##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2009
 COMMISSION FILE NO: 0-17411
 PARKVALE FINANCIAL CORPORATION
  Pennsylvania
    
    25-1556590(State of incorporation)
    
    (I.R.S. Employer
Identification Number)
 4220 William Penn Highway, Monroeville, Pennsylvania 15146
  þ o
 o o
  Large accelerated filer o   
    Accelerated filer þ
    Non-accelerated filer o
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



PARKVALE FINANCIAL CORPORATION
  PagePart I. Financial InformationItem 1.Consolidated Statements of Financial Condition as of December 31, 2009
and June 30, 2009
    
    
    3Consolidated Statements of Operations for the three months and six months ended
December 31, 2009 and 2008
    
    
    4Consolidated Statements of Cash Flows for the six months ended
December 31, 2009 and 2008
    
    
    5Consolidated Statements of Shareholders Equity for the six months ended
December 31, 2009
    
    
    6Notes to Unaudited Interim Consolidated Financial Statements
    
    
    7-21Item 2.Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    21-33Item 3.Quantitative and Qualitative Disclosures about Market Risk
    
    
    33Item 4.Controls and Procedures
    
    
    33Part II  Other Information
    
    
    34Signatures
    
    
    35Exhibits
    
    
    36-38EX-31.1EX-31.2EX-32.1
  2




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PARKVALE FINANCIAL CORPORATION
 
 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
  December 31,
    
    
    June 30,2009
    
    
    2009(Unaudited)ASSETSCash and noninterest-earning deposits
    
    $
    17,998
    
    
    $
    15,381Federal funds sold
    
    
    129,429
    
    
    
    150,510Cash and cash equivalents
    
    
    147,427
    
    
    
    165,891Interest-earning deposits in other banks
    
    
    592
    
    
    
    3,899Investment securities available for sale (cost of
$20,122 at December 31 and $22,041 at June 30)
    
    
    20,181
    
    
    
    23,505Investment securities held to maturity (fair value
of $520,940 at December 31 and $438,745 at June 30)
    
    
    579,975
    
    
    
    504,029Loans, net of allowance of $18,883 at December 31
and $17,960 at June 30
    
    
    1,053,009
    
    
    
    1,108,936Foreclosed real estate, net
    
    
    5,853
    
    
    
    5,706Office properties and equipment, net
    
    
    17,709
    
    
    
    18,073Goodwill
    
    
    25,634
    
    
    
    25,634Intangible assets
    
    
    3,332
    
    
    
    3,786Prepaid expenses and other assets
    
    
    62,184
    
    
    
    47,647Total assets
    
    $
    1,915,896
    
    
    $
    1,907,106LIABILITIES AND SHAREHOLDERS EQUITYLIABILITIESDeposits
    
    $
    1,528,142
    
    
    $
    1,511,248Advances from Federal Home Loan Bank
    
    
    186,087
    
    
    
    186,202Term debt
    
    
    25,000
    
    
    
    25,000Other debt
    
    
    15,485
    
    
    
    21,261Advance payments from borrowers for taxes and insurance
    
    
    6,678
    
    
    
    7,359Other liabilities
    
    
    2,991
    
    
    
    5,276Total liabilities
    
    
    1,764,383
    
    
    
    1,756,346SHAREHOLDERS EQUITYPreferred stock ($1.00 par value, liquidation preference $1,000;
5,000,000 shares authorized; 31,762 shares issued)
    
    
    31,762
    
    
    
    31,762Common stock ($1.00 par value; 10,000,000 shares
authorized; 6,734,894 shares issued)
    
    
    6,735
    
    
    
    6,735Additional paid in capital
    
    
    2,983
    
    
    
    4,116Treasury stock at cost (1,223,531 shares at December 31
and 1,307,199 at June 30)
    
    
    (25,566
    )
    
    
    (27,314
    )Accumulated other comprehensive loss
    
    
    (1,812
    )
    
    
    (10
    )Retained earnings
    
    
    137,411
    
    
    
    135,471Total shareholders equity
    
    
    151,513
    
    
    
    150,760Total liabilities and shareholders equity
    
    $
    1,915,896
    
    
    $
    1,907,106
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##### Table of Contents



PARKVALE FINANCIAL CORPORATION
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
   Three months ended
    
    
    Six months endedDecember 31,
    
    
    December 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Interest income:Loans
    
    $
    14,231
    
    
    $
    17,215
    
    
    $
    29,023
    
    
    $
    34,797Investments
    
    
    4,964
    
    
    
    5,861
    
    
    
    10,096
    
    
    
    11,596Federal funds sold
    
    
    105
    
    
    
    59
    
    
    
    203
    
    
    
    562Total interest income
    
    
    19,300
    
    
    
    23,135
    
    
    
    39,322
    
    
    
    46,955Interest expense:Deposits
    
    
    7,386
    
    
    
    10,043
    
    
    
    15,379
    
    
    
    20,466Borrowings
    
    
    2,377
    
    
    
    2,470
    
    
    
    4,766
    
    
    
    4,970Term debt
    
    
    447
    
    
    
    
    
    
    
    769
    
    
    
    Total interest expense
    
    
    10,210
    
    
    
    12,513
    
    
    
    20,914
    
    
    
    25,436Net interest income
    
    
    9,090
    
    
    
    10,622
    
    
    
    18,408
    
    
    
    21,519Provision for loan losses
    
    
    1,398
    
    
    
    2,129
    
    
    
    3,687
    
    
    
    3,156Net interest income after
provision for losses
    
    
    7,692
    
    
    
    8,493
    
    
    
    14,721
    
    
    
    18,363Noninterest Income:Other-than-temporary impairment losses
recognized in earnings
    
    
    (3,240
    )
    
    
    (1,060
    )
    
    
    (6,001
    )
    
    
    (5,007
    )Non-credit related losses recognized in
other comprehensive income
    
    
    2,458
    
    
    
