UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
DC 20549





FORM
10-Q





(Mark
One)




xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934





For the
quarterly period ended December 31,
2009





OR




 ̈TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934





For the
transition period from ________________ to





Commission
File No. 1-34155





First Savings Financial
Group, Inc.


(Exact
name of registrant as specified in its charter)





Indiana
                37-1567871(State
      or other jurisdiction of
                (I.R.S.
      Employerincorporation
      or organization)
                Identification
      Number)





501 East Lewis & Clark
Parkway, Indiana 47129


(Address
of principal executive offices) (Zip Code)





Registrant's
telephone number, including area code 1-812-283-0724




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





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





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).  Yes  ̈  No
 ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.





(Check
      one):
              Large
      Accelerated Filer  ̈
              Accelerated
      Filer  ̈Non-accelerated
      Filer  ̈
              Smaller Reporting Companyx




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).   Yes  ̈   No
x





The
number of shares outstanding of the registrant’s common stock as of January 31,
2010 was 2,414,940.





FIRST
SAVINGS FINANCIAL GROUP, INC.





INDEX





PagePart
      I
                    Financial
      InformationItem
      1.  Financial StatementsConsolidated
      Balance Sheets as of December 31, 2009 and September 30, 2009
      (unaudited)
                    3Consolidated
      Statements of Income for the three months ended December 31, 2009 and 2008
      (unaudited)
                    4Consolidated
      Statements of Cash Flows for the three months ended December 31, 2009 and
      2008 (unaudited)
                    5Notes
      to Consolidated Financial Statements (unaudited)
                    6-17Item
      2.  Management’s Discussion and Analysis of Financial Condition
      and Results of Operations
                    18-22Item
      3.  Quantitative and Qualitative Disclosures About Market
      Risk
                    23Item
      4.  Controls and Procedures
                    24Part
      II
                    Other
      InformationItem
      1.  Legal Proceedings
                    25Item
      1A.  Risk Factors
                    25Item
      2.  Unregistered Sales of Equity Securities and Use of
      Proceeds
                    25Item
      3.  Defaults Upon Senior Securities
                    26Item
      4.  Submission of Matters to a Vote of Security
      Holders
                    26Item
      5.  Other Information
                    26Item
      6.  Exhibits
                    26Signatures
                    
                    27


-2-


PART
I - FINANCIAL INFORMATION


FIRST
SAVINGS FINANCIAL GROUP, INC. AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEETS


(Unaudited)




December
      31,
                                                    
                                                    
                                                    September
      30,(In
      thousands, except share and per share data)
                                                    
                                                    2009
                                                    
                                                    
                                                    2009ASSETSCash
      and due from banks
                                                    
                                                    $
                                                    11,478
                                                    
                                                    
                                                    $
                                                    8,359Interest-bearing
      deposits with banks
                                                    
                                                    
                                                    2,485
                                                    
                                                    
                                                    
                                                    2,045Total
      cash and cash equivalents
                                                    
                                                    
                                                    13,963
                                                    
                                                    
                                                    
                                                    10,404Securities
      available for sale, at fair value
                                                    
                                                    
                                                    78,561
                                                    
                                                    
                                                    
                                                    72,580Securities
      held to maturity
                                                    
                                                    
                                                    6,215
                                                    
                                                    
                                                    
                                                    6,782Loans
      held for sale
                                                    
                                                    
                                                    520
                                                    
                                                    
                                                    
                                                    317Loans,
      net
                                                    
                                                    
                                                    353,403
                                                    
                                                    
                                                    
                                                    353,823Federal
      Home Loan Bank stock, at cost
                                                    
                                                    
                                                    4,170
                                                    
                                                    
                                                    
                                                    4,170Premises
      and equipment
                                                    
                                                    
                                                    9,792
                                                    
                                                    
                                                    
                                                    9,916Foreclosed
      real estate
                                                    
                                                    
                                                    904
                                                    
                                                    
                                                    
                                                    1,589Accrued
      interest receivable:Loans
                                                    
                                                    
                                                    1,499
                                                    
                                                    
                                                    
                                                    1,607Securities
                                                    
                                                    
                                                    554
                                                    
                                                    
                                                    
                                                    493Cash
      surrender value of life insurance
                                                    
                                                    
                                                    5,188
                                                    
                                                    
                                                    
                                                    3,931Goodwill
                                                    
                                                    
                                                    5,882
                                                    
                                                    
                                                    
                                                    5,882Core
      deposit intangible
                                                    
                                                    
                                                    2,668
                                                    
                                                    
                                                    
                                                    2,741Other
      assets
                                                    
                                                    
                                                    8,036
                                                    
                                                    
                                                    
                                                    6,576Total
    Assets
                                                    
                                                    $
                                                    491,355
                                                    
                                                    
                                                    $
                                                    480,811LIABILITIESDeposits:Noninterest-bearing
                                                    
                                                    $
                                                    24,740
                                                    
                                                    
                                                    $
                                                    25,388Interest-bearing
                                                    
                                                    
                                                    335,231
                                                    
                                                    
                                                    
                                                    325,428Total
      deposits
                                                    
                                                    
                                                    359,971
                                                    
                                                    
                                                    
                                                    350,816Federal
      funds purchased
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    1,180Repurchase
      agreements
                                                    
                                                    
                                                    17,135
                                                    
                                                    
                                                    
                                                    17,239Borrowings
      from Federal Home Loan Bank
                                                    
                                                    
                                                    59,367
                                                    
                                                    
                                                    
                                                    55,773Accrued
      interest payable
                                                    
                                                    
                                                    525
                                                    
                                                    
                                                    
                                                    516Advance
      payments by borrowers for taxes and insurance
                                                    
                                                    
                                                    150
                                                    
                                                    
                                                    
                                                    341Accrued
      expenses and other liabilities
                                                    
                                                    
                                                    1,571
                                                    
                                                    
                                                    
                                                    2,069Total
      Liabilities
                                                    
                                                    
                                                    438,719
                                                    
                                                    
                                                    
                                                    427,934STOCKHOLDERS'
      EQUITYPreferred
      stock of $.01 par value per shareAuthorized
      1,000,000 shares; none issued
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -Common
      stock of $.01 par value per shareAuthorized
      20,000,000 shares; issued 2,542,042 shares
                                                    
                                                    
                                                    25
                                                    
                                                    
                                                    
                                                    25Additional
      paid-in capital
                                                    
                                                    
                                                    24,267
                                                    
                                                    
                                                    
                                                    24,263Retained
      earnings - substantially restricted
                                                    
                                                    
                                                    30,153
                                                    
                                                    
                                                    
                                                    29,453Accumulated
      other comprehensive income
                                                    
                                                    
                                                    1,134
                                                    
                                                    
                                                    
                                                    932Unearned
      ESOP shares
                                                    
                                                    
                                                    (1,614
                                                    )
                                                    
                                                    
                                                    (1,796
                                                    )Less
      treasury stock, at cost - 127,102 shares
                                                    
                                                    
                                                    (1,329
                                                    )
                                                    
                                                    
                                                    -Total
      Stockholders' Equity
                                                    
                                                    
                                                    52,636
                                                    
                                                    
                                                    
                                                    52,877Total Liabilities and
      Stockholders' Equity
                                                    
                                                    $
                                                    491,355
                                                    
                                                    
                                                    $
                                                    480,811





See notes
to consolidated financial statements.





