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 June 30,
2012



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. Employer      
|incorporation 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. YesxNo ̈



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). YesxNo ̈



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 ̈Nox



The number of shares outstanding of the registrant’s common
stock as of July 31, 2012 was 2,359,581.











FIRST SAVINGS FINANCIAL GROUP, INC.



INDEX



|           |                                                                                                                               | Page 
|---------- | ----------------------------------------------------------------------------------------------------------------------------- | -----
|           |                                                                                                                               |      
|Part I     | Financial Information                                                                                                         |      
|           |                                                                                                                               |      
|           | Item 1.  Financial Statements                                                                                                 |      
|           |                                                                                                                               |      
|           | Consolidated Balance Sheets as of June 30, 2012 and September 30, 2011 (unaudited)                                            | 3    
|           |                                                                                                                               |      
|           | Consolidated Statements of Income for the three months and nine months ended June 30, 2012 and 2011 (unaudited)               | 4    
|           |                                                                                                                               |      
|           | Consolidated Statements of Comprehensive Income for the three months and nine months ended June 30, 2012 and 2011 (unaudited) | 5    
|           |                                                                                                                               |      
|           | Consolidated Statement of Changes in Stockholders’ Equity for the nine months ended June 30, 2012 (unaudited)                 | 6    
|           |                                                                                                                               |      
|           | Consolidated Statements of Cash Flows for the nine months ended June 30, 2012 and 2011 (unaudited)                            | 7    
|           |                                                                                                                               |      
|           | Notes to Consolidated Financial Statements (unaudited)                                                                        | 8-38 
|           |                                                                                                                               |      
|           | Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations                                | 39-50
|           |                                                                                                                               |      
|           | Item 3.  Quantitative and Qualitative Disclosures About Market Risk                                                           | 51-53
|           |                                                                                                                               |      
|           | Item 4.  Controls and Procedures                                                                                              | 54   
|           |                                                                                                                               |      
|Part II    | Other Information                                                                                                             |      
|           |                                                                                                                               |      
|           | Item 1.  Legal Proceedings                                                                                                    | 55   
|           |                                                                                                                               |      
|           | Item 1A.  Risk Factors                                                                                                        | 55   
|           |                                                                                                                               |      
|           | Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds                                                          | 56   
|           |                                                                                                                               |      
|           | Item 3.  Defaults Upon Senior Securities                                                                                      | 56   
|           |                                                                                                                               |      
|           | Item 4.  Mine Safety Disclosures                                                                                              | 56   
|           |                                                                                                                               |      
|           | Item 5.  Other Information                                                                                                    | 56   
|           |                                                                                                                               |      
|           | Item 6.  Exhibits                                                                                                             | 57   
|           |                                                                                                                               |      
|Signatures |                                                                                                                               | 58   



-2-







PART I - FINANCIAL INFORMATION

FIRST SAVINGS FINANCIAL GROUP, INC. AND
SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)



|                                                                                                                                                                       |  | June 30, |         |   | September 30, |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | ------- | - | ------------- | -
|(In thousands, except share and per share data)                                                                                                                        |  | 2012     |         |   | 2011          |  
|                                                                                                                                                                       |  |          |         |   |               |  
|ASSETS                                                                                                                                                                 |  |          |         |   |               |  
|Cash and due from banks                                                                                                                                                |  | $        | 7,694   |   |               | $
|Interest-bearing deposits with banks                                                                                                                                   |  |          | 7,588   |   |               |  
|Total cash and cash equivalents                                                                                                                                        |  |          | 15,282  |   |               |  
|                                                                                                                                                                       |  |          |         |   |               |  
|Trading account securities                                                                                                                                             |  |          | 2,130   |   |               |  
|Securities available for sale, at fair value                                                                                                                           |  |          | 153,729 |   |               |  
|Securities held to maturity                                                                                                                                            |  |          | 8,406   |   |               |  
|                                                                                                                                                                       |  |          |         |   |               |  
|Loans held for sale                                                                                                                                                    |  |          | 92      |   |               |  
|Loans, net                                                                                                                                                             |  |          | 365,157 |   |               |  
|                                                                                                                                                                       |  |          |         |   |               |  
|Federal Home Loan Bank stock, at cost                                                                                                                                  |  |          | 5,400   |   |               |  
|Real estate development and construction                                                                                                                               |  |          | 4,112   |   |               |  
|Premises and equipment                                                                                                                                                 |  |          | 10,246  |   |               |  
|Foreclosed real estate                                                                                                                                                 |  |          | 1,415   |   |               |  
|Accrued interest receivable:                                                                                                                                           |  |          |         |   |               |  
|Loans                                                                                                                                                                  |  |          | 1,354   |   |               |  
|Securities                                                                                                                                                             |  |          | 1,280   |   |               |  
|Cash surrender value of life insurance                                                                                                                                 |  |          | 8,483   |   |               |  
|Goodwill                                                                                                                                                               |  |          | 5,940   |   |               |  
|Core deposit intangible                                                                                                                                                |  |          | 1,933   |   |               |  
|Other assets                                                                                                                                                           |  |          | 2,079   |   |               |  
|                                                                                                                                                                       |  |          |         |   |               |  
|Total Assets                                                                                                                                                           |  | $        | 587,038 |   |               | $
|                                                                                                                                                                       |  |          |         |   |               |  
|LIABILITIES                                                                                                                                                            |  |          |         |   |               |  
|Deposits:                                                                                                                                                              |  |          |         |   |               |  
|Noninterest-bearing                                                                                                                                                    |  | $        | 39,095  |   |               | $
|Interest-bearing                                                                                                                                                       |  |          | 363,904 |   |               |  
|Total deposits                                                                                                                                                         |  |          | 402,999 |   |               |  
|                                                                                                                                                                       |  |          |         |   |               |  
|Repurchase agreements                                                                                                                                                  |  |          | 1,327   |   |               |  
|Borrowings from Federal Home Loan Bank                                                                                                                                 |  |          | 98,044  |   |               |  
|Accrued interest payable                                                                                                                                               |  |          | 248     |   |               |  
|Advance payments by borrowers for taxes and insurance                                                                                                                  |  |          | 406     |   |               |  
|Accrued expenses and other liabilities                                                                                                                                 |  |          | 2,997   |   |               |  
|Total Liabilities                                                                                                                                                      |  |          | 506,021 |   |               |  
|                                                                                                                                                                       |  |          |         |   |               |  
|STOCKHOLDERS’ EQUITY                                                                                                                                                   |  |          |         |   |               |  
|Preferred stock of $.01 par value per share Authorized 982,880 shares; none issued                                                                                     |  |          | -       |   |               |  
|Senior Non-Cumulative Perpetual Preferred Stock, Series A, $.01 par value; Authorized 17,120 shares; issued 17,120 shares; aggregate liquidation preference of $17,120 |  |          | -       |   |               |  
|Common stock of $.01 par value per share Authorized 20,000,000 shares;
    issued 2,542,042 shares                                                                     |  |          | 25      |   |               |  
|Additional paid-in capital                                                                                                                                             |  |          | 41,953  |   |               |  
|Retained earnings - substantially restricted                                                                                                                           |  |          | 38,819  |   |               |  
|Accumulated other comprehensive income                                                                                                                                 |  |          | 4,397   |   |               |  
|Unearned ESOP shares                                                                                                                                                   |  |          | (1,235  | ) |               |  
|Unearned stock compensation                                                                                                                                            |  |          | (747    | ) |               |  
|Less treasury stock, at cost - 182,461 shares (172,333 shares at September 30, 2011)                                                                                   |  |          | (2,195  | ) |               |  
|Total Stockholders’ Equity                                                                                                                                             |  |          | 81,017  |   |               |  
|                                                                                                                                                                       |  |          |         |   |               |  
|Total Liabilities and Stockholders’ Equity                                                                                                                             |  | $        | 587,038 |   |               | $



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 Ended |           |   | Nine Months Ended |  
|--------------------------------------------------- |  | ------------------ | --------- | - | ----------------- | -
|                                                    |  | June 30,           |           |   | June 30,          |  
|(In thousands, except per share data)               |  | 2012               |           |   | 2011              |  
|                                                    |  |                    |           |   |                   |  
|INTEREST INCOME                                     |  |                    |           |   |                   |  
|Loans, including fees                               |  | $                  | 5,083     |   |                   | $
|Securities:                                         |  |                    |           |   |                   |  
|Taxable                                             |  |                    | 1,117     |   |                   |  
|Tax-exempt                                          |  |                    | 317       |   |                   |  
|Dividend income                                     |  |                    | 38        |   |                   |  
|Interest-bearing deposits with banks                |  |                    | 4         |   |                   |  
|Total interest income                               |  |                    | 6,559     |   |                   |  
|                                                    |  |                    |           |   |                   |  
|INTEREST EXPENSE                                    |  |                    |           |   |                   |  
|Deposits                                            |  |                    | 817       |   |                   |  
|Repurchase agreements                               |  |                    | 2         |   |                   |  
|Borrowings from Federal Home Loan Bank              |  |                    | 305       |   |                   |  
|Total interest expense                              |  |                    | 1,124     |   |                   |  
|                                                    |  |                    |           |   |                   |  
|Net interest income                                 |  |                    | 5,435     |   |                   |  
|Provision for loan losses                           |  |                    | 308       |   |                   |  
|                                                    |  |                    |           |   |                   |  
|Net interest income after provision for loan losses |  |                    | 5,127     |   |                   |  
|                                                    |  |                    |           |   |                   |  
|NONINTEREST INCOME                                  |  |                    |           |   |                   |  
|Service charges on deposit accounts                 |  |                    | 289       |   |                   |  
|Net gain on sales of available for sale securities  |  |                    | 18        |   |                   |  
|Net gain on trading account securities              |  |                    | 31        |   |                   |  
|Unrealized gain (loss) on derivative contract       |  |                    | (13       | ) |                   |  
|Net gain on sales of loans                          |  |                    | 41        |   |                   |  
|Increase in cash surrender value of life insurance  |  |                    | 72        |   |                   |  
|Gain on life insurance                              |  |                    | 321       |   |                   |  
|Commission income                                   |  |                    | 67        |   |                   |  
|Other income                                        |  |                    | 219       |   |                   |  
|Total noninterest income                            |  |                    | 1,045     |   |                   |  
|                                                    |  |                    |           |   |                   |  
|NONINTEREST EXPENSE                                 |  |                    |           |   |                   |  
|Compensation and benefits                           |  |                    | 2,326     |   |                   |  
|Occupancy and equipment                             |  |                    | 468       |   |                   |  
|Data processing                                     |  |                    | 452       |   |                   |  
|Advertising                                         |  |                    | 122       |   |                   |  
|Professional fees                                   |  |                    | 301       |   |                   |  
|FDIC insurance premiums                             |  |                    | 83        |   |                   |  
|Net loss on foreclosed real estate                  |  |                    | 96        |   |                   |  
|Other operating expenses                            |  |                    | 721       |   |                   |  
|Total noninterest expense                           |  |                    | 4,569     |   |                   |  
|Income before income taxes                          |  |                    | 1,603     |   |                   |  
|Income tax expense                                  |  |                    | 331       |   |                   |  
|Net Income                                          |  | $                  | 1,272     |   |                   | $
|                                                    |  |                    |           |   |                   |  
|Preferred stock dividends declared                  |  |                    | 43        |   |                   |  
|Net Income Available to Common Shareholders         |  | $                  | 1,229     |   |                   | $
|                                                    |  |                    |           |   |                   |  
|Net income per common share:                        |  |                    |           |   |                   |  
|Basic                                               |  | $                  | 0.57      |   |                   | $
|Diluted                                             |  | $                  | 0.55      |   |                   | $
|                                                    |  |                    |           |   |                   |  
|Weighted average common shares outstanding:         |  |                    |           |   |                   |  
|Basic                                               |  |                    | 2,167,488 |   |                   |  
|Diluted                                             |  |                    | 2,237,130 |   |                   |  



See notes to consolidated financial statements.



-4-







PART I - FINANCIAL INFORMATION

FIRST SAVINGS FINANCIAL GROUP, INC. AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME

(Unaudited)



|                                                                            |  | Three Months Ended |       |   | Nine Months Ended |  
|--------------------------------------------------------------------------- |  | ------------------ | ----- | - | ----------------- | -
|                                                                            |  | June 30,           |       |   | June 30,          |  
|(In thousands)                                                              |  | 2012               |       |   | 2011              |  
|                                                                            |  |                    |       |   |                   |  
|Net Income                                                                  |  | $                  | 1,272 |   |                   | $
|                                                                            |  |                    |       |   |                   |  
|OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX                               |  |                    |       |   |                   |  
|Unrealized gains (losses) on securities available for sale:                 |  |                    |       |   |                   |  
|Unrealized holding gains (losses) arising during the period                 |  |                    | 1,109 |   |                   |  
|Income tax (expense) benefit                                                |  |                    | (377  | ) |                   |  
|Net of tax amount                                                           |  |                    | 732   |   |                   |  
|                                                                            |  |                    |       |   |                   |  
|Less: reclassification adjustment for realized gains included in net income |  |                    | (18   | ) |                   |  
|Income tax expense                                                          |  |                    | 6     |   |                   |  
|Net of tax amount                                                           |  |                    | (12   | ) |                   |  
|                                                                            |  |                    |       |   |                   |  
|Other Comprehensive Income (Loss)                                           |  |                    | 720   |   |                   |  
|                                                                            |  |                    |       |   |                   |  
|Comprehensive Income                                                        |  | $                  | 1,992 |   |                   | $



See notes to consolidated financial statements.



-5-







PART I - FINANCIAL INFORMATION

FIRST SAVINGS FINANCIAL GROUP, INC. AND
SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS’ EQUITY

(Unaudited)



|                                                                                                               |  |           |   |  |        |   |    |                 |  |   |          |  |  | Accumulated   |        |   | Unearned     |   |       |          |  |   |        |  
|-------------------------------------------------------------------------------------------------------------- |  | --------- | - |  | ------ | - | -- | --------------- |  | - | -------- |  |  | ------------- | ------ | - | ------------ | - | ----- | -------- |  | - | ------ | -
|                                                                                                               |  |           |   |  |        |   |    |                 |  |   |          |  |  | Other         |        |   | Stock        |   |       |          |  |   |        |  
|                                                                                                               |  | Preferred |   |  | Common |   |    | Additional      |  |   | Retained |  |  | Comprehensive |        |   | Compensation |   |       | Treasury |  |   |        |  
|(In thousands, except share and per share data)                                                                |  | Stock     |   |  | Stock  |   |    | Paid-in Capital |  |   | Earnings |  |  | Income        |        |   | and ESOP     |   |       | Stock    |  |   | Total  |  
|                                                                                                               |  |           |   |  |        |   |    |                 |  |   |          |  |  |               |        |   |              |   |       |          |  |   |        |  
|Balances at September 30, 2010                                                                                 |  | $         | - |  |        | $ | 25 |                 |  | $ | 24,310   |  |  | $             | 31,889 |   |              | $ | 2,959 |          |  | $ | (2,703 | )
|                                                                                                               |  |           |   |  |        |   |    |                 |  |   |          |  |  |               |        |   |              |   |       |          |  |   |        |  
|Net income                                                                                                     |  |           | - |  |        |   | -  |                 |  |   | -        |  |  |               | 3,177  |   |              |   | -     |          |  |   | -      |  
|                                                                                                               |  |           |   |  |        |   |    |                 |  |   |          |  |  |               |        |   |              |   |       |          |  |   |        |  
|Change in unrealized gain on securities available for sale, net of reclassification adjustments and tax effect |  |           | - |  |        |   | -  |                 |  |   | -        |  |  |               | -      |   |              |   | (145  | )        |  |   | -      |  
|                                                                                                               |  |           |   |  |        |   |    |                 |  |   |          |  |  |               |        |   |              |   |       |          |  |   |        |  
|Stock compensation expense                                                                                     |  |           | - |  |        |   | -  |                 |  |   | 139      |  |  |               | -      |   |              |   | -     |          |  |   | 195    |  
|                                                                                                               |  |           |   |  |        |   |    |                 |  |   |          |  |  |               |        |   |              |   |       |          |  |   |        |  
|Shares released by ESOP trust                                                                                  |  |           | - |  |        |   | -  |                 |  |   | 64       |  |  |               | 14     |   |              |   | -     |          |  |   | 121    |  
|                                                                                                               |  |           |   |  |        |   |    |                 |  |   |          |  |  |               |        |   |              |   |       |          |  |   |        |  
|Purchase of 49,731 treasury shares                                                                             |  |           | - |  |        |   | -  |                 |  |   | -        |  |  |               | -      |   |              |   | -     |          |  |   | -      |  
|                                                                                                               |  |           |   |  |        |   |    |                 |  |   |          |  |  |               |        |   |              |   |       |          |  |   |        |  
|Balances at June 30, 2011                                                                                      |  | $         | - |  |        | $ | 25 |                 |  | $ | 24,513   |  |  | $             | 35,080 |   |              | $ | 2,814 |          |  | $ | (2,387 | )
|                                                                                                               |  |           |   |  |        |   |    |                 |  |   |          |  |  |               |        |   |              |   |       |          |  |   |        |  
|Balances at September 30, 2011                                                                                 |  | $         | - |  |        | $ | 25 |                 |  | $ | 41,729   |  |  | $             | 35,801 |   |              | $ | 3,354 |          |  | $ | (2,285 | )
|                                                                                                               |  |           |   |  |        |   |    |                 |  |   |          |  |  |               |        |   |              |   |       |          |  |   |        |  
|Net income                                                                                                     |  |           | - |  |        |   | -  |                 |  |   | -        |  |  |               | 3,146  |   |              |   | -     |          |  |   | -      |  
|                                                                                                               |  |           |   |  |        |   |    |                 |  |   |          |  |  |               |        |   |              |   |       |          |  |   |        |  
|Change in unrealized gain on securities available for sale, net of reclassification adjustments and tax effect |  |           | - |  |        |   | -  |                 |  |   | -        |  |  |               | -      |   |              |   | 1,043 |          |  |   | -      |  
|                                                                                                               |  |           |   |  |        |   |    |                 |  |   |          |  |  |               |        |   |              |   |       |          |  |   |        |  
|Preferred stock dividends declared                                                                             |  |           | - |  |        |   | -  |                 |  |   | -        |  |  |               | (128   | ) |              |   | -     |          |  |   | -      |  
|                                                                                                               |  |           |   |  |        |   |    |                 |  |   |          |  |  |               |        |   |              |   |       |          |  |   |        |  
|Stock compensation expense                                                                                     |  |           | - |  |        |   | -  |                 |  |   | 147      |  |  |               | -      |   |              |   | -     |          |  |   | 195    |  
|                                                                                                               |  |           |   |  |        |   |    |                 |  |   |          |  |  |               |        |   |              |   |       |          |  |   |        |  
|Shares released by ESOP trust                                                                                  |  |           | - |  |        |   | -  |                 |  |   | 77       |  |  |               | -      |   |              |   | -     |          |  |   | 108    |  
|                                                                                                               |  |           |   |  |        |   |    |                 |  |   |          |  |  |               |        |   |              |   |       |          |  |   |        |  
|Purchase of 10,128 treasury shares                                                                             |  |           | - |  |        |   | -  |                 |  |   | -        |  |  |               | -      |   |              |   | -     |          |  |   | -      |  
|                                                                                                               |  |           |   |  |        |   |    |                 |  |   |          |  |  |               |        |   |              |   |       |          |  |   |        |  
|Balances at June 30, 2012                                                                                      |  | $         | - |  |        | $ | 25 |                 |  | $ | 41,953   |  |  | $             | 38,819 |   |              | $ | 4,397 |          |  | $ | (1,982 | )