    
    
    
    
    2,458
    
    
    
    Net impairment losses recognized in earnings
    
    
    (782
    )
    
    
    (1,060
    )
    
    
    (3,543
    )
    
    
    (5,007
    )Service charges on deposit accounts
    
    
    1,615
    
    
    
    1,650
    
    
    
    3,267
    
    
    
    3,392Other fees and service charges
    
    
    359
    
    
    
    327
    
    
    
    726
    
    
    
    710Net gain on sale of assets
    
    
    1,103
    
    
    
    
    
    
    
    2,205
    
    
    
    25Other
    
    
    511
    
    
    
    636
    
    
    
    1,054
    
    
    
    1,251Total noninterest income
    
    
    2,806
    
    
    
    1,553
    
    
    
    3,709
    
    
    
    371Noninterest Expense:Compensation and employee benefits
    
    
    3,625
    
    
    
    4,092
    
    
    
    7,432
    
    
    
    8,100Office occupancy
    
    
    1,095
    
    
    
    1,095
    
    
    
    2,206
    
    
    
    2,201Marketing
    
    
    93
    
    
    
    71
    
    
    
    160
    
    
    
    240FDIC insurance
    
    
    645
    
    
    
    62
    
    
    
    1,213
    
    
    
    123Office supplies, telephone and postage
    
    
    463
    
    
    
    466
    
    
    
    933
    
    
    
    927Other
    
    
    1,393
    
    
    
    1,365
    
    
    
    2,962
    
    
    
    2,656Total noninterest expense
    
    
    7,314
    
    
    
    7,151
    
    
    
    14,906
    
    
    
    14,247Income before income taxes
    
    
    3,184
    
    
    
    2,895
    
    
    
    3,524
    
    
    
    4,487Income tax expense
    
    
    759
    
    
    
    830
    
    
    
    244
    
    
    
    1,317Net income
    
    
    2,425
    
    
    
    2,065
    
    
    
    3,280
    
    
    
    3,170Less: Preferred stock dividend
    
    
    397
    
    
    
    35
    
    
    
    794
    
    
    
    35Income to common shareholders
    
    $
    2,028
    
    
    $
    2,030
    
    
    $
    2,486
    
    
    $
    3,135Net income per common basic share
    
    $
    0.38
    
    
    $
    0.37
    
    
    $
    0.46
    
    
    $
    0.57Net income per common diluted share
    
    $
    0.38
    
    
    $
    0.37
    
    
    $
    0.46
    
    
    $
    0.57
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PARKVALE FINANCIAL CORPORATION
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
   Six months endedDecember 31,2009
    
    
    2008Cash flows from operating activities:Interest received
    
    $
    38,828
    
    
    $
    45,137Loan fees received (premiums paid)
    
    
    182
    
    
    
    222Disbursements of student loans
    
    
    
    
    
    
    (30
    )Proceeds from sales of student loans
    
    
    
    
    
    
    361Other fees and commissions received
    
    
    4,490
    
    
    
    4,793Interest paid
    
    
    (20,882
    )
    
    
    (25,549
    )Cash paid to suppliers and others
    
    
    (31,617
    )
    
    
    (13,430
    )Income taxes paid
    
    
    
    
    
    
    (2,501
    )Net cash provided by (used in) operating activities
    
    
    (8,999
    )
    
    
    9,003Cash flows from investing activities:Proceeds from sale of investment securities available for sale
    
    
    2,192
    
    
    
    3,012Proceeds from maturities of investment securities
    
    
    180,056
    
    
    
    35,692Purchase of investment securities held to maturity
    
    
    (256,644
    )
    
    
    (86,164
    )Decrease (increase) in deposits in other banks
    
    
    3,307
    
    
    
    (23,416
    )Sales of loans
    
    
    7,527
    
    
    
    Principal collected on loans
    
    
    135,861
    
    
    
    92,147Loans made to customers, net of loans in process
    
    
    (91,292
    )
    
    
    (61,584
    )Other
    
    
    (149
    )
    
    
    (125
    )Net cash (used in) investing activities
    
    
    (19,142
    )
    
    
    (40,438
    )Cash flows from financing activities:Net increase (decrease) in checking and savings accounts
    
    
    51,673
    
    
    
    (4,837
    )Net (decrease) in certificates of deposit
    
    
    (34,779
    )
    
    
    (7,063
    )Proceeds from long term debt
    
    
    
    
    
    
    25,000Repayment of FHLB advances
    
    
    (13
    )
    
    
    (5,013
    )Net (decrease) in other borrowings
    
    
    (5,776
    )
    
    
    (1,027
    )(Decrease) in borrowers advances for taxes and insurance
    
    
    (680
    )
    
    
    (418
    )Proceeds from issuance of preferred stock
    
    
    
    
    
    
    31,762Cash dividends paid
    
    
    (1,336
    )
    
    
    (2,412
    )Proceeds from exercise of stock options
    
    
    
    
    
    
    111Contribution to benefit plans
    
    
    588
    
    
    
    Payment for treasury stock
    
    
    
    
    
    
    (717
    )Net cash provided by financing activities
    
    
    9,677
    
    
    
    35,386Net (decrease) increase in cash and cash equivalents
    
    
    (18,464
    )
    
    
    3,951Cash and cash equivalents at beginning of period
    
    
    165,891
    
    
    
    104,692Cash and cash equivalents at end of period
    
    $
    147,427
    
    
    $
    108,643Reconciliation of net income to net cash provided
by operating activities:Net income
    
    $
    3,280
    
    
    $
    3,170Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation and amortization
    
    
    965
    
    
    
    1,013Accretion and amortization of loan fees and discounts
    
    
    (969
    )
    
    
    (1,372
    )Loan fees collected and deferred and (premiums paid)
    
    
    (2
    )
    
    
    31Provision for loan losses
    
    
    3,687
    
    
    