-3-




PART
I - FINANCIAL INFORMATION


FIRST
SAVINGS FINANCIAL GROUP, INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF INCOME


(Unaudited)




Three
      Months EndedDecember
      31,(In
      thousands, except share and per share data)
                        
                        2009
                        
                        
                        2008INTEREST
      INCOMELoans,
      including fees
                        
                        $
                        5,667
                        
                        
                        $
                        2,871Securities:Taxable
                        
                        
                        767
                        
                        
                        
                        284Tax-exempt
                        
                        
                        138
                        
                        
                        
                        19Dividend
      income
                        
                        
                        17
                        
                        
                        
                        18Interest-bearing
      deposits with banks
                        
                        
                        6
                        
                        
                        
                        14Total
      interest income
                        
                        
                        6,595
                        
                        
                        
                        3,206INTEREST
      EXPENSEDeposits
                        
                        
                        1,346
                        
                        
                        
                        1,215Repurchase
      agreements
                        
                        
                        91
                        
                        
                        
                        -Borrowings
      from Federal Home Loan Bank
                        
                        
                        230
                        
                        
                        
                        74Total
      interest expense
                        
                        
                        1,667
                        
                        
                        
                        1,289Net
      interest income
                        
                        
                        4,928
                        
                        
                        
                        1,917Provision
      for loan losses
                        
                        
                        358
                        
                        
                        
                        59Net
      interest income after provision for loan losses
                        
                        
                        4,570
                        
                        
                        
                        1,858NONINTEREST
      INCOMEService
      charges on deposit accounts
                        
                        
                        411
                        
                        
                        
                        147Net
      gain on sales of mortgage loans
                        
                        
                        9
                        
                        
                        
                        3Increase
      in cash surrender value of life insurance
                        
                        
                        57
                        
                        
                        
                        49Commission
      income
                        
                        
                        28
                        
                        
                        
                        -Other
      income
                        
                        
                        220
                        
                        
                        
                        83Total
      noninterest income
                        
                        
                        725
                        
                        
                        
                        282NONINTEREST
      EXPENSECompensation
      and benefits
                        
                        
                        2,122
                        
                        
                        
                        979Occupancy
      and equipment
                        
                        
                        532
                        
                        
                        
                        214Data
      processing
                        
                        
                        236
                        
                        
                        
                        140Advertising
                        
                        
                        93
                        
                        
                        
                        54Professional
      fees
                        
                        
                        114
                        
                        
                        
                        96FDIC
      insurance premiums
                        
                        
                        150
                        
                        
                        
                        8Charitable
      contributions
                        
                        
                        3
                        
                        
                        
                        1,204Net
      loss on foreclosed real estate
                        
                        
                        22
                        
                        
                        
                        28Other
      operating expenses
                        
                        
                        693
                        
                        
                        
                        466Total
      noninterest expense
                        
                        
                        3,965
                        
                        
                        
                        3,189Income
      (loss) before income taxes
                        
                        
                        1,330
                        
                        
                        
                        (1,049
                        )Income
      tax expense (benefit)
                        
                        
                        438
                        
                        
                        
                        (409
                        )Net Income
      (Loss)
                        
                        $
                        892
                        
                        
                        $
                        (640
                        )OTHER
      COMPREHENSIVE INCOME, NET OF TAXUnrealized
      gain on securities:Unrealized
      holding gains arising during the period
                        
                        
                        202
                        
                        
                        
                        189Less:
      reclassification adjustment
                        
                        
                        -
                        
                        
                        
                        -Other
      comprehensive income
                        
                        
                        202
                        
                        
                        
                        189Comprehensive
      Income (Loss)
                        
                        $
                        1,094
                        
                        
                        $
                        (451
                        )Net Income (Loss) per common
      share, basic
                        
                        $
                        0.38
                        
                        
                        $
                        (0.29
                        )Net Income (Loss) per common
      share, diluted
                        
                        $
                        0.38
                        
                        
                        $
                        (0.29
                        )Dividends per common
      share
                        
                        $
                        0.08
                        
                        
                        $
                        -





See notes
to consolidated financial statements.





-4-




PART
I - FINANCIAL INFORMATION


FIRST
SAVINGS FINANCIAL GROUP, INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(Unaudited)




Three
      Months EndedDecember
      31,(In
      thousands)
                                            
                                            2009
                                            
                                            
                                            2008CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      income (loss)
                                            
                                            $
                                            892
                                            
                                            
                                            $
                                            (640
                                            )Adjustments
      to reconcile net income (loss) to net cash providedby
      (used in) operating activities:Provision
      for loan losses
                                            
                                            
                                            358
                                            
                                            
                                            
                                            59Depreciation
      and amortization
                                            
                                            
                                            292
                                            
                                            
                                            
                                            71Amortization
      of premiums and accretion of discountson
      securities, net
                                            
                                            
                                            (33
                                            )
                                            
                                            
                                            18Mortgage
      loans originated for sale
                                            
                                            
                                            (1,035
                                            )
                                            
                                            
                                            (354
                                            )Proceeds
      on sale of mortgage loans
                                            
                                            
                                            841
                                            
                                            
                                            
                                            357Gain
      on sale of mortgage loans
                                            
                                            
                                            (9
                                            )
                                            
                                            
                                            (3
                                            )Net
      realized and unrealized gain on foreclosed real estate
                                            
                                            
                                            (62
                                            )
                                            
                                            
                                            -Increase
      in cash value of life insurance
                                            
                                            
                                            (57
                                            )
                                            
                                            
                                            (49
                                            )Deferred
      income taxes
                                            
                                            
                                            (2,263
                                            )
                                            
                                            
                                            (392
                                            )ESOP
      compensation expense
                                            
                                            
                                            189
                                            
                                            
                                            
                                            126Contribution
      of common stock to charitable foundation
                                            
                                            
                                            -
                                            
                                            
                                            
                                            1,100(Increase)
      decrease in accrued interest receivable
                                            
                                            
                                            47
                                            
                                            
                                            
                                            (84
                                            )Increase
      (decrease) in accrued interest payable
                                            
                                            
                                            9
                                            
                                            
                                            
                                            (22
                                            )Change
      in other assets and liabilities, net
                                            
                                            
                                            (12
                                            )
                                            
                                            
                                            664Net Cash Provided By (Used In)
      Operating Activities
                                            
                                            
                                            (843
                                            )
                                            
                                            
                                            851CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of securities available for sale
                                            
                                            
                                            (16,668
                                            )
                                            
                                            
                                            (15,133
                                            )Proceeds
      from sales of securities available for sale
                                            
                                            
                                            191
                                            
                                            
                                            
                                            2,200Proceeds
      from maturities of securities available for sale
                                            
                                            
                                            8,050
                                            
                                            
                                            
                                            2,000Principal
      collected on mortgage-backed securities
                                            
                                            
                                            3,401
                                            
                                            
                                            
                                            347Net
      increase in loans
                                            
                                            
                                            (82
                                            )
                                            
                                            
                                            (6,396
                                            )Investment
      in cash surrender value of life insurance
                                            
                                            
                                            (1,200
                                            )
                                            
                                            
                                            -Proceeds
      from sale of foreclosed real estate
                                            
                                            
                                            860
                                            
                                            
                                            
                                            -Purchase
      of premises and equipment
                                            
                                            
                                            (95
                                            )
                                            
                                            
                                            (62
                                            )Net
      Cash Used In Investing Activities
                                            
                                            
                                            (5,543
                                            )
                                            
                                            
                                            (17,044
                                            )CASH
      FLOWS FROM FINANCING ACTIVITIESNet
      increase (decrease) in deposits
                                            
                                            
                                            9,155
                                            
                                            
                                            
                                            (26,836
                                            )Net
      decrease in federal funds purchased
                                            
                                            
                                            (1,180
                                            )
                                            
                                            
                                            -Net
      decrease in repurchase agreements
                                            
                                            
                                            (104
                                            )
                                            
                                            
                                            -Increase
      in Federal Home Loan Bank line of credit
                                            
                                            
                                            1,148
                                            
                                            
                                            
                                            403Proceeds
      from Federal Home Loan Bank advances
                                            
                                            
                                            39,439
                                            
                                            
                                            
                                            7,050Repayment
      of Federal Home Loan Bank advances
                                            
                                            
                                            (36,993
                                            )
                                            
                                            
                                            (1,050
                                            )Net
      decrease in advance payments byborrowers
      for taxes and insurance
                                            
                                            
                                            (191
                                            )
                                            
                                            
                                            (209
                                            )Purchase
      of treasury stock
                                            
                                            
                                            (1,329
                                            )
                                            
                                            
                                            -Proceeds
      from issuance of common stock
                                            
                                            
                                            -
                                            
                                            
                                            
                                            21,160Net Cash Provided By Financing
      Activities
                                            
                                            
                                            9,945
                                            
                                            
                                            
                                            518Net
      Increase (Decrease) in Cash and Cash Equivalents
                                            
                                            
                                            3,559
                                            
                                            
                                            
                                            (15,675
                                            )Cash
      and cash equivalents at beginning of period
                                            
                                            
                                            10,404
                                            
                                            
                                            
                                            21,379Cash
      and Cash Equivalents at End of Period
                                            
                                            $
                                            13,963
                                            
                                            
                                            $
                                            5,704





See notes
to consolidated financial statements.