See notes to consolidated financial statements.



-6-







PART I - FINANCIAL INFORMATION

FIRST SAVINGS FINANCIAL GROUP, INC. AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                                  |  | Nine Months Ended |        
|--------------------------------------------------------------------------------- |  | ----------------- | -------
|                                                                                  |  | June 30,          |        
|(In thousands)                                                                    |  | 2012              |        
|                                                                                  |  |                   |        
|CASH FLOWS FROM OPERATING ACTIVITIES                                              |  |                   |        
|Net income                                                                        |  | $                 | 3,146  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                   |        
|Provision for loan losses                                                         |  |                   | 897    
|Depreciation and amortization                                                     |  |                   | 740    
|Amortization of premiums and accretion of discounts on securities, net            |  |                   | 256    
|Net purchases of trading account securities                                       |  |                   | (2,100 
|Net gain on trading account securities                                            |  |                   | (31    
|Loans originated for sale                                                         |  |                   | (5,231 
|Proceeds on sales of loans                                                        |  |                   | 5,253  
|Net gain on sales of loans                                                        |  |                   | (114   
|Net realized and unrealized loss on foreclosed real estate                        |  |                   | 83     
|Net gain on sales of available for sale securities                                |  |                   | (18    
|Unrealized (gain) loss on derivative contract                                     |  |                   | 33     
|Gain on life insurance                                                            |  |                   | (321   
|Increase in cash surrender value of life insurance                                |  |                   | (221   
|Deferred income taxes                                                             |  |                   | 17     
|ESOP and stock compensation expense                                               |  |                   | 494    
|Increase in accrued interest receivable                                           |  |                   | (436   
|Decrease in accrued interest payable                                              |  |                   | (151   
|Change in other assets and liabilities, net                                       |  |                   | 1,072  
|Net Cash Provided By Operating Activities                                         |  |                   | 3,368  
|                                                                                  |  |                   |        
|CASH FLOWS FROM INVESTING ACTIVITIES                                              |  |                   |        
|Purchase of securities available for sale                                         |  |                   | (69,555
|Proceeds from sales of securities available for sale                              |  |                   | 518    
|Proceeds from maturities of securities available for sale                         |  |                   | 9,118  
|Proceeds from maturities of securities held to maturity                           |  |                   | 360    
|Principal collected on mortgage-backed securities                                 |  |                   | 16,912 
|Net increase in loans                                                             |  |                   | (12,276
|Purchase of Federal Home Loan Bank stock                                          |  |                   | (1,000 
|Proceeds from redemption of Federal Home Loan Bank stock                          |  |                   | -      
|Proceeds from sale of foreclosed real estate                                      |  |                   | 160    
|Investment in real estate development and construction                            |  |                   | (4,112 
|Purchase of premises and equipment                                                |  |                   | (321   
|Net Cash Used In Investing Activities                                             |  |                   | (60,196
|                                                                                  |  |                   |        
|CASH FLOWS FROM FINANCING ACTIVITIES                                              |  |                   |        
|Net increase in deposits                                                          |  |                   | 15,373 
|Net decrease in repurchase agreements                                             |  |                   | (15,076
|Increase (decrease) in Federal Home Loan Bank line of credit                      |  |                   | 4,963  
|Proceeds from Federal Home Loan Bank advances                                     |  |                   | 100,000
|Repayment of Federal Home Loan Bank advances                                      |  |                   | (60,056
|Net increase (decrease) in advance payments by borrowers for taxes and insurance  |  |                   | 76     
|Purchase of treasury stock                                                        |  |                   | (172   
|Dividends paid on preferred stock                                                 |  |                   | (201   
|Net Cash Provided By Financing Activities                                         |  |                   | 44,907 
|                                                                                  |  |                   |        
|Net Decrease in Cash and Cash Equivalents                                         |  |                   | (11,921
|                                                                                  |  |                   |        
|Cash and cash equivalents at beginning of period                                  |  |                   | 27,203 
|                                                                                  |  |                   |        
|Cash and Cash Equivalents at End of Period                                        |  | $                 | 15,282 



See notes to consolidated financial statements.



-7-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



| | 1. | Presentation of Interim Information
| | -- | -----------------------------------



First Savings Financial Group,
Inc. (the “Company”) is the thrift holding company of First Savings Bank, F.S.B. (the “Bank”), a wholly-owned
subsidiary. The Bank is a federally-chartered savings bank which provides a variety of banking services to individuals and business
customers through twelve locations in southern Indiana. The Bank attracts deposits primarily from the general public and uses those
funds, along with other borrowings, primarily to originate residential mortgage, commercial mortgage, construction, commercial
business and consumer loans, and to a lesser extent, to invest in mortgage-backed securities and other securities.



The Bank has three-wholly owned
subsidiaries: First Savings Investments, Inc., a Nevada corporation that manages a securities portfolio, FFCC, Inc., which is an
Indiana corporation that participates in commercial real estate development and leasing, and Southern Indiana Financial Corporation,
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 June 30, 2012, the results of operations for the three- and nine-month periods ended June 30, 2012 and 2011, and the cash
flows for the nine-month periods ended June 30, 2012 and 2011. 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 accounting principles generally accepted in the United States
of America (“GAAP”) for interim financial statements, conform to general practices within the banking industry and
are presented as permitted by the instructions to Form 10-Q. Accordingly, they do not contain certain information included in the
Company’s audited consolidated financial statements and related notes for the year ended September 30, 2011 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.



-8-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



| | 2. | Investment Securities
| | -- | ---------------------



Agency bonds and notes, agency
mortgage-backed securities and agency collateralized mortgage obligations (“CMO”) include securities issued by the
Government National Mortgage Association (“GNMA”), a U.S. government agency, and the Federal National Mortgage Association
(“FNMA”), the Federal Home Loan Mortgage Corporation (“FHLMC”) and the Federal Home Loan Bank (“FHLB”),
which are U.S. government-sponsored enterprises. Privately-issued CMO and asset-backed securities (“ABS”) are complex
securities issued by non-government special-purpose entities that are collateralized by residential mortgage loans and residential
home equity loans.



Investment securities have been
classified according to management’s intent. The amortized cost of securities and their fair values are as follows:



|                                    |  |                |         |  | Gross      |   |       | Gross      |  |   |       | 
|----------------------------------- |  | -------------- | ------- |  | ---------- | - | ----- | ---------- |  | - | ----- | 
|                                    |  | Amortized      |         |  | Unrealized |   |       | Unrealized |  |   | Fair  | 
|                                    |  | Cost           |         |  | Gains      |   |       | Losses     |  |   | Value | 
|                                    |  | (In thousands) |        
|June 30, 2012:                      |  |                |         |  |            |   |       |            |  |   |       | 
|Securities available for sale:      |  |                |         |  |            |   |       |            |  |   |       | 
|                                    |  |                |         |  |            |   |       |            |  |   |       | 
|Agency bonds and notes              |  | $              | 20,657  |  |            | $ | 154   |            |  | $ | -     | 
|Agency mortgage-backed              |  |                | 43,219  |  |            |   | 719   |            |  |   | 34    | 
|Agency CMO                          |  |                | 18,978  |  |            |   | 324   |            |  |   | 3     | 
|Privately-issued CMO                |  |                | 4,316   |  |            |   | 521   |            |  |   | 51    | 
|Privately-issued ABS                |  |                | 5,768   |  |            |   | 1,138 |            |  |   | 61    | 
|Municipal                           |  |                | 53,795  |  |            |   | 4,282 |            |  |   | 54    | 
|Subtotal – debt securities          |  |                | 146,733 |  |            |   | 7,138 |            |  |   | 203   | 
|                                    |  |                |         |  |            |   |       |            |  |   |       | 
|Equity securities                   |  |                | -       |  |            |   | 61    |            |  |   | -     | 
|                                    |  |                |         |  |            |   |       |            |  |   |       | 
|Total securities available for sale |  | $              | 146,733 |  |            | $ | 7,199 |            |  | $ | 203   | 
|                                    |  |                |         |  |            |   |       |            |  |   |       | 
|Securities held to maturity:        |  |                |         |  |            |   |       |            |  |   |       | 
|                                    |  |                |         |  |            |   |       |            |  |   |       | 
|Agency mortgage-backed              |  | $              | 1,629   |  |            | $ | 127   |            |  | $ | -     | 
|Municipal                           |  |                | 6,777   |  |            |   | 237   |            |  |   | -     | 
|                                    |  |                |         |  |            |   |       |            |  |   |       | 
|Total securities held to maturity   |  | $              | 8,406   |  |            | $ | 364   |            |  | $ | -     | 



-9-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



|                                    |  |                |         |  | Gross      |   |       | Gross      |  |   |       | 
|----------------------------------- |  | -------------- | ------- |  | ---------- | - | ----- | ---------- |  | - | ----- | 
|                                    |  | Amortized      |         |  | Unrealized |   |       | Unrealized |  |   | Fair  | 
|                                    |  | Cost           |         |  | Gains      |   |       | Losses     |  |   | Value | 
|                                    |  | (In thousands) |        
|September 30, 2011:                 |  |                |         |  |            |   |       |            |  |   |       | 
|Securities available for sale:      |  |                |         |  |            |   |       |            |  |   |       | 
|                                    |  |                |         |  |            |   |       |            |  |   |       | 
|Agency bonds and notes              |  | $              | 12,762  |  |            | $ | 104   |            |  | $ | -     | 
|Agency mortgage-backed              |  |                | 17,719  |  |            |   | 590   |            |  |   | -     | 
|Agency CMO                          |  |                | 25,368  |  |            |   | 330   |            |  |   | 7     | 
|Privately-issued CMO                |  |                | 10,037  |  |            |   | 1,535 |            |  |   | 176   | 
|Municipal                           |  |                | 37,344  |  |            |   | 2,915 |            |  |   | -     | 
|Subtotal – debt securities          |  |                | 103,230 |  |            |   | 5,474 |            |  |   | 183   | 
|                                    |  |                |         |  |            |   |       |            |  |   |       | 
|Equity securities                   |  |                | -       |  |            |   | 56    |            |  |   | -     | 
|                                    |  |                |         |  |            |   |       |            |  |   |       | 
|Total securities available for sale |  | $              | 103,230 |  |            | $ | 5,530 |            |  | $ | 183   | 
|                                    |  |                |         |  |            |   |       |            |  |   |       | 
|Securities held to maturity:        |  |                |         |  |            |   |       |            |  |   |       | 
|                                    |  |                |         |  |            |   |       |            |  |   |       | 
|Agency mortgage-backed              |  | $              | 2,337   |  |            | $ | 184   |            |  | $ | -     | 
|Municipal                           |  |                | 7,169   |  |            |   | -     |            |  |   | -     | 
|                                    |  |                |         |  |            |   |       |            |  |   |       | 
|Total securities held to maturity   |  | $              | 9,506   |  |            | $ | 184   |            |  | $ | -     | 



The amortized cost and fair value
of investment securities as of June 30, 2012 by contractual maturity are shown below. Expected maturities of mortgage-backed securities,
CMO and ABS may differ from contractual maturities because the mortgages underlying the obligations may be prepaid without penalty.



|                                       |  | Available for Sale |         |  | Held to Maturity |  
|-------------------------------------- |  | ------------------ | ------- |  | ---------------- | -
|                                       |  | Amortized          |         |  | Fair             |  
|                                       |  | Cost               |         |  | Value            |  
|                                       |  | (In thousands)     |        
|                                       |  |                    |         |  |                  |  
|Due within one year                    |  | $                  | 750     |  |                  | $
|Due after one year through five years  |  |                    | 2,600   |  |                  |  
|Due after five years through ten years |  |                    | 6,365   |  |                  |  
|Due after ten years                    |  |                    | 64,737  |  |                  |  
|                                       |  |                    | 74,452  |  |                  |  
|                                       |  |                    |         |  |                  |  
|Equity securities                      |  |                    | -       |  |                  |  
|CMO                                    |  |                    | 23,294  |  |                  |  
|ABS                                    |  |                    | 5,768   |  |                  |  
|Mortgage-backed securities             |  |                    | 43,219  |  |                  |  
|                                       |  |                    |         |  |                  |  
|                                       |  | $                  | 146,733 |  |                  | $



-10-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



Information pertaining to available
for sale securities with gross unrealized losses at June 30, 2012, aggregated by investment category and the length of time that
individual securities have been in a continuous loss position, follows:



|                                                  |  | Number                 |    |  |       |   |        | Gross      | 
|------------------------------------------------- |  | ---------------------- | -- |  | ----- | - | ------ | ---------- | 
|                                                  |  | of Investment          |    |  | Fair  |   |        | Unrealized | 
|                                                  |  | Positions              |    |  | Value |   |        | Losses     | 
|                                                  |  | (Dollars in thousands) |   
|Securities available for sale:                    |  |                        |    |  |       |   |        |            | 
|                                                  |  |                        |    |  |       |   |        |            | 
|Continuous loss position less than twelve months: |  |                        |    |  |       |   |        |            | 
|Agency mortgage-backed                            |  |                        | 4  |  |       | $ | 11,310 |            | 
|Agency CMO                                        |  |                        | 1  |  |       |   | 911    |            | 
|Privately-issued ABS                              |  |                        | 2  |  |       |   | 144    |            | 
|Municipal bonds                                   |  |                        | 6  |  |       |   | 3,690  |            | 
|                                                  |  |                        |    |  |       |   |        |            | 
|Total less than twelve months                     |  |                        | 13 |  |       |   | 16,055 |            | 
|                                                  |  |                        |    |  |       |   |        |            | 
|Continuous loss position more than twelve months: |  |                        |    |  |       |   |        |            | 
|Privately-issued CMO                              |  |                        | 2  |  |       |   | 637    |            | 
|Privately-issued ABS                              |  |                        | 1  |  |       |   | 55     |            | 
|                                                  |  |                        |    |  |       |   |        |            | 
|Total more than twelve months                     |  |                        | 3  |  |       |   | 692    |            | 
|                                                  |  |                        |    |  |       |   |        |            | 
|Total securities available for sale               |  |                        | 16 |  |       | $ | 16,747 |            | 



At June 30, 2012, the Company
did not have any securities held to maturity with an unrealized loss.



Management evaluates securities
for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant
such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost,
(2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its
investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.



