   |   |
|   | Balance—beginning of year |   | $                        | 1,583  |   |   | $ | 1,634 |   |
|   | Additions                       |   |                     | 397    |   |   |   | 391 |   |
|   | Repayments                      |   |                     | (462   | ) |   |   | (442 | ) |
|   |                            |   |                     |   |   |   |   |   |   |
|   | Balance—end of year       |   | $                        | 1,518  |   |   | $ | 1,583 |   |

----

|   | The following schedule summarizes the changes in the allowance for loan losses: |
|--------|---------------------------------------------------------------------------------|

|   |                       |   | Year Ended September 30, |   |
|--------|----------------------------|--------|--------------------------|--------|
|   |                       |   | 2009                     |   |   | 2008 |   |
|   |                       |   | (Dollars in Thousands)   |   |
|   |                       |   |                     |   |   |   |   |
|   | Balance, beginning of year |   | $                        | 1,591  |   |   | $ | 1,011 |   |
|   | Provision for loan losses  |   |                     | 1,403  |   |   |   | 1,084 |   |
|   | Charge-offs                |   |                     | (262   | ) |   |   | (504 | ) |
|   | Recoveries                 |   |                     | -      |   |   |   | - |   |
|   |                       |   |                     |   |   |   |   |   |   |
|   | Balance, end of year       |   | $                        | 2,732  |   |   | $ | 1,591 |   |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | A loan is considered to be impaired when, based upon current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan. During the periods presented, loan impairment was evaluated based on the fair value of the loan’s collateral. Impairment lossesare included in the provision for loan losses.  Large groups of smaller balance, homogeneous loans are collectively evaluated for impairment, except for those loans restructured under a troubled debt restructuring.  Loans collectively evaluated for impairment include smaller balance commercial real estate loans, residential real estate loans and consumer loans. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | As of September 30, 2009 and 2008, the recorded investment in loans that are considered to be impaired was as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

|   |                                         |   | Year Ended September 30, |   |
|--------|----------------------------------------------|--------|--------------------------|--------|
|   |                                         |   | 2009                     |   |   | 2008 |   |
|   |                                         |   | (Dollars in thousands)   |   |
|   | Impaired loans with related allowance        |   | $                        | 1,661  |   |   | $ | 3,640 |   |
|   | Impaired loans with no related allowance     |   | $                        | -      |   |   | $ | - |   |
|   | Average impaired loans                       |   | $                        | 3,176  |   |   | $ | 3,640 |   |
|   | Interest income recognized on impaired loans |   | $                        | 41     |   |   | $ | - |   |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The impaired amounts in both 2009 and 2008 represents two construction loans in which current appraisal has been obtained of the underlying collateral properties, which shows a deterioration in the value of such properties consistent with the change in values in the region.  As a result of the Company’s measurement of impairedloans, as of September 30, 2009, specific reserves aggregated to $873,000 and $529,000 at September 30, 2009 and 2008, respectively. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Interest income on impaired loans other than nonaccrual loans is recognized on an accrual basis. Interest income on nonaccrual loans is recognized only as collected.  Interest income foregone on non-accrual loans at September 30, 2009 and 2008 amounted to $121,000 and $133,000, respectively.                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Nonperforming loans (which consist of nonaccrual loans and loans in excess of 90 days delinquent and still accruing interest) at September 30, 2009 and 2008 amounted to approximately $2.0 million and $4.0 million, respectively.                                                                                                                                                                                                                                                          |

----

| 6. | OFFICE PROPERTIES AND EQUIPMENT |
|----|---------------------------------|

|   |                                                                                                                   |   | September 30,          |   |
|--------|------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|
|   |                                                                                                                   |   | 2009                   |   |   | 2008 |   |
|   |                                                                                                                   |   | (Dollars in Thousands) |   |
|   |                                                                                                                   |   |                   |   |   |   |   |
|   | Land                                                                                                                   |   | $                      | 247    |   |   | $ | 247 |   |
|   | Buildings and improvements                                                                                             |   |                   | 2,565  |   |   |   | 2,565 |   |
|   | Furniture and equipment                                                                                                |   |                   | 3,052  |   |   |   | 2,914 |   |
|   | Automobiles                                                                                                            |   |                   | 122    |   |   |   | 122 |   |
|   |                                                                                                                   |   |                   |   |   |   |   |   |   |
|   |           Total                                                      |   |                   | 5,986  |   |   |   | 5,848 |   |
|   | Accumulated depreciation                                                                                               |   |                   | (3,994 | ) |   |   | (3,666 | ) |
|   |                                                                                                                   |   |                   |   |   |   |   |   |   |
|   | Total office properties and equipment, net of accumulated depreciation                                                 |   | $                      | 1,992  |   |   | $ | 2,182 |   |
|   |                                                                                                                   |   |                   |   |   |   |   |   |   |
|   | For the years ended September 30, 2009 and 2008, depreciation expense amounted to $328,000 and $336,000, respectively. |

|  7.    | DEPOSITS |
|----------------------------|----------|

|   |                                          |   | September 30,          |    |
|--------|-----------------------------------------------|--------|------------------------|---------|
|   |                                          |   | 2009                   |    |   | 2008 |   |
|   |                                          |   | Amount                 |    |   | Percent |   |   | Amount |   |   | Percent |   |
|   |                                          |   | (Dollars in thousands) |    |
|   |                                          |   |                   |    |   |   |   |   |   |   |   |   |   |
|   | Money market deposit accounts                 |   | $                      | 75,349  |   |   |   | 17.4 | % |   | $ | 66,484 |   |   |   | 17.6 | % |
|   | Checking accounts                             |   |                   | 29,869  |   |   |   | 6.9 |   |   |   | 27,335 |   |   |   | 7.3 |   |
|   | Passbook, club and statement savings          |   |                   | 66,968  |   |   |   | 15.5 |   |   |   | 67,921 |   |   |   | 18.0 |   |
|   | Certificates maturing in six months or less   |   |                   | 120,636 |   |   |   | 27.9 |   |   |   | 93,141 |   |   |   | 24.7 |   |
|   | Certificates maturing in more than six months |   |                   | 139,552 |   |   |   | 32.3 |   |   |   | 121,949 |   |   |   | 32.4 |   |
|   |                                          |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Total                                         |   | $                      | 432,374 |   |   |   | 100.0 | % |   | $ | 376,830 |   |   |   | 100.0 | % |