-5-




FIRST
SAVINGS FINANCIAL GROUP, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)








1.           Presentation
of Interim Information





First
Savings Financial Group, Inc. (“Company”), an Indiana corporation, was
incorporated in May 2008 to serve as the holding company for First Savings Bank,
F.S.B. (“Bank”), a federally-chartered savings bank.  On October 6,
2008, in accordance with a Plan of Conversion adopted by its board of directors
and approved by its members, the Bank converted from a mutual savings bank to a
stock savings bank and became the wholly-owned subsidiary of the
Company.  In connection with the conversion, the Company issued an
aggregate of 2,542,042 shares of common stock at an offering price of $10.00 per
share.  In addition, in connection with the conversion, First Savings
Charitable Foundation was formed, to which the Company contributed 110,000
shares of common stock and $100,000 in cash.  The Company’s common
stock began trading on the Nasdaq Capital Market on October 7, 2008 under the
symbol “FSFG”.





The Bank
has three-wholly owned subsidiaries: First Savings Investments, Inc., a Nevada
corporation that manages a securities portfolio, Southern Indiana Financial
Corporation which sells non-deposit investment products, and FFCC, Inc., which
is currently inactive.





In the
opinion of management, the unaudited consolidated financial statements include
all adjustments considered necessary to present fairly the financial position as
of December 31, 2009, and the results of operations for the three-month periods
ended December 31, 2009 and 2008 and the cash flows for the three-month periods
ended December 31, 2009 and 2008.  All of these adjustments are of a
normal, recurring nature.  Such adjustments are the only adjustments
included in the unaudited consolidated financial statements.  Interim
results are not necessarily indicative of results for a full
year.





The
accompanying unaudited consolidated financial statements and notes have been
prepared in accordance with U.S. generally accepted accounting principles
(“GAAP”) for interim financial statements and are presented as permitted by the
instructions to Form 10-Q.  Accordingly, they do not contain certain
information included in the Bank’s annual audited consolidated financial
statements and related notes for the year ended September 30, 2009 included in
the Form 10-K.




The
unaudited consolidated financial statements include the accounts of the Company
and its subsidiaries.  All material intercompany balances and
transactions have been eliminated in consolidation.




2.           Acquisition
of Community First Bank





On
September 30, 2009, the Company acquired 100 percent of the outstanding common
shares of Community First Bank, (“Community First”), a full service community
bank located in Corydon, Indiana, pursuant to an Agreement and Plan of
Reorganization dated April 28, 2009.  The acquisition was recorded
using the purchase method of accounting and was effective at the close of
business on September 30, 2009.  Accordingly, the results of
operations of Community First have been included in the Company’s results of
operations since the date of acquisition.  The acquisition expanded
the Company’s presence into Harrison, Crawford and Washington Counties,
Indiana.  The Company expects to benefit from growth in this market
area as well as from expansion of the banking services provided to the existing
customers of Community First.


-6-




FIRST
SAVINGS FINANCIAL GROUP, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)




3.           Supplemental
Disclosure for Earnings Per Share





When
presented, basic earnings per share are computed by dividing income available to
common stockholders by the weighted average number of common shares outstanding
for the period.  Diluted earnings per share reflect the potential
dilution that could occur if securities or other contracts to issue common stock
were exercised or converted into common stock or resulted in the issuance of
common stock that then shared in the earnings of the entity.  The
Company had no dilutive potential common shares outstanding during the
three-month periods ended December 31, 2009 and 2008.





Three Months EndedDecember 31,(Dollars in thousands, except per share data)
                          
                          2009
                          
                          
                          2008BasicEarnings:Net
      income (loss)
                          
                          $
                          892
                          
                          
                          $
                          (640
                          )Shares:Weighted
      average common shares outstanding
                          
                          
                          2,348,048
                          
                          
                          
                          2,186,313Net
      income (loss) per common share, basic
                          
                          $
                          0.38
                          
                          
                          $
                          (0.29
                          )


-7-





FIRST
SAVINGS FINANCIAL GROUP, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)




4.           Comprehensive
Income





Comprehensive income is defined as the
change in equity (net assets) of a business enterprise during a period from
transactions and other events and circumstances from non-owner
sources.  It includes all changes in equity during a period except
those resulting from investments by owners and distributions to
owners.  Comprehensive income for the Company includes net income and
other comprehensive income representing the net unrealized gains and losses on
securities available for sale.  The following tables set forth the
components of other comprehensive income and the allocated tax amounts for the
three-month periods ended December 31, 2009 and 2008:





ThreeMonthsEndedDecember 31,(Dollars in thousands)
                          
                          2009
                          
                          
                          2008Unrealized
      gains on securities:Unrealized
      holding gainsarising
      during the period
                          
                          $
                          334
                          
                          
                          $
                          313Income
      tax expense
                          
                          
                          (132
                          )
                          
                          
                          (124
                          )Net
      of tax amount
                          
                          
                          202
                          
                          
                          
                          189Less:  reclassificationadjustment
      for realized gains orlosses
      included in net income
                          
                          
                          -
                          
                          
                          
                          -Income
      tax benefit
                          
                          
                          -
                          
                          
                          
                          -Net
      of tax amount
                          
                          
                          -
                          
                          
                          
                          -Other
      comprehensive income, net of tax
                          
                          $
                          202
                          
                          
                          $
                          189




5.           Supplemental
Disclosures of Cash Flow Information





Three Months EndedDecember 31,2009
                  
                  
                  2008(In
      thousands)Cash
      payments for:Interest
                  
                  $
                  2,244
                  
                  
                  $
                  1,310Taxes
                  
                  
                  40
                  
                  
                  
                  -Transfers
      from loans to foreclosed real estate
                  
                  
                  105
                  
                  
                  
                  -Proceeds
      from sales of foreclosed real estate financed through
      loans
                  
                  
                  260
                  
                  
                  
                  -


-8-


FIRST
SAVINGS FINANCIAL GROUP, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)




6.
            Fair
      Value Measurements and Disclosures about Fair Value of Financial
      Instruments





Effective
October 1, 2008, the Company adopted the provisions of Accounting Standards
Codification (“ASC”) Topic 820 (formerly Statement of Financial Accounting
Standards (“SFAS”) No. 157),
Fair Value Measurements, for financial assets and financial
liabilities.  This statement is definitional and disclosure oriented
and addresses how companies should approach measuring fair value when required
by GAAP; it does not create or modify any current GAAP requirements to apply
fair value accounting.  ASC Topic 820 prescribes various disclosures
about financial statement categories and amounts which are measured at fair
value, if such disclosures are not already specified elsewhere in GAAP. 
The adoption of the standard did not have a material effect on the Company's
consolidated financial statements.





Fair
value is defined as the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date.  The standard establishes a fair value hierarchy
that prioritizes the use of inputs used in valuation methodologies into the
following three levels:





Level
      1:
            Inputs
      to the valuation methodology are quoted prices, unadjusted, for identical
      assets or liabilities in active markets.  A quoted market price
      in an active market provides the most reliable evidence of fair value and
      shall be used to measure fair value whenever
  available.





Level
      2:
            Inputs
      to the valuation methodology include quoted market prices for similar
      assets or liabilities in active markets; inputs to the valuation
      methodology include quoted market prices for identical or similar assets
      or liabilities in markets that are not active; or inputs to the valuation
      methodology that are derived principally from or can be corroborated by
      observable market data by correlation or other
  means.





Level
      3:
            Inputs
      to the valuation methodology are unobservable and significant to the fair
      value measurement.  Level 3 assets and liabilities include
      financial instruments whose value is determined using discounted cash flow
      methodologies, as well as instruments for which the determination of fair
      value requires significant management judgment or
    estimation.





A
description of the valuation methodologies used for instruments measured at fair
value, as well as the general classification of such instruments pursuant to the
valuation hierarchy, is set forth below.  These valuation
methodologies were applied to all of the Company’s financial assets carried at
fair value or the lower of cost or fair value.  The table below
presents the balances of financial assets measured at fair value on a recurring
and nonrecurring basis as of December 31, 2009.  The Company had no
liabilities measured at fair value as of December 31, 2009.