The total available for sale
debt securities in loss positions at June 30, 2012 have depreciated approximately 1.20% from the Company’s amortized cost
basis and are fixed and variable rate securities with a weighted-average yield of 4.13% and a weighted-average coupon rate of 4.45%
at June 30, 2012.



U.S. government agency mortgage-backed
securities and CMOs, and municipal bonds in loss positions at June 30, 2012 had depreciated approximately 0.57% from the Company’s
amortized cost basis as of June 30, 2012. All of the agency and municipal securities are issued by U.S. government agencies, U.S.
government-sponsored enterprises and municipal governments, and are generally secured by first mortgage loans and municipal project
revenues.



-11-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



The unrealized losses on agency
securities and municipal bonds relate principally to current interest rates for similar types of securities. In analyzing an issuer’s
financial condition, management considers whether the securities are issued by the federal government, its agencies, or other governments,
whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition.
As management has the ability to hold debt securities to maturity, or for the foreseeable future if classified as available for
sale, no declines are deemed to be other-than-temporary.



At June 30, 2012, the five privately-issued
CMO and ABS securities in loss positions had depreciated approximately 11.82% from the Company’s carrying value and include
securities collateralized by residential mortgage loans and residential home equity loans. Four of these securities with fair values
totaling $737,000 and unrealized losses of $97,000 at June 30, 2012 were rated below investment grade by a nationally recognized
statistical rating organization (“NRSRO”).



The Company evaluates
the existence of a potential credit loss component related to the decline in fair value of the privately-issued CMO and
ABS portfolios each quarter using an independent third party analysis. At June 30, 2012, the Company held
nineteen privately-issued CMO and ABS securities acquired in a 2009 bank acquisition with an aggregate carrying value of $3.3
million and fair value of $3.9 million that have been downgraded to a substandard regulatory classification due to a
downgrade of the security’s credit quality rating by various rating agencies. Based on the independent third party
analysis of the expected cash flows, management has determined that the declines in value for these securities are temporary
and, as a result, no other-than-temporary impairment has been recognized on the privately-issued CMO and ABS portfolios.
While the Company did not recognize a credit-related impairment loss at June 30, 2012, additional deterioration in market,
economic or other conditions that affect the value of the underlying collateral may have an adverse impact on the credit
quality in the future and therefore, require a credit-related impairment charge.



On May 31, 2012 the Company invested
$5.0 million in a managed brokerage account that invests in small and medium lot, investment grade municipal bonds. The brokerage
account is managed by an investment advisory firm registered with the U.S. Securities and Exchange Commission. At June 30, 2012,
trading account securities recorded at fair value totaled $2.1 million, comprised of investment grade municipal bonds. The remaining
$2.9 million of the managed brokerage account was invested in Federal Deposit Insurance Corporation (“FDIC”) insured
deposits at June 30, 2012. During the three and nine months ended June 30, 2012, the Company reported net gains on trading account
securities of $31,000, including realized gains on the sale of securities and unrealized gains on securities held as of the balance
sheet date.



During the three and nine months
ended June 30, 2012, the Company realized gross gains on sales of available for sale agency securities of $18,000. During the nine
months ended June 30, 2011, the Company realized gross gains on sales of available for sale municipal securities of $68,000.



-12-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



| | 3. | Loans and Allowance for Loan Losses
| | -- | -----------------------------------



Loans at June 30, 2012 and September 30, 2011 consisted
of the following:



|                                              |  | June 30,       |         |   | September 30, |  
|--------------------------------------------- |  | -------------- | ------- | - | ------------- | -
|                                              |  | 2012           |         |   | 2011          |  
|                                              |  | (In thousands) |        
|Real estate mortgage:                         |  |                |         |   |               |  
|1-4 family residential                        |  | $              | 164,167 |   |               | $
|Multi-family residential                      |  |                | 27,499  |   |               |  
|Commercial                                    |  |                | 90,877  |   |               |  
|Residential construction                      |  |                | 12,945  |   |               |  
|Commercial construction                       |  |                | 3,368   |   |               |  
|Land and land development                     |  |                | 13,092  |   |               |  
|Commercial business loans                     |  |                | 36,676  |   |               |  
|Consumer:                                     |  |                |         |   |               |  
|Home equity loans                             |  |                | 14,878  |   |               |  
|Auto loans                                    |  |                | 8,185   |   |               |  
|Other consumer loans                          |  |                | 3,985   |   |               |  
|Gross loans                                   |  |                | 375,672 |   |               |  
|                                              |  |                |         |   |               |  
|Deferred loan origination fees and costs, net |  |                | 426     |   |               |  
|Undisbursed portion of loans in process       |  |                | (6,046  | ) |               |  
|Allowance for loan losses                     |  |                | (4,895  | ) |               |  
|                                              |  |                |         |   |               |  
|Loans, net                                    |  | $              | 365,157 |   |               | $



During the nine-month period ended
June 30, 2012, there was no significant change in the Company’s lending activities or methodology used to estimate the allowance
for loan losses as disclosed in the Company’s Annual Report on Form 10-K for the year ended September 30, 2011.



-13-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



The following table provides the components
of the recorded investment in loans for each portfolio class as of June 30, 2012:



|                                                          |  | Residential Real Estate |         |  | Commercial Real Estate |   |        | Multifamily |  |   | Construction |   |  | Land & Land Development |        |   | Commercial Business |   |        | Consumer |  |   | Total  |  
|--------------------------------------------------------- |  | ----------------------- | ------- |  | ---------------------- | - | ------ | ----------- |  | - | ------------ | - |  | ----------------------- | ------ | - | ------------------- | - | ------ | -------- |  | - | ------ | -
|                                                          |  | (In thousands)          |        
|                                                          |  |                         |         |  |                        |   |        |             |  |   |              |   |  |                         |        |   |                     |   |        |          |  |   |        |  
|Recorded Investment in Loans:                             |  |                         |         |  |                        |   |        |             |  |   |              |   |  |                         |        |   |                     |   |        |          |  |   |        |  
|Principal loan balance                                    |  | $                       | 164,167 |  |                        | $ | 90,877 |             |  | $ | 27,499       |   |  | $                       | 10,267 |   |                     | $ | 13,092 |          |  | $ | 36,676 |  
|                                                          |  |                         |         |  |                        |   |        |             |  |   |              |   |  |                         |        |   |                     |   |        |          |  |   |        |  
|Accrued interest receivable                               |  |                         | 625     |  |                        |   | 320    |             |  |   | 85           |   |  |                         | 27     |   |                     |   | 52     |          |  |   | 160    |  
|                                                          |  |                         |         |  |                        |   |        |             |  |   |              |   |  |                         |        |   |                     |   |        |          |  |   |        |  
|Net deferred loan origination fees and costs              |  |                         | 527     |  |                        |   | (88    | )           |  |   | (3           | ) |  |                         | (9     | ) |                     |   | (8     | )        |  |   | (16    | )
|                                                          |  |                         |         |  |                        |   |        |             |  |   |              |   |  |                         |        |   |                     |   |        |          |  |   |        |  
|Recorded investment in loans                              |  | $                       | 165,319 |  |                        | $ | 91,109 |             |  | $ | 27,581       |   |  | $                       | 10,285 |   |                     | $ | 13,136 |          |  | $ | 36,820 |  
|                                                          |  |                         |         |  |                        |   |        |             |  |   |              |   |  |                         |        |   |                     |   |        |          |  |   |        |  
|Recorded Investment in Loans as Evaluated for Impairment: |  |                         |         |  |                        |   |        |             |  |   |              |   |  |                         |        |   |                     |   |        |          |  |   |        |  
|Individually evaluated for impairment                     |  | $                       | 2,864   |  |                        | $ | 1,391  |             |  | $ | -            |   |  | $                       | 174    |   |                     | $ | 340    |          |  | $ | 66     |  
|                                                          |  |                         |         |  |                        |   |        |             |  |   |              |   |  |                         |        |   |                     |   |        |          |  |   |        |  
|Collectively evaluated for impairment                     |  |                         | 161,735 |  |                        |   | 89,522 |             |  |   | 27,581       |   |  |                         | 10,111 |   |                     |   | 12,796 |          |  |   | 36,754 |  
|                                                          |  |                         |         |  |                        |   |        |             |  |   |              |   |  |                         |        |   |                     |   |        |          |  |   |        |  
|Acquired with deteriorated credit quality                 |  |                         | 720     |  |                        |   | 196    |             |  |   | -            |   |  |                         | -      |   |                     |   | -      |          |  |   | -      |  
|                                                          |  |                         |         |  |                        |   |        |             |  |   |              |   |  |                         |        |   |                     |   |        |          |  |   |        |  
|Ending balance                                            |  | $                       | 165,319 |  |                        | $ | 91,109 |             |  | $ | 27,581       |   |  | $                       | 10,285 |   |                     | $ | 13,136 |          |  | $ | 36,820 |  



-14-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



The following table provides the components
of the recorded investment in loans for each portfolio class as of September 30, 2011:



|                                                          |  | Residential Real Estate |         |  | Commercial Real Estate |   |        | Multifamily |  |   | Construction |   |  | Land & Land Development |       |   | Commercial Business |   |        | Consumer |  |   | Total  |  
|--------------------------------------------------------- |  | ----------------------- | ------- |  | ---------------------- | - | ------ | ----------- |  | - | ------------ | - |  | ----------------------- | ----- | - | ------------------- | - | ------ | -------- |  | - | ------ | -
|                                                          |  | (In thousands)          |        
|                                                          |  |                         |         |  |                        |   |        |             |  |   |              |   |  |                         |       |   |                     |   |        |          |  |   |        |  
|Recorded Investment in Loans:                             |  |                         |         |  |                        |   |        |             |  |   |              |   |  |                         |       |   |                     |   |        |          |  |   |        |  
|Principal loan balance                                    |  | $                       | 169,353 |  |                        | $ | 73,513 |             |  | $ | 24,909       |   |  | $                       | 7,645 |   |                     | $ | 12,947 |          |  | $ | 40,628 |  
|                                                          |  |                         |         |  |                        |   |        |             |  |   |              |   |  |                         |       |   |                     |   |        |          |  |   |        |  
|Accrued interest receivable                               |  |                         | 622     |  |                        |   | 335    |             |  |   | 84           |   |  |                         | 18    |   |                     |   | 59     |          |  |   | 148    |  
|                                                          |  |                         |         |  |                        |   |        |             |  |   |              |   |  |                         |       |   |                     |   |        |          |  |   |        |  
|Net deferred loan origination fees and costs              |  |                         | 619     |  |                        |   | (34    | )           |  |   | (3           | ) |  |                         | (6    | ) |                     |   | (6     | )        |  |   | (44    | )
|                                                          |  |                         |         |  |                        |   |        |             |  |   |              |   |  |                         |       |   |                     |   |        |          |  |   |        |  
|Recorded investment in loans                              |  | $                       | 170,594 |  |                        | $ | 73,814 |             |  | $ | 24,990       |   |  | $                       | 7,657 |   |                     | $ | 13,000 |          |  | $ | 40,732 |  
|                                                          |  |                         |         |  |                        |   |        |             |  |   |              |   |  |                         |       |   |                     |   |        |          |  |   |        |  
|Recorded Investment in Loans as Evaluated for Impairment: |  |                         |         |  |                        |   |        |             |  |   |              |   |  |                         |       |   |                     |   |        |          |  |   |        |  
|Individually evaluated for impairment                     |  | $                       | 3,758   |  |                        | $ | 1,133  |             |  | $ | -            |   |  | $                       | 174   |   |                     | $ | 340    |          |  | $ | 2      |  
|                                                          |  |                         |         |  |                        |   |        |             |  |   |              |   |  |                         |       |   |                     |   |        |          |  |   |        |  
|Collectively evaluated for impairment                     |  |                         | 166,427 |  |                        |   | 72,100 |             |  |   | 24,990       |   |  |                         | 7,483 |   |                     |   | 12,660 |          |  |   | 40,730 |  
|                                                          |  |                         |         |  |                        |   |        |             |  |   |              |   |  |                         |       |   |                     |   |        |          |  |   |        |  
|Acquired with deteriorated credit quality                 |  |                         | 769     |  |                        |   | 581    |             |  |   | -            |   |  |                         | -     |   |                     |   | -      |          |  |   | -      |  
|                                                          |  |                         |         |  |                        |   |        |             |  |   |              |   |  |                         |       |   |                     |   |        |          |  |   |        |  
|Ending balance                                            |  | $                       | 170,954 |  |                        | $ | 73,814 |             |  | $ | 24,990       |   |  | $                       | 7,657 |   |                     | $ | 13,000 |          |  | $ | 40,732 |  



-15-









FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



An analysis of the allowance for loan losses
as of June 30, 2012 is as follows:



|                                                |  | Residential Real Estate |     |  | Commercial Real Estate |   |       | Multifamily |  |   | Construction |  |  | Land & Land Development |    |  | Commercial Business |   |    | Consumer |  |   | Total | 
|----------------------------------------------- |  | ----------------------- | --- |  | ---------------------- | - | ----- | ----------- |  | - | ------------ |  |  | ----------------------- | -- |  | ------------------- | - | -- | -------- |  | - | ----- | 
|                                                |  | (In thousands)          |    
|Ending Allowance Balance Attributable to Loans: |  |                         |     |  |                        |   |       |             |  |   |              |  |  |                         |    |  |                     |   |    |          |  |   |       | 
|Individually evaluated for impairment           |  | $                       | 60  |  |                        | $ | 70    |             |  | $ | -            |  |  | $                       | -  |  |                     | $ | -  |          |  | $ | -     | 
|                                                |  |                         |     |  |                        |   |       |             |  |   |              |  |  |                         |    |  |                     |   |    |          |  |   |       | 
|Collectively evaluated for impairment           |  |                         | 865 |  |                        |   | 1,911 |             |  |   | 465          |  |  |                         | 79 |  |                     |   | 24 |          |  |   | 1,181 | 
|                                                |  |                         |     |  |                        |   |       |             |  |   |              |  |  |                         |    |  |                     |   |    |          |  |   |       | 
|Acquired with deteriorated credit quality       |  |                         | -   |  |                        |   | -     |             |  |   | -            |  |  |                         | -  |  |                     |   | -  |          |  |   | -     | 
|                                                |  |                         |     |  |                        |   |       |             |  |   |              |  |  |                         |    |  |                     |   |    |          |  |   |       | 
|Ending balance                                  |  | $                       | 925 |  |                        | $ | 1,981 |             |  | $ | 465          |  |  | $                       | 79 |  |                     | $ | 24 |          |  | $ | 1,181 | 



An analysis of the allowance for loan losses
as of September 30, 2011 is as follows:



|                                                |  | Residential Real Estate |     |  | Commercial Real Estate |   |       | Multifamily |  |   | Construction |  |  | Land & Land Development |    |  | Commercial Business |   |    | Consumer |  |   | Total | 
|----------------------------------------------- |  | ----------------------- | --- |  | ---------------------- | - | ----- | ----------- |  | - | ------------ |  |  | ----------------------- | -- |  | ------------------- | - | -- | -------- |  | - | ----- | 
|                                                |  | (In thousands)          |    
|Ending Allowance Balance Attributable to Loans: |  |                         |     |  |                        |   |       |             |  |   |              |  |  |                         |    |  |                     |   |    |          |  |   |       | 
|Individually evaluated for impairment           |  | $                       | 84  |  |                        | $ | 70    |             |  | $ | -            |  |  | $                       | -  |  |                     | $ | -  |          |  | $ | -     | 
|                                                |  |                         |     |  |                        |   |       |             |  |   |              |  |  |                         |    |  |                     |   |    |          |  |   |       | 
|Collectively evaluated for impairment           |  |                         | 749 |  |                        |   | 1,244 |             |  |   | 604          |  |  |                         | 56 |  |                     |   | 53 |          |  |   | 1,525 | 
|                                                |  |                         |     |  |                        |   |       |             |  |   |              |  |  |                         |    |  |                     |   |    |          |  |   |       | 
|Acquired with deteriorated credit quality       |  |                         | -   |  |                        |   | -     |             |  |   | -            |  |  |                         | -  |  |                     |   | -  |          |  |   | -     | 
|                                                |  |                         |     |  |                        |   |       |             |  |   |              |  |  |                         |    |  |                     |   |    |          |  |   |       | 
|Ending balance                                  |  | $                       | 833 |  |                        | $ | 1,314 |             |  | $ | 604          |  |  | $                       | 56 |  |                     | $ | 53 |          |  | $ | 1,525 | 