----

|   |                     |   | September 30, 2009     |    |
|--------|--------------------------|--------|------------------------|---------|
|   |                     |   | (Dollars in Thousands) |    |
|   |                     |   |                   |    |
|   | One year or less         |   | $                      | 168,189 |   |
|   | One through two years    |   |                   | 50,902  |   |
|   | Two through three years  |   |                   | 16,778  |   |
|   | Three through four years |   |                   | 13,732  |   |
|   | Four through five years  |   |                   | 10,587  |   |
|   |                     |   |                   |    |   |
|   | Total                    |   | $                      | 260,188 |   |

|   |                                                                                                                                   |
|--------|----------------------------------------------------------------------------------------------------------------------------------------|
|   | Certificates of deposit of $100,000 or more at each of such dates totaled approximately $91.9 million and $66.7 million, respectively. |
|   |                                                                                                                                   |
|   | Interest expense on deposits was comprised of the following:                                                                           |

|   |                                          |   | Year Ended September 30, |   |
|--------|-----------------------------------------------|--------|--------------------------|--------|
|   |                                          |   | 2009                     |   |   | 2008 |   |
|   |                                          |   | (Dollars in Thousands)   |   |
|   | NOW and money market deposits accounts        |   | $                        | 1,863  |   |   | $ | 2,793 |   |
|   | Passbook, club and statement savings accounts |   |                     | 1,532  |   |   |   | 1,681 |   |
|   | Certificate accounts                          |   |                     | 8,585  |   |   |   | 8,922 |   |
|   | Total                                         |   | $                        | 11,980 |   |   | $ | 13,396 |   |

|  8.   | ADVANCES FROM FEDERAL HOME LOAN BANK                                                                                                      |
|----------------------|-------------------------------------------------------------------------------------------------------------------------------------------|
|                 |                                                                                                                                      |
|                 | Advances from Federal Home Loan Bank totaled $19.7 million and $31.7 million at September 30, 2009 and 2008, respectively.                |
|                 |                                                                                                                                      |
|                 | There were advances as part of the community housing program totaling $659,000 and $701,000 at September 30, 2009 and 2008, respectively. |

----

|   |           |   | September 30,          |   |
|--------|----------------|--------|------------------------|--------|
|   |           |   | 2009                   |   |   | 2008 |   |
|   |           |   |                   |   |   | Fixed |   |   |   |   |   | Fixed |   |
|   |           |   |                   |   |   | Interest |   |   |   |   |   | Interest |   |
|   | Due            |   | Amount                 |   |   | Rate |   |   | Amount |   |   | Rate |   |
|   |           |   | (Dollars in Thousands) |   |
|   | October 2008   |   | $                      | -      |   |   |   | - |   |   | $ | 18,000 |   |   |   | 2.78 | % |
|   | December 2009  |   |                   | 6,000  |   |   |   | 1.59 | % |   |   | - |   |   |   | - |   |
|   | July 2010      |   |                   | 2,000  |   |   |   | 5.98 | % |   |   | 2,000 |   |   |   | 5.98 | % |
|   | August 2010    |   |                   | 3,000  |   |   |   | 5.93 | % |   |   | 3,000 |   |   |   | 5.93 | % |
|   | September 2010 |   |                   | 8,000  |   |   |   | 5.69 | % |   |   | 8,000 |   |   |   | 5.69 | % |
|   |           |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   |           |   | $                      | 19,000 |   |   |   |   |   |   | $ | 31,000 |   |   |   |   |   |

| 9. | INCOME TAXES |
|----|--------------|

|   | The Company files a consolidated federal income tax return.  The Company uses the specific charge-off method for computing reserves for bad debts.  Generally this method allows the Company to deduct an annual addition to the reserve for bad debt equal to its net charge-offs. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                    |
|   | The provision for income taxes for the years ended September 30, 2009 and 2008 consists of the following:                                                                                                                                                                                               |

|   |                                                                            |   | Year Ended September 30, |   |
|--------|---------------------------------------------------------------------------------|--------|--------------------------|--------|
|   |                                                                            |   | 2009                     |   |   | 2008 |   |
|   |                                                                            |   | (Dollars in thousands)   |   |
|   |                                                                            |   |                     |   |   |   |   |
|   | Current:                                                                        |   |                     |   |   |   |   |
|   | Federal                                                                         |   | $                        | 1,625  |   |   | $ | 1,128 |   |
|   | State                                                                           |   |                     | -      |   |   |   | - |   |
|   |           Total current taxes |   |                     | 1,625  |   |   |   | 1,128 |   |
|   |                                                                            |   |                     |   |   |   |   |   |   |
|   | Deferred income tax (benefit) expense                                           |   |                     | (1,275 | ) |   |   | (366 | ) |
|   | Total income tax provision                                                      |   | $                        | 350    |   |   | $ | 762 |   |

----

|   |                                                             |   | September 30,          |   |
|--------|------------------------------------------------------------------|--------|------------------------|--------|
|   |                                                             |   |                   |   |   |   |   |
|   |                                                             |   | 2009                   |   |   | 2008 |   |
|   |                                                             |   | (Dollars in Thousands) |   |
|   | Deferred tax assets:                                             |   |                   |   |   |   |   |
|   | Unrealized loss on available for sale securities                 |   | $                      | 201    |   |   | $ | 356 |   |
|   | Deposit premium                                                  |   |                   | 167    |   |   |   | 216 |   |
|   | Allowance for loan losses                                        |   |                   | 974    |   |   |   | 594 |   |
|   | Real estate owned expenses                                       |   |                   | 469    |   |   |   | 99 |   |
|   | Non-accrual interest                                             |   |                   | 15     |   |   |   | 21 |   |
|   | Accrued vacation                                                 |   |                   | 44     |   |   |   | 34 |   |
|   | Capital loss carryforward                                        |   |                   | 1,873  |   |   |   | 1,873 |   |
|   | Impairment loss                                                  |   |                   | 1,363  |   |   |   | 247 |   |
|   | Post-retirement benefit plans                                    |   |                   | 154    |   |   |   | 200 |   |
|   | Split dollar life insurance                                      |   |                   | 84     |   |   |   | - |   |
|   | Employee benefit plans                                           |   |                   | 246    |   |   |   | 110 |   |
|   | Total deferred tax assets                                        |   |                   | 5,590  |   |   |   | 3,750 |   |
|   | Valuation allowance                                              |   |                   | (2,551 | ) |   |   | (1,991 | ) |
|   | Total deferred  tax assets, net of valuation allowance |   |                   | 3,039  |   |   |   | 1,759 |   |
|   |                                                             |   |                   |   |   |   |   |   |   |
|   |                                                             |   |                   |   |   |   |   |   |   |
|   | Deferred tax liabilities:                                        |   |                   |   |   |   |   |   |   |
|   | Property                                                         |   |                   | 480    |   |   |   | 467 |   |
|   | Mortgage servicing                                               |   |                   | 4      |   |   |   | 6 |   |
|   | Deferred loan fees                                               |   |                   | 212    |   |   |   | 195 |   |
|   | Total                                                            |   |                   | 696    |   |   |   | 668 |   |
|   | Net deferred tax asset                                           |   | $                      | 2,343  |   |   | $ | 1,091 |   |