-9-


FIRST
SAVINGS FINANCIAL GROUP, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)




Carrying ValueLevel 1
                    
                    
                    Level 2
                    
                    
                    Level 3
                    
                    
                    Total(In thousands)Assets
      Measured - Recurring BasisSecurities
      available for sale
                    
                    $
                    70
                    
                    
                    $
                    78,491
                    
                    
                    $
                    -
                    
                    
                    $
                    78,561Interest
      rate cap contract
                    
                    
                    -
                    
                    
                    
                    263
                    
                    
                    
                    -
                    
                    
                    
                    263Assets
      Measured - Nonrecurring BasisImpaired
      loans
                    
                    
                    -
                    
                    
                    
                    5,285
                    
                    
                    
                    -
                    
                    
                    
                    5,285Loans
      held for sale
                    
                    
                    -
                    
                    
                    
                    520
                    
                    
                    
                    -
                    
                    
                    
                    520Foreclosed
      real estate
                    
                    
                    -
                    
                    
                    
                    904
                    
                    
                    
                    -
                    
                    
                    
                    904





In
general, fair value is based upon quoted market prices, where
available.  If quoted market prices are not available, fair value is
based on internally developed models or obtained from third parties that
primarily use, as inputs, observable market-based parameters or a matrix pricing
model that employs the Bond Market Association’s standard calculations for cash
flow and price/yield analysis and observable market-based
parameters.  Valuation adjustments may be made to ensure that
financial instruments are recorded at fair value, or the lower of cost or fair
value.  These adjustments may include unobservable
parameters.  Any such valuation adjustments have been applied
consistently over time.  The Company’s valuation methodologies may
produce a fair value calculation that may not be indicative of net realizable
value or reflective of future fair values.  While management believes
the Company’s valuation methodologies are appropriate and consistent with other
market participants, the use of different methodologies or assumptions to
determine the fair value of certain financial instruments could result in a
different estimate of fair value at the reporting date.





Securities
Available for Sale.Securities classified
as available for sale are reported at fair value on a recurring
basis.  These securities are classified as Level 1 of the valuation
hierarchy where quoted market prices from reputable third-party brokers are
available in an active market.  If quoted market prices are not
available, the Company obtains fair value measurements from an independent
pricing service.  These securities are reported using Level 2 inputs
and the fair value measurements consider observable data that may include dealer
quotes, market spreads, cash flows, U.S. government and agency yield curves,
live trading levels, trade execution data, market consensus prepayment speeds,
credit information, and the security’s terms and conditions, among other
factors.  Changes in fair value of securities available for sale are
recorded in other comprehensive income, net of income tax effect.





Derivative
Financial Instruments.Derivative
financial instruments consist of an interest rate cap contract.  As
such, significant fair value inputs can generally be verified by counterparties
and do not typically involve significant management judgments (Level 2
inputs).




-10-


FIRST
SAVINGS FINANCIAL GROUP, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)




Impaired
Loans.  Impaired loans are carried at the present value of
estimated future cash flows using the loan's existing rate or the fair value of
collateral if the loan is collateral dependent.  Impaired loans are
evaluated and valued at the time the loan is identified as impaired at the lower
of cost or market value.  For collateral dependent impaired loans,
market value is measured based on the value of the collateral securing these
loans and is classified as Level 2 in the fair value
hierarchy.  Collateral may be real estate and/or business assets,
including equipment, inventory and/or accounts receivable, and its fair value is
generally determined based on real estate appraisals or other independent
evaluations by qualified professionals.  Impaired loans are reviewed
and evaluated on at least a quarterly basis for additional impairment and
adjusted accordingly, based on the same factors identified above.





Loans Held for
Sale.  Loans held for sale are carried at the lower of cost or
market value.  The portfolio is comprised of residential real estate
loans and fair value is based on specific prices of underlying contracts for
sale to investors.  These measurements are carried at Level
2.





Foreclosed Real
Estate Held for Sale.  Foreclosed real estate held for sale is
reported at the lower of cost or fair value less estimated costs to dispose of
the property using Level 2 inputs.  The fair values are determined by
real estate appraisals using valuation techniques consistent with the market
approach using recent sales of comparable properties.  In cases where
such inputs are unobservable, the balance is reflected within the Level 3
hierarchy.





There
were no transfers in or out of the Company's Level 3 financial assets for the
three months ended December 31, 2009.


-11-


FIRST
SAVINGS FINANCIAL GROUP, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)




GAAP
requires disclosure of fair value information about financial instruments for
interim reporting periods, whether or not recognized in the consolidated balance
sheet.  In cases where quoted market prices are not available, fair
values are based on estimates using present value or other valuation
techniques.  Those techniques are significantly affected by the
assumptions used, including the discount rate and estimates of future cash
flows.  In that regard, the derived fair value estimates cannot be
substantiated by comparison to independent markets and, in many cases, could not
be realized in immediate settlement of the instruments.  Accordingly,
the aggregate fair value amounts presented do not represent the underlying value
of the Company.  The estimated fair values of the Company's financial
instruments are as follows:




December 31, 2009
                              
                              
                              September 30, 2009Carrying
                              
                              
                              Fair
                              
                              
                              Carrying
                              
                              
                              FairAmount
                              
                              
                              Value
                              
                              
                              Amount
                              
                              
                              Value(In
      thousands)Financial
      assets:Cash
      and due from banks
                              
                              $
                              11,478
                              
                              
                              $
                              11,478
                              
                              
                              $
                              8,359
                              
                              
                              $
                              8,359Interest-bearing
      deposits in banks
                              
                              
                              2,485
                              
                              
                              
                              2,485
                              
                              
                              
                              2,045
                              
                              
                              
                              2,045Securities
      available for sale
                              
                              
                              78,561
                              
                              
                              
                              78,561
                              
                              
                              
                              72,580
                              
                              
                              
                              72,580Securities
      held to maturity
                              
                              
                              6,215
                              
                              
                              
                              6,466
                              
                              
                              
                              6,782
                              
                              
                              
                              7,054Loans,
      net
                              
                              
                              353,403
                              
                              
                              
                              359,729
                              
                              
                              
                              353,823
                              
                              
                              
                              360,157Mortgage
      loans held for sale
                              
                              
                              520
                              
                              
                              
                              520
                              
                              
                              
                              317
                              
                              
                              
                              317Federal
      Home Loan Bank stock
                              
                              
                              4,170
                              
                              
                              
                              4,170
                              
                              
                              
                              4,170
                              
                              
                              
                              4,170Accrued
      interest receivable
                              
                              
                              2,053
                              
                              
                              
                              2,053
                              
                              
                              
                              2,100
                              
                              
                              
                              2,100Financial
      liabilities:Deposits
                              
                              
                              359,971
                              
                              
                              
                              363,437
                              
                              
                              
                              350,816
                              
                              
                              
                              354,194Federal
      funds purchased
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              1,180
                              
                              
                              
                              1,180Short-term
      repurchase agreements
                              
                              
                              1,306
                              
                              
                              
                              1,306
                              
                              
                              
                              1,304
                              
                              
                              
                              1,304Long-term
      repurchase agreements
                              
                              
                              15,829
                              
                              
                              
                              15,817
                              
                              
                              
                              15,935
                              
                              
                              
                              15,935Borrowings
      from Federal HomeLoan
      Bank
                              
                              
                              59,367
                              
                              
                              
                              59,292
                              
                              
                              
                              55,773
                              
                              
                              
                              56,184Accrued
      interest payable
                              
                              
                              525
                              
                              
                              
                              525
                              
                              
                              
                              516
                              
                              
                              
                              516Advance
      payments by borrowers for taxes and insurance
                              
                              
                              150
                              
                              
                              
                              153
                              
                              
                              
                              341
                              
                              
                              
                              348Derivative
      financial instruments included in other assets:Interest
      rate cap
                              
                              
                              263
                              
                              
                              
                              263
                              
                              
                              
                              202
                              
                              
                              
                              202Off-balance-sheet
      financial instruments:Asset
      (liability) related to commitments to extend credit
                              
                              
                              -
                              
                              
                              
                              40
                              
                              
                              
                              -
                              
                              
                              
                              39





The
carrying amounts in the preceding table are included in the consolidated balance
sheets under the applicable captions.  The following methods and
assumptions were used to estimate the fair value of each class of financial
instrument for which it is practicable to estimate that value:


-12-





FIRST
SAVINGS FINANCIAL GROUP, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)




Cash
and Cash Equivalents





For cash
and short-term instruments, including cash and due from banks and
interest-bearing deposits with banks, the carrying amount is a reasonable
estimate of fair value.