    3,156Net writedown on sale of securities
    
    
    1,338
    
    
    
    4,982Decrease (increase) in accrued interest receivable
    
    
    414
    
    
    
    (458
    )(Increase) in other assets
    
    
    (14,950
    )
    
    
    (2,224
    )Increase (decrease) in accrued interest payable
    
    
    146
    
    
    
    (11
    )(Decrease) increase in other liabilities
    
    
    (2,908
    )
    
    
    716Total adjustments
    
    
    (12,279
    )
    
    
    5,833Net cash provided by (used in) operating activities
    
    
    ($8,999
    )
    
    $
    9,003
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PARKVALE FINANCIAL CORPORATION
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
   AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    TotalPreferred
    
    
    Common
    
    
    Paid-in
    
    
    Treasury
    
    
    Comprehensive
    
    
    Retained
    
    
    ShareholdersStock
    
    
    Stock
    
    
    Capital
    
    
    Stock
    
    
    Income (Loss)
    
    
    Earnings
    
    
    EquityBalance, June 30, 2009
    
    $
    31,762
    
    
    $
    6,735
    
    
    $
    4,116
    
    
    
    ($27,314
    )
    
    
    ($10
    )
    
    $
    135,471
    
    
    $
    150,760Net income, six months ended
December 31, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,280
    
    
    
    3,280Accumulated other comprehensive
Income (loss):Change in swap liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (201
    )Change in unrealized gain (loss)
on securities, net of deferred
tax benefit of $(128)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (201
    )Reclassification adjustment, net
of taxes of $(805)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,400
    )
    
    
    
    
    
    
    (1,802
    )Comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,478Dividends declared on common
stock at $0.10 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (546
    )
    
    
    (546
    )Dividends on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (794
    )
    
    
    (794
    )Allocation of treasury stock to
retirement plans
    
    
    
    
    
    
    
    
    
    
    (1,160
    )
    
    
    1,748
    
    
    
    
    
    
    
    
    
    
    
    588Recognition of stock option
compensation expense
    
    
    
    
    
    
    
    
    
    
    27
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27Balance, December 31, 2009
    
    $
    31,762
    
    
    $
    6,735
    
    
    $
    2,983
    
    
    
    ($25,566
    )
    
    
    ($1,812
    )
    
    $
    137,411
    
    
    $
    151,513
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NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
  STATEMENTS OF OPERATIONS
  SUBSEQUENT EVENTS
  LOANS
    
    December 31, 2009
    
    June 30, 2009Loans are summarized as follows:Mortgage loans:Residential:1-4 Family
    
    $
    668,085
    
    
    $
    726,586Multifamily
    
    
    30,239
    
    
    
    34,216Commercial
    
    
    124,607
    
    
    
    114,827Other
    
    
    12,678
    
    
    
    14,806835,609
    
    
    
    890,435Consumer loans
    
    
    185,802
    
    
    
    185,818Commercial business loans
    
    
    43,865
    
    
    
    44,602Loans on savings accounts
    
    
    5,627
    
    
    
    5,0311,070,903
    
    
    
    1,125,886Less: Loans in process
    
    
    
    
    
    
    60Allowance for loan losses
    
    
    18,883
    
    
    
    17,960Unamortized premiums and deferred loan fees
    
    
    (989
    )
    
    
    (1,070
    )Loans, net
    
    $
    1,053,009
    
    
    $
    1,108,936
   2009
    
    
    2008Beginning balance
    
    $
    17,960
    
    
    $
    15,249Provision for losses  mortgage loans
    
    
    3,616
    
    
    
    1,380Provision for losses  consumer loans
    
    
    74
    
    
    
    1,237Provision for (recovery of) losses  commercial loans
    
    
    (3
    )
    
    
    539Loans recovered
    
    
    25
    
    
    
    14Loans charged off
    
    
    (2,789
    )
    
    
    (2,522
    )Ending balance
    
    $
    18,883
    
    
    $
    15,897
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NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
 COMPREHENSIVE INCOME
  FAIR VALUE OF FINANCIAL INSTRUMENTS
  Level I 
    
    Quoted prices are available in the active markets for
identical assets or liabilities as of the measurement date.Level II 
    
    Pricing inputs are other than quoted prices in active markets,
which are either directly or indirectly observable as of the
measurement date. The nature of these assets and liabilities
includes items for which quoted prices are available but
traded less frequently, and items that are fair valued using
other financial instruments, the parameters of which can be
directly observed.Level III 
    
    Valuations derived from valuation techniques in which one or
more significant inputs or significant value drivers are
unobservable. Level III valuations incorporate certain
assumptions and projections in determining the fair value
assigned to such assets or liabilities.
   Financial Instruments  Measured on a recurring basis
    
    Level I
    
    Level II
    
    Level III
    
    TotalAssets: Available for sale securities
    
    $
    20,181
    
    
    
    
    
    
    
    
    
    
    $
    20,181Liability: Interest rate swaps
    
    
    
    
    
    
    125
    
    
    
    
    
    
    
    125
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NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
  Level I
    
    Level II
    
    Level III
    
    TotalAssets Measured on a Nonrecurring Basis:OTTI  Held to maturity trust preferred securities
    
    $
    115
    
    
    
    
    
    
    $
    3,300
    
    
    $
    3,415OTTI  Held to maturity Non Agency CMO securities
    
    
    
    
    
    
    
    
    
    
    543
    
    
    
    543Impaired loans
    
    
    
    
    
    
    
    
    
    
    3,085
    
    
    
    3,085Impaired Foreclosed real estate
    
    
    
    
    
    
    
    
    
    
    246
    
    
    
    246
  Cash and Noninterest-Bearing Deposits  Federal Funds Sold
Interest-Earning Deposits in Other Banks
Accrued interest
Cash Surrender Value (CSV) of Bank Owned Life Insurance (BOLI)
Checking, savings and money market accounts
  Investments and Mortgage-Backed Securities:
 Loans Receivable:
 Deposit Liabilities:
 Advances from Federal Home Loan Bank:
 Term Debt:
 9