-16-









FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



An analysis of the changes in the allowance
for loan losses for the three months ended June 30, 2012 is as follows:



|                                      |  | Residential Real Estate |     |   | Commercial Real Estate |   |       | Multifamily |  |   | Construction |   |  | Land & Land Development |    |  | Commercial Business |   |    | Consumer |  |   | Total |  
|------------------------------------- |  | ----------------------- | --- | - | ---------------------- | - | ----- | ----------- |  | - | ------------ | - |  | ----------------------- | -- |  | ------------------- | - | -- | -------- |  | - | ----- | -
|                                      |  | (In thousands)          |    
|Changes in Allowance for Loan Losses: |  |                         |     |   |                        |   |       |             |  |   |              |   |  |                         |    |  |                     |   |    |          |  |   |       |  
|Beginning balance                     |  | $                       | 979 |   |                        | $ | 1,612 |             |  | $ | 647          |   |  | $                       | 64 |  |                     | $ | 33 |          |  | $ | 1,379 |  
|                                      |  |                         |     |   |                        |   |       |             |  |   |              |   |  |                         |    |  |                     |   |    |          |  |   |       |  
|Provisions                            |  |                         | 29  |   |                        |   | 547   |             |  |   | (182         | ) |  |                         | 15 |  |                     |   | (9 | )        |  |   | (165  | )
|Charge-offs                           |  |                         | (85 | ) |                        |   | (178  | )           |  |   | -            |   |  |                         | -  |  |                     |   | -  |          |  |   | (33   | )
|Recoveries                            |  |                         | 2   |   |                        |   | -     |             |  |   | -            |   |  |                         | -  |  |                     |   | -  |          |  |   | -     |  
|                                      |  |                         |     |   |                        |   |       |             |  |   |              |   |  |                         |    |  |                     |   |    |          |  |   |       |  
|Ending balance                        |  | $                       | 925 |   |                        | $ | 1,981 |             |  | $ | 465          |   |  | $                       | 79 |  |                     | $ | 24 |          |  | $ | 1,181 |  



An analysis of the changes in the allowance
for loan losses for the nine months ended June 30, 2012 is as follows:



|                                      |  | Residential Real Estate |      |   | Commercial Real Estate |   |       | Multifamily |  |   | Construction |   |  | Land & Land Development |    |  | Commercial Business |   |     | Consumer |  |   | Total |  
|------------------------------------- |  | ----------------------- | ---- | - | ---------------------- | - | ----- | ----------- |  | - | ------------ | - |  | ----------------------- | -- |  | ------------------- | - | --- | -------- |  | - | ----- | -
|                                      |  | (In thousands)          |     
|Changes in Allowance for Loan Losses: |  |                         |      |   |                        |   |       |             |  |   |              |   |  |                         |    |  |                     |   |     |          |  |   |       |  
|Beginning balance                     |  | $                       | 833  |   |                        | $ | 1,314 |             |  | $ | 604          |   |  | $                       | 56 |  |                     | $ | 53  |          |  | $ | 1,525 |  
|                                      |  |                         |      |   |                        |   |       |             |  |   |              |   |  |                         |    |  |                     |   |     |          |  |   |       |  
|Provisions                            |  |                         | 359  |   |                        |   | 859   |             |  |   | (139         | ) |  |                         | 23 |  |                     |   | (29 | )        |  |   | (312  | )
|Charge-offs                           |  |                         | (375 | ) |                        |   | (192  | )           |  |   | -            |   |  |                         | -  |  |                     |   | -   |          |  |   | (33   | )
|Recoveries                            |  |                         | 108  |   |                        |   | -     |             |  |   | -            |   |  |                         | -  |  |                     |   | -   |          |  |   | 1     |  
|                                      |  |                         |      |   |                        |   |       |             |  |   |              |   |  |                         |    |  |                     |   |     |          |  |   |       |  
|Ending balance                        |  | $                       | 925  |   |                        | $ | 1,981 |             |  | $ | 465          |   |  | $                       | 79 |  |                     | $ | 24  |          |  | $ | 1,181 |  



-17-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



An analysis of the changes in the allowance
for loan losses for the three months ended June 30, 2011 is as follows:



|                                      |  | Residential Real Estate |       |   | Commercial Real Estate |   |       | Multifamily |  |   | Construction |  |  | Land & Land Development |     |   | Commercial Business |   |    | Consumer |  |   | Total |  
|------------------------------------- |  | ----------------------- | ----- | - | ---------------------- | - | ----- | ----------- |  | - | ------------ |  |  | ----------------------- | --- | - | ------------------- | - | -- | -------- |  | - | ----- | -
|                                      |  | (In thousands)          |       |   |                        |  
|Changes in Allowance for Loan Losses: |  |                         |       |   |                        |   |       |             |  |   |              |  |  |                         |     |   |                     |   |    |          |  |   |       |  
|Beginning balance                     |  | $                       | 1,236 |   |                        | $ | 880   |             |  | $ | 554          |  |  | $                       | 145 |   |                     | $ | 37 |          |  | $ | 961   |  
|                                      |  |                         |       |   |                        |   |       |             |  |   |              |  |  |                         |     |   |                     |   |    |          |  |   |       |  
|Provisions                            |  |                         | (203  | ) |                        |   | 210   |             |  |   | 135          |  |  |                         | (91 | ) |                     |   | 57 |          |  |   | 193   |  
|Charge-offs                           |  |                         | (177  | ) |                        |   | -     |             |  |   | -            |  |  |                         | -   |   |                     |   | -  |          |  |   | (19   | )
|Recoveries                            |  |                         | -     |   |                        |   | -     |             |  |   | -            |  |  |                         | -   |   |                     |   | -  |          |  |   | 153   |  
|                                      |  |                         |       |   |                        |   |       |             |  |   |              |  |  |                         |     |   |                     |   |    |          |  |   |       |  
|Ending balance                        |  | $                       | 856   |   |                        | $ | 1,090 |             |  | $ | 689          |  |  | $                       | 54  |   |                     | $ | 94 |          |  | $ | 1,288 |  



An analysis of the changes in the allowance
for loan losses for the nine months ended June 30, 2011 is as follows:



|                                      |  | Residential Real Estate |       |   | Commercial Real Estate |   |       | Multifamily |  |   | Construction |  |  | Land & Land Development |      |   | Commercial Business |   |    | Consumer |  |   | Total |  
|------------------------------------- |  | ----------------------- | ----- | - | ---------------------- | - | ----- | ----------- |  | - | ------------ |  |  | ----------------------- | ---- | - | ------------------- | - | -- | -------- |  | - | ----- | -
|                                      |  | (In thousands)          |       |   |                        |  
|Changes in Allowance for Loan Losses: |  |                         |       |   |                        |   |       |             |  |   |              |  |  |                         |      |   |                     |   |    |          |  |   |       |  
|Beginning balance                     |  | $                       | 1,242 |   |                        | $ | 600   |             |  | $ | 369          |  |  | $                       | 218  |   |                     | $ | 62 |          |  | $ | 891   |  
|                                      |  |                         |       |   |                        |   |       |             |  |   |              |  |  |                         |      |   |                     |   |    |          |  |   |       |  
|Provisions                            |  |                         | 15    |   |                        |   | 495   |             |  |   | 320          |  |  |                         | (156 | ) |                     |   | 32 |          |  |   | 255   |  
|Charge-offs                           |  |                         | (414  | ) |                        |   | (5    | )           |  |   | -            |  |  |                         | (8   | ) |                     |   | -  |          |  |   | (72   | )
|Recoveries                            |  |                         | 13    |   |                        |   | -     |             |  |   | -            |  |  |                         | -    |   |                     |   | -  |          |  |   | 214   |  
|                                      |  |                         |       |   |                        |   |       |             |  |   |              |  |  |                         |      |   |                     |   |    |          |  |   |       |  
|Ending balance                        |  | $                       | 856   |   |                        | $ | 1,090 |             |  | $ | 689          |  |  | $                       | 54   |   |                     | $ | 94 |          |  | $ | 1,288 |  



-18-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



The following table presents impaired loans
individually evaluated for impairment as of June 30, 2012 and for the three and nine months ended June 30, 2012 and 2011. The Company
did not recognize any interest income on impaired loans for the three and nine months ended June 30, 2012 and 2011.



|                                          |  | At June 30, 2012    |       |  | Three Months Ended June 30, |   |       | Nine Months Ended June 30, | 
|----------------------------------------- |  | ------------------- | ----- |  | --------------------------- | - | ----- | -------------------------- | 
|                                          |  | Recorded Investment |       |  | Unpaid Principal Balance    |   |       | Related Allowance          | 
|                                          |  | (In thousands)      |      
|Loans with no related allowance recorded: |  |                     |       |  |                             |   |       |                            | 
|Residential real estate                   |  | $                   | 2,712 |  |                             | $ | 3,079 |                            | 
|Commercial real estate                    |  |                     | 1,187 |  |                             |   | 1,206 |                            | 
|Multifamily                               |  |                     | -     |  |                             |   | -     |                            | 
|Construction                              |  |                     | 174   |  |                             |   | 174   |                            | 
|Land and land development                 |  |                     | 340   |  |                             |   | 346   |                            | 
|Commercial business                       |  |                     | 66    |  |                             |   | 65    |                            | 
|Consumer                                  |  |                     | 104   |  |                             |   | 106   |                            | 
|                                          |  |                     |       |  |                             |   |       |                            | 
|                                          |  | $                   | 4,583 |  |                             | $ | 4,976 |                            | 
|                                          |  |                     |       |  |                             |   |       |                            | 
|Loans with an allowance recorded:         |  |                     |       |  |                             |   |       |                            | 
|Residential real estate                   |  | $                   | 152   |  |                             | $ | 151   |                            | 
|Commercial real estate                    |  |                     | 204   |  |                             |   | 211   |                            | 
|Multifamily                               |  |                     | -     |  |                             |   | -     |                            | 
|Construction                              |  |                     | -     |  |                             |   | -     |                            | 
|Land and land development                 |  |                     | -     |  |                             |   | -     |                            | 
|Commercial business                       |  |                     | -     |  |                             |   | -     |                            | 
|Consumer                                  |  |                     | 252   |  |                             |   | 252   |                            | 
|                                          |  |                     |       |  |                             |   |       |                            | 
|                                          |  | $                   | 608   |  |                             | $ | 614   |                            | 
|                                          |  |                     |       |  |                             |   |       |                            | 
|Total:                                    |  |                     |       |  |                             |   |       |                            | 
|Residential real estate                   |  | $                   | 2,864 |  |                             | $ | 3,230 |                            | 
|Commercial real estate                    |  |                     | 1,391 |  |                             |   | 1,417 |                            | 
|Multifamily                               |  |                     | -     |  |                             |   | -     |                            | 
|Construction                              |  |                     | 174   |  |                             |   | 174   |                            | 
|Land and land development                 |  |                     | 340   |  |                             |   | 346   |                            | 
|Commercial business                       |  |                     | 66    |  |                             |   | 65    |                            | 
|Consumer                                  |  |                     | 356   |  |                             |   | 358   |                            | 
|                                          |  |                     |       |  |                             |   |       |                            | 
|                                          |  | $                   | 5,191 |  |                             | $ | 5,590 |                            | 



-19-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



The following table presents impaired loans
individually evaluated for impairment as of September 30, 2011.



|                                          |  | Recorded Investment |       |  | Unpaid Principal Balance |   |       | Related Allowance | 
|----------------------------------------- |  | ------------------- | ----- |  | ------------------------ | - | ----- | ----------------- | 
|                                          |  | (In thousands)      |      
|Loans with no related allowance recorded: |  |                     |       |  |                          |   |       |                   | 
|Residential real estate                   |  | $                   | 3,584 |  |                          | $ | 3,953 |                   | 
|Commercial real estate                    |  |                     | 898   |  |                          |   | 899   |                   | 
|Multifamily                               |  |                     | -     |  |                          |   | -     |                   | 
|Construction                              |  |                     | 174   |  |                          |   | 174   |                   | 
|Land and land development                 |  |                     | 340   |  |                          |   | 346   |                   | 
|Commercial business                       |  |                     | 2     |  |                          |   | 2     |                   | 
|Consumer                                  |  |                     | 134   |  |                          |   | 136   |                   | 
|                                          |  |                     |       |  |                          |   |       |                   | 
|                                          |  | $                   | 5,132 |  |                          | $ | 5,510 |                   | 
|                                          |  |                     |       |  |                          |   |       |                   | 
|Loans with an allowance recorded:         |  |                     |       |  |                          |   |       |                   | 
|Residential real estate                   |  | $                   | 174   |  |                          | $ | 175   |                   | 
|Commercial real estate                    |  |                     | 235   |  |                          |   | 235   |                   | 
|Multifamily                               |  |                     | -     |  |                          |   | -     |                   | 
|Construction                              |  |                     | -     |  |                          |   | -     |                   | 
|Land and land development                 |  |                     | -     |  |                          |   | -     |                   | 
|Commercial business                       |  |                     | -     |  |                          |   | -     |                   | 
|Consumer                                  |  |                     | 81    |  |                          |   | 81    |                   | 
|                                          |  |                     |       |  |                          |   |       |                   | 
|                                          |  | $                   | 490   |  |                          | $ | 491   |                   | 
|                                          |  |                     |       |  |                          |   |       |                   | 
|Total:                                    |  |                     |       |  |                          |   |       |                   | 
|Residential real estate                   |  | $                   | 3,758 |  |                          | $ | 4,128 |                   | 
|Commercial real estate                    |  |                     | 1,133 |  |                          |   | 1,134 |                   | 
|Multifamily                               |  |                     | -     |  |                          |   | -     |                   | 
|Construction                              |  |                     | 174   |  |                          |   | 174   |                   | 
|Land and land development                 |  |                     | 340   |  |                          |   | 346   |                   | 
|Commercial business                       |  |                     | 2     |  |                          |   | 2     |                   | 
|Consumer                                  |  |                     | 215   |  |                          |   | 217   |                   | 
|                                          |  |                     |       |  |                          |   |       |                   | 
|                                          |  | $                   | 5,622 |  |                          | $ | 6,001 |                   | 



-20-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



Nonperforming loans consists of nonaccrual
loans and loans over 90 days past due and still accruing interest. The following table presents the recorded investment in nonperforming
loans by class of loans at June 30, 2012:



|                          |  | Nonaccrual Loans |       |  | Loans 90+ Days Past Due Still Accruing |   |     | Total NonperformingLoans | 
|------------------------- |  | ---------------- | ----- |  | -------------------------------------- | - | --- | ------------------------ | 
|                          |  | (In thousands)   |      
|                          |  |                  |       |  |                                        |   |     |                          | 
|Residential real estate   |  | $                | 2,864 |  |                                        | $ | 641 |                          | 
|Commercial real estate    |  |                  | 1,391 |  |                                        |   | -   |                          | 
|Multifamily               |  |                  | -     |  |                                        |   | 46  |                          | 
|Construction              |  |                  | 174   |  |                                        |   | -   |                          | 
|Land and land development |  |                  | 340   |  |                                        |   | -   |                          | 
|Commercial business       |  |                  | 66    |  |                                        |   | 176 |                          | 
|Consumer                  |  |                  | 356   |  |                                        |   | 11  |                          | 
|                          |  |                  |       |  |                                        |   |     |                          | 
|Total                     |  | $                | 5,191 |  |                                        | $ | 874 |                          | 



The following table presents the recorded
investment in nonperforming loans by class of loans at September 30, 2011:



|                          |  | Nonaccrual Loans |       |  | Loans 90+ Days Past Due Still Accruing |   |       | Total NonperformingLoans | 
|------------------------- |  | ---------------- | ----- |  | -------------------------------------- | - | ----- | ------------------------ | 
|                          |  | (In thousands)   |      
|                          |  |                  |       |  |                                        |   |       |                          | 
|Residential real estate   |  | $                | 3,758 |  |                                        | $ | 603   |                          | 
|Commercial real estate    |  |                  | 1,133 |  |                                        |   | 949   |                          | 
|Multifamily               |  |                  | -     |  |                                        |   | -     |                          | 
|Construction              |  |                  | 174   |  |                                        |   | -     |                          | 
|Land and land development |  |                  | 340   |  |                                        |   | -     |                          | 
|Commercial business       |  |                  | 2     |  |                                        |   | 99    |                          | 
|Consumer                  |  |                  | 215   |  |                                        |   | 61    |                          | 
|                          |  |                  |       |  |                                        |   |       |                          | 
|Total                     |  | $                | 5,622 |  |                                        | $ | 1,712 |                          | 