----

|   | The income tax expense differs from that computed at the statutory federal corporate tax rate as follows: |
|--------|-----------------------------------------------------------------------------------------------------------|

|   |                                        |   | Year Ended September 30, |   |
|--------|---------------------------------------------|--------|--------------------------|--------|
|   |                                        |   | 2009                     |   |   | 2008 |   |
|   |                                        |   |                     |   |   | Percentage |   |   |   |   |   | Percentage |   |
|   |                                        |   |                     |   |   | of Pretax |   |   |   |   |   | of Pretax |   |
|   |                                        |   | Amount                   |   |   | Income |   |   | Amount |   |   | Income |   |
|   |                                        |   | (Dollars in Thousands)   |   |
|   | Tax at statutory rate                       |   | $                        | (162   | ) |   |   | (34.0 | )% |   | $ | (1,145 | ) |   |   | (34.0 | )% |
|   | Adjustments resulting from:                 |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Valuation allowance                         |   |                     | 560    |   |   |   | 117.6 |   |   |   | 1,991 |   |   |   | 59.1 |   |
|   | Income from bank owned life insurance       |   |                     | (71    | ) |   |   | (14.9 | ) |   |   | (68 | ) |   |   | (2.0 | ) |
|   | Income from muncipal obligations            |   |                     | (28    | ) |   |   | (5.9 | ) |   |   | (29 | ) |   |   | (0.9 | ) |
|   | Employee stock option plan                  |   |                     | 44     |   |   |   | 9.2 |   |   |   | - |   |   |   | - |   |
|   | Other                                       |   |                     | 7      |   |   |   | 1.5 |   |   |   | 13 |   |   |   | 0.4 |   |
|   |                                        |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Income tax expense per statements of income |   | $                        | 350    |   |   |   | 73.5 | % |   | $ | 762 |   |   |   | 22.6 | % |

|   | There is currently no liability for uncertain tax positions and no known unrecognized tax benefits. The Company recognizes, when applicable, interest and penalties related to unrecognized tax benefits in the provision for income taxes in the Unaudited Consolidated Statement of Operations. As of September 30,2009, the Internal Revenue Service has concluded an audit of the Company’s tax returns for the year ended September 30, 2007 in which there was no change necessary to the Company’s tax liability.  The Company’s federal and state income tax returns for taxable years through September 30, 2005 have been closed for purposes of examination by the Internal Revenue Service and the Pennsylvania Department of Revenue. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10. | REGULATORY CAPITAL REQUIREMENTS |
|-----|---------------------------------|

|   | The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory – and possibly additional discretionary – actions by regulators that, if undertaken, could have a direct material effect on theCompany’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s and the Bank’s capital amounts and the Bank’s classification are also subject to qualitative judgments by the regulatorsabout components, risk weightings, and other factors. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below) of Tier 1 capital (as defined in the regulations) to average assets (as defined) and risk-weighted assets (as defined), and of total capital (as defined) to risk-weightedassets. Management believes, as of September 30, 2009 and 2008, that the Company and the Bank met all regulatory capital adequacy requirements to which they are subject.                                                                                                                                                                                                                                                                                                                                                                                                       |

----

|   |                                     |   |                         |   |   |              |   |   |                 |   |   |              |   |   | To Be            |   |
|--------|------------------------------------------|--------|------------------------------|--------|--------|-------------------|--------|--------|----------------------|--------|--------|-------------------|--------|--------|------------------|--------|
|   |                                     |   |                         |   |   |              |   |   |                 |   |   |              |   |   | Well Capitalized |   |
|   |                                     |   |                         |   |   |              |   |   |                 |   |   |              |   |   | Under Prompt     |   |
|   |                                     |   |                         |   |   |              |   |   | Required for Capital |   |   | Corrective Action |   |
|   |                                     |   | Actual                       |   |   | Adequacy Purposes |   |   | Provisions           |   |
|   |                                     |   | Amount                       |   |   | Ratio             |   |   | Amount               |   |   | Ratio             |   |   | Amount           |   |   | Ratio |   |
|   |                                     |   |  (Dollars in thousands) |   |
|   | September 30, 2009:                      |   |                         |   |   |              |   |   |                 |   |   |              |   |   |             |   |   |   |   |
|   | Tier 1 capital (to average assets)       |   |                         |   |   |              |   |   |                 |   |   |              |   |   |             |   |   |   |   |
|   | Company                                  |   | $                            | 56,248 |   |              |   | 10.86  | %                    |   | $      | 20,709            |   |   |             | 4.0    | % |   |   | N/A |   |   |   | N/A |   |
|   | Bank                                     |   |                         | 51,712 |   |              |   | 9.99   |                 |   |   | 20,709            |   |   |             | 4.0    |   |   | $ | 25,886 |   |   |   | 5.0 | % |
|   | Tier 1 capital (to risk-weighted assets) |   |                         |   |   |              |   |   |                 |   |   |              |   |   |             |   |   |   |   |   |   |   |   |   |   |
|   | Company                                  |   |                         | 56,248 |   |              |   | 24.59  |                 |   |   | 9,150             |   |   |             | 4.0    |   |   |   | N/A |   |   |   | N/A |   |
|   | Bank                                     |   |                         | 51,712 |   |              |   | 22.61  |                 |   |   | 9,150             |   |   |             | 4.0    |   |   |   | 13,724 |   |   |   | 6.0 |   |
|   | Total capital (to risk-weighted assets)  |   |                         |   |   |              |   |   |                 |   |   |              |   |   |             |   |   |   |   |   |   |   |   |   |   |
|   | Company                                  |   |                         | 58,990 |   |              |   | 25.79  |                 |   |   | 18,299            |   |   |             | 8.0    |   |   |   | N/A |   |   |   | N/A |   |
|   | Bank                                     |   |                         | 54,454 |   |              |   | 23.81  |                 |   |   | 18,299            |   |   |             | 8.0    |   |   |   | 22,874 |   |   |   | 10.0 |   |
|   |                                     |   |                         |   |   |              |   |   |                 |   |   |              |   |   |             |   |   |   |   |   |   |   |   |   |   |
|   | September 30, 2008:                      |   |                         |   |   |              |   |   |                 |   |   |              |   |   |             |   |   |   |   |   |   |   |   |   |   |
|   | Tier 1 capital (to average assets)       |   |                         |   |   |              |   |   |                 |   |   |              |   |   |             |   |   |   |   |   |   |   |   |   |   |
|   | Company                                  |   | $                            | 69,178 |   |              |   | 14.49  | %                    |   | $      | 19,099            |   |   |             | 4.0    | % |   |   | N/A |   |   |   | N/A |   |
|   | Bank                                     |   |                         | 63,720 |   |              |   | 13.14  |                 |   |   | 19,403            |   |   |             | 4.0    |   |   | $ | 24,254 |   |   |   | 5.0 | % |
|   | Tier 1 capital (to risk-weighted assets) |   |                         |   |   |              |   |   |                 |   |   |              |   |   |             |   |   |   |   |   |   |   |   |   |   |
|   | Company                                  |   |                         | 69,178 |   |              |   | 31.20  |                 |   |   | 8,869             |   |   |             | 4.0    |   |   |   | N/A |   |   |   | N/A |   |
|   | Bank                                     |   |                         | 63,720 |   |              |   | 28.74  |                 |   |   | 8,869             |   |   |             | 4.0    |   |   |   | 13,304 |   |   |   | 6.0 |   |
|   | Total capital (to risk-weighted assets)  |   |                         |   |   |              |   |   |                 |   |   |              |   |   |             |   |   |   |   |   |   |   |   |   |   |
|   | Company                                  |   |                         | 70,778 |   |              |   | 31.92  |                 |   |   | 17,738            |   |   |             | 8.0    |   |   |   | N/A |   |   |   | N/A |   |
|   | Bank                                     |   |                         | 65,320 |   |              |   | 29.46  |                 |   |   | 17,738            |   |   |             | 8.0    |   |   |   | 22,173 |   |   |   | 10.0 |   |