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NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
 Off-Balance-Sheet Instruments:
  December 31, 2009
    
    June 30, 2009Estimated
    
    Carrying
    
    Estimated
    
    CarryingFair Value
    
    Value
    
    Fair Value
    
    ValueFinancial Assets:Cash and non-interest-earning deposits
    
    $
    17,998
    
    
    $
    17,998
    
    
    $
    15,381
    
    
    $
    15,381Federal funds sold
    
    
    129,429
    
    
    
    129,429
    
    
    
    150,510
    
    
    
    150,510Interest-earning deposits in other banks
    
    
    592
    
    
    
    592
    
    
    
    3,899
    
    
    
    3,899Investment securities, excluding mortgage-backed securities
    
    
    307,263
    
    
    
    341,637
    
    
    
    251,380
    
    
    
    285,012Mortgage-backed securities
    
    
    233,858
    
    
    
    258,519
    
    
    
    210,870
    
    
    
    241,058Loans receivable, gross of allowances
    
    
    1,106,434
    
    
    
    1,070,903
    
    
    
    1,154,459
    
    
    
    1,125,886Accrued interest receivable
    
    
    6,603
    
    
    
    6,603
    
    
    
    7,017
    
    
    
    7,017Cash Surrender Value of BOLI
    
    
    24,745
    
    
    
    24,745
    
    
    
    24,188
    
    
    
    24,188Financial Liabilities:Checking, savings and money market accounts
    
    $
    673,657
    
    
    $
    673,657
    
    
    $
    621,967
    
    
    $
    621,967Certificates of deposit
    
    
    867,411
    
    
    
    845,788
    
    
    
    900,017
    
    
    
    878,433Accrued interest payable
    
    
    9,708
    
    
    
    9,708
    
    
    
    11,713
    
    
    
    11,713Advances from Federal Home Loan Bank
    
    
    202,339
    
    
    
    186,087
    
    
    
    199,156
    
    
    
    186,202Term debt
    
    
    24,480
    
    
    
    25,000
    
    
    
    24,673
    
    
    
    25,000Commercial investment agreements
    
    
    14,862
    
    
    
    15,485
    
    
    
    20,136
    
    
    
    21,261Off-balance sheet loan instruments
    
    $
    10
    
    
    
    
    
    
    $
    13
    
    
    
    
 INVESTMENT SECURITIES
  Investment Securities available for sale:
 Investment Securities Held to Maturity:
 10




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##### Table of Contents



NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
 Other-than Temporary Impairments
     Available for Sale Investments
 December 31, 2009
    
    
    June 30, 2009Amortized Cost
    
    
    Fair Value
    
    
    Amortized Cost
    
    
    Fair ValueFHLB of Pittsburgh stock
    
    $
    14,099
    
    
    $
    14,099
    
    
    $
    13,826
    
    
    $
    13,826Preferred stocks:FHLMC Series M Pfd
    
    
    20
    
    
    
    56
    
    
    
    20
    
    
    
    49FHLMC Series S Pfd
    
    
    30
    
    
    
    65
    
    
    
    30
    
    
    
    73Bank of America Corp Pfd Series J
    
    
    
    
    
    
    
    
    
    
    2,192
    
    
    
    3,680Mutual Funds  ARM mortgages
    
    
    5,500
    
    
    
    5,303
    
    
    
    5,500
    
    
    
    5,302Common equities
    
    
    473
    
    
    
    658
    
    
    
    473
    
    
    
    575$
    20,122
    
    
    $
    20,181
    
    
    $
    22,041
    
    
    $
    23,505
 11




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##### Table of Contents



NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
 Held to Maturity Investments
 December 31, 2009
    
    
    June 30, 2009Amortized Cost
    
    
    Fair Value
    
    
    Amortized Cost
    
    
    Fair ValueU.S. Government and agency obligations
    
    $
    187,313
    
    
    $
    187,063
    
    
    $
    108,682
    
    
    $
    109,719Municipal obligations
    
    
    16,820
    
    
    
    17,299
    
    
    
    19,165
    
    
    
    19,365Corporate debt:Short to medium term corporate debt
    
    
    44,810
    
    
    
    46,022
    
    
    
    57,464
    
    
    
    57,848Pooled trust preferred securities
    
    
    63,147
    
    
    
    29,310
    
    
    
    68,306
    
    
    
    34,456Individual trust preferred securities
    
    
    9,366
    
    
    
    7,388
    
    
    
    9,354
    
    
    
    6,487Mortgage-backed securities:Agency
    
    
    93,340
    
    
    
    94,185
    
    
    
    63,367
    
    
    
    63,811Agency Collateralized Mortgage Obligations
(CMOs)
    
    
    11,215
    
    
    
    11,163
    
    
    
    1,540
    
    
    
    1,558CMOs  non agency
    
    
    153,964
    
    
    
    128,510
    
    
    
    176,145
    
    
    
    145,496$
    579,975
    
    
    $
    520,940
    
    
    $
    504,029
    
    
    $
    438,745
   Available for Sale Investments
 Less than 12 months
    
    
    Greater than 12 monthsOf unrealized losses
    
    
    of unrealized losses
    
    
    TotalFair Value
    
    
    Unrealized loss
    
    
    Fair Value
    
    
    Unrealized loss
    
    
    Fair Value
    
    
    Unrealized lossMutual funds
    
    $
    
    
    
    $
    
    
    
    $
    4,792
    
    
    $
    208
    
    
    $
    4,792
    
    
    $
    208Common equities
    
    
    301
    
    
    
    18
    
    
    
    
    
    
    
    
    
    
    
    301
    
    
    
    18Held to Maturity InvestmentsU.S. Government and agency
obligations
    
    
    125,301
    
    
    
