##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended June 30, 2005
 OR
 o
             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.: 0-23010
 Laurel Capital Group, Inc.
  Pennsylvania
    
    25-1717451(State or other jurisdiction
of incorporation or organization)
    
    (I.R.S. Employer
Identification Number)
 2724 Harts Run Road
Allison Park, Pennsylvania
    
    15101(Address)
    
    (Zip Code)
 (412) 487-7400
 Not Applicable
  Common Stock (par value $.01 per share)  (Title of Class)
 þ o
 þ
 o þ
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




---



TABLE OF CONTENTS  PART IItem 1. BusinessItem 2.PropertiesItem 3. Legal ProceedingsItem 4.Submission of Matters to a Vote of Security HoldersPART IIItem 5. Market for Registrants Common Equity and Related Stockholder MattersItem 6. Selected Financial DataItem 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 7A.Quantitative and Qualitative Disclosures about Market RiskItem 8. Financial Statements and Supplementary DataItem 9.Changes In and Disagreements with Accountants on Accounting and Financial DisclosureItem 9A.Controls and ProceduresItem 9B. Other InformationPART IIIItem 10. Directors and Executive Officers of the RegistrantItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related TransactionsItem 14. Principal Accountant Fees and ServicesPART IVItem 15. Exhibits, Financial Statement Schedules and Reports on Form 8-KSIGNATURESEX-11EX-13EX-23EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2    Table of Contents  
 PART I
 
 Item 1. Business
 General
 www.laurelsb.com
   Market Area
  2




---



##### Table of Contents



    
  Forward Looking Statements
  Lending Activities
 General.
 3




---



##### Table of Contents



As of June 30,2005
    
    
    
    
    
    
    2004
    
    
    
    
    
    
    2003
    
    
    
    
    
    
    2002
    
    
    
    
    
    
    2001Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %(Dollars in Thousands)Real estate loans:Single-family
    
    $
    165,845
    
    
    
    77.4
    %
    
    $
    125,304
    
    
    
    70.3
    %
    
    $
    118,962
    
    
    
    62.6
    %
    
    $
    131,359
    
    
    
    71.1
    %
    
    $
    130,039
    
    
    
    70.3
    %Multi-family
    
    
    1,461
    
    
    
    0.7
    %
    
    
    1,616
    
    
    
    0.9
    %
    
    
    2,640
    
    
    
    1.4
    %
    
    
    3,202
    
    
    
    1.7
    %
    
    
    2,892
    
    
    
    1.6
    %Construction and
development (1)
    
    
    5,095
    
    
    
    2.4
    %
    
    
    5,247
    
    
    
    2.9
    %
    
    
    14,728
    
    
    
    7.7
    %
    
    
    9,687
    
    
    
    5.3
    %
    
    
    10,763
    
    
    
    5.8
    %Commercial
    
    
    4,437
    
    
    
    2.1
    %
    
    
    6,322
    
    
    
    3.6
    %
    
    
    5,337
    
    
    
    2.8
    %
    
    
    4,496
    
    
    
    2.4
    %
    
    
    5,051
    
    
    
    2.7
    %Total real estate loans
    
    
    176,838
    
    
    
    82.6
    %
    
    
    138,489
    
    
    
    77.7
    %
    
    
    141,667
    
    
    
    74.5
    %
    
    
    148,744
    
    
    
    80.5
    %
    
    
    148,745
    
    
    
    80.4
    %Commercial and other loans
(2)
    
    
    665
    
    
    
    0.3
    %
    
    
    1,475
    
    
    
    0.8
    %
    
    
    3,012
    
    
    
    1.6
    %
    
    
    1,560
    
    
    
    .8
    %
    
    
    1,707
    
    
    
    .9
    %Consumer loans (3)
    
    
    36,638
    
    
    
    17.1
    %
    
    
    38,295
    
    
    
    21.5
    %
    
    
    45,463
    
    
    
    23.9
    %
    
    
    34,461
    
    
    
    18.7
    %
    
    
    34,441
    
    
    
    18.7
    %Total loans
    
    $
    214,141
    
    
    
    100.0
    %
    
    $
    178,259
    
    
    
    100.0
    %
    
    $
    190,142
    
    
    
    100.0
    %
    
    $
    184,765
    
    
    
    100.0
    %
    
    $
    184,893
    
    
    
    100.0
    %Less:Loans in process
    
    
    (3,290
    )
    
    
    
    
    
    
    (3,459
    )
    
    
    
    
    
    
    (7,314
    )
    