| 11. | EMPLOYEE BENEFITS |
|-----|-------------------|

----

----

|   | A summary of the Company’s non-vested stock award activity for the year ended September 30, 2009 is presented in the following table:  |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                            |   | Year EndedSeptember 30, 2009 |    |
|--------|-------------------------------------------------|--------|------------------------------|---------|
|   |                                            |   | Number ofShares              |    |   | Weighted AverageGrant Date FairValue |   |
|   | Nonvested stock awards at beginning of year     |   |                         | -       |   |   | $ | - |   |
|   |    Issued                        |   |                         | 173,228 |   |   |   | 11.17 |   |
|   |    Vested                        |   |                         | -       |   |   |   | - |   |
|   | Nonvested stock awards at the end of the period |   |                         | 173,228 |   |   | $ | 11.17 |   |

|   | In December 2008, the shareholders of the Company also approved the adoption of the 2008 Stock Option Plan.  The Stock Option Plan authorizes the grant of stock options to officers, employees and directors of the Company to acquire shares of common stock with an exercise price at least equal to the market value of the common stock on the grant date.  Options will generally become vestedand exercisable at the rate of 20% per year over five years and are generally exercisable for a period of ten years after the grant date.   A total of 565,369 shares of common stock were approved for future issuance pursuant to the Stock Option Plan.  There were 315,194 incentive stock options and 113,072 non-qualified stock options awarded during January 2009.  As of September 30, 2009, no options were vested or had been forfeited. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | A summary of the status of the Company’ stock options under the Stock Option Plan as of September 30, 2009 and changes during the year ended September 30, 2009 are presented below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

|   |                                 |   | Year EndedSeptember 30, 2009 |    |
|--------|--------------------------------------|--------|------------------------------|---------|
|   |                                 |   | Number ofShares              |    |   | Weighted AverageExercise Price |   |
|   |                                 |   |                         |    |   |   |   |
|   | Outstanding at beginning of year     |   |                         | -       |   |   | $ | - |   |
|   | Granted                              |   |                         | 428,266 |   |   |   | 11.17 |   |
|   | Exercised                            |   |                         | -       |   |   |   | - |   |
|   | Forfeited                            |   |                         | -       |   |   |   | - |   |
|   | Outstanding at the end of the period |   |                         | 428,266 |   |   | $ | 11.17 |   |
|   | Exercisable at the end of the period |   |                         | -       |   |   | $ | - |   |

|   | The weighted average remaining contractual term was approximately 9.25 years for options outstanding as of September 30, 2009.  No options were exercisable as of September 30, 2009. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |                     | September 30, 2009 |
|--------|--------------------------|--------------------|
|   | Dividend yield           | 1.79%              |
|   | Expected volatility      | 27.94%             |
|   | Risk-free interest rate  | 1.96%              |
|   | Expected life of options | 6.5 years          |

| 12. | COMMITMENTS AND CONTINGENT LIABILITIES |
|-----|----------------------------------------|

----

|   | September 30, |   | Lease Obligation       |   |
|--------|---------------|--------|------------------------|--------|
|   |          |   | (Dollars in thousands) |   |
|   | 2010          |   | $                      | 76     |   |
|   | 2011          |   |                   | 65     |   |
|   | 2012          |   |                   | 42     |   |
|   | Total         |   | $                      | 183    |   |

| 13. | FAIR VALUE OF FINANCIAL INSTRUMENTS |
|-----|-------------------------------------|

|   |                                                         |   | September 30,          |    |
|--------|--------------------------------------------------------------|--------|------------------------|---------|
|   |                                                         |   | 2009                   |    |   | 2008 |   |
|   |                                                         |   |                   |    |   |   |   |   |   |   |   |   |   |
|   |                                                         |   | Carrying               |    |   | Fair |   |   | Carrying |   |   | Fair |   |
|   |                                                         |   | Amount                 |    |   | Value |   |   | Amount |   |   | Value |   |
|   |                                                         |   | (Dollars in thousands) |    |
|   | Assets:                                                      |   |                   |    |   |   |   |   |   |   |   |   |   |
|   | Cash and cash equivalents                                    |   | $                      | 13,669  |   |   | $ | 13,669 |   |   | $ | 9,454 |   |   | $ | 9,454 |   |
|   | Investment and mortgage-backed securities held to maturity   |   |                   | 160,126 |   |   |   | 161,968 |   |   |   | 163,303 |   |   |   | 160,552 |   |
|   | Investment and mortgage-backed securities available for sale |   |                   | 62,407  |   |   |   | 62,407 |   |   |   | 55,106 |   |   |   | 55,106 |   |
|   | Loans receivable, net                                        |   |                   | 256,694 |   |   |   | 262,000 |   |   |   | 243,969 |   |   |   | 244,772 |   |
|   | Federal Home Loan Bank stock                                 |   |                   | 3,545   |   |   |   | 3,545 |   |   |   | 2,620 |   |   |   | 2,620 |   |
|   |                                                         |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Liabilities:                                                 |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | NOW accounts                                                 |   |                   | 29,869  |   |   |   | 29,869 |   |   |   | 27,335 |   |   |   | 27,335 |   |
|   | Money market deposit accounts                                |   |                   | 75,349  |   |   |   | 75,349 |   |   |   | 66,484 |   |   |   | 66,484 |   |
|   | Passbook, club and statement savings accounts                |   |                   | 66,968  |   |   |   | 66,968 |   |   |   | 67,921 |   |   |   | 67,921 |   |
|   | Certificates of deposit                                      |   |                   | 260,188 |   |   |   | 266,192 |   |   |   | 215,090 |   |   |   | 217,290 |   |
|   | Advances from Federal Home Loan Bank                         |   |                   | 19,659  |   |   |   | 20,294 |   |   |   | 31,701 |   |   |   | 32,233 |   |