-21-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



The following table presents the
aging of the recorded investment in past due loans at June 30, 2012 by class of loans:



|                          |  | 30-59 Days Past Due |       |  | 60-89 Days Past Due |   |       | 90 + Days Past Due |  |   | Total Past Due |  |  | Current |        |  | Total Loans |  
|------------------------- |  | ------------------- | ----- |  | ------------------- | - | ----- | ------------------ |  | - | -------------- |  |  | ------- | ------ |  | ----------- | -
|                          |  | (In thousands)      |      
|                          |  |                     |       |  |                     |   |       |                    |  |   |                |  |  |         |        |  |             |  
|Residential real estate   |  | $                   | 6,017 |  |                     | $ | 2,914 |                    |  | $ | 3,067          |  |  | $       | 11,998 |  |             | $
|Commercial real estate    |  |                     | 282   |  |                     |   | 76    |                    |  |   | 1,266          |  |  |         | 1,624  |  |             |  
|Multifamily               |  |                     | -     |  |                     |   | -     |                    |  |   | 46             |  |  |         | 46     |  |             |  
|Construction              |  |                     | -     |  |                     |   | -     |                    |  |   | 174            |  |  |         | 174    |  |             |  
|Land and land development |  |                     | -     |  |                     |   | -     |                    |  |   | 340            |  |  |         | 340    |  |             |  
|Commercial business       |  |                     | 142   |  |                     |   | -     |                    |  |   | 242            |  |  |         | 384    |  |             |  
|Consumer                  |  |                     | 278   |  |                     |   | 185   |                    |  |   | 11             |  |  |         | 474    |  |             |  
|                          |  |                     |       |  |                     |   |       |                    |  |   |                |  |  |         |        |  |             |  
|Total                     |  | $                   | 6,719 |  |                     | $ | 3,175 |                    |  | $ | 5,146          |  |  | $       | 15,040 |  |             | $



The following table presents the
aging of the recorded investment in past due loans at September 30, 2011 by class of loans:



|                          |  | 30-59 Days Past Due |       |  | 60-89 Days Past Due |   |       | 90 + Days Past Due |  |   | Total Past Due |  |  | Current |        |  | Total Loans |  
|------------------------- |  | ------------------- | ----- |  | ------------------- | - | ----- | ------------------ |  | - | -------------- |  |  | ------- | ------ |  | ----------- | -
|                          |  | (In thousands)      |      
|                          |  |                     |       |  |                     |   |       |                    |  |   |                |  |  |         |        |  |             |  
|Residential real estate   |  | $                   | 4,145 |  |                     | $ | 842   |                    |  | $ | 2,213          |  |  | $       | 7,200  |  |             | $
|Commercial real estate    |  |                     | 216   |  |                     |   | 400   |                    |  |   | 2,003          |  |  |         | 2,619  |  |             |  
|Multifamily               |  |                     | -     |  |                     |   | -     |                    |  |   | -              |  |  |         | -      |  |             |  
|Construction              |  |                     | -     |  |                     |   | -     |                    |  |   | 174            |  |  |         | 174    |  |             |  
|Land and land development |  |                     | 47    |  |                     |   | -     |                    |  |   | 341            |  |  |         | 388    |  |             |  
|Commercial business       |  |                     | 122   |  |                     |   | 932   |                    |  |   | 101            |  |  |         | 1,155  |  |             |  
|Consumer                  |  |                     | 246   |  |                     |   | 274   |                    |  |   | 147            |  |  |         | 667    |  |             |  
|                          |  |                     |       |  |                     |   |       |                    |  |   |                |  |  |         |        |  |             |  
|Total                     |  | $                   | 4,776 |  |                     | $ | 2,448 |                    |  | $ | 4,979          |  |  | $       | 12,203 |  |             | $



-22-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



The Company categorizes loans
into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial
information, public information, historical payment experience, credit documentation, and current economic trends, among other
factors. The Company classifies loans based on credit risk at least quarterly. The Company uses the following regulatory definitions
for risk ratings:



Special Mention: Loans
classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected,
these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit
position at some future date.



Substandard:Loans classified
as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged,
if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized
by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.



Doubtful:Loans classified
as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses
make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and
improbable.



Loss:Loans classified
as loss are considered uncollectible and of such little value that their continuance on the Company’s books as an asset,
without establishment of a specific valuation allowance or charge-off, is not warranted.



-23-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



Loans not meeting the criteria
above that are analyzed individually as part of the above described process are considered to be pass rated loans. As of June 30,
2012, and based on the most recent analysis performed, the recorded investment in loans by risk category was as follows:



|                |  | Residential Real Estate |         |  | Commercial Real Estate |   |        | Multifamily |  |   | Construction |  |  | Land and Land Development |        |  | Commercial Business |   |        | Consumer |  |   | Total  | 
|--------------- |  | ----------------------- | ------- |  | ---------------------- | - | ------ | ----------- |  | - | ------------ |  |  | ------------------------- | ------ |  | ------------------- | - | ------ | -------- |  | - | ------ | 
|                |  | (In thousands)          |        
|                |  |                         |         |  |                        |   |        |             |  |   |              |  |  |                           |        |  |                     |   |        |          |  |   |        | 
|Pass            |  | $                       | 150,963 |  |                        | $ | 85,669 |             |  | $ | 24,456       |  |  | $                         | 10,111 |  |                     | $ | 12,152 |          |  | $ | 34,849 | 
|Special Mention |  |                         | 2,718   |  |                        |   | 1,990  |             |  |   | 320          |  |  |                           | -      |  |                     |   | 644    |          |  |   | 412    | 
|Substandard     |  |                         | 11,067  |  |                        |   | 3,246  |             |  |   | 2,805        |  |  |                           | 174    |  |                     |   | 340    |          |  |   | 1,559  | 
|Doubtful        |  |                         | 571     |  |                        |   | 204    |             |  |   | -            |  |  |                           | -      |  |                     |   | -      |          |  |   | -      | 
|Loss            |  |                         | -       |  |                        |   | -      |             |  |   | -            |  |  |                           | -      |  |                     |   | -      |          |  |   | -      | 
|                |  |                         |         |  |                        |   |        |             |  |   |              |  |  |                           |        |  |                     |   |        |          |  |   |        | 
|Total           |  | $                       | 165,319 |  |                        | $ | 91,109 |             |  | $ | 27,581       |  |  | $                         | 10,285 |  |                     | $ | 13,136 |          |  | $ | 36,820 | 



As of September 30, 2011, and
based on the most recent analysis performed, the recorded investment in loans by risk category was as follows:



|                |  | Residential Real Estate |         |  | Commercial Real Estate |   |        | Multifamily |  |   | Construction |  |  | Land and Land Development |       |  | Commercial Business |   |        | Consumer |  |   | Total  | 
|--------------- |  | ----------------------- | ------- |  | ---------------------- | - | ------ | ----------- |  | - | ------------ |  |  | ------------------------- | ----- |  | ------------------- | - | ------ | -------- |  | - | ------ | 
|                |  | (In thousands)          |        
|                |  |                         |         |  |                        |   |        |             |  |   |              |  |  |                           |       |  |                     |   |        |          |  |   |        | 
|Pass            |  | $                       | 157,240 |  |                        | $ | 67,572 |             |  | $ | 22,699       |  |  | $                         | 7,483 |  |                     | $ | 12,223 |          |  | $ | 37,639 | 
|Special Mention |  |                         | 2,044   |  |                        |   | 2,296  |             |  |   | 327          |  |  |                           | -     |  |                     |   | 402    |          |  |   | 1,819  | 
|Substandard     |  |                         | 10,696  |  |                        |   | 3,711  |             |  |   | 1,964        |  |  |                           | 174   |  |                     |   | 375    |          |  |   | 1,272  | 
|Doubtful        |  |                         | 974     |  |                        |   | 235    |             |  |   | -            |  |  |                           | -     |  |                     |   | -      |          |  |   | 2      | 
|Loss            |  |                         | -       |  |                        |   | -      |             |  |   | -            |  |  |                           | -     |  |                     |   | -      |          |  |   | -      | 
|                |  |                         |         |  |                        |   |        |             |  |   |              |  |  |                           |       |  |                     |   |        |          |  |   |        | 
|Total           |  | $                       | 170,954 |  |                        | $ | 73,814 |             |  | $ | 24,990       |  |  | $                         | 7,657 |  |                     | $ | 13,000 |          |  | $ | 40,732 | 



-24-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



Modification of a loan is considered
to be a troubled debt restructuring (“TDR”) if the debtor is experiencing financial difficulties and the Company grants
a concession to the debtor that it would not otherwise consider. By granting the concession, the Company expects to obtain more
cash or other value from the debtor, or to increase the probability of receipt, than would be expected by not granting the concession.
The concession may include, but is not limited to, reduction of the stated interest rate of the loan, reduction of accrued interest,
extension of the maturity date or reduction of the face amount or maturity amount of the debt. A concession will be granted when,
as a result of the restructuring, the Company does not expect to collect all amounts due, including interest at the original stated
rate. A concession may also be granted if the debtor is not able to access funds elsewhere at a market rate for debt with similar
risk characteristics as the restructured debt. The Company’s determination of whether a loan modification is a TDR considers
the individual facts and circumstances surrounding each modification.



Loans modified in a TDR may be
retained in accrual status if the borrower has maintained a period of performance in which the borrower’s lending relationship
was not greater than ninety days delinquent at the time of restructuring and the Company determines the future collection of principal
and interest is reasonably assured. Loans modified in a TDR that are placed on nonaccrual status at the time of restructuring will
continue in nonaccrual status until the Company determines the future collection of principal and interest is reasonably assured,
which generally requires that the borrower demonstrate a period of performance according to the restructured terms of at least
six consecutive months.



The following table summarizes
the Company’s recorded investment in TDRs by class of loan and accrual status at June 30, 2012 and September 30, 2011. There
was no specific reserve included in the allowance for loan losses related to TDRs at June 30, 2012 or September 30, 2011.



|                        |  | Accruing       |       |  | Nonaccrual |   |   | Total | 
|----------------------- |  | -------------- | ----- |  | ---------- | - | - | ----- | 
|                        |  | (In thousands) |      
|June 30, 2012:          |  |                |       |  |            |   |   |       | 
|Residential real estate |  | $              | 2,794 |  |            | $ | - |       | 
|Commercial real estate  |  |                | 1,300 |  |            |   | - |       | 
|Multifamily             |  |                | 2,367 |  |            |   | - |       | 
|Consumer                |  |                | 161   |  |            |   | - |       | 
|                        |  |                |       |  |            |   |   |       | 
|Total                   |  | $              | 6,622 |  |            | $ | - |       | 
|                        |  |                |       |  |            |   |   |       | 
|September 30, 2011:     |  |                |       |  |            |   |   |       | 
|Residential real estate |  | $              | 1,499 |  |            | $ | - |       | 
|Commercial real estate  |  |                | 812   |  |            |   | - |       | 
|                        |  |                |       |  |            |   |   |       | 
|Total                   |  | $              | 2,311 |  |            | $ | - |       | 



-25-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



The following table summarizes
information in regard to TDRs that were restructured during the three- and nine-month periods ended June 30, 2012:



|                                  |  | Number of Loans |    |  | Pre- ModificationPrincipal Balance |   |       | Post- ModificationPrincipal Balance | 
|--------------------------------- |  | --------------- | -- |  | ---------------------------------- | - | ----- | ----------------------------------- | 
|                                  |  | (In thousands)  |   
|                                  |  |                 |    |  |                                    |   |       |                                     | 
|Three Months Ended June 30, 2012: |  |                 |    |  |                                    |   |       |                                     | 
|Residential real estate           |  |                 | 6  |  |                                    | $ | 830   |                                     | 
|Consumer                          |  |                 | 1  |  |                                    |   | 159   |                                     | 
|                                  |  |                 |    |  |                                    |   |       |                                     | 
|Total                             |  |                 | 7  |  |                                    | $ | 989   |                                     | 
|                                  |  |                 |    |  |                                    |   |       |                                     | 
|Nine Months Ended June 30, 2012:  |  |                 |    |  |                                    |   |       |                                     | 
|Residential real estate           |  |                 | 13 |  |                                    | $ | 1,620 |                                     | 
|Commercial real estate            |  |                 | 1  |  |                                    |   | 772   |                                     | 
|Multifamily                       |  |                 | 1  |  |                                    |   | 1,797 |                                     | 
|Consumer                          |  |                 | 1  |  |                                    |   | 159   |                                     | 
|                                  |  |                 |    |  |                                    |   |       |                                     | 
|Total                             |  |                 | 16 |  |                                    | $ | 4,348 |                                     | 



For the TDRs listed above, the
terms of modification included temporary interest-only payment periods, reduction of the state interest rate, capitalization of
accrued interest, extension of the maturity date, and the renewal of matured loans where the debtor was unable to access funds
elsewhere at a market interest rate for debt with similar risk characteristics.



The Company had not committed
to lend any additional amounts as of June 30, 2012 and September 30, 2011 to customers with outstanding loans classified as TDRs.



During the nine-month period
ended June 30, 2012, the Company had one TDR with a balance of $262,000 that was modified within the previous twelve months for
which there was a payment default (defined as more than 90 days past due). The Company recognized a net charge-off of $42,000 for
this TDR during the nine-month period ended June 30, 2012.



| | 4. | Real Estate Development and Construction
| | -- | ----------------------------------------



On March 22, 2011 the Company
acquired a 4.077 acre parcel of land in New Albany, Indiana for $2.97 million. On April 5, 2012, the Bank received approval from
the Office of the Comptroller of the Currency (“OCC”) to develop the land for retail purposes through its subsidiary,
FFCC. The retail development may include a future branch location, but the Bank has not yet filed an application with the OCC seeking
approval to locate a branch on the site. The total cost of the development is expected to be approximately $6.9 million, including
the $4.1 million paid as of June 30, 2012. The development costs will be partially funded by a $5.0 million loan commitment from
another financial institution. The loan commitment is for a 10 year term with a fixed interest rate of 4.0% for the first six years
of the loan term, then adjusting annually thereafter to the one-year LIBOR rate plus 250 basis points. The development is expected
to be completed by December 31, 2013.



-26-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



| | 5. | 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. Earnings per share information is presented below for the three-month and nine-month periods ended
June 30, 2012 and 2011.



|                                                       |  | Three Months Ended                            |           |   | Nine Months Ended |  
|------------------------------------------------------ |  | --------------------------------------------- | --------- | - | ----------------- | -
|                                                       |  | June 30,                                      |           |   | June 30,          |  
|                                                       |  | 2012                                          |           |   | 2011              |  
|                                                       |  | (Dollars in thousands, except per share data) |          
|                                                       |  |                                               |          
|Basic:                                                 |  |                                               |           |   |                   |  
|Earnings:                                              |  |                                               |           |   |                   |  
|Net income                                             |  | $                                             | 1,272     |   |                   | $
|Less: Preferred stock dividends declared               |  |                                               | (43       | ) |                   |  
|                                                       |  |                                               |           |   |                   |  
|Net income available to common shareholders            |  | $                                             | 1,229     |   |                   | $
|                                                       |  |                                               |           |   |                   |  
|Shares:                                                |  |                                               |           |   |                   |  
|Weighted average common shares outstanding             |  |                                               | 2,167,488 |   |                   |  
|                                                       |  |                                               |           |   |                   |  
|Net income per common share, basic                     |  | $                                             | 0.57      |   |                   | $
|                                                       |  |                                               |           |   |                   |  
|Diluted:                                               |  |                                               |           |   |                   |  
|Earnings:                                              |  |                                               |           |   |                   |  
|Net income                                             |  | $                                             | 1,272     |   |                   | $
|Less: Preferred stock dividends declared               |  |                                               | (43       | ) |                   |  
|                                                       |  |                                               |           |   |                   |  
|Net income available to common shareholders            |  | $                                             | 1,229     |   |                   | $
|                                                       |  |                                               |           |   |                   |  
|Shares:                                                |  |                                               |           |   |                   |  
|Weighted average common shares outstanding             |  |                                               | 2,167,488 |   |                   |  
|Add: Dilutive effect of outstanding options            |  |                                               | 54,523    |   |                   |  
|Add: Dilutive effect of restricted stock               |  |                                               | 15,119    |   |                   |  
|Weighted average common shares outstanding as adjusted |  |                                               | 2,237,130 |   |                   |  
|                                                       |  |                                               |           |   |                   |  
|Net income per common share, diluted                   |  | $                                             | 0.55      |   |                   | $



Unearned ESOP and nonvested restricted
stock shares are not considered as outstanding for purposes of computing weighted average common shares outstanding.



-27-







FIRST SAVINGS FINANCIAL GROUP, INC. AND
SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



| | 6. | Supplemental Disclosures of Cash Flow Information
| | -- | -------------------------------------------------



|                                                                     |  | Nine Months Ended |      
|-------------------------------------------------------------------- |  | ----------------- | -----
|                                                                     |  | June 30,          |      
|                                                                     |  | 2012              |      
|                                                                     |  | (In thousands)    |      
|Cash payments for:                                                   |  |                   |      
|Interest                                                             |  | $                 | 3,966
|Taxes                                                                |  |                   | 578  
|                                                                     |  |                   |      
|Transfers from loans to foreclosed real estate                       |  |                   | 1,306
|                                                                     |  |                   |      
|Proceeds from sales of foreclosed real estate financed through loans |  |                   | 655  



| | 7. | Fair Value Measurements and Disclosures about Fair Value of Financial Instruments
| | -- | ---------------------------------------------------------------------------------



Financial Accounting Standards
Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements, provides
the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for
identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The
three levels of the fair value hierarchy under FASB ASC Topic 820 are described as follows:





| | 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 June 30, 2012 and September 30, 2011. The Company had no liabilities
measured at fair value as of June 30, 2012 or September 30, 2011.