    
    
    
    
    
    (4,719
    )
    
    
    
    
    
    
    (6,160
    )Allowance for loan
losses
    
    
    (1,989
    )
    
    
    
    
    
    
    (2,032
    )
    
    
    
    
    
    
    (2,006
    )
    
    
    
    
    
    
    (1,803
    )
    
    
    
    
    
    
    (1,759
    )Unamortized costs and fees
    
    
    887
    
    
    
    
    
    
    
    523
    
    
    
    
    
    
    
    380
    
    
    
    
    
    
    
    79
    
    
    
    
    
    
    
    (66
    )Net loans receivable
    
    $
    209,749
    
    
    
    
    
    
    $
    173,291
    
    
    
    
    
    
    $
    181,202
    
    
    
    
    
    
    $
    178,322
    
    
    
    
    
    
    $
    176,908Loans held for sale (4)
    
    $
    947
    
    
    
    
    
    
    $
    1,130
    
    
    
    
    
    
    $
    1,439
    
    
    
    
    
    
    $
    1,371
    
    
    
    
    
    
    $
    1,701
 
 (1)
    
    The $5.1 million construction and development loan portfolio outstanding at June 30, 2005
consisted of adjustable-rate construction loans totaling $4.0 million and fixed-rate
construction loans totaling $1.1 million.(2)
    
    Commercial and other loans consists primarily of U.S. Department of Agriculture loans which
are guaranteed.(3)
    
    Consumer loans consist primarily of home equity loans, home equity lines of credit and 4




---



##### Table of Contents



automobile loans. For additional information regarding these loans, see Note 4 to the Notes
to Consolidated Financial Statements in the Companys 2005 Annual Report to Stockholders
(Annual Report) set forth as Exhibit 13 hereto.(4)
    
    Loans held for sale consist of guaranteed student loans. Maturities and Repricing of Loans.
 Total Loans
    
    
    Loans Scheduled to Mature or Reprice in the Year Ended June 30,Outstanding at June
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2027 and30, 2005
    
    
    2006
    
    
    2007 - 2008
    
    
    2009 - 2010
    
    
    2011 - 2016
    
    
    2017 - 2026
    
    
    Thereafter(In Thousands)Fixed-rate mortgage loans
    
    $
    77,146
    
    
    $
    46
    
    
    $
    956
    
    
    $
    2,065
    
    
    $
    6,966
    
    
    $
    27,740
    
    
    $
    39,373Adjustable-rate mortgage loans
    
    
    94,597
    
    
    
    4,859
    
    
    
    23,419
    
    
    
    64,711
    
    
    
    1,608
    
    
    
    
    
    
    
    Construction
    
    
    5,095
    
    
    
    395
    
    
    
    482
    
    
    
    2,722
    
    
    
    
    
    
    
    776
    
    
    
    720Consumer and other loans
    
    
    37,303
    
    
    
    2,290
    
    
    
    5,306
    
    
    
    6,142
    
    
    
    11,611
    
    
    
    11,536
    
    
    
    418Total
    
    $
    214,141
    
    
    $
    7,590
    
    
    $
    30,163
    
    
    $
    75,640
    
    
    $
    20,185
    
    
    $
    40,052
    
    
    $
    40,511
  Origination, Purchase and Sale of Loans.
  5




---



##### Table of Contents



Year Ended June 30,2005
    
    
    2004
    
    
    2003(In Thousands)Real estate originations:Residential:Single-family
    
    $
    59,729
    
    
    $
    26,094
    
    
    $
    28,881Multi-family
    
    
    
    
    
    
    168
    
    
    
    124Commercial
    
    
    570
    
    
    
    900
    
    
    
    1,256Construction and development (1)
    
    
    4,053
    
    
    
    3,876
    
    
    
    14,396Total real estate loan originations
    
    
    64,352
    
    
    
    31,038
    
    
    
    44,657Consumer and other loan originations (2)
    
    
    14,527
    
    
    
    17.796
    
    
    
    24,960Total loan originations
    
    
    78,879
    
    
    
    48,834
    
    
    
    69,617Loans purchased
    
    
    5,910
    
    
    
    20,832
    
    
    
    Loans acquired by acquisition (3)
    
    
    
    
    
    
    
    
    
    
    24,555Total loan originations, loans purchased
and loans Acquired
    
    
    84,789
    
    
    
    69,666
    
    
    
    94,172Students loans sold
    
    
    563
    
    
    
    849
    
    
    
    612Principal loan repayments
    
    
    47,408
    
    
    