----

| 14. | FAIR VALUE MEASUREMENTS |
|-----|-------------------------|

----

| Level 1 | Quoted prices in active markets for identical assets or liabilities.                                                                                                                                                                                                                                                                                                                                                                                  |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Level 2 | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.                                                                                                                                                |
| Level 3 | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for whichthe determination of fair value requires significant management judgment or estimation.  |

|   |                                                  |   | Category Used for Fair Value Measurement |   |
|--------|-------------------------------------------------------|--------|------------------------------------------|--------|
|   |                                                  |   | Level 1                                  |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
|   |                                                  |   | (Dollars in Thousands)                   |   |
|   |                                                  |   |                                     |   |   |   |   |   |   |   |   |   |   |
|   | Assets:                                               |   |                                     |   |   |   |   |   |   |   |   |   |   |
|   | Securities available for sale:                        |   |                                     |   |   |   |   |   |   |   |   |   |   |
|   | U.S. Government and agency obligations                |   | $                                        | -      |   |   | $ | 1,982 |   |   | $ | - |   |   | $ | 1,982 |   |
|   | Mortgage-backed securities - U.S. Government agencies |   |                                     | -      |   |   |   | 52,611 |   |   |   | - |   |   |   | 52,611 |   |
|   | Mortgage-backed securities - Non-agency               |   |                                     | -      |   |   |   | 7,685 |   |   |   | 82 |   |   |   | 7,767 |   |
|   | FNMA and FHLMC preferred stock                        |   |                                     | 47     |   |   |   | - |   |   |   | - |   |   |   | 47 |   |
|   | Total                                                 |   | $                                        | 47     |   |   | $ | 62,278 |   |   | $ | 82 |   |   | $ | 62,407 |   |

----

|                                                                                                           |   | Fair Value Measurements UsingSignificant Unobservable Inputs(Level 3) |   |
|----------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|--------|
|                                                                                                           |   | Non agency mortgage-backedsecurities                                  |   |
|                                                                                                           |   | (Dollars in Thousands)                                                |   |
|                                                                                                           |   |                                                                  |   |
| Balance, October 1, 2008:                                                                                      |   | $                                                                     | 384    |   |
|      Total losses, realized/unrealized                                                |   |                                                                  |   |   |
|           Included in earnings                               |   |                                                                  | (261   | ) |
|           Included in accumulated other comprehensive income |   |                                                                  | 49     |   |
|      Purchases, maturities, prepayments and calls, net                                |   |                                                                  | (132   | ) |
|      Transfers into Level 3, net                                                      |   |                                                                  | 42     |   |
|            Total                                        |   | $                                                                     | 82     |   |

----

|              |   | At September 30, 2009 |   |
|-------------------|--------|-----------------------|--------|
|              |   | (in thousands)        |   |
|              |   |                  |   |   |   |   |   |   |   |   |   |   |
|              |   | Level 1               |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Impaired Loans    |   | $                     | -      |   |   | $ | 788 |   |   | $ | - |   |   |   | 788 |   |
| Real estate owned |   |                  | -      |   |   |   | - |   |   |   | 3,622 |   |   |   | 3,622 |   |
| Total             |   | $                     | -      |   |   | $ | 788 |   |   | $ | 3,622 |   |   | $ | 4,410 |   |

| 15. | PRUDENTIAL BANCORP, INC. OF PENNSYLVANIA (PARENT COMPANY ONLY) |
|-----|----------------------------------------------------------------|

| STATEMENT OF FINANCIAL CONDITION                 |   |                   |    |   |   |   |
|--------------------------------------------------|--------|------------------------|---------|--------|--------|--------|
| At September 30,                                 |   | 2009                   |    |   | 2008   |   |
|                                             |   | (Dollars in thousands) |    |
| Assets:                                          |   |                   |    |   |   |   |
| Cash                                             |   | $                      | 954     |   |   | $      | 1,834 |   |
| ESOP loan receivable                             |   |                   | 3,848   |   |   |   | 3,998 |   |
| Investment in Bank                               |   |                   | 51,321  |   |   |   | 63,029 |   |
| Other assets                                     |   |                   | 251     |   |   |   | 179 |   |
| Total assets                                     |   | $                      | 56,374  |   |   | $      | 69,040 |   |
|                                             |   |                   |    |   |   |   |   |   |
| Liabilities:                                     |   |                   |    |   |   |   |   |   |
| Accrued dividend payable                         |   | $                      | 517     |   |   | $      | 553 |   |
| Total liabilities                                |   |                   | 517     |   |   |   | 553 |   |
|                                             |   |                   |    |   |   |   |   |   |
| Stockholders’ equity:                      |   |                   |    |   |   |   |   |   |
| Preferred stock                                  |   |                   | -       |   |   |   | - |   |
| Common stock                                     |   |                   | 126     |   |   |   | 126 |   |
| Additional paid-in-capital                       |   |                   | 52,938  |   |   |   | 54,925 |   |
| Unearned ESOP shares                             |   |                   | (3,457  | )      |   |   | (3,680 | ) |
| Treasury stock                                   |   |                   | (28,652 | )      |   |   | (19,481 | ) |
| Retained earnings                                |   |                   | 35,293  |   |   |   | 37,288 |   |
| Accumulated other comprehensive loss             |   |                   | (391    | )      |   |   | (691 | ) |
|                                             |   |                   |    |   |   |   |   |   |
| Total stockholders’ equity                 |   |                   | 55,857  |   |   |   | 68,487 |   |
|                                             |   |                   |    |   |   |   |   |   |
| Total liabilities and stockholders’ equity |   | $                      | 56,374  |   |   | $      | 69,040 |   |