-28-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



|                                      |  | Carrying Value |   
|------------------------------------- |  | -------------- | --
|                                      |  | Level 1        |   
|                                      |  | (In thousands) |   
|June 30, 2012:                        |  |                |   
|Assets Measured - Recurring Basis:    |  |                |   
|Trading account securities            |  | $              | - 
|                                      |  |                |   
|Securities available for sale:        |  |                |   
|Agency bonds and notes                |  | $              | - 
|Agency mortgage-backed                |  |                | - 
|Agency CMO                            |  |                | - 
|Privately-issued CMO                  |  |                | - 
|Privately-issued ABS                  |  |                | - 
|Municipal                             |  |                | - 
|Equity securities                     |  |                | 61
|Total securities available for sale   |  | $              | 61
|                                      |  |                |   
|Interest rate cap contract            |  | $              | - 
|                                      |  |                |   
|Assets Measured - Nonrecurring Basis: |  |                |   
|Impaired loans                        |  | $              | - 
|Loans held for sale                   |  |                | - 
|Foreclosed real estate                |  |                | - 
|                                      |  |                |   
|September 30, 2011:                   |  |                |   
|Assets Measured - Recurring Basis:    |  |                |   
|Securities available for sale:        |  |                |   
|Agency bonds and notes                |  | $              | - 
|Agency mortgage-backed                |  |                | - 
|Agency CMO                            |  |                | - 
|Privately-issued CMO                  |  |                | - 
|Municipal                             |  |                | - 
|Equity securities                     |  |                | 56
|Total securities available for sale   |  | $              | 56
|                                      |  |                |   
|Interest rate cap contract            |  | $              | - 
|                                      |  |                |   
|Assets Measured - Nonrecurring Basis: |  |                |   
|Impaired loans                        |  | $              | - 
|Foreclosed real estate                |  |                | - 



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.



-29-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



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.



Trading Account Securities
and Securities Available for Sale.Securities classified as trading and 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 trading account securities are reported
in noninterest income. 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 involve significant management judgments (Level 2 inputs).



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 comprised of residential real estate loans
and fair value is based on specific prices of underlying contracts for sales to investors. These measurements are carried at Level
2.



Foreclosed Real Estate.
Foreclosed real estate held for sale is reported at 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.



Transfers Between Categories.
There were no transfers into or out of the Company’s Level 3 financial assets for the nine-month periods ended June 30, 2012 and
2011. In addition, there were no transfers into or out of Levels 1 and 2 of the fair value hierarchy during the nine-month periods
ended June 30, 2012 and 2011.



-30-







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:



|                                                           |  | June 30, 2012  |         |  | September 30, 2011 |  
|---------------------------------------------------------- |  | -------------- | ------- |  | ------------------ | -
|                                                           |  | Carrying       |         |  | Fair               |  
|                                                           |  | Amount         |         |  | Value              |  
|                                                           |  | (In thousands) |        
|Financial assets:                                          |  |                |         |  |                    |  
|Cash and due from banks                                    |  | $              | 7,694   |  |                    | $
|Interest-bearing deposits with banks                       |  |                | 7,588   |  |                    |  
|Trading account securities                                 |  |                | 2,130   |  |                    |  
|Securities available for sale                              |  |                | 153,729 |  |                    |  
|Securities held to maturity                                |  |                | 8,406   |  |                    |  
|                                                           |  |                |         |  |                    |  
|Loans, net                                                 |  |                | 365,157 |  |                    |  
|                                                           |  |                |         |  |                    |  
|Loans held for sale                                        |  |                | 92      |  |                    |  
|Federal Home Loan Bank stock                               |  |                | 5,400   |  |                    |  
|Accrued interest receivable                                |  |                | 2,634   |  |                    |  
|                                                           |  |                |         |  |                    |  
|Financial liabilities:                                     |  |                |         |  |                    |  
|Deposits                                                   |  |                | 402,999 |  |                    |  
|Short-term repurchase agreements                           |  |                | 1,327   |  |                    |  
|Borrowings from Federal Home Loan Bank                     |  |                | 98,044  |  |                    |  
|Accrued interest payable                                   |  |                | 248     |  |                    |  
|Advance payments by borrowers for taxes and insurance      |  |                | 406     |  |                    |  
|                                                           |  |                |         |  |                    |  
|Derivative financial instruments included in other assets: |  |                |         |  |                    |  
|Interest rate cap                                          |  |                | 17      |  |                    |  



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:



-31-







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 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 borrowings
from the FHLB and repurchase agreements. Fair value for FHLB advances and long-term repurchase agreements is estimated by discounting
the future cash flows at current interest rates for FHLB advances of similar maturities. For 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.



-32-







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 years’ 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- and nine-month
periods ended June 30, 2012 amounted to $64,000 and $186,000, respectively. Compensation expense recognized for the three- and
nine-month periods ended June 30, 2011 amounted to $58,000 and $183,000, respectively. Company common stock held by the ESOP trust
at June 30, 2012 was as follows:



|Allocated shares              |  |   | 79,895    | 
|----------------------------- |  | - | --------- | 
|Unearned shares               |  |   | 123,468   | 
|Total ESOP shares             |  |   | 203,363   | 
|                              |  |   |           | 
|Fair value of unearned shares |  | $ | 2,179,000 | 



| | 9. | Stock Based Compensation Plans
| | -- | ------------------------------



The Company’s 2010 Equity
Incentive Plan (“Plan”), which the Company’s shareholders approved in February 2010, provides for the award of
stock options, restricted shares and performance shares.  The aggregate number of shares of the Company’s common stock
available for issuance under the Plan may not exceed 355,885 shares.  The Company may grant both non-statutory and statutory
(i.e., incentive) stock options that may not have a term exceeding ten years.  An award of a performance share is a grant
of a right to receive shares of the Company’s common stock contingent upon the achievement of specific performance criteria
or other objectives set at the grant date.  Awards granted under the Plan may be granted either alone, in addition to, or
in tandem with any other award granted under the Plan.  The terms of the Plan include a provision whereby all unearned options
and shares become immediately exercisable and fully vested upon a change in control.



-33-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



In April 2010, the Company funded
a trust, administered by an independent trustee, which acquired 101,681 common shares in the open market at a price per share of
$13.60 for a total cost of $1.4 million. These acquired common shares were later granted to directors, officers and key employees in
the form of restricted stock in May 2010 at a price per share of $13.25 for a total of $1.3 million. The difference between the
purchase price and grant price of the common shares issued as restricted stock, totaling $41,000, was recognized by the Company
as a reduction of additional paid in capital. The restricted stock vests ratably over a five-year period from the grant date. Compensation
expense is measured based on the fair market value of the restricted stock at the grant date and is recognized ratably over the
period during which the shares are earned (the vesting period). Compensation expense related to restricted stock recognized for
both the three-month periods ended June 30, 2012 and 2011 amounted to $65,000. Compensation expense related to restricted stock
recognized for both the nine-month periods ended June 30, 2012 and 2011 amounted to $195,000. A summary of the Company’s
nonvested restricted shares activity under the Plan as of June 30, 2012 and changes during the nine-month period then ended is
presented below.



|                             |  |        |         |   | Weighted   |  
|---------------------------- |  | ------ | ------- | - | ---------- | -
|                             |  | Number |         |   | Average    |  
|                             |  | of     |         |   | Grant Date |  
|                             |  | Shares |         |   | Fair Value |  
|                             |  |        |         |   |            |  
|Nonvested at October 1, 2011 |  |        | 78,470  |   |            | $
|Granted                      |  |        | -       |   |            |  
|Vested                       |  |        | (19,620 | ) |            |  
|Forfeited                    |  |        | -       |   |            |  
|                             |  |        |         |   |            |  
|Nonvested at June 30, 2012   |  |        | 58,850  |   |            | $



At June 30, 2012, there was $747,000
of total unrecognized compensation expense related to nonvested restricted shares. The compensation expense is expected to be recognized
over the remaining vesting period of 2.9 years.



In May 2010, the Company awarded
177,549 incentive and 76,655 non-statutory stock options to directors, officers and key employees. The options granted vest ratably
over five years and are exercisable in whole or in part for a period up to ten years from the date of the grant. Compensation expense
is measured based on the fair market value of the options at the grant date and is recognized ratably over the period during which
the shares are earned (the vesting period). The weighted average fair value at the grant date for options granted in 2010 was $3.09,
as determined at the date of grant using the Binomial option pricing model.



-34-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



A summary of stock option activity
under the Plan as of June 30, 2012, and changes during the nine-month period then ended is presented below.



|                               |  |                                               |         |  |          |   |       | Weighted    |  |  |           | 
|------------------------------ |  | --------------------------------------------- | ------- |  | -------- | - | ----- | ----------- |  |  | --------- | 
|                               |  |                                               |         |  | Weighted |   |       | Average     |  |  |           | 
|                               |  | Number                                        |         |  | Average  |   |       | Remaining   |  |  | Aggregate | 
|                               |  | of                                            |         |  | Exercise |   |       | Contractual |  |  | Intrinsic | 
|                               |  | Shares                                        |         |  | Price    |   |       | Term        |  |  | Value     | 
|                               |  | (Dollars in thousands, except per share data) |        
|                               |  |                                               |         |  |          |   |       |             |  |  |           | 
|Outstanding at October 1, 2011 |  |                                               | 245,232 |  |          | $ | 13.25 |             |  |  |           | 
|Granted                        |  |                                               | -       |  |          |   | -     |             |  |  |           | 
|Exercised                      |  |                                               | -       |  |          |   | -     |             |  |  |           | 
|Forfeited or expired           |  |                                               | -       |  |          |   | -     |             |  |  |           | 
|                               |  |                                               |         |  |          |   |       |             |  |  |           | 
|Outstanding at June 30, 2012   |  |                                               | 245,232 |  |          | $ | 13.25 |             |  |  | 7.9       | 
|                               |  |                                               |         |  |          |   |       |             |  |  |           | 
|Exercisable at June 30, 2012   |  |                                               | 98,095  |  |          | $ | 13.25 |             |  |  | 7.9       | 



The Company
recognized compensation expense related to stock options of $38,000 for both the three-month periods ended June 30, 2012 and
2011. The Company recognized compensation expense related to stock options of $114,000 and $139,000 for the nine-month periods
ended June 30, 2012 and 2011, respectively. At June 30, 2012, there was $436,000 of unrecognized compensation expense related
to nonvested stock options, which will be recognized over the remaining vesting period of 2.9 years.



| | 10. | Preferred Stock
| | --- | ---------------



On August 11, 2011, the Company
entered into a Securities Purchase Agreement (“Purchase Agreement”) with the United States Department of the Treasury,
pursuant to which the Company issued 17,120 shares of the its Senior Non-Cumulative Perpetual Preferred Stock, Series A (“Series
A Preferred Stock”), having a liquidation amount per share equal to $1,000, for a total purchase price of $17,120,000. The
Purchase Agreement was entered into, and the Series A Preferred Stock was issued, pursuant to the Small Business Lending Fund (“SBLF”)
program, a $30 billion fund established under the Small Business Jobs Act of 2010, that encourages lending to small businesses
by providing Tier 1 capital to qualified community banks with assets of less than $10 billion.



-35-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



Holders of the Series A Preferred
Stock are entitled to receive non-cumulative dividends, payable quarterly, on each January 1, April 1, July 1 and October 1, beginning
October 1, 2011. The dividend rate, as a percentage of the liquidation amount, can fluctuate on a quarterly basis during the first
ten quarters during which the Series A Preferred Stock is outstanding and may be adjusted between 1.0% and 5.0% per annum, to reflect
the amount of change in the Bank’s level of Qualified Small Business Lending (“QSBL”) (as defined in the Purchase
Agreement) over the baseline level calculated under the terms of the Purchase Agreement (“Baseline”).  In addition
to the dividend, in the event the Bank’s level of QSBL has not increased relative to the Baseline, at the beginning of the
tenth calendar quarter, the Company will be subject to an additional lending incentive fee equal to 2.0% per annum. For the eleventh
dividend period through the eighteenth dividend period, inclusive, and that portion of the nineteenth dividend period before, but
not including, the four and one half (41⁄2) year anniversary of the date of issuance, the dividend rate will be fixed at between
1.0% and 7.0% per annum based upon the increase in QSBL as compared to the Baseline. After four and one half (41⁄2) years
from issuance, the dividend rate will increase to nine 9.0%. Based upon the Bank’s level of QSBL over the Baseline for purposes
of calculating the dividend rate for the initial dividend period, the dividend rate for the initial dividend period ended September
30, 2011 was 4.84%. The dividend rate for the fourth dividend period ended June 30, 2012 was 1.0% and the weighted average dividend
rate for the nine-month period ended June 30, 2012 was 1.0%.



The Series A Preferred Stock
is non-voting, except in limited circumstances. In the event that the Company fails to timely make five dividend payments, whether
or not consecutive, the holder of the Series A Preferred Stock will have the right, but not the obligation, to appoint a representative
as an observer on the Company’s board of directors.



The Series A Preferred Stock
may be redeemed at any time at the Company’s option, at a redemption price of one hundred percent (100%) of the liquidation
amount plus accrued but unpaid dividends to the date of redemption for the current period, subject to the approval of its federal
banking regulator.



The Series A Preferred Stock
was issued in a private placement exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.
The Company has agreed to register the Series A Preferred Stock under certain circumstances set forth in the Purchase Agreement.
The Series A Preferred Stock is not subject to any contractual restrictions on transfer.



-36-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



| | 11. | Recent Accounting Pronouncements
| | --- | --------------------------------



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



In May 2011, the FASB issued Accounting
Standards Update (“ASU”) No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements
by U.S. GAAP and IFRSs. The amendments in this ASU generally represent clarifications of FASB ASC Topic 820, but also include
some instances where a particular principle or requirement for measuring fair value or disclosing information about fair value
measurements has changed. This ASU results in common principles and requirements for measuring fair value and for disclosing information
about fair value measurements in accordance with U.S. GAAP and IFRSs. The amendments in this ASU are to be applied prospectively.
For public entities, the amendments are effective for interim and annual periods beginning after December 15, 2011. Early application
by public entities is not permitted. Adoption of this ASU did not have any impact on the Company’s consolidated financial
position or results of operations.



In June 2011, the FASB issued
ASU No. 2011-05, Amendments to Topic 220, Comprehensive Income. Under the amendments in this ASU, an entity has the option
to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either
in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity
is required to present each component of net income along with total net income, each component of other comprehensive income along
with a total for other comprehensive income, and a total amount for comprehensive income. This ASU eliminates the option to present
the components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments in this
ASU do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must
be reclassified to net income. The amendments in this ASU should be applied retrospectively. For public entities, the amendments
are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted,
because compliance with the amendments is already permitted. The amendments do not require any transition disclosures. The adoption
of this ASU did not have any impact on the Company’s consolidated financial position or results of operations. ASU No. 2011-12
issued in December 2011 deferred the effective date of ASU No. 2011-05 related to the presentation of reclassifications of items
out of accumulated other comprehensive income. All other requirements of ASU No. 2011-05 were not affected by ASU No. 2011-12.



-37-







FIRST SAVINGS FINANCIAL GROUP, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



In December 2011, the FASB issued
ASU No. 2011-11, Balance Sheet (Topic 210). The update requires an entity to disclose information about offsetting
and related arrangements to enable users of the financial statements to understand the effect of netting arrangements on the entity’s
financial position. The scope includes derivatives, sale and repurchase agreements and reverse sale and repurchase agreements,
and securities borrowing and securities lending arrangements. The amendments in the update are effective for annual reporting periods
beginning on or after January 1, 2013, and interim periods within those annual periods, with disclosures required by the amendments
provided retrospectively for all comparative periods presented. The adoption of this update is not expected to have any impact
on the Company’s consolidated financial position or results of operations.



| | 12. | Subsequent Event
| | --- | ----------------



The Company acquired the Indiana
branch offices of Elizabethtown, Kentucky-based First Federal Savings Bank of Elizabethtown, Inc. (“First Federal”)
on July 6, 2012, pursuant to an Agreement to Purchase Assets and Assume Liabilities dated February 8, 2012 (the “Agreement”).
The offices are located in Corydon, Elizabeth, Georgetown and Lanesville, Indiana. The Company has consolidated the operations
of the acquired Corydon office with its existing Corydon office and the operations of the acquired Georgetown office with its existing
Georgetown office because of their close proximities. The acquisition expanded the Company’s presence in Harrison and Floyd
Counties, Indiana.



Pursuant to the terms of the
Agreement, the Company assumed certain deposit and other liabilities and purchased certain performing loans, real estate and other
assets associated with the four First Federal banking offices. The transaction will be accounted for using the purchase method
of accounting. Under the purchase method of accounting, the purchase price is assigned to the assets acquired and liabilities assumed
based on their estimated fair values, net of applicable income tax effects. The excess of cost over the fair value of the acquired
net assets will be recorded as goodwill. As of the filing date of this report, the Company was still in the process of determining
the fair value of the acquired assets and assumed liabilities, and the related goodwill resulting from the transaction.