    76,961
    
    
    
    90,383Other, net (4)
    
    
    360
    
    
    
    76
    
    
    
    229Total principal loan repayments and other
    
    
    48,331
    
    
    
    77,886
    
    
    
    91,224Net increase (decrease) in loans receivable, net
and loans held for sale
    
    $
    36,458
    
    
    $
    (8,220
    )
    
    $
    2,948
 6




---



##### Table of Contents



(1)
    
    Construction and development loans are classified as either residential or commercial real
estate loans at the time of origination depending on the nature of the properties securing the
loans. Construction loan originations totaled $4.1 million during fiscal 2005, of which $3.4
million were adjustable-rate loans and $708,000 were fixed-rate loans.(2)
    
    Includes student loans held for sale(3)
    
    Reflects loans acquired in conjunction with the acquisition of SFSB Holding Company on March
28, 2003.(4)
    
    Includes transfers to real estate owned and all activity in the allowance for possible loan
losses. Lending Programs and Policies
 Residential Lending.
   7




---



##### Table of Contents



Commercial and Multi-Family Real Estate Lending.
   Construction and Development Lending.
 8




---



##### Table of Contents



Consumer Lending.
   9




---



##### Table of Contents



Regulatory Requirements
  Loan Servicing and Loan Fees
    10




---



##### Table of Contents



Non-performing Loans and Other Real Estate Owned
      11




---



##### Table of Contents



June 30,2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001(Dollars in Thousands)Non-accruing loans:Single-family residential real estate
    
    $
    854
    
    
    $
    1,561
    
    
    $
    572
    
    
    $
    232
    
    
    $
    467Commercial real estate
    
    
    
    
    
    
    418
    
    
    
    282
    
    
    
    
    
    
    
    31Consumer and other loans
    
    
    115
    
    
    
    177
    
    
    
    102
    
    
    
    55
    
    
    
    25Total non-accruing loans
    
    $
    969
    
    
    $
    2,156
    
    
    $
    956
    
    
    $
    287
    
    
    $
    523Total non-performing loans as a percentage
of net loans receivable
    
    
    0.46
    %
    
    
    1.24
    %
    
    
    0.53
    %
    
    
    0.11
    %
    
    
    0.30
    %Total real estate owned, net of related
reserves
    
    $
    37
    
    
    $
    
    
    
    $
    
    
    
    $
    131
    
    
    $
    290Total non-performing assets as a
percentage of total assets
    
    
    0.33
    %
    
    
    0.72
    %
    
    
    0.30
    %
    
    
    0.12
    %
    
    
    0.20
    %
  Allowance for Estimated Loan Losses.
 12




---



##### Table of Contents



Year Ended June 30,2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001(Dollars in Thousands)Balance at beginning of period
    
    $
    2,032
    
    
    $
    2,006
    
    
    $
    1,803
    
    
    $
    1,759
    
    
    $
    1,798Charge offs:Residential real estate
    
    
    (61
    )
    
    
    (4
    )
    
    
    (2
    )
    
    
    
    
    
    
    (56
    )Consumer
    
    
    (6
    )
    
    
    (26
    )
    
    
    (28
    )
    
    
    (20
    )
    
    
    (19
    )Total charge offs
    
    
    (67
    )
    
    
    (30
    )
    
    
    (30
    )
    
    
    (20
    )
    
    
    (75
    )Recoveries:Residential real estate
    
    
    8
    
    
    
    22
    
    
    
    
    
    
    
    20
    
    
    
    Consumer
    
    
    7
    
    
    
    22
    
    
    
    12
    
    
    
    26
    
    
    
    18Total recoveries
    
    
    15
    
    
    
    44
    
    
    
    12
    
    
    
    46
    
    
    
    18Net (chargeoffs) recoveries
    
    
    (52
    )
    
    
    14
    
    
    
    (18
    )
    
    
    26
    
    
    
    (57
    )Provision for losses on loans
    
    
    9
    
    
    
    12
    
    
    
    12
    
    
    
    18
    
    
    
    18Allowance on loans acquired from
Stanton Federal Savings Bank
    
    
    
    
    
    
    
    
    
    
    209
    
    
    
    
    
    
    