----

| INCOME STATEMENT                             |   |                   |    |   |   |   |
|----------------------------------------------|--------|------------------------|---------|--------|--------|--------|
| For the year ended September 30,             |   | 2009                   |    |   | 2008   |   |
|                                         |   | (Dollars in thousands) |    |
| Interest on ESOP loan                        |   | $                      | 227     |   |   | $      | 235 |   |
| Equity in the undistributed loss of the Bank |   |                   | (11,118 | )      |   |   | (4,039 | ) |
| Dividends from Bank                          |   |                   | 10,450  |   |   |   | 5,000 |   |
| Other income                                 |   |                   | 53      |   |   |   | 51 |   |
|                                         |   |                   |    |   |   |   |   |   |
| Total income                                 |   |                   | (388    | )      |   |   | 1,247 |   |
|                                         |   |                   |    |   |   |   |   |   |
| Professional services                        |   |                   | 323     |   |   |   | 250 |   |
| Other expense                                |   |                   | 198     |   |   |   | 172 |   |
|                                         |   |                   |    |   |   |   |   |   |
| Total expense                                |   |                   | 521     |   |   |   | 422 |   |
|                                         |   |                   |    |   |   |   |   |   |
| Income (loss) before income taxes            |   |                   | (909    | )      |   |   | 825 |   |
|                                         |   |                   |    |   |   |   |   |   |
| Income tax benefit                           |   |                   | (83     | )      |   |   | (45 | ) |
|                                         |   |                   |    |   |   |   |   |   |
| Net (loss) income                            |   | $                      | (826    | )      |   | $      | 870 |   |

| CASH FLOWS                                           |   |                   |    |   |   |   |
|------------------------------------------------------|--------|------------------------|---------|--------|--------|--------|
| For the year ended September 30,                     |   | 2009                   |    |   | 2008   |   |
|                                                 |   | (Dollars in thousands) |    |
| Operating activities:                                |   |                   |    |   |   |   |
| Net (loss) income                                    |   | $                      | (826    | )      |   | $      | 870 |   |
| Decrease in assets                                   |   |                   | (68     | )      |   |   | (62 | ) |
| Equity in the undistributed loss of the Bank         |   |                   | 11,118  |   |   |   | 4,039 |   |
|                                                 |   |                   |    |   |   |   |   |   |
| Net cash used in operating activities                |   |                   | 10,224  |   |   |   | 4,847 |   |
|                                                 |   |                   |    |   |   |   |   |   |
| Investing activities:                                |   |                   |    |   |   |   |   |   |
| Repayments received on ESOP loan                     |   |                   | 150     |   |   |   | 141 |   |
|                                                 |   |                   |    |   |   |   |   |   |
| Net cash provided by  investing activities |   |                   | 150     |   |   |   | 141 |   |
| Financing activities:                                |   |                   |    |   |   |   |   |   |
| Cash dividends paid                                  |   |                   | (2,083  | )      |   |   | (2,160 | ) |
| Payment to repurchase common stock                   |   |                   | (9,171  | )      |   |   | (5,109 | ) |
|                                                 |   |                   |    |   |   |   |   |   |
| Net cash used in financing activities                |   |                   | (11,254 | )      |   |   | (7,269 | ) |
|                                                 |   |                   |    |   |   |   |   |   |
| Net decrease in cash and cash equivalents            |   |                   | (880    | )      |   |   | (2,281 | ) |
|                                                 |   |                   |    |   |   |   |   |   |
| Cash and cash equivalents, beginning of year         |   |                   | 1,834   |   |   |   | 4,115 |   |
|                                                 |   |                   |    |   |   |   |   |   |
| Cash and cash equivalents, end of year               |   | $                      | 954     |   |   | $      | 1,834 |   |

----

| 16. | CONSOLIDATED QUARTERLY FINANCIAL DATA (UNAUDITED) |
|-----|---------------------------------------------------|

|   |                                       |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|--------|--------------------------------------------|--------|--------------------|--------|--------|--------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|   |                                       |   | September 30, 2009 |   |   | September 30, 2008 |   |
|   |                                       |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   |                                       |   | 1st                |   |   | 2nd                |   |   | 3rd    |   |   | 4th    |   |   | 1st    |   |   | 2nd    |   |   | 3rd    |   |   | 4th    |   |
|   |                                       |   | Qtr                |   |   | Qtr                |   |   | Qtr    |   |   | Qtr    |   |   | Qtr    |   |   | Qtr    |   |   | Qtr    |   |   | Qtr    |   |
|   |                                       |   | (In thousands)     |   |   | (In thousands)     |   |
|   |                                       |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Interest income                            |   | $                  | 7,227  |   |               | $      | 6,905  |   |   | $      | 6,620  |   |   | $      | 6,634  |   |   | $      | 6,661  |   |   | $      | 6,565  |   |   | $ | 6,465 |   |   | $ | 6,717 |   |
|   | Interest expenses                          |   |               | 3,462  |   |               |   | 3,426  |   |   |   | 3,188  |   |   |   | 2,865  |   |   |   | 3,894  |   |   |   | 3,767  |   |   |   | 3,503 |   |   |   | 3,490 |   |
|   | Net interest income                        |   |               | 3,765  |   |               |   | 3,479  |   |   |   | 3,432  |   |   |   | 3,769  |   |   |   | 2,767  |   |   |   | 2,798  |   |   |   | 2,962 |   |   |   | 3,227 |   |
|   | Provision for loan losses                  |   |               | 313    |   |               |   | 50     |   |   |   | 810    |   |   |   | 230    |   |   |   | 75     |   |   |   | 75     |   |   |   | 112 |   |   |   | 821 |   |
|   | Net income after provision for loan losses |   |               | 3,452  |   |               |   | 3,429  |   |   |   | 2,622  |   |   |   | 3,539  |   |   |   | 2,692  |   |   |   | 2,723  |   |   |   | 2,850 |   |   |   | 2,406 |   |
|   | Non-interest income (charges)              |   |               | (1,947 | )      |               |   | (434   | )      |   |   | (55    | )      |   |   | (16    | )      |   |   | 222    |   |   |   | (1,279 | )      |   |   | (3,798 | ) |   |   | (430 | ) |
|   | Non-interest expense                       |   |               | 2,454  |   |               |   | 2,678  |   |   |   | 2,782  |   |   |   | 3,151  |   |   |   | 2,010  |   |   |   | 2,504  |   |   |   | 1,907 |   |   |   | 2,332 |   |
|   | Income (loss) before income taxes          |   |               | (949   | )      |               |   | 317    |   |   |   | (215   | )      |   |   | 372    |   |   |   | 904    |   |   |   | (1,060 | )      |   |   | (2,855 | ) |   |   | (356 | ) |
|   | Income tax expense (benefit)               |   |               | 44     |   |               |   | 365    |   |   |   | 11     |   |   |   | (69    | )      |   |   | 290    |   |   |   | (381   | )      |   |   | 705 |   |   |   | 149 |   |
|   | Net (loss) income                          |   | $                  | (993   | )      |               | $      | (48    | )      |   | $      | (226   | )      |   | $      | 441    |   |   | $      | 614    |   |   | $      | (679   | )      |   | $ | (3,560 | ) |   | $ | (505 | ) |
|   |                                       |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Per share:                                 |   |               |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Earnings (loss) per share - basic          |   | $                  | (0.09  | )      |               | $      | (0.004 | )      |   | $      | (0.02  | )      |   | $      | 0.04   |   |   | $      | 0.06   |   |   | $      | (0.06  | )      |   | $ | (0.33 | ) |   | $ | (0.05 | ) |
|   | Earnings (loss) per share - diluted        |   |               | (0.09  | )      |               | $      | (0.004 | )      |   |   | (0.02  | )      |   |   | 0.04   |   |   |   | 0.06   |   |   |   | (0.06  | )      |   |   | (0.33 | ) |   |   | (0.05 | ) |
|   | Dividends per share                        |   |               | 0.05   |   |               |   | 0.05   |   |   |   | 0.05   |   |   |   | 0.05   |   |   |   | 0.05   |   |   |   | 0.05   |   |   |   | 0.05 |   |   |   | 0.05 |   |