    1,351
    
    
    
    
    
    
    
    
    
    
    
    125,301
    
    
    
    1,351Municipal obligations
    
    
    
    
    
    
    
    
    
    
    903
    
    
    
    97
    
    
    
    903
    
    
    
    97Pooled trust preferred securities
    
    
    6,025
    
    
    
    3,321
    
    
    
    23,285
    
    
    
    30,516
    
    
    
    29,310
    
    
    
    33,837Individual trust preferred securities
    
    
    1,122
    
    
    
    82
    
    
    
    5,100
    
    
    
    2,001
    
    
    
    6,222
    
    
    
    2,083Mortgage-backed securities  agency
    
    
    
    
    
    
    
    
    
    
    10,033
    
    
    
    88
    
    
    
    10,033
    
    
    
    88Mortgage-backed securities
Non agency CMOs
    
    
    19,343
    
    
    
    1,983
    
    
    
    83,324
    
    
    
    24,564
    
    
    
    102,667
    
    
    
    26,547
 12




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##### Table of Contents



NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
 Available for sale securities.
 FHLB of Pittsburgh Stock
 Preferred Stocks
 Mutual Funds
 Common Equities.
 General
 Held to maturity securities.
 U.S. Government and Agency Obligations.
 Trust Preferred Securities
 13




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##### Table of Contents



NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
       14




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##### Table of Contents



NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
  ExpectedDefaults (%
    
    Excessof
    
    SubordinationLowest
    
    
    
    
    
    Actual
    
    Actual
    
    performing
    
    (as a % ofNote
    
    Par
    
    Book
    
    Fair
    
    Unrealized
    
    Credit
    
    # of
    
    Default %
    
    Deferral %
    
    collateral)
    
    performingDeal
    
    Class
    
    Value
    
    Value
    
    Value
    
    Gain (Loss)
    
    Ratings
    
    Issuers
    
    (1)
    
    (1) (2)
    
    (3)
    
    collateral) (4)Pooled InvestmentsP1
    
    C1
    
    
    5,000
    
    
    
    5,000
    
    
    
    1,916
    
    
    
    (3,084
    )
    
    Ca
    
    
    81
    
    
    
    16.4
    %
    
    
    12.8
    %
    
    
    3.3
    %
    
    
    14.1
    %P2
    
    A2A
    
    
    5,000
    
    
    
    4,552
    
    
    
    1,442
    
    
    
    (3,110
    )
    
    BB
    
    
    79
    
    
    
    14.1
    %
    
    
    10.4
    %
    
    
    6.8
    %
    
    
    47.5
    %P3
    
    C1
    
    
    4,592
    
    
    
    4,376
    
    
    
    2,056
    
    
    
    (2,320
    )
    
    Ca
    
    
    85
    
    
    
    9.5
    %
    
    
    8.7
    %
    
    
    1.3
    %
    
    
    15.1
    %P4
    
    C1
    
    
    5,058
    
    
    
    4,718
    
    
    
    1,979
    
    
    
    (2,739
    )
    
    
    C
    
    
    
    72
    
    
    
    11.0
    %
    
    
    10.0
    %
    
    
    3.0
    %
    
    
    4.8
    %P5
    
    C1
    
    
    5,023
    
    
    
    4,958
    
    
    
    1,945
    
    
    
    (3,013
    )
    
    Ca
    
    
    93
    
    
    
    9.4
    %
    
    
    12.1
    %
    
    
    2.6
    %
    
    
    28.5
    %P6
    
    C1
    
    
    3,075
    
    
    
    3,075
    
    
    
    1,171
    
    
    
    (1,904
    )
    
    
    C
    
    
    
    65
    
    
    
    19.1
    %
    
    
    10.8
    %
    
    
    2.5
    %
    
    
    21.2
    %P8
    
    C
    
    
    3,219
    
    
    
    2,903
    
    
    
    1,103
    
    
    
    (1,800
    )
    
    Ca
    
    
    52
    
    
    
    11.3
    %
    
    
    14.2
    %
    
    
    4.6
    %
    
    
    19.2
    %P9
    
    B
    
    
    2,008
    
    
    
    1,671
    
    
    
    670
    
    
    
    (1,001
    )
    
    Ca
    
    
    54
    
    
    
    8.7
    %
    
    
    22.3
    %
    
    
    4.1
    %
    
    
    23.9
    %P10
    
    B1
    
    
    5,000
    
    
    
    4,843
    
    
    
    3,637
    
    
    
    (1,206
    )
    
    
    B2
    
    
    
    25
    
    
    
    0.0
    %
    
    
    5.8
    %
    
    
    4.6
    %
    
    
    43.2
    %P11     (5)  (6)
    
    Mezz
    
    
    1,500
    
    
    
    1,064
    
    
    
    1,064
    
    
    
    0
    
    
    Ca
    
    
    35
    
    
    
    8.4
    %
    
    
    24.3
    %
    
    
    4.3
    %
    
    
    0.0
    %P12
    
    B2
    
    
    1,000
    
    
    
    1,000
    
    
    
    471
    
    
    
    (529
    )
    
    Ca
    
    
    49
    
    
    
    14.4
    %
    
    
    11.9
    %
    
    
    2.6
    %
    
    
    13.9
    %P13
    
    B
    
    
    3,909
    
    
    
    3,759
    
    
    
    1,531
    
    
    
    (2,228
    )
    
    Caa3
    
    
    55
    
    
    
    10.3
    %
    
    
    13.6
    %
    
    
    2.1
    %
    
    
    30.4
    %P14
    
    A1
    
    
    4,777
    
    
    
    4,396
    
    
    
    1,846
    
    
    
    (2,550
    )
    
    BB
    
    
    64
    
    
    
    17.8
    %
    
    
    8.0
    %
    
    
    3.4
    %
    
    
    48.2
    %P15     (6)
    