Debt
and Equity Securities





For
marketable equity securities, the fair values are based on quoted market
prices.  For debt securities, the Company obtains fair value
measurements from an independent pricing service and the fair value measurements
consider observable data that may include dealer quotes, market spreads, cash
flows, U.S. government and agency yield curves, live trading levels, trade
execution data, market consensus prepayment speeds, credit information, and the
security’s terms and conditions, among other factors.  For Federal
Home Loan Bank  (FHLB) stock, a restricted equity security, the
carrying amount is a reasonable estimate of fair value because it is not
marketable.





Loans





The fair
value of loans is estimated by discounting the future cash flows using the
current rates at which similar loans would be made to borrowers with similar
credit ratings and terms.  The carrying amount of accrued interest
receivable approximates its fair value.





Deposits





The fair
value of demand and savings deposits and other transaction accounts is the
amount payable on demand at the balance sheet date.  The fair value of
fixed-maturity time deposits is estimated by discounting the future cash flows
using the rates currently offered for deposits with similar remaining
maturities.  The carrying amount of accrued interest payable
approximates its fair value.





Borrowed
Funds





Borrowed
funds include repurchase agreements and borrowings from the
FHLB.  Fair value for advances and long-term repurchase agreements is
estimated by discounting the future cash flows at current interest rates for
advances of similar maturities.  For federal funds purchased,
short-term repurchase agreements and FHLB line of credit borrowings, the
carrying value is a reasonable estimate of fair value.





Derivative
Financial Instruments





For
derivative financial instruments, the fair values generally represent an
estimate of the amount the Company would receive or pay upon termination of the
agreement at the reporting date, taking into account the current interest rates,
and exclusive of any accrued interest.





Off-Balance-Sheet
Financial Instruments





Commitments
to extend credit were evaluated and fair value was estimated using the fees
currently charged to enter into similar agreements, taking into account the
remaining terms of the agreements and the present creditworthiness of the
counterparties.  For fixed-rate loan commitments, the fair value
estimate considers the difference between current interest rates and the
committed rates.


-13-


FIRST
SAVINGS FINANCIAL GROUP, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)




7.           Defined
Benefit Plan





The Bank
sponsors a defined benefit pension plan (“Plan”) covering substantially all
employees.  Contributions are intended to provide not only for
benefits attributed to service to date but also for those expected to be earned
in the future.  The Bank’s funding policy is to contribute the larger
of the amount required to fully fund the Plan’s current liability or the amount
necessary to meet the funding requirements as defined by the Internal Revenue
Code.




Three Months EndedDecember 31,2009
                    
                    
                    2008(In
      thousands)Net
      periodic benefit expense:Service
      cost
                    
                    $
                    -
                    
                    
                    $
                    -Interest
      cost on projected benefit obligation
                    
                    
                    74
                    
                    
                    
                    94Expected
      return on plan assets
                    
                    
                    (35
                    )
                    
                    
                    (94
                    )Amortization
      of transition asset
                    
                    
                    -
                    
                    
                    
                    -Amortization
      of prior service cost
                    
                    
                    -
                    
                    
                    
                    -Amortization
      of unrecognized gain
                    
                    
                    (1
                    )
                    
                    
                    -Net
      periodic benefit expense
                    
                    $
                    38
                    
                    
                    $
                    -Other
      changes in plan assets and benefit obligations recognized in other
      comprehensive income:Amortization
      of transition asset
                    
                    
                    -
                    
                    
                    
                    -Amortization
      of prior service cost
                    
                    
                    -
                    
                    
                    
                    -Total
      recognized in other comprehensive income
                    
                    
                    -
                    
                    
                    
                    -Total
      recognized in net periodic pension benefit expense and other comprehensive
      income
                    
                    $
                    38
                    
                    
                    $
                    -





The Bank
made no contributions to the Plan for the three month period ended December 31,
2009.   Effective June 30, 2008, the Bank curtailed the accrual
of benefits for active participants in the Plan.    As a
result, each active participant’s pension benefit will be determined based on
the participant’s compensation and duration of employment as of June 30, 2008,
and compensation and employment after that date will not be taken into account
in determining pension benefits under the Plan.  Accordingly, the Bank
does not anticipate future contributions to the Plan.  The Bank filed
an application with the Internal Revenue Service in October 2008 in order to
obtain approval to terminate the Plan. The Bank has determined to provide the
over-funded balance of the Plan’s assets, if any, to its active participants
upon full termination of the Plan, which is expected to occur in the second
calendar quarter of 2010.  As a result, the Bank anticipates a
one-time charge to expense in the quarter ending June 30, 2010.  At
December 31, 2009, an unrealized gain of $428,000, net of income taxes, was
included in the accumulated other comprehensive income component of
stockholders’ equity.




-14-


FIRST
SAVINGS FINANCIAL GROUP, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)




8.           Employee
Stock Ownership Plan





On
October 6, 2008, the Company established a leveraged employee stock ownership
plan (“ESOP”) covering substantially all employees.  The ESOP trust
acquired 203,363 shares of Company common stock at a cost of $10.00 per share
financed by a term loan with the Company.  The employer loan and the
related interest income are not recognized in the consolidated financial
statements as the debt is serviced from Company
contributions.  Dividends payable on allocated shares are charged to
retained earnings and are satisfied by the allocation of cash dividends to
participant accounts.  Dividends payable on unallocated shares are not
considered dividends for financial reporting purposes.  Shares held by
the ESOP trust are allocated to participant accounts based on the ratio of the
current year principal and interest payments to the total of the current year
and future year’s principal and interest to be paid on the employer
loan.  Compensation expense is recognized based on the average fair
value of shares released for allocation to participant accounts during the year
with a corresponding credit to stockholders’ equity.  Compensation
expense recognized for the three-month periods ended December 31,
2009  and 2008 amounted to $189,000 and $126,000,
respectively.  Company common stock held by the ESOP trust at December
31, 2009 was as follows:





Allocated
      shares
                  
                  
                  42,413Unearned
      shares
                  
                  
                  160,950Total
      ESOP shares
                  
                  
                  203,363Fair
      value of unearned shares
                  
                  $
                  1,682,000





9.
            Stockholders’
      Equity





As
discussed in Note 1, the Company sold 2,432,042 shares of common stock at a
price of $10.00 per share on October 6, 2008 in connection with the mutual to
stock conversion of the Bank, for gross proceeds of $24,320,420.  In
connection with the conversion, the Company also contributed 110,000 common
shares and $100,000 in cash to the First Savings Charitable
Foundation.  Expenses of the offering amounted to $1,126,000 and were
charged against the gross proceeds of the conversion.




10.
            Recent
      Accounting Pronouncements





The
following are summaries of recently issued accounting pronouncements that impact
the accounting and reporting practices of the Company:





In
December 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS
No. 160, Non-controlling
Interests in Consolidated Financial Statements – an amendment of ARB
No. 51, (ASC Topic 810). This statement applies to all entities that
prepare consolidated financial statements, except not-for-profit organizations,
but will affect only those entities that have an outstanding non-controlling
interest in one or more subsidiaries or that deconsolidate a subsidiary. This
statement amends ARB No. 51 to establish accounting and reporting standards
for the non-controlling interest in a subsidiary and for the deconsolidation of
a subsidiary. This statement is effective for fiscal years beginning after
January 1, 2009.  The adoption of this statement did not have a
material effect on the Company's consolidated financial position or results of
operations.




-15-


FIRST
SAVINGS FINANCIAL GROUP, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)




In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations
(Revised) (ASC Topic 805).  This statement retains the
fundamental requirements of SFAS No. 141 and requires the acquisition method of
accounting (previously referred to as the purchase method by SFAS No.
141).  The statement requires, among other things, the expensing of
direct transaction costs, certain contingent assets and liabilities to be
recognized at fair value and earn-out arrangements may be required to be
measured at fair value and recognized each period in earnings.  The
statement is effective for transactions occurring after the beginning of the
first annual reporting period beginning on or after December 15, 2008 with early
adoption not permitted.  The acquisition described in Note 2 was
accounted for in accordance with SFAS No. 141 as the Company was not permitted
to adopt the revised standard until October 1, 2009.  The adoption of
the revised standard did not have a material effect on the Company’s
consolidated financial position or results of operations.