| 17. | FINANCIAL STATEMENT RESTATEMENT |
|-----|---------------------------------|

----

|                                             |   | September 30, 2008     |    |
|--------------------------------------------------|--------|------------------------|---------|
|                                             |   | As                     |    |   |   |   |   |   |   |
|                                             |   | Previously             |    |   |   |   |   | As |   |
|                                             |   | Reported               |    |   | Adjustment |   |   | Restated |   |
| STATEMENT OF FINANCIAL CONDITION                 |   | (Dollars in thousands) |    |
| Deferred income taxes - net                      |   | $                      | 891     |   |   | $ | 200 |   |   | $ | 1,091 |   |
| Total assets                                     |   |                   | 489,337 |   |   |   | 200 |   |   |   | 489,537 |   |
| Accounts payable and accrued expenses            |   |                   | 6,581   |   |   |   | 588 |   |   |   | 7,169 |   |
| Total liabilities                                |   |                   | 420,462 |   |   |   | 588 |   |   |   | 421,050 |   |
| Retained earnings                                |   |                   | 37,676  |   |   |   | (388 | ) |   |   | 37,288 |   |
| Total stockholders’ equity                 |   |                   | 68,875  |   |   |   | (388 | ) |   |   | 68,487 |   |
| Total liabilities and stockholders’ equity |   |                   | 489,337 |   |   |   | 200 |   |   |   | 489,537 |   |

|                                 |   | Year ended             |   |
|--------------------------------------|--------|------------------------|--------|
|                                 |   | September 30, 2008     |   |
|                                 |   | As                     |   |   |   |   |   |   |   |
|                                 |   | Previously             |   |   |   |   |   | As |   |
|                                 |   | Reported               |   |   | Adjustment |   |   | Restated |   |
| Consolidated Statement of Operations |   | (Dollars in thousands) |   |
| Salaries and employee benefits       |   | $                      | 4,342  |   |   | $ | (22 | ) |   | $ | 4,320 |   |
| Total non-interest expense           |   |                   | 8,775  |   |   |   | (22 | ) |   |   | 8,753 |   |
| Loss before taxes                    |   |                   | (3,390 | ) |   |   | 22 |   |   |   | (3,368 | ) |
| Deferred tax benefit                 |   |                   | (373   | ) |   |   | 7 |   |   |   | (366 | ) |
| Total income tax expense             |   |                   | 755    |   |   |   | 7 |   |   |   | 762 |   |
| Net loss                             |   |                   | (4,145 | ) |   |   | 15 |   |   |   | (4,130 | ) |

|                                             |   | Year ended             |   |
|--------------------------------------------------|--------|------------------------|--------|
|                                             |   | September 30, 2008     |   |
|                                             |   | As                     |   |   |   |   |   |   |   |
|                                             |   | Previously             |   |   |   |   |   | As |   |
|                                             |   | Reported               |   |   | Adjustment |   |   | Restated |   |
| Consolidated Statement of Cash Flows             |   | (Dollars in thousands) |   |
| Net loss                                         |   | $                      | (4,145 | ) |   | $ | 15 |   |   | $ | (4,130 | ) |
| Deferred income tax benefit                      |   |                   | (373   | ) |   |   | 7 |   |   |   | (366 | ) |
| Changes in accounts payable and accrued expenses |   |                   | 5,668  |   |   |   | (22 | ) |   |   | 5,646 |   |

----

| 18. | SUBSEQUENT EVENTS |
|-----|-------------------|

----

| ● | maintain records that accurately reflect the Company’s transactions; |
|---------|----------------------------------------------------------------------------|

| ● | prepare financial statement and footnote disclosures in accordance with GAAP that can be relied upon by external users; |
|---------|-------------------------------------------------------------------------------------------------------------------------|

| ● | prevent and detect unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| /s/ Thomas A. Vento                   |                      | /s/ Joseph R. Corrato       |   |
|---------------------------------------|---------------------------|-----------------------------|--------|
| Thomas A. Vento                       |                      | Joseph R. Corrato           |   |
| President and Chief Executive Officer | Executive Vice President, |
|                                  |                      | Chief Financial Officer and |
|                                  |                      | Chief Accounting Officer    |

----

| Plan Category                                              |   | Number of securities to beissued upon exercise ofoutstanding options, warrantsand rights(a) |    |                  | Weighted-averageexercise price ofoutstanding options,warrants and rights(b) |   |   | Number of securities remainingavailable for future issuanceunder equity compensationplans (excluding securitiesreflected in column (a))(c) |   |
|------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|---------|-----------------------|-----------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Equity compensation plans approved by security holders     |   |                                                                                        | 601,494 | (1)    |                                                                        | $      | 11.17  | (1)                                                                                                               |   |   | 190,023 |     |
| Equity compensation plans not approved by security holders |   |                                                                                        | --      |                  |                                                                        |   | --     |                                                                                                                                       |   |   |  -- |   |
| Total                                                      |   |                                                                                        | 601,494 |                  |                                                                        | $      | 11.17  |                                                                                                                                       |   |   | 190,023 |   |