    B
    
    
    5,000
    
    
    
    2,236
    
    
    
    2,236
    
    
    
    0
    
    
    CC
    
    
    34
    
    
    
    20.5
    %
    
    
    7.4
    %
    
    
    5.1
    %
    
    
    0.0
    %P16
    
    C1
    
    
    5,000
    
    
    
    4,930
    
    
    
    2,228
    
    
    
    (2,702
    )
    
    
    C
    
    
    
    49
    
    
    
    15.6
    %
    
    
    6.7
    %
    
    
    2.0
    %
    
    
    22.6
    %P17
    
    C1
    
    
    5,000
    
    
    
    4,970
    
    
    
    2,678
    
    
    
    (2,292
    )
    
    
    C
    
    
    
    43
    
    
    
    18.2
    %
    
    
    7.9
    %
    
    
    0.0
    %
    
    
    19.8
    %P18
    
    D
    
    
    5,058
    
    
    
    4,696
    
    
    
    1,337
    
    
    
    (3,359
    )
    
    
    C
    
    
    
    63
    
    
    
    9.3
    %
    
    
    18.4
    %
    
    
    2.0
    %
    
    
    6.9
    %Subtotal
    
    17
    
    
    69,219
    
    
    
    63,147
    
    
    
    29,310
    
    
    
    (33,837
    )Single Issuer InvestmentsS1
    
    N/A
    
    
    1,000
    
    
    
    925
    
    
    
    695
    
    
    
    (230
    )
    
    BB-
    
    
    1
    
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %S2
    
    N/A
    
    
    2,000
    
    
    
    1,967
    
    
    
    1,391
    
    
    
    (576
    )
    
    BB-
    
    
    1
    
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %S3
    
    N/A
    
    
    3,000
    
    
    
    2,765
    
    
    
    1,826
    
    
    
    (939
    )
    
    Baa2
    
    
    1
    
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %S4
    
    N/A
    
    
    500
    
    
    
    444
    
    
    
    206
    
    
    
    (238
    )
    
    BB
    
    
    1
    
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %S5
    
    N/A
    
    
    1,000
    
    
    
    1,007
    
    
    
    1,051
    
    
    
    44
    
    
    NR
    
    
    1
    
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %S6
    
    N/A
    
    
    700
    
    
    
    712
    
    
    
    699
    
    
    
    (13
    )
    
    NR
    
    
    1
    
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %S7
    
    N/A
    
    
    529
    
    
    
    492
    
    
    
    423
    
    
    
    (69
    )
    
    
    B+
    
    
    
    1
    
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %S8
    
    N/A
    
    
    1,000
    
    
    
    1,000
    
    
    
    982
    
    
    
    (18
    )
    
    BBB-
    
    
    1
    
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %S9     (5)
    
    N/A
    
    
    500
    
    
    
    54
    
    
    
    115
    
    
    
    61
    
    
    NR
    
    
    1
    
    
    
    0.0
    %
    
    
    100.0
    %
    
    
    0.0
    %Subtotal
    
    9
    
    
    10,229
    
    
    
    9,366
    
    
    
    7,388
    
    
    
    (1,978
    )Grand total of Trust
Preferred holdings
    
    
    79,448
    
    
    
    72,513
    
    
    
    36,698
    
    
    
    (35,815
    )
   
 (1)
    
    As a percentage of the total collateral.(2)
    
    Includes deferrals that have not paid current interest payments as permitted by the debt instruments.(3)
    
    Expected defaults are determined by an analysis of the collateral for each security. The total expected defaults are then appliedover a three year period with 50% projected to occur in year 1, 30% in year 2, and 20% in year 3.(4)
    
    Excess subordination represents the additional defaults in excess of actual deferrals and defaults that the CDO can absorbbefore the security experiences a shortfall in principal.(5)
    
    Book value reduced in March 2009 to fair value as a result of OTTI.(6)
    
    Book value reduced in December 2009 to fair value as a result of OTTI. 15




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##### Table of Contents



NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
 Non agency CMOs
 Year originated
    
    
    
    
    Book Value
    
    
    Fair Value2003
    
    
    
    
    $
    16,173
    
    
    $
    16,5622004
    
    
    
    
    
    21,979
    
    
    
    18,8322005
    
    
    
    
    
    75,876
    
    
    
    65,3882006
    
    
    
    
    
    21,603
    
    
    
    13,6572007
    
    
    
    
    
    
    
    
    
    2008
    
    
    
    
    
    12,026
    
    
    
    7,9842009
    
    
    
    
    
    6,307
    
    
    
    6,087$
    153,964
    
    
    $
    128,510
  Book Value
    
    
    Fair ValueAAA by Moodys, S&P, or Fitch
    
    $
    56,299
    
    
    $
    54,842AA by Moodys or S&P
    
    
    10,780
    
    
    
    9,795A by Moodys, S&P, or Fitch
    
    
    43,301
    
    
    
    36,157BBB by Moodys or Fitch
    
    
    15,947
    
    
    
    11,333BB by Fitch
    
    
    3,477
    
    
    
    1,086CCC by S&P or Fitch
    
    
    16,001
    
    
    
    11,063CC by Fitch
    
    
    8,159
    
    
    
    4,234$
    153,964
    
    
    $
    128,510
  General
 16




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##### Table of Contents



NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
 Other-Than-Temporary- Impairment
  Unadjusted
    
    OTTI
    
    OTTI
    
    12/31/09
    
    12/31/09Carrying
    
    Charge to
    
    charge to
    
    Carrying
    
    FairSecurity
    
    Value
    
    earnings
    
    OCI
    
    Value
    
    ValueNon Agency CMO
    
    $
    2,019
    
    
    $
    1,186
    
    
    $
    580
    
    
    $
    253
    
    
    $
    543Pooled trust preferred security
    
    
    6,624
    
    
    
    866
    
    
    