-38-







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; the ability
to successfully integrate the operations of Community First; and changes in accounting principles and guidelines. Additional factors
that may affect our results are discussed herein and in our Annual Report on Form 10-K for the year ended September 30, 2011 under
“Part II, 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 nine-month
period ended June 30, 2012, 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, 2011.



Comparison of Financial Condition at June 30, 2012 and September
30, 2011



Cash and Cash
Equivalents. Cash and cash equivalents decreased from $27.2 million at September 30, 2011 to $15.3 million at June 30,
2012, due to decreases in cash and due from banks of $10.4 million and interest-bearing deposits with banks of $1.5 million. The
decrease in cash and cash equivalents was primarily used to fund the loan portfolio growth and purchases of securities available
for sale.



Loans.
Net loans receivable increased $10.8 million, from $354.4 million at September 30, 2011 to $365.2 million at June 30, 2012, primarily
due to increases in nonresidential permanent and construction loans of $16.6 million, multi-family residential mortgage loans of
$2.6 million and land and land development loans of $145,000, which more than offset decreases in commercial business loans of
$4.0 million, consumer loans of $2.5 million and residential permanent and construction loans of $243,000. The decreases in commercial
business loans, consumer loans and residential mortgage loans are primarily due to loan payoffs that have not been replaced by
new originations for the Bank’s in-house loan portfolio. The net increase in net loans receivable was primarily funded by
the decrease in cash and cash equivalents, and increases in deposits and borrowings.



-39-







FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 2



MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS



Trading Account
Securities. Trading account securities increased by $2.1 million due to an investment on May 31, 2012 in a managed brokerage
account for the purpose of participating in the short-term trading of small and medium lot, investment grade municipal bonds. At
June 30, 2012, trading account securities recorded at fair value totaled $2.1 million, comprised of investment grade municipal
bonds. The Company had no trading account securities at September 30, 2011.



Securities Available
for Sale. Securities available for sale increased $45.1 million from $108.6 million at September 30, 2011 to $153.7 million
at June 30, 2012 due primarily to purchases of $69.6 million, partially offset by maturities and calls of $9.1 million, principal
repayments of $16.2 million and sales of $518,000. The increase in securities available for sale, primarily in U.S. government
agency and sponsored enterprises securities, including mortgage-backed securities, and municipal bonds was primarily funded by
the decrease in cash and cash equivalents, and increases in deposits and borrowings.



Securities Held
to Maturity. Investment securities held-to-maturity decreased $1.1 million from $9.5 million at September 30, 2011 to $8.4
million at June 30, 2012 due primarily to principal repayments on mortgage-backed securities.



Deposits.
Total deposits increased $15.4 million from $387.6 million at September 30, 2011 to $403.0 million at June 30, 2012 primarily due
to increases in noninterest-bearing demand deposit accounts of $5.7 million, interest-bearing demand deposit accounts of $10.4
million, savings accounts of $4.2 million, and money market deposit accounts of $13.7 million, which more than offset a decrease
in certificates of deposit of $18.5 million during the period. The decrease in certificates of deposit occurred in various maturity
classes and in brokered certificates of deposit, which decreased $1.2 million. The decrease in certificates of deposit is primarily
attributed to maturities that customers are investing in more liquid accounts given the low interest rate environment.



Borrowings.
Borrowings from FHLB increased $44.9 million from $53.1 million at September 30, 2011 to $98.0 million at June 30, 2012 while repurchase
agreements decreased $15.1 million from $16.4 million at September 30, 2011 to $1.3 million at June 30, 2012. Management has increased
the level of FHLB advances in order repay matured brokered certificates of deposit and repurchase agreements, to take advantage
of historically low interest rates, provide short-term liquidity and provide funding for the loan portfolio growth and purchases
of available for sale securities.



Stockholders’
Equity. Stockholders’ equity increased $4.4 million from $76.6 million at September 30, 2011 to $81.0 million at
June 30, 2012. The increase was due primarily to $3.0 million of retained net earnings and a $1.0 million increase in net unrealized
gains on securities available for sale.



-40-







FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 2



MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS



Results of Operations for the Nine Months
Ended June 30, 2012 and 2011



Overview.
The Company reported net income of $3.1 million and net income available to common shareholders of $3.0 million, or $1.36 per diluted
share, for the nine-month period ended June 30, 2012 compared to net income of $3.2 million, or $1.45 per diluted share, for the
nine-month period ended June 30, 2011.



Net Interest
Income. Net interest income increased $218,000, or 4.1%, for the nine-month period ended June 30, 2012 compared to the
same period in 2011. Average interest-earnings assets increased $32.4 million and average interest-bearing liabilities increased
$7.7 million when comparing the two periods. The tax-equivalent interest rate spread was 4.12% for 2012 as compared to 4.34% for
2011.



Total interest income
decreased $379,000, or 5.7%, when comparing the two periods due primarily to a decrease in the average tax-equivalent yield on
interest-earning assets from 5.62% for 2011 to 5.20% for 2012, which more than offset the change in interest income due to an increase
in the average balance of interest-earning assets of $32.4 million from $470.8 million for 2011 to $503.2 million for 2012. The
average balance of loans and investment securities increased $17.8 million and $12.7 million, respectively, when comparing the
two periods.



Total interest expense
decreased $597,000, or 45.9%, due primarily to a decrease in the average cost of interest-bearing liabilities from 1.28% for 2011
to 1.08% for 2012, which more than offset the change in interest expense due to an increase in the average balance of interest-bearing
liabilities of $7.7 million from $424.4 million for 2011 to $432.1 million for 2012. The average cost of interest-bearing liabilities
decreased for 2012 primarily as a result of lower market interest rates as compared to 2011, the repricing of certificates of deposit
at lower market interest rates as they matured and the utilization of lower-cost brokered certificates of deposit and FHLB borrowings
as alternative sources of funding. The average balance of deposits increased $13.6 million while the average balance of borrowings
decreased $5.9 million when comparing the two periods.



-41-







FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 2



MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS



Average Balance
Sheets.The following table presents information regarding average balances of assets and liabilities, the total dollar
amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on
average interest-bearing liabilities, and the resulting annualized average yields and costs for the nine-month periods ended June
30, 2012 and 2011. The yields and costs for the periods indicated are derived by dividing income or expense by the average balances
of assets or liabilities, respectively, for the periods presented. Nonaccrual loans are included in average balances only. Loan
fees are included in interest income on loans and are not material. Tax exempt income on loans and investment securities has been
calculated on a tax equivalent basis using a federal marginal tax rate of 34%.



|                                                                        |  | Nine Months Ended June 30, |        
|----------------------------------------------------------------------- |  | -------------------------- | -------
|                                                                        |  | 2012                       |        
|                                                                        |  | Average Balance            |        
|                                                                        |  | (Dollars in thousands)     |        
|Assets:                                                                 |  |                            |        
|Interest-bearing deposits with banks                                    |  | $                          | 5,241  
|Loans                                                                   |  |                            | 362,288
|Investment securities                                                   |  |                            | 102,401
|Agency mortgage-backed securities                                       |  |                            | 28,430 
|Federal Home Loan Bank stock                                            |  |                            | 4,819  
|Total interest-earning assets                                           |  |                            | 503,179
|                                                                        |  |                            |        
|Non-interest-earning assets                                             |  |                            | 46,103 
|Total assets                                                            |  | $                          | 549,282
|                                                                        |  |                            |        
|Liabilities and equity:                                                 |  |                            |        
|NOW accounts                                                            |  | $                          | 73,455 
|Money market deposit accounts                                           |  |                            | 44,966 
|Savings accounts                                                        |  |                            | 43,460 
|Time deposits                                                           |  |                            | 193,828
|Total interest-bearing deposits                                         |  |                            | 355,709
|                                                                        |  |                            |        
|Borrowings (1)                                                          |  |                            | 76,368 
|Total interest-bearing liabilities                                      |  |                            | 432,077
|                                                                        |  |                            |        
|Non-interest-bearing deposits                                           |  |                            | 36,289 
|Other non-interest-bearing liabilities                                  |  |                            | 2,827  
|Total liabilities                                                       |  |                            | 471,193
|                                                                        |  |                            |        
|Total equity                                                            |  |                            | 78,089 
|Total liabilities and equity                                            |  | $                          | 549,282
|Net interest income                                                     |  |                            |        
|Interest rate spread                                                    |  |                            |        
|Net interest margin                                                     |  |                            |        
|Average interest-earning assets to average interest-bearing liabilities |  |                            |        










| | (1) | Includes Federal Home Loan Bank borrowings and repurchase agreements.
| | --- | ---------------------------------------------------------------------



-42-







FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 2



MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS



Rate/Volume Analysis.The following table sets forth the effects of changing rates and volumes on our net interest income for the nine-month
periods ended June 30, 2012 and 2011. The rate column shows the effects attributable to changes in rate (changes in rate multiplied
by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior
rate). The net column represents the sum of the prior columns. Changes attributable to changes in both rate and volume have been
allocated proportionally based on the absolute dollar amounts of change in each.



|                                               |  | Nine Months Ended June 30, 2012 Compared to Nine Months Ended June 30, 2011 |       
|---------------------------------------------- |  | --------------------------------------------------------------------------- | ------
|                                               |  | Increase (Decrease) Due to                                                  |       
|                                               |  | Rate                                                                        |       
|                                               |  |                                                                             |       
|Interest income:                               |  |                                                                             |       
|Interest-bearing deposits with banks           |  | $                                                                           | (12   
|Loans                                          |  |                                                                             | (1,320
|Investment securities                          |  |                                                                             | (181  
|Agency mortgage-backed securities              |  |                                                                             | (44   
|Other interest-earning assets                  |  |                                                                             | 11    
|Total interest-earning assets                  |  |                                                                             | (1,546
|                                               |  |                                                                             |       
|Interest expense:                              |  |                                                                             |       
|Deposits                                       |  |                                                                             | (557  
|Borrowings (1)                                 |  |                                                                             | (90   
|Total interest-bearing liabilities             |  |                                                                             | (647  
|Net increase (decrease) in net interest income |  | $                                                                           | (899  










(1) Includes Federal Home Loan Bank borrowings
and repurchase agreements.



Provision for
Loan Losses. The provision for loan losses was $897,000 for the nine months ended June 30, 2012 compared to $1.1 million
for the same period in 2011.



Net charge-offs were
$674,000 for the nine months ended June 30, 2012 compared to net charge-offs of $438,000 for the same period in 2011.



The recorded investment
in nonperforming loans was $6.1 million at June 30, 2012 compared to $7.3 million at September 30, 2011 and $7.9 million at June
30, 2011. Nonperforming loans at June 30, 2012 include nonaccrual loans of $5.2 million and loans totaling $874,000 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 decrease in nonperforming loans from September
30, 2011 to June 30, 2012 is due primarily to a single borrower relationship that was transferred from nonaccrual to accrual status
during the nine months ended June 30, 2012. This lending relationship had a total recorded investment of approximately $2.0 million
at June 30, 2012 and is secured by 23 non-owner occupied, one-to-four family investment properties, which were predominately constructed
in the past ten years and sold on contract to their occupants. All of these loans were current at June 30, 2012 and the borrower
had made all contractual principal and interest payments for a period of at least six consecutive months.



-43-







FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 2



MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS



Gross loans receivable
increased $16.2 million from $359.5 million at June 30, 2011 to $375.7 million at June 30, 2012, primarily due to increases in
nonresidential permanent and construction loans of $22.7 million, multi-family residential mortgage loans of $2.6 million, and
land and land development loans of $264,000, which more that offset decreases in residential permanent and construction loans of
$3.0 million, commercial business loans of $2.2 million and consumer loans of $4.2 million when comparing the two periods. The
decreases in residential mortgage loans, commercial business loans and consumer loans are primarily due to loan payoffs that have
not been replaced by new originations.



The allowance for loan
losses was $4.9 million at June 30, 2012 compared to $4.7 million at September 30, 2011 and $4.4 million at June 30, 2011. 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 changes in the loan portfolio and overall economic conditions.



Noninterest Income.
Noninterest income increased $95,000 for the nine-month period ended June 30, 2012 as compared to the same period in 2011. The
increase was due primarily to a gain on life insurance of $321,000 and an increase in other noninterest income of $102,000 for
2012, which more than offset decreases in service charges on deposit accounts of $158,000 and net gains on the sale of loans of
$149,000. The decrease in service charges on deposits was due primarily to a decrease in overdraft fee income. The increase in
other income is due primarily to increases in surcharge, interchange and other fee income sources.



Noninterest Expense.
Noninterest expenses increased $809,000 for the nine-month period ended June 30, 2012 as compared to the same period in 2011. The
increase was due primarily to increases in advertising expense, professional fees, and data processing expense of $243,000, $297,000
and $246,000, respectively, which more than offset decreases in FDIC insurance premiums and net losses on foreclosed real estate
of $166,000 and $134,000, respectively. The increase in advertising expense was due primarily to a rebranding and advertising campaign
for the Bank’s new look and logo that was launched in September 2011. The increases in data processing and professional fees
expenses are due primarily to expenditures associated with the acquisition and planned integration of the four Indiana branch locations
acquired from First Federal on July 6, 2012.



Income Tax Expense.
The Company recognized income tax expense of $1.0 million for the nine-month period ended June 30, 2012, for an effective tax rate
of 24.5%, compared to income tax expense of $1.3 million, for an effective tax rate of 29.2%, for the same period in 2011. The
lower effective tax rate for the nine months ended June 30, 2012 was due primarily to a higher level of tax exempt income for 2012.



-44-







FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 2



MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS



Results of Operations for the Three
Months Ended June 30, 2012 and 2011



Overview.
The Company reported net income of $1.3 million and net income available to common shareholders of $1.2 million, or $0.55 per diluted
share, for the quarter ended June 30, 2012 compared to net income of $1.1 million, or $0.51 per diluted share, for the quarter
ended June 30, 2011.



Net Interest
Income. Net interest income increased $170,000, or 1.1%, for the three months ended June 30, 2012 compared to the same
period in 2011. Average interest-earnings assets increased $45.3 million and average interest-bearing liabilities increased $19.2
million when comparing the two periods. The tax-equivalent interest rate spread was 4.12% for 2012 as compared to 4.37% for 2011.



Total interest income
decreased $33,000, or 0.2%, when comparing the two periods due primarily to a decrease in the average tax-equivalent yield on interest-earning
assets from 5.60% for 2011 to 5.12% for 2012, which more than offset the change in interest income due to an increase in the average
balance of interest-earning assets of $45.3 million from $481.3 million for 2011 to $526.6 million for 2012. The average balance
of loans and investment securities increased $19.8 million and $22.3 million, respectively, when comparing the two periods.



Total interest expense
decreased $203,000, or 5.0%, due primarily to a decrease in the average cost of interest-bearing liabilities from 1.23% for 2011
to 1.00% for 2012. The average balance of interest-bearing liabilities increased by $19.2 million from $431.2 million for 2011
to $450.4 million for 2012. The average cost of interest-bearing liabilities decreased for 2012 primarily as a result of lower
market interest rates as compared to 2011, the repricing of certificates of deposit at lower market interest rates as they matured
and the utilization of lower-cost brokered certificates of deposit and FHLB borrowings as alternatives sources of funding. The
average balance of deposits increased $22.1 million while the average balance of borrowings decreased $2.8 million when comparing
the two periods. The decrease in borrowings is due primarily to the maturity of $15.0 million of repurchase agreements that occurred
in the quarter ended December 31, 2011, which was partially offset by increased borrowings from FHLB.



-45-











FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 2



MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS



Average Balance
Sheets.The following table presents information regarding average balances of assets and liabilities, the total dollar
amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on
average interest-bearing liabilities, and the resulting annualized average yields and costs for the three-month periods ended June
30, 2012 and 2011. The yields and costs for the periods indicated are derived by dividing income or expense by the average balances
of assets or liabilities, respectively, for the periods presented. Nonaccrual loans are included in average balances only. Loan
fees are included in interest income on loans and are not material. Tax exempt income on loans and investment securities has been
calculated on a tax equivalent basis using a federal marginal tax rate of 34%.



|                                                                        |  | Three Months Ended June 30, |        
|----------------------------------------------------------------------- |  | --------------------------- | -------
|                                                                        |  | 2012                        |        
|                                                                        |  | Average Balance             |        
|                                                                        |  | (Dollars in thousands)      |        
|Assets:                                                                 |  |                             |        
|Interest-bearing deposits with banks                                    |  | $                           | 6,635  
|Loans                                                                   |  |                             | 366,905
|Investment securities                                                   |  |                             | 108,119
|Agency mortgage-backed securities                                       |  |                             | 39,805 
|Federal Home Loan Bank stock                                            |  |                             | 5,134  
|Total interest-earning assets                                           |  |                             | 526,598
|                                                                        |  |                             |        
|Non-interest-earning assets                                             |  |                             | 46,749 
|Total assets                                                            |  | $                           | 573,347
|                                                                        |  |                             |        
|Liabilities and equity:                                                 |  |                             |        
|NOW accounts                                                            |  | $                           | 79,736 
|Money market deposit accounts                                           |  |                             | 48,235 
|Savings accounts                                                        |  |                             | 45,755 
|Time deposits                                                           |  |                             | 190,973
|Total interest-bearing deposits                                         |  |                             | 364,699
|                                                                        |  |                             |        
|Borrowings (1)                                                          |  |                             | 85,687 
|Total interest-bearing liabilities                                      |  |                             | 450,386
|                                                                        |  |                             |        
|Non-interest-bearing deposits                                           |  |                             | 39,565 
|Other non-interest-bearing liabilities                                  |  |                             | 3,515  
|Total liabilities                                                       |  |                             | 493,466
|                                                                        |  |                             |        
|Total equity                                                            |  |                             | 79,881 
|Total liabilities and equity                                            |  | $                           | 573,347
|Net interest income                                                     |  |                             |        
|Interest rate spread                                                    |  |                             |        
|Net interest margin                                                     |  |                             |        
|Average interest-earning assets to average interest-bearing liabilities |  |                             |        





(1) Includes Federal Home Loan Bank borrowings and repurchase
agreements.