    Balance at end of period
    
    $
    1,989
    
    
    $
    2,032
    
    
    $
    2,006
    
    
    $
    1,803
    
    
    $
    1,759Allowance for loan losses as a
percent of total net loans
outstanding
    
    
    0.95
    %
    
    
    1.17
    %
    
    
    1.11
    %
    
    
    1.00
    %
    
    
    0.99
    %Allowance for loan losses as a
percent of non-performing loans
    
    
    205.05
    %
    
    
    94.25
    %
    
    
    209.83
    %
    
    
    919.90
    %
    
    
    336.33
    %Ratio of net (chargeoffs) recoveries
to average loans outstanding
    
    
    -0.03
    %
    
    
    0.01
    %
    
    
    -0.02
    %
    
    
    0.01
    %
    
    
    -0.03
    %
 13




---



##### Table of Contents



June 30,2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001Percent
    
    
    
    
    
    
    Percent
    
    
    
    
    
    
    Percent
    
    
    
    
    
    
    Percent
    
    
    
    
    
    
    Percentof Loans
    
    
    
    
    
    
    of Loans
    
    
    
    
    
    
    of Loans
    
    
    
    
    
    
    of Loans
    
    
    
    
    
    
    of Loansin Each
    
    
    
    
    
    
    in Each
    
    
    
    
    
    
    in Each
    
    
    
    
    
    
    in Each
    
    
    
    
    
    
    in EachCategory
    
    
    
    
    
    
    Category
    
    
    
    
    
    
    Category
    
    
    
    
    
    
    Category
    
    
    
    
    
    
    Categoryto Total
    
    
    
    
    
    
    to Total
    
    
    
    
    
    
    to Total
    
    
    
    
    
    
    to Total
    
    
    
    
    
    
    to TotalAmount
    
    
    Loans
    
    
    Amount
    
    
    Loans
    
    
    Amount
    
    
    Loans
    
    
    Amount
    
    
    Loans
    
    
    Amount
    
    
    Loans(Dollars in Thousands)Residential real estate(1)
    
    $
    1,127
    
    
    
    79.8
    %
    
    $
    917
    
    
    
    73.2
    %
    
    $
    867
    
    
    
    70.3
    %
    
    $
    973
    
    
    
    76.4
    %
    
    $
    901
    
    
    
    76.1
    %Multi-family real estate
    
    
    18
    
    
    
    0.7
    %
    
    
    16
    
    
    
    0.9
    %
    
    
    26
    
    
    
    1.4
    %
    
    
    32
    
    
    
    1.7
    %
    
    
    29
    
    
    
    1.6
    %Commercial real estate
    
    
    67
    
    
    
    2.1
    %
    
    
    188
    
    
    
    3.6
    %
    
    
    148
    
    
    
    2.8
    %
    
    
    67
    
    
    
    2.4
    %
    
    
    83
    
    
    
    2.7
    %Consumer and other
    
    
    777
    
    
    
    17.4
    %
    
    
    911
    
    
    
    22.3
    %
    
    
    965
    
    
    
    25.5
    %
    
    
    731
    
    
    
    19.5
    %
    
    
    746
    
    
    
    19.6
    %Total
    
    $
    1,989
    
    
    
    100.0
    %
    
    $
    2,032
    
    
    
    100.0
    %
    
    $
    2,006
    
    
    
    100.0
    %
    
    $
    1,803
    
    
    
    100.0
    %
    
    $
    1,759
    
    
    
    100.0
    %
 
 (1)
    
    Includes construction and development loans. Investment Activities
 Mortgage-Backed Securities.
   14




---



##### Table of Contents



June 30,2005
    
    
    2004
    
    
    2003(In Thousands)Mortgage-backed securities held to maturity:Fannie Mae REMIC
    
    $
    
    
    
    $
    
    
    
    $
    27Mortgage-backed securities available for sale:GNMA
    
    $
    823
    
    
    $
    1,390
    
    
    $
    3,283Fannie Mae
    
    
    7,462
    
    
    
    10,288
    
    
    
    4,521Fannie Mae REMIC
    
    
    1,939
    
    
    
    4,373
    
    
    
    432Freddie Mac
    
    
    2,074
    
    
    
    2,673
    
    
    
    1,710Freddie Mac REMIC
    
    
    721
    
    
    
    2,308
    
    
    
    3,139Other  REMIC
    
    
    
    
    
    
    
    
    
    
    232Total
    
    $
    13,019
    
    
    $
    21,032
    
    
    $
    13,317
  Amounts at June 30, 2005 Which Mature inAfter One
    
    
    After FiveOne Year
    
    
    Five to
    
    
    to 10
    
    
    Over 10or Less
    
    
    Years
    
    
    Years
    
    
    Years
    
    
    Total(Dollars in Thousands)Mortgage-backed securities available for sale:GNMA
    
    $
    2
    
    
    $
    33
    
    
    $
    60
    
    
    $
    728
    
    
    $
    823Fannie Mae
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,462
    
    
    