In June
2009, the FASB issued two standards which change the way entities account for
securitizations and special-purpose entities:  SFAS No. 166, Accounting for Transfers of
Financial Assets, (ASC Topic 860)and SFAS No. 167, Amendments to FASB Interpretation
No. 46(R), (ASC Topic 810).SFAS No. 166 is
a revision to SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities, and
requires more information about transfers of financial assets, including
securitization transactions, and where entities have continuing exposure to the
risks related to transferred financial assets. This statement eliminates the
concept of a “qualifying special-purpose entity,” changes the requirements for
derecognizing financial assets, and requires additional
disclosures.  SFAS No. 167 is a revision to FASB Interpretation No. 46
(Revised December 2003), Consolidation of Variable Interest
Entities, and changes how a reporting entity determines when an entity
that is insufficiently capitalized or is not controlled through voting (or
similar rights) should be consolidated.  The determination of whether
a reporting entity is required to consolidate another entity is based on, among
other things, the other entity’s purpose and design and the reporting entity’s
ability to direct the activities of the other entity that most significantly
impact the other entity’s economic performance.  These new standards
require a number of new disclosures.  SFAS No. 167 requires a
reporting entity to provide additional disclosures about its involvement with
variable interest entities and any significant changes in risk exposure due to
that involvement.  A reporting entity will be required to disclose how
its involvement with a variable interest entity affects the reporting entity’s
financial statements.  SFAS No. 166 enhances information reported to
users of financial statements by providing greater transparency about transfers
of financial assets and an entity’s continuing involvement in transferred
financial assets.  These statements will be effective at the beginning
of a reporting entity’s first fiscal year beginning after November 15,
2009.  Early application is not permitted.  The adoption of
these statements is not expected to have a material effect on the Company's
consolidated financial position or results of operations.


-16-





FIRST
SAVINGS FINANCIAL GROUP, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)




In August
2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-05, Fair Value Measurements and
Disclosures,(Topic 820)– Measuring Liabilities at Fair
Value.This ASU provides amendments for fair value measurements of
liabilities. It provides clarification that in circumstances in which a quoted
price in an active market for the identical liability is not available, a
reporting entity is required to measure fair value using one or more techniques.
ASU 2009-05 also clarifies that when estimating the fair value of a liability, a
reporting entity is not required to include a separate input or adjustment to
other inputs relating to the existence of a restriction that prevents the
transfer of the liability. ASU 2009-05 is effective for the first reporting
period (including interim periods) beginning after issuance. The adoption of ASU
2009-05 did not have a material effect on the Company’s consolidated financial
position or results of operations.





In
January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and
Disclosures (Topic 820) – Improving Disclosures about Fair
Value Measurements. This ASU provides amendments to ASC Topic 820 to
provide users of financial statements with additional information regarding fair
value.  New disclosures required by the ASU include disclosures of
significant transfers between Level 1 and Level 2 and the reasons for such
transfers, disclosure of the reasons for transfers in or out of Level 3 and that
significant transfers into Level 3 be disclosed separately from significant
transfers out of Level 3, and disclosure of the valuation techniques used in
connection with Level 2 and Level 3 valuations and the reason for any changes in
valuation methods.  This ASU will generally be effective for interim
and annual periods beginning after December 15, 2009.  However,
disclosures of purchases, sales, issuances, and settlements in the roll forward
activity in Level 3 fair value measurements will be effective for fiscal years
beginning after December 15, 2010, and for interim periods within those fiscal
years.  The adoption of this ASU is not expected to have a material
effect on the Company’s consolidated financial position or results of
operations.





11.
            Subsequent
      Events





The
Company has evaluated whether any subsequent events that require recognition or
disclosure in the accompanying consolidated financial statements and related
notes thereto have taken place through the date these consolidated financial
statements were issued (February 10, 2010).  The Company has
determined that there are no such subsequent events.




-17-


FIRST
SAVINGS FINANCIAL GROUP, INC.


PART
I - ITEM 2





MANAGEMENT’S
DISCUSSION AND


ANALYSIS
OF FINANCIAL CONDITION AND


RESULTS
OF OPERATIONS





Safe
Harbor Statement for Forward-Looking Statements





This
report may contain forward-looking statements within the meaning of the federal
securities laws.  These statements are not historical facts; rather
they are statements based on the Company’s current expectations regarding its
business strategies and their intended results and its future
performance.  Forward-looking statements are preceded by terms such as
“expects,” “believes,” “anticipates,” “intends” and similar
expressions.





Forward-looking
statements are not guarantees of future performance.  Numerous risks
and uncertainties could cause or contribute to the Company's actual results,
performance and achievements being materially different from those expressed or
implied by the forward-looking statements.  Factors that may cause or
contribute to these differences include, without limitation, general economic
conditions, including changes in market interest rates and changes in monetary
and fiscal policies of the federal government; legislative and regulatory
changes; the quality and composition of the loan and investment securities
portfolio; loan demand; deposit flows; competition; and changes in accounting
principles and guidelines.  Additional factors that may affect our
results are discussed in our Annual Report on Form 10-K for the year ended
September 30, 2009 under “Item 1A. Risk Factors.”  These factors
should be considered in evaluating the forward-looking statements and undue
reliance should not be placed on such statements.  Except as required
by applicable law or regulation, the Company assumes no obligation and disclaims
any obligation to update any forward-looking statements.





Critical
Accounting Policies





During
the three-month period ended December 31, 2009, there was no significant change
in the Company's critical accounting policies or the application of critical
accounting policies as disclosed in the Company's Annual Report on Form 10-K for
the year ended September 30, 2009.





Comparison
of Financial Condition at December 31, 2009 and September 30, 2009





Cash and Cash
Equivalents.  Cash and cash equivalents increased from $10.4
million at September 30, 2009 to $14.0 million at December 31,
2009.





Loans.  Net
loans receivable decreased $420,000 from $353.8 million at September 30, 2009 to
$353.4 million at December 31, 2009, primarily due to a decrease in consumer
loans of $1.3 million, offset by an increase in multifamily mortgage loans of
$1.1 million.





Securities
Available for Sale.  Securities available for sale increased
$6.0 million from $72.6 million at September 30, 2009 to $78.6 million at
December 31, 2009 due primarily to purchases of $16.7 million, offset by sales
of $191,000, maturities and calls of $8.1 million and principal repayments of
$2.8 million.  The increase in securities available for sale during
the three months ended December 31, 2009, primarily in U.S. government agency
and municipal securities, was funded by increases in deposits and
borrowings.


-18-


FIRST
SAVINGS FINANCIAL GROUP, INC.


PART
I - ITEM 2





MANAGEMENT’S
DISCUSSION AND


ANALYSIS
OF FINANCIAL CONDITION AND


RESULTS
OF OPERATIONS





Securities Held
to Maturity.  Investment securities held-to-maturity decreased
$567,000 from $6.8 million at September 30, 2009 to $6.2 million at December 31,
2009 due primarily to principal repayments on mortgage-backed
securities.





Other
Assets.  Cash surrender value of life insurance increased from
$3.9 million at September 30, 2009 to $5.2 million at December 31, 2009
primarily as the result of a $1.2 million investment in bank-owned life
insurance during the period.  Other assets increased $1.5 million when
comparing the two periods due primarily to prepaid FDIC insurance premiums of
$2.1 million paid in December 2009.





Deposits.  Total
deposits increased $9.2 million from $350.8 million at September 30, 2009 to
$360.0 million at December 31, 2009 primarily due to increases in
interest-bearing demand deposit accounts of $6.4 million and certificates of
deposit of $3.7 million, offset by a decrease in noninterest-bearing demand
deposits accounts of $648,000 during the period.  The increase in
interest-bearing demand deposit accounts occurred primarily in public fund and
business checking accounts.  The increase in certificates of deposit
was primarily in products having maturities of twelve months or less, resulting
from depositors’ preference for shorter-term maturities in the current low-rate
environment.