-46-







FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 2



MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS



Rate/Volume Analysis.The following table sets forth the effects of changing rates and volumes on our net interest income for the three-month
periods ended June 30, 2012 and 2011. The rate column shows the effects attributable to changes in rate (changes in rate multiplied
by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior
rate). The net column represents the sum of the prior columns. Changes attributable to changes in both rate and volume have been
allocated proportionally based on the absolute dollar amounts of change in each.



|                                               |  | Three Months Ended June 30, 2012 Compared to Three Months Ended June 30, 2011 |     
|---------------------------------------------- |  | ----------------------------------------------------------------------------- | ----
|                                               |  | Increase (Decrease) Due to                                                    |     
|                                               |  | Rate                                                                          |     
|                                               |  | (In thousands)                                                                |     
|Interest income:                               |  |                                                                               |     
|Interest-bearing deposits with banks           |  | $                                                                             | (22 
|Loans                                          |  |                                                                               | (485
|Investment securities                          |  |                                                                               | -   
|Agency mortgage-backed securities              |  |                                                                               | (29 
|Other interest-earning assets                  |  |                                                                               | 6   
|Total interest-earning assets                  |  |                                                                               | (530
|                                               |  |                                                                               |     
|Interest expense:                              |  |                                                                               |     
|Deposits                                       |  |                                                                               | (224
|Borrowings (1)                                 |  |                                                                               | (39 
|Total interest-bearing liabilities             |  |                                                                               | (263
|Net increase (decrease) in net interest income |  | $                                                                             | (267





---

(1) Includes Federal
Home Loan Bank borrowings and repurchase agreements.



Provision for
Loan Losses. The provision for loan losses was $308,000 for the three months ended June 30, 2012 compared to $435,000 for
the same period in 2011. The decreased level of provision for loan losses for the 2012 period is primarily due to a decrease in
nonperforming loans. As discussed earlier, the decrease in nonperforming loans from September 30, 2011 to June 30, 2012 is due
primarily to a single borrower relationship that was transferred from nonaccrual to accrual status during the six months ended
June 30, 2012. This lending relationship had a total recorded investment of approximately $2.0 million at June 30, 2012 and is
secured by 23 non-owner occupied, one-to-four family investment properties, which were predominately constructed in the past ten
years and sold on contract to their occupants.



Net charge-offs were
$336,000 for the three months ended June 30, 2012 compared to net charge-offs of $145,000 for the same period in 2011.



-47-







FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 2



MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS



Noninterest Income.
Noninterest income increased $253,000 for the quarter ended June 30, 2012 as compared to the same period in 2011. The increase
was due primarily to the aforementioned gain on a life insurance contract of $321,000 during the quarter ended June 30, 2012, which
more than offset decreases in service charges on deposit accounts of $59,000 and net gains on the sale of loans of $83,000. The
decrease in service charges on deposits was due primarily to a decrease in overdraft fee income.



Noninterest Expense.
Noninterest expenses increased $513,000 for the quarter ended June 30, 2012 as compared to the same period in 2011. The increase
was due primarily to increases in compensation and benefits, data processing, and professional fees expenses of $196,000, $179,000
and $160,000, respectively, which more than offset decreases in FDIC insurance premiums of $66,000. The increase in compensation
and benefits expense is due primarily to normal salary, wages and benefits increases. The increases in data processing and professional
fees expenses are due primarily to expenditures associated with the acquisition and planned integration of the First Federal branches
that were acquired in July 2012.



Income Tax Expense.
The Company recognized income tax expense of $331,000 for the quarter ended June 30, 2012, for an effective tax rate of 20.6%,
compared to income tax expense of $443,000, for an effective tax rate of 28.3%, for the same period in 2011. The lower effective
tax rate for the three months ended June 30, 2012 was primarily due to a higher level of tax exempt income for 2012.



-48-







FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 2



MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS



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 June 30, 2012, the Bank had cash and cash equivalents of $15.3 million,
trading account securities with a fair value of $2.1 million and securities available-for-sale with a fair value of $153.7 million.
If the Bank requires funds beyond its ability to generate them internally, it has additional borrowing capacity with the FHLB,
borrowing capacity on a federal funds purchased line of credit facility with another financial institution 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 agency and sponsored
enterprises securities, mortgage backed securities and collateralized mortgage obligations issued by U.S. government agencies and
sponsored enterprises, and municipal bonds.



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.



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 OCC but with prior notice to OCC, cannot exceed net income for that year to date plus retained
net income (as defined) for the preceding two calendar years. At June 30, 2012, the Company had liquid assets of $924,000.



Capital Management.
The Bank is required to maintain specific amounts of capital pursuant to regulatory requirements. As of June 30, 2012, the Bank
was in compliance with all regulatory capital requirements that were effective as of such date, with tangible, core and risk-based
capital ratios of 11.08%, 11.08% and 18.11%, respectively. The regulatory requirements at that date were 1.5%, 3.0% and 8.0%, respectively.
At June 30, 2012, the Bank was considered “well-capitalized” under applicable regulatory guidelines.



-49-







FIRST SAVINGS FINANCIAL GROUP, INC.

PART I - ITEM 2



MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS



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, 2011.



For the nine months
ended June 30, 2012, 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.



-50-







FIRST SAVINGS FINANCIAL GROUP, INC.

PART I – ITEM 3



QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK



Qualitative Aspects
of Market Risk. Market risk is the risk that the estimated fair value of the Company’s assets, liabilities, and derivative financial
instruments will decline as a result of changes in interest rates or financial market volatility, or that the Company’s net income will be
significantly reduced by interest rate changes.



The Company’s
principal financial objective is to achieve long-term profitability while reducing its exposure to fluctuating market interest
rates by operating within acceptable limits established for interest rate risk and maintaining adequate levels of funding and liquidity.
The Company has sought to reduce the exposure of its earnings to changes in market interest rates by attempting to manage the mismatch
between asset and liability maturities and interest rates. In order to reduce the exposure to interest rate fluctuations, the Company
has developed strategies to manage its liquidity, shorten its effective maturities of certain interest-earning assets and decrease
the interest rate sensitivity of its asset base. Management has sought to decrease the average maturity of its assets by emphasizing
the origination of short-term residential mortgage, commercial mortgage and commercial business loans, all of which are retained
by the Company for its portfolio. The Company relies on retail deposits as its primary source of funds. Management believes the
primary use of retail deposits, complimented with a modest allocation of brokered deposits and FHLB borrowings, reduce the effects
of interest rate fluctuations because they generally represent a more stable source of funds. The Company does not engage in hedging activities or purchase
high-risk derivative instruments and also is not subject to foreign currency exchange rate risk or commodity price risk.



Quantitative Aspects
of Market Risk. Potential cash flows, sales, or replacement value of many of the Company’s assets and liabilities, especially those that
earn or pay interest, are sensitive to changes in the general level of interest rates. This interest rate risk arises primarily
from the Company’s normal business activities of gathering deposits and extending loans. Many factors affect the Company’s exposure to changes in interest
rates, such as general economic and financial conditions, customer preferences, historical pricing relationships, and re-pricing
characteristics of financial instruments. The Company’s earnings can also be affected by the monetary and fiscal policies of the U.S. Government
and its agencies, particularly the Federal Reserve Board.



An element in the Company’s ongoing
process is to measure and monitor interest rate risk using a Net Interest Income at Risk simulation to model the interest rate
sensitivity of the balance sheet and to quantify the impact of changing interest rates on the Company. The model quantifies the
effects of various possible interest rate scenarios on projected net interest income over a one-year horizon. The model assumes
a semi-static balance sheet and measures the impact on net interest income relative to a base case scenario of hypothetical changes
in interest rates over twelve months and provides no effect given to any steps that management might take to counter the effect
of the interest rate movements. The scenarios include prepayment assumptions, changes in the level of interest rates, the shape
of the yield curve, and spreads between market interest rates in order to capture the impact from re-pricing, yield curve, option,
and basis risks.



-51-







FIRST SAVINGS FINANCIAL GROUP, INC.

PART I – ITEM 3



QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK



Results of the
Company’s simulation modeling, which assumes an immediate and sustained parallel shift in market interest rates,
project that the Company’s net interest income could change as follows over a one-year horizon, relative to the
Company’s base
case scenario, based on June 30, 2012 financial information. The Company implemented the Net Interest Income at Risk
simulation during the quarter ended June 30, 2012 and therefore does not have comparable information for the quarter ended
June 30, 2011.



|                  |  | At June 30, 2012       |       
|----------------- |  | ---------------------- | ------
|Immediate Change  |  | One Year Horizon       |       
|in the Level      |  | Dollar                 |       
|of Interest Rates |  | Change                 |       
|                  |  | (Dollars in thousands) |       
|300bp             |  | $                      | (1,206
|200bp             |  |                        | (798  
|100bp             |  |                        | (428  
|Static            |  |                        | -     
|(100)bp           |  |                        | 268   



At June 30,
2012, the Company’s simulated exposure to an increase in interest rates shows that an immediate and sustained increase
in rates of 1.00% will decrease the Company’s net interest income by $428,000 or 1.89% over a one year horizon compared
to a flat interest rate scenario. Furthermore, rate increases of 2.00% and 3.00% would cause net interest income to decline
by 3.52% and 5.33% respectively, while an immediate and sustained decrease in interest rates of 1.00% would decrease net
interest income by 1.19%.



Management believes
that the Company will recognize an improvement in its rate sensitivity of the balance sheet in subsequent quarters primarily due
to the acquisition of First Federal branches in July 2012, which will result in significant changes in the mix of assets and liabilities
and less reliance on short-term wholesale funding.



The Company also has
longer term interest rate risk exposure, which may not be appropriately measured by Net Interest Income at Risk modeling, and therefore
uses an Economic Value of Equity (“EVE”) interest rate sensitivity analysis in order to evaluate the impact of its
interest rate risk on earnings and capital. This is measured by computing the changes in net EVE for its cash flows from assets,
liabilities and off-balance sheet items in the event of a range of assumed changes in market interest rates. EVE modeling involves
discounting present values of all cash flows for on and off balance sheet items under different interest rate scenarios and provides
no effect given to any steps that management might take to counter the effect of the interest rate movements. The discounted present
value of all cash flows represents the Company’s EVE and is equal to the market value of assets minus the market value of
liabilities, with adjustments made for off-balance sheet items. The amount of base case EVE and its sensitivity to shifts in interest
rates provide a measure of the longer term re-pricing and option risk in the balance sheet.



-52-







FIRST SAVINGS FINANCIAL GROUP, INC.

PART I – ITEM 3



QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK



Results of
the Company’s simulation modeling, which assumes an immediate and sustained parallel shift in market interest rates,
project that the Company’s EVE could change as follows, relative to the
Company’s base case scenario, based on June 30, 2012
financial information.



|                  |  | At June 30, 2012         |       
|----------------- |  | ------------------------ | ------
|Immediate Change  |  | Economic Value of Equity |       
|in the Level      |  | Dollar                   |       
|of Interest Rates |  | Amount                   |       
|                  |  | (Dollars in thousands)   |       
|300bp             |  | $                        | 58,723
|200bp             |  |                          | 67,960
|100bp             |  |                          | 75,936
|Static            |  |                          | 80,977
|(100)bp           |  |                          | 79,878



The
previous table indicates that at June 30, 2012, the Company would expect a decrease in its EVE in the event of an
immediate and sustained 100 to 300 basis point increase or an immediate and sustained 100 basis point decrease in prevailing
interest rates. The expected decrease in the Company’s EVE given a larger increase in rates is primarily attributable
to the relatively high percentage of fixed-rate loans in the Company’s loan portfolio and its short-term
wholesale funding strategy in anticipation of the significant increase in excess deposits as a result of the acquisition of
the First Federal branches in July 2012, a portion of which will be used to repay these short-term borrowings. At
June 30, 2012, approximately 61.6% of the loan portfolio consisted of fixed-rate loans. In addition, the Company had
wholesale borrowings of approximately $73.5 million in the form of FHLB borrowings and brokered certificates of deposits at
June 30, 2012, having final maturities within sixty days from that date. As previously noted, management believes that the
Company will recognize an improvement in the rate sensitivity of the balance sheet in subsequent quarters primarily due to
the acquisition of the First Federal branches in July 2012.



The models are
driven by expected behavior in various interest rate scenarios and many factors besides market interest rates affect the
Company’s net interest income and EVE. For this reason, the Company models many different combinations of interest rates
and balance sheet assumptions to understand its overall sensitivity to market interest rate changes. Therefore, as with any
method of measuring interest rate risk, certain shortcomings are inherent in the method of analysis presented in the
foregoing tables and it is recognized that the model outputs are not guarantees of actual results. For example, although
certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to
changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in
advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates.
Additionally, certain assets, such as adjustable-rate mortgage loans, have features that restrict changes in interest rates
on a short-term basis and over the life of the asset. Further, in the event of a change in interest rates, expected rates of
prepayments on loans and early withdrawals from certificates of deposit could deviate significantly from those assumed in
the modeling scenarios.



-53-







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 June 30, 2012, there were no changes in the Company’s internal control over financial reporting that materially affected,
or are reasonably likely to materially affect, the Company’s internal control over financial reporting.



-54-







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, 2011 which could materially affect our business, financial condition
or future results. Other than as noted below, 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.



The following disclosure has
been added to the risk factor entitled “Changing interest rates may hurt our earnings and asset value”:



At June 30, 2012 approximately
$227.7 million, or 61.6% of the total loan portfolio, consisted of fixed-rate mortgage loans. This investment in fixed-rate mortgage
loans exposes the Company to increased levels of interest rate risk.



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FIRST SAVINGS FINANCIAL GROUP, INC.

PART II



OTHER INFORMATION



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



The following table presents
information regarding the Company’s stock repurchase activity during the quarter ended June 30, 2012:



|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 programs | 
|------------------------------------ |  | ----------------------------------------------- | ----- |  | ------------------------------------------ | - | ----- | --------------------------------------------------------------------------------------------------- |  |  | --------------------------------------------------------------------------------------------------------------------------- | 
|April 1, 2012 through April 30, 2012 |  |                                                 | —     |  |                                            |   | —     |                                                                                                     |  |  | —                                                                                                                           | 
|May 1, 2012 through May 31, 2012     |  |                                                 | 4,526 |  |                                            | $ | 17.61 |                                                                                                     |  |  | 4,526                                                                                                                       | 
|June 1, 2012 through June 30, 2012   |  |                                                 | —     |  |                                            |   | —     |                                                                                                     |  |  | —                                                                                                                           | 
|Total                                |  |                                                 | —     |  |                                            |   | —     |                                                                                                     |  |  | —                                                                                                                           | 










(1) On October 20, 2010, the
Company announced that its Board of Directors authorized a stock repurchase program to acquire up to 120,747 shares, or 5.0% of
the Company’s outstanding common stock. Under the program, repurchases are 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.



| | Item 3. | Defaults upon Senior Securities
| | ------- | -------------------------------



Not applicable.



| | Item 4. | Mine Safety Disclosures
| | ------- | -----------------------



Not applicable.



| | Item 5. | Other Information
| | ------- | -----------------



None.



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FIRST SAVINGS FINANCIAL GROUP, INC.

PART II



OTHER INFORMATION



| | Item 6. | Exhibits
| | ------- | --------



| | 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
| | ---- | -----------------------------------------------------



| | 101* | The following materials from the Company’s Quarterly
Report on Form 10-Q for the quarter ended June 30, 2012, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated
Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the
Consolidated Statement of Changes in Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows and (vi) related
notes
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



* To be filed by amendment.



-57-







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)                       
|                     |                                    
|DatedAugust 14, 2012 |                                    
|                     |                                    
|                     |                                    
|                     |                                    
|DatedAugust 14, 2012 |                                    
|                     |                                    
|                     |                                    



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