    2,458
    
    
    
    3,300
    
    
    
    3,300Individual trust preferred security
    
    
    500
    
    
    
    446
    
    
    
    
    
    
    
    54
    
    
    
    115
  Trust preferred securities
    
    
    Non Agency CMOBalance at June 30, 2009
    
    $
    552
    
    
    $
    714Total losses  realized/unrealized
    
    
    2,458
    
    
    
    Included as a charge to earnings
    
    
    (552
    )
    
    
    (134
    )Change to other comprehensive income
    
    
    
    
    
    
    Balance at December 31, 2009
    
    $
    2,458
    
    
    $
    580The amount of securities with OTTI charges to earnings are as follows:Recorded in September 2009
    
    $
    2,761
    
    
    $
    Recorded in December 2009
    
    
    648
    
    
    
    134$
    3,409
    
    
    $
    134The above OTTI charge to earnings amounts are categorized as of December 31, 2009 as follows:Writeoffs no longer reflected as investments
    
    $
    2,761
    
    
    $
    Charged to earnings:Level III  Pooled TPS
    
    
    648
    
    
    
    Level III  Non Agency CMO
    
    
    
    
    
    
    134
  17




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##### Table of Contents



NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
   
    
    Estimate of future cash flows  cash flows are constructed on Intex software. Intex
is a proprietary software program recognized as the industry standard for analyzing all
types of collateralized debt obligations. It includes each deals structural features
updated with information from trustee reports, including collateral/hedge
agreement/cash flow detail, as it becomes available. A present value analysis is then
performed on the modeled cash flows to determine any cash flow shortages to Parkvales
respective holdings, if any.
    
    Credit analysis  A quarterly credit evaluation is performed for each of the issuers
comprising the collateral across the various pooled trust preferred securities. The
credit evaluation considers all evidence available and includes the nature of the
issuers business and geographic footprint. The analysis focuses on shareholders
equity, loan loss reserves, non-performing assets, credit quality ratios and capital
adequacy.
    
    Probability of default  A probability of default is determined for each issuer and
is used to calculate the expected impact of future deferrals and defaults in the
expected cash flow analysis. Each issuer in the collateral pool is assigned a
probability of default with an emphasis on near term probability in the first three
years. Issuers currently defaulted are assigned a 100% probability of loss, and issuers
currently deferring are assigned a probability of loss with recoveries ranging from 0%
to 50% projected to begin 2 years after the deferrals began. All other issuers in the
pool are assigned a probability of loss ranging from 0% to 80%, with ranges based upon
the results of the credit analysis. The probability of loss of 0% is assigned to only
the strongest financial institutions. The probability of default is updated quarterly
with data provided by trustees and other sources.
 18




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##### Table of Contents



NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
  GOODWILL AND MARKET VALUATION
    19




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NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
 EARNINGS PER SHARE (EPS)
  Three months ended
    
    
    Six months endedDecember 31,
    
    
    December 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Numerator for basic and diluted earnings per share:Net income
    
    $
    2,425
    
    
    $
    2,065
    
    
    $
    3,280
    
    
    $
    3,170Less: Preferred stock dividend
    
    
    397
    
    
    
    35
    
    
    
    794
    
    
    
    35Net income available to common stockholders
    
    $
    2,028
    
    
    $
    2,030
    
    
    $
    2,486
    
    
    $
    3,135Denominator:Weighted average shares
for basic earnings per common share
    
    
    5,428,604
    
    
    
    5,467,423
    
    
    
    5,428,150
    
    
    
    5,474,896Effect of dilutive stock options
    
    
    
    
    
    
    625
    
    
    
    
    
    
    
    2,116Weighted average shares for
dilutive earnings per common share
    
    
    5,428,604
    
    
    
    5,468,048
    
    
    
    5,428,150
    
    
    
    5,477,012Net income per common share: Basic
    
    $
    0.38
    
    
    $
    0.37
    
    
    $
    0.46
    
    
    $
    0.57Diluted
    
    $
    0.38
    
    
    $
    0.37
    
    
    $
    0.46
    
    
    $
    0.57
 NEW ACCOUNTING PRONOUNCEMENTS
   20




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NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
   
  PARKVALE FINANCIAL CORPORATION
 
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
 AND RESULTS OF OPERATIONS
  Forward-Looking Statements:
    21




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##### Table of Contents



Critical Accounting Policies, Judgments and Estimates:
    Balance Sheet Data:
 December 31,2009
    
    2008Total assets
    
    $
    1,915,896
    
    
    $
    1,890,250Loans, net
    
    
    1,053,009
    
    
    
    1,163,968Interest-earning deposits and federal funds sold
    
    
    130,021
    
    
    
    120,669Total investments
    
    
    600,156
    
    
    
    487,821Deposits
    
    
    1,528,142
    
    
    
    1,481,785FHLB advances
    
    
    186,087
    
    
    
    186,315Shareholders equity
    
    
    151,513
    
    
    
    163,264Book value per common share
    
    $
    21.73
    
    
    $
    24.23
 22




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##### Table of Contents



Three Months Ended
    
    Six Months EndedDecember 31, (1)
    