Borrowings.  Borrowings
from FHLB increased $3.6 million from $55.8 million at September 30, 2009 to
$59.4 million at December 31, 2009, which was used primarily to fund purchases
of securities available for sale.  Management determined that
utilizing a certain level of FHLB advances as a funding source alternative to
certificates of deposit was advantageous given the lower interest rate
environment for advances.  Federal funds purchased decreased $1.2
million from September 30, 2009 due to the full repayment of these borrowings as
of December 31, 2009.





Stockholders’
Equity. Stockholders’ equity decreased $241,000 from $52.9 million at
September 30, 2009 to $52.6 million at December 31, 2009.  The
decrease was due primarily to the open market repurchase of $1.3 million of
common stock recorded as treasury stock, offset by a $202,000 increase in
accumulated other comprehensive income representing the net unrealized gains on
available for sale securities, $182,000 for ESOP shares released during the
quarter and $700,000 of retained net earnings.  During the quarter
ended December 31, 2009, the Company declared a special dividend of $0.08 per
share, totaling $193,000, payable to shareholders of record as of the close of
business on January 4, 2010.





Results
of Operations for the Three Months Ended December 31, 2009 and 2008





Overview.  The
Company reported net income of $892,000 ($0.38 per share) for the three-month
period ended December 31, 2009, compared to a net loss of $640,000 ($0.29 per
share) for the same period in 2008.





Net Interest
Income.  Net interest income increased $3.0 million, or 158.5%,
for the three months ended December 31, 2009 compared to the same period in
2008.  The increase is primarily the result of an increase in the
tax-equivalent interest rate spread from 2.96% for 2008 to 4.45% for 2009, as
average interest-earnings assets increased $230.0 million and average
interest-bearing liabilities increased $251.9 million.  The increases
in the tax-equivalent interest rate spread, average interest-earning assets and
average interest-bearing liabilities are due primarily to the acquisition of
Community First.


-19-


FIRST
SAVINGS FINANCIAL GROUP, INC.


PART
I - ITEM 2





MANAGEMENT’S
DISCUSSION AND


ANALYSIS
OF FINANCIAL CONDITION AND


RESULTS
OF OPERATIONS





Total interest income increased $3.4
million, or 105.7%, as a result of an increase in average interest-earning
assets of $230.0 million, or 108.0%, from $212.9 million for the three months
ended December 31, 2008 to $442.9 million for the three months ended December
31, 2009.  The average tax equivalent yield on interest-earning assets
was 6.05% for 2008 compared to 6.04% for 2009.  Average loans,
investment securities and FHLB stock increased $177.2 million, $53.5 million and
$2.8 million, respectively, while average interest-bearing deposits with banks
decreased $3.6 million.





Total
interest expense increased $378,000, or 29.1%, as a result of an increase in
average interest-bearing liabilities of $251.9 million from $166.9 million for
the three months ended December 31, 2008 to $418.7 million for the three months
ended December 31, 2009, which more than offset a decrease in the average cost
of funds from 3.09% in 2008 to 1.59% in 2009.  The average cost of
interest-bearing liabilities decreased for 2009 primarily as a result of lower
market interest rates as compared to 2008, the repricing of certificates of
deposit at lower market interest rates as they matured and the utilization of
lower-cost FHLB advances as a source of funding and the assumption of lower cost
liabilities of Community First.





Provision for
Loan Losses.  The provision for loan losses was $358,000 for
the three months ended December 31, 2009 compared to $59,000 for the same period
in 2008.  The increase in the provision for loan losses is primarily
due to an increase in classified loans during the quarter ended December 31,
2009.





Gross
loans receivable increased $174.6 million from $182.7 million at December 31,
2008 to $357.3 million at December 31, 2009, primarily due to the acquisition of
Community First.  Residential mortgage, nonresidential mortgage,
commercial business, construction, and automobile loans increased most
significantly, by $71.7 million, $30.1 million, $21.3 million, $15.2 million and
$15.0 million, respectively, when comparing the two periods.





Nonperforming
loans increased $4.3 million from $1.8 million at December 31, 2008 to $6.1
million at December 31, 2009, of which $3.6 million were acquired in the
acquisition of Community First.  The balance of nonperforming loans at
December 31, 2009 includes nonaccrual loans of $5.7 million and loans totaling
$350,000 that are over 90 days past due, but still accruing
interest.  These loans are still accruing interest because the
estimated value of the collateral and collection efforts are deemed sufficient
to ensure their full recovery.  The balance of nonaccrual loans at
December 31, 2009 consists of commercial business loans ($1.5 million), consumer
loans ($144,000), residential mortgage loans ($2.7 million), nonresidential
mortgage loans ($1.0 million) and land and land development loans
($389,000).  The $2.7 million of nonaccrual residential mortgage loans
consists of those secured by owner occupied, one-to-four family residences ($1.7
million), non-owner occupied, one-to-four family investment properties
($568,000) and speculative construction homes ($442,000).  The
nonaccrual non-owner occupied, one-to-four family investment properties loans
consist primarily of three unrelated borrowing relationships.





Net
charge-offs were $119,000 for the three months ended December 31, 2009 compared
to net charge-offs of $246,000 for the same period in 2008.


-20-


FIRST
SAVINGS FINANCIAL GROUP, INC.


PART
I - ITEM 2





MANAGEMENT’S
DISCUSSION AND


ANALYSIS
OF FINANCIAL CONDITION AND


RESULTS
OF OPERATIONS





The
allowance for loan losses was $3.9 million at December 31, 2009 compared to $3.7
million at September 30, 2009 and $1.5 million at December 31,
2008.  Management has deemed these amounts as adequate on those dates
based on its best estimate of probable known and inherent loan
losses.  The consistent application of management’s allowance for loan
losses methodology resulted in an increase in the level of the allowance for
loan losses consistent with the increase in the gross loan portfolio and
nonperforming loans and the change in overall economic conditions.





Noninterest
Income.  Noninterest income increased $443,000 for the
three-month period ended December 31, 2009 as compared to the same period in
2008.  The increase was primarily due to increases in service charges
on deposit accounts of $264,000 (primarily due to fees earned on acquired
Community First accounts), commission income of $28,000 and other income of
$137,000, which includes an unrealized gain of $61,000 on an interest rate cap
contract acquired in the Community First acquisition.





Noninterest
Expense.  Noninterest expense increased $776,000 to $4.0
million for 2009 compared to $3.2 million for the same period in
2008.  Compensation and benefits expense increased $1.1 million
primarily due to additional personnel resulting from the Community First
acquisition. Occupancy, data processing, FDIC insurance premiums and other
operating expenses increased $318,000, $96,000, $142,000 and $227,000,
respectively, when comparing the two periods, also primarily as a result of the
Community First acquisition.  Charitable contributions decreased $1.2
million when comparing the two periods due to the $1.2 million one-time
contribution to the First Savings Charitable Foundation during
2008.





Income Tax
Expense.  The Company recognized income tax expense of $438,000
for the three months ended December 31, 2009 compared to a tax benefit of
$409,000 for the three-month period ended December 31, 2008.  The tax
benefit for the period ended December 31, 2008 was primarily due to increased
deferred tax assets related to the temporary timing difference generated by the
$1.2 million charitable contribution to the First Savings Charitable
Foundation.  The effective tax rate was 32.9% for the three-month
period ended December 31, 2009.





Liquidity
and Capital Resources





Liquidity
Management.  Liquidity
is the ability to meet current and future financial obligations of a short-term
nature.  The Bank’s primary sources of funds are customer deposits,
proceeds from loan repayments, maturing securities and FHLB
advances.  While loan repayments and maturities are a predictable
source of funds, deposit flows and mortgage prepayments are greatly influenced
by market interest rates, general economic conditions and
competition.  At December 31, 2009, the Bank had cash and cash
equivalents of $14.0 million and securities available-for-sale with a fair value
of $78.6 million.  If the Bank requires funds beyond its ability to
generate them internally, it has additional borrowing capacity with FHLB and
additional collateral eligible for repurchase agreements.





The
Bank’s primary investing activity is the origination of one-to-four family
mortgage loans and, to a lesser extent, consumer, multi-family, commercial real
estate, commercial business and residential construction loans.  The
Bank also invests in U.S. Government and agency securities and mortgage-backed
securities issued by U.S. Government agencies.


-21-


FIRST
SAVINGS FINANCIAL GROUP, INC.