----

| (1) | Includes 173,228 shares subject to restricted stock grants which were not vested as of September 30, 2009.  The weighted-average exercise price excludes such restricted stock grants. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)    | Documents Filed as Part of this Report.                                                   |
|--------|-------------------------------------------------------------------------------------------|
|   |                                                                                      |
| (1)    | The following financial statements are incorporated by reference from Item 8 hereof:      |
|   |                                                                                      |
|   | Consolidated Statements of Financial Condition                                            |
|   | Consolidated Statements of Income                                                         |
|   | Consolidated Statements of Changes in Stockholders’ Equity and Comprehensive Income |
|   | Consolidated Statements of Cash Flows                                                     |
|   | Notes to Consolidated Financial Statements                                                |

----

| (2) | All schedules for which provision is made in the applicable accounting regulation of the SEC are omitted because of the absence of conditions under which they are required or because the required information is included in the consolidated financial statements and related notes thereto. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The following exhibits are filed as part of this Form 10-K, and this list includes the Exhibit Index. |
|-----|------------------------------------------------------------------------------------------------------------|

| Exhibit No. | Description                                                                                                                                                                                                                                                                          |
|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   3.1  | Articles of Incorporation of Prudential Bancorp, Inc. of Pennsylvania(1)                                                                                                                                                                                                             |
|   3.2  | Bylaws of Prudential Bancorp, Inc. of Pennsylvania(1)                                                                                                                                                                                                                                |
|   4.0  | Form of Stock Certificate of Prudential Bancorp, Inc. of Pennsylvania(1)                                                                                                                                                                                                             |
| 10.1        | Amended and Restated Employment Agreement between Prudential Savings Bank and Thomas A. Vento (2)*                                                                                                                                                                                   |
| 10.2        | Amended and Restated Employment Agreement between Prudential Savings Bank and Joseph R. Corrato (2)*                                                                                                                                                                                 |
| 10.3        | Amended and Restated Post Retirement Agreement between Prudential Savings Bank and Joseph W. Packer, Jr. (2)*                                                                                                                                                                        |
| 10.4        | Amended and Restated Split-Dollar Collateral Assignment with Joseph W. Packer, Jr. and Diane B. Packer (2)*                                                                                                                                                                          |
| 10.5        | Amended and Restated Split-Dollar Collateral Assignment with Joseph W. Packer, Jr. (2)*                                                                                                                                                                                              |
| 10.6        | Amendment No. 1 to Split-Dollar Agreement between the Bank and Joseph W. Packer, Jr. (2)*                                                                                                                                                                                            |
| 10.7        | Settlement Agreement, dated November 7, 2008, by and among Prudential Mutual Holding Company, Prudential Bancorp, Inc. of Pennsylvania, Prudential Savings Bank, Stilwell Value Partners, I, L.P., Stilwell Partners L.P., Stilwell Value LLC, Joseph Stilwell and John Stilwell (3) |
| 10.8        |     Prudential Bancorp, Inc. of Pennsylvania 2008 Stock Option Plan (4)*                                                                                                                                                                                              |
| 10.9        |     Prudential Bancorp, Inc. of Pennsylvania 2008 Recognition and Retention Plan and Trust Agreement (5)*                                                                                                                                                   |
| 21.0        | Subsidiaries of the Registrant – Reference is made to “Item 1. Business – Subsidiaries” for the required information                                                                                                                                         |
| 23.1        | Consent of SR Snodgrass, A.C.                                                                                                                                                                                                                                                        |
| 23.2        | Consent of Deloitte & Touche LLP                                                                                                                                                                                                                                                 |
| 31.1        | Section 1350 Certification of the Chief Executive Officer                                                                                                                                                                                                                            |
| 31.2        | Section 1350 Certification of the Chief Financial Officer                                                                                                                                                                                                                            |
| 32.0        | Section 906 Certification                                                                                                                                                                                                                                                            |

|   | * | Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Form 10-K pursuant to Item 15(b) hereof. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | (1) | Incorporated by reference from the Company’s Registration Statement on Form S-1 (Commission File No. 333-119130) filed with the Commission on September 30, 2004. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Incorporated by reference from the Company’s Current Report on Form 8-K, dated November 19, 2008 and filed with the Commission on November 25, 2008 (Commission File No. 000-51214). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Incorporated by reference from the Company’s Current Report on Form 8-K, dated November 7, 2008 and filed with the Commission on November 7, 2008 (Commission File No. 000-51214). |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Incorporated by reference from Appendix A of Prudential Bancorp, Inc. of Pennsylvania's definitive proxy statement (Commission File No. 000-51214) filed with the Commission on November 26, 2008. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Incorporated by reference from Appendix B of Prudential Bancorp, Inc. of Pennsylvania's definitive proxy statement (Commission File No. 000-51214) filed with the Commission on November 26, 2008. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Exhibits |
|-----|----------|

|   |   | The exhibits listed under (a)(3) of this Item 15 are filed herewith. |
|--------|--------|----------------------------------------------------------------------|

| (c) | Reference is made to (a)(2) of this Item 15. |
|-----|----------------------------------------------|

----

|              | Prudential Bancorp, Inc. of Pennsylvania |
|-------------------|------------------------------------------|
|              |                                     |
| December 23, 2009 | By:                                      | /s/ Thomas A. Vento |
|              |                                     | Thomas A. VentoPresident and Chief Executive Officer |

| /s/ Joseph W. Packer, Jr.                                                                       | December 23, 2009 |
|-------------------------------------------------------------------------------------------------|-------------------|
| Joseph W. Packer, Jr.Chairman of the Board                                                      |              |
|                                                                                            |              |
| /s/ Thomas A. Vento                                                                             | December 23, 2009 |
| Thomas A. VentoPresident and Chief Executive Officer                                            |              |
|                                                                                            |              |
| /s/ Jerome R. Balka, Esq.                                                                       | December 23, 2009 |
| Jerome R. Balka, Esq.Director                                                                   |              |
|                                                                                            |              |
| /s/ A. J. Fanelli                                                                               | December 23, 2009 |
| A. J. FanelliDirector                                                                           |              |
|                                                                                            |              |
| /s/ Francis V. Mulcahy                                                                          | December 23, 2009 |
| Francis V. MulcahyDirector                                                                      |              |
|                                                                                            |              |
| /s/ JOHN C. HOSIER                                                                              | December 23, 2009 |
| John C. HosierDirector                                                                          |              |
|                                                                                            |              |
| /s/ Joseph R. Corrato                                                                           | December 23, 2009 |
| Joseph R. CorratoExecutive Vice President, Chief Financial Officer and Chief Accounting Officer |              |