    December 31, (1)2009
    
    2008
    
    2009
    
    2008Average yield earned on all
interest-earning assets
    
    
    4.30
    %
    
    
    5.38
    %
    
    
    4.38
    %
    
    
    5.43
    %Average rate paid on all
interest-bearing liabilities
    
    
    2.33
    %
    
    
    3.00
    %
    
    
    2.39
    %
    
    
    3.04
    %Average interest rate spread
    
    
    1.97
    %
    
    
    2.38
    %
    
    
    1.99
    %
    
    
    2.39
    %Net yield on average
interest-earning assets
    
    
    2.03
    %
    
    
    2.47
    %
    
    
    2.05
    %
    
    
    2.49
    %Other expenses to average assets
    
    
    1.53
    %
    
    
    1.56
    %
    
    
    1.56
    %
    
    
    1.55
    %Taxes to pre-tax income
    
    
    23.84
    %
    
    
    28.67
    %
    
    
    6.92
    %
    
    
    29.35
    %Dividend payout ratio
    
    
    13.04
    %
    
    
    59.27
    %
    
    
    21.83
    %
    
    
    76.88
    %Return on average assets
    
    
    0.51
    %
    
    
    0.45
    %
    
    
    0.34
    %
    
    
    0.34
    %Return on average equity
    
    
    6.37
    %
    
    
    5.68
    %
    
    
    4.32
    %
    
    
    4.52
    %Average equity to average total assets
    
    
    7.96
    %
    
    
    7.94
    %
    
    
    7.93
    %
    
    
    7.61
    %Dividends per common share
    
    $
    0.05
    
    
    $
    0.22
    
    
    $
    0.10
    
    
    $
    0.44
 At December 31,2009
    
    2008One year gap to total assets
    
    
    4.56
    %
    
    
    11.73
    %Intangibles to total equity
    
    
    19.12
    %
    
    
    18.30
    %Ratio of nonperforming assets to total assets
    
    
    1.90
    %
    
    
    1.10
    %Number of full-service offices
    
    
    48
    
    
    
    48
 
 (1)
    
    The applicable income and expense figures have been annualized in calculating the
percentages. Nonperforming Loans and Foreclosed Real Estate:
   12/31/09
    
    
    6/30/09
    
    
    12/31/08Delinquent single-family mortgage loans
    
    $
    21,760
    
    
    $
    21,046
    
    
    $
    11,041Delinquent other loans
    
    
    5,609
    
    
    
    3,321
    
    
    
    2,334Total nonperforming loans
    
    
    27,369
    
    
    
    24,367
    
    
    
    13,375Total impaired loans
    
    
    3,085
    
    
    
    3,568
    
    
    
    508Real estate owned, net
    
    
    5,853
    
    
    
    5,706
    
    
    
    6,897Total
    
    $
    36,307
    
    
    $
    33,641
    
    
    $
    20,780
   23




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24




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Allowance for Loan Losses:
   Liquidity and Capital Resources:
  25




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TARP Capital Purchase Program
    26




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Term Debt
     27




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##### Table of Contents



Tier 1
    
    Tier 1
    
    TotalCore
    
    Risk-Based
    
    Risk-Based(Dollars in 000s)
    
    Capital
    
    Capital
    
    CapitalEquity capital (1)
    
    $
    174,448
    
    
    $
    174,448
    
    
    $
    174,448Less non-allowable intangible assets
    
    
    (28,966
    )
    
    
    (28,966
    )
    
    
    (28,966
    )Plus permitted valuation allowances (2)
    
    
    
    
    
    
    
    
    
    
    14,157Plus allowable unrealized holding gains (3)
    
    
    1,929
    
    
    
    1,929
    
    
    
    1,929Total regulatory capital
    
    
    147,411
    
    
    
    147,411
    
    
    
    161,568Minimum required capital
    
    
    75,300
    
    
    
    52,759
    
    
    
    105,519Excess regulatory capital
    
    $
    72,111
    
    
    $
    94,652
    
    
    $
    56,049Adjusted total assets (1)
    
    $
    1,882,502
    
    
    $
    1,318,982
    
    
    $
    1,318,982Regulatory capital as a percentage
    
    
    7.83
    %
    
    
    11.18
    %
    
    
    12.25
    %Minimum capital required as a percentage
    
    
    4.00
    %
    
    
    4.00
    %
    
    
    8.00
    %Excess regulatory capital as a percentage
    
    
    3.83
    %
    
    
    7.18
    %
    
    
    4.25
    %Well capitalized requirement
    
    
    5.00
    %
    
    
    6.00
    %
    
    
    10.00
    %
 
 (1)
    
    Represents amounts for the consolidated Bank as reported to the Pennsylvania Department
of Banking and FDIC on Form 041 for the quarter ended December 31, 2009.(2)
    
    Limited to 1.25% of risk adjusted total assets.(3)
    
    Limited to 45% of pretax net unrealized holding gains.  Results of Operations  Comparison of Three Months Ended December 31, 2009 and 2008:
  Interest Income:
  28




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Interest Expense:
  Net Interest Income:
  Provision for Loan Losses:
   29




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##### Table of Contents



Noninterest Income:
   Pooled trust preferred securities
    
    $
    648,000Collateralized Mortgage Obligation
    
    
    134,000
      30




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Noninterest Expense:
  Income Tax Expense (Benefit):
  Results of Operations  Comparison of Six Months Ended December 31, 2009 and 2008:
  Interest Income:
  31




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Interest Expense:
  Net Interest Income:
  Provision for Loan Losses:
  Noninterest Income:
   Pooled trust preferred securities
    
    $
    3,409,000Collateralized Mortgage Obligation
    
    
    134,000
 32




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Noninterest Expense:
  Income Tax Expense (Benefit):
   Impact of Inflation and Changing Prices:
  
   
   33




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##### Table of Contents



PART II  OTHER INFORMATION
 Item 1. Legal Proceedings
    
    None
    (a)
    
    Not applicable
  (c)
    
    Not applicable
   Item 4. Submission of Matters to a Vote of Security Holders
    
    None
 Item 5. Other Information
    
    None
  31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of
the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Interim Principal Financial Officer pursuant to Rule
13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer and Interim Principal Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
 34




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##### Table of Contents



SIGNATURES
  Parkvale Financial CorporationDATE: February 1, 2010
    By:
    /s/ Gilbert A. RiazziGilbert A. RiazziVice President and
Interim Principal Financial OfficerDATE: February 1, 2010
    By:
    /s/ Robert J. McCarthy, Jr.Robert J. McCarthy, Jr.President and
Chief Executive Officer 35