PART
I - ITEM 2





MANAGEMENT’S
DISCUSSION AND


ANALYSIS
OF FINANCIAL CONDITION AND


RESULTS
OF OPERATIONS





The
Company is a separate legal entity from the Bank and must provide for its own
liquidity to pay its operating expenses and other financial obligations, to pay
any dividends and to repurchase any of its outstanding common
stock.  The Company’s primary source of income is dividends received
from the Bank.  The amount of dividends that the Bank may declare and
pay to the Company in any calendar year, without the receipt of prior approval
from the Office of Thrift Supervision (“OTS”) but with prior notice to OTS,
cannot exceed net income for that year to date plus retained net income (as
defined) for the preceding two calendar years.  At December 31, 2009
the Company had liquid assets of $5.7 million.





The Bank
must maintain an adequate level of liquidity to ensure the availability of
sufficient funds to support loan growth and deposit withdrawals, to satisfy
financial commitments and to take advantage of investment
opportunities.  Historically, the Bank has been able to retain a
significant amount of its deposits as they mature.





Capital
Management.  The Bank is required to maintain specific amounts
of capital pursuant to OTS regulatory requirements.  As of December
31, 2009, the Bank was in compliance with all regulatory capital requirements,
which were effective as of such date, with tangible, core and risk-based capital
ratios of 7.61%, 7.61% and 12.94%, respectively.  The regulatory
requirements at that date were 1.5%, 3.0% and 8.0%, respectively.  At
December 31, 2009, the Bank was considered “well-capitalized” under applicable
regulatory guidelines.





Off-Balance
Sheet Arrangements





In the
normal course of operations, the Company engages in a variety of financial
transactions that, in accordance with GAAP, are not recorded on the Company's
financial statements.  These transactions involve, to varying degrees,
elements of credit, interest rate and liquidity risk.  Such
transactions are primarily used to manage customers’ requests for funding and
take the form of loan commitments and letters of credit.  A further
presentation of the Company’s off-balance sheet arrangements is presented in the
Company’s Annual Report on Form 10-K for the year ended September 30,
2009.





For the
three months ended December 31, 2009, the Company did not engage in any
off-balance sheet transactions reasonably likely to have a material effect on
the Company's financial condition, results of operations or cash
flows.


-22-


FIRST
SAVINGS FINANCIAL GROUP, INC.


PART
I – ITEM 3





QUANTITATIVE
AND QUALITATIVE DISCLOSURES


ABOUT
MARKET RISK





For a discussion of the Company’s asset
and liability management policies, as well as the potential impact of interest
rate changes upon the market value of the Company’s portfolio equity, see
“Interest Rate Risk Management” and “Net Portfolio Value Analysis” in the
Company’s Annual Report on Form 10-K for the year ended September 30,
2009.  Management periodically reviews the impact of interest rate
changes upon net interest income and the market value of the Company’s portfolio
equity.  Based on such reviews, management believes that there have
been no material changes in the market risk of the Company’s asset and liability
position since September 30, 2009.


-23-


FIRST
SAVINGS FINANCIAL GROUP, INC.


PART
I - ITEM 4





CONTROLS
AND PROCEDURES





Controls
and Procedures





The
Company’s management, including the Company’s principal executive officer and
the Company’s principal financial officer, have evaluated the effectiveness of
the Company’s “disclosure controls and procedures,” as such term is defined in
Rule 13a-15(e) of the Securities Exchange Act of 1934, as
amended.  Based on their evaluation, the principal executive officer
and the principal financial officer concluded that, as of the end of the period
covered by this report, the Company’s disclosure controls and procedures were
effective for the purpose of ensuring that information required to be disclosed
in reports that the Company files or submits under the Exchange Act with the SEC
(1) is recorded, processed, summarized, and reported within the time periods
specified in the SEC’s Rules and Forms and (2) is accumulated and communicated
to the Company’s management, including its principal executive and principal
financial officers, as appropriate to allow timely decisions regarding required
disclosure.





During
the quarter ended December 31, 2009, there were no changes in the Company's
internal control over financial reporting which materially affected, or are
reasonably likely to materially affect, the Company’s internal control over
financial reporting.


-24-


FIRST
SAVINGS FINANCIAL GROUP, INC.


PART
II





OTHER
INFORMATION





Item 1.
            Legal
      Proceedings





The
Company is not a party to any legal proceedings.  Periodically, there
have been various claims and lawsuits involving the Bank, mainly as a plaintiff,
such as claims to enforce liens, condemnation proceedings on properties in which
the Bank holds security interests, claims involving the making and servicing of
real property loans and other issues incident to the Bank’s
business.  The Bank is not a party to any pending legal proceedings
that it believes would have a material adverse affect on its financial condition
or operations.





Item
      1A.
            Risk
      Factors





In
addition to the other information set forth in this report, you should carefully
consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual
Report on Form 10-K for the year ended September 30, 2009 which could materially
affect our business, financial condition or future results. There have been no
material changes to the risk factors described in our Annual Report on Form
10-K, however these are not the only risks that we face. Additional risks and
uncertainties not currently known to us or that we currently deem to be
immaterial also may materially adversely affect our business, financial
condition and/or operating results.





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




Period
                                    
                                    (a)
                                      Total number of
                                      shares (or units)
                                      purchased
                                    
                                    
                                    (b)
                                      Average price
                                      paid per share
                                      (or unit)
                                    
                                    
                                    (c)
                                      Total number of shares
                                      (or units) purchased as
                                      part of publicly
                                      announced plans or
                                      programs (1)
                                    
                                    
                                    (d)
                                      Maximum number (or
                                      appropriate dollar value) of
                                      shares (or units) that may yet
                                      be purchased under the plans
                                      or programsMonth
      #1
                                      October
      1, 2009 through
                                      October
      31, 2009
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —Month
      #2
                                      November
      1, 2009 through
                                      November
      30, 2009
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —Month
      #3
                                      December
      1, 2009 through
                                      December
      31, 2009
                                    
                                    
                                    127,102
                                    
                                    
                                    $
                                    10.40
                                    
                                    
                                    
                                    127,102
                                    
                                    
                                    
                                    —Total
                                    
                                    
                                    127,102
                                    
                                    
                                    $
                                    10.40
                                    
                                    
                                    
                                    127,102
                                    
                                    
                                    
                                    —





(1)  On
December 2, 2009, the Company announced that its Board of Directors authorized a
stock repurchase program to acquire up to 127,102 shares, or 5%, of the
Company’s outstanding common stock.  Under the program, repurchases
were to be conducted through open market purchases or privately negotiated
transactions, and were to be made from time to time depending on market
conditions and other factors.  On December 10, 2009, the Company
announced completion of the program, having repurchased 127,102 shares in a
block transaction at a price of $10.40 per share for a total cost of
approximately $1.3 million.


-25-


FIRST
SAVINGS FINANCIAL GROUP, INC.


PART
II





OTHER
INFORMATION





Item 3.
            Defaults
      upon Senior Securities





Not
applicable.





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





None.





Item 5.
            Other
      Information





None.





Item 6.
            Exhibits





2.1
              Plan
      of Conversion (1)





3.1
              Articles
      of Incorporation of First Savings Financial Group, Inc.
  (1)





3.2
              Bylaws
      of First Savings Financial Group, Inc.
(1)





31.1
              Rule
      13a-14(a)/15d-14(a) Certification of Chief Executive
    Officer





31.2
              Rule
      13a-14(a)/15d-14(a) Certification of Chief Financial
    Officer





32.1
              Section
      1350 Certification of Chief Executive
Officer





32.2
              Section
      1350 Certification of Chief Financial
Officer





(1)
              Incorporated
      by reference into this document from the Exhibits filed with the
      Securities and Exchange Commission on the Registration Statement on Form
      S-1, and any amendments thereto, Registration No.
    333-151636.




-26-




SIGNATURES





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





FIRST
      SAVINGS FINANCIAL GROUP, INC.
                      (Registrant)DatedFebruary
      10, 2010
                    BY:
                    /s/
      Larry W. MyersLarry
      W. MyersPresident
      and Chief Executive OfficerDatedFebruary
      10, 2010
                    BY:
                    /s/
      Anthony A. SchoenAnthony
      A. SchoenChief
      Financial
Officer


-27-