    7,462Fannie Mae REMIC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,939
    
    
    
    1,939Freddie Mac
    
    
    
    
    
    
    
    
    
    
    82
    
    
    
    1,992
    
    
    
    2,074Freddie Mac REMIC
    
    
    
    
    
    
    
    
    
    
    421
    
    
    
    300
    
    
    
    721Total
    
    $
    2
    
    
    $
    33
    
    
    $
    563
    
    
    $
    12,421
    
    
    $
    13,019Weighted average yield
    
    
    9.06
    %
    
    
    5.05
    %
    
    
    4.48
    %
    
    
    4.17
    %
    
    
    4.18
    %
   15




---



##### Table of Contents



Investment Securities.
  16




---



##### Table of Contents



June 30,2005
    
    
    2004
    
    
    2003(In Thousands)Investment securities held to maturity:U.S. Government Agency Notes
    
    $
    10,918
    
    
    $
    
    
    
    $
    Corporate notes and commercial paper
    
    
    
    
    
    
    12,210
    
    
    
    9,207Total
    
    $
    10,918
    
    
    $
    12,210
    
    
    $
    9,207Investment securities available for sale:Municipal obligations
    
    $
    7,628
    
    
    $
    10,308
    
    
    $
    15,373Shay Financial Services ARM Fund
    
    
    23,931
    
    
    
    23,274
    
    
    
    22,785Freddie Mac preferred stock
    
    
    750
    
    
    
    750
    
    
    
    750Fannie Mae stock
    
    
    583
    
    
    
    583
    
    
    
    965Freddie Mac stock
    
    
    684
    
    
    
    684
    
    
    
    999Corporate and U.S. government agency notes
    
    
    10,459
    
    
    
    10,517
    
    
    
    3,135CRA Qualified Investment Fund
    
    
    1,000
    
    
    
    1,000
    
    
    
    1,000Other
    
    
    220
    
    
    
    220
    
    
    
    460Total
    
    $
    45,255
    
    
    $
    47,336
    
    
    $
    45,467
  Amounts at June 30, 2005 Which Mature InOne Year or
    
    
    1 to 5
    
    
    5 to 10
    
    
    Over 10Less
    
    
    Years
    
    
    Years
    
    
    Years
    
    
    Total(Dollars in Thousands)Investment securities held to maturity:U.S. Government Agency Notes
    
    $
    2,900
    
    
    $
    7,020
    
    
    $
    
    
    
    $
    998
    
    
    $
    10,918Weighted average yield
    
    
    2.56
    %
    
    
    3.51
    %
    
    
    0.00
    %
    
    
    3.64
    %
    
    
    3.27
    %Investment securities available for sale:Municipal obligations
    
    $
    
    
    
    $
    
    
    
    $
    1,876
    
    
    $
    5,752
    
    
    $
    7,628Shay Financial Services ARM Fund (1)
    
    
    23,931
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,931Freddie Mac preferred stock (1)
    
    
    750
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    750Fannie Mae stock (1)
    
    
    583
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    583Freddie Mac stock (1)
    
    
    684
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    684Corporate and U.S. government agency notes
    
    
    1,000
    
    
    
    5,000
    
    
    
    1,459
    
    
    
    3,000
    
    
    
    10,459CRA Qualified Investment Fund (1)
    
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,000Other
    
    
    220
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    220Total
    
    $
    28,168
    
    
    $
    5,000
    
    
    $
    3,335
    
    
    $
    8,752
    
    
    $
    45,255Weighted average yield
    
    
    3.33
    %
    
    
    3.66
    %
    
    
    5.61
    %
    
    
    4.84
    %
    
    
    3.83
    %
 17




---



##### Table of Contents



(1)
    
    Such investment securities have no stated contractual maturity. Sources of Funds
 General.
 Deposits.
  As of June 30,2005
    
    
    2004
    
    
    2003% of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % ofAmount
    
    
    Deposits
    
    
    Amount
    
    
    Deposits
    
    
    Amount
    
    
    Deposits(Dollars in Thousands)Passbook and club accounts
    
    $
    44,749
    
    
    
    17.6
    %
    
    $
    46,790
    
    
    
    19.0
    %
    
    $
    47,532
    
    
    
    17.9
    %NOW deposits
    
    
    39,263
    
    
    
    15.4
    %
    
    
    38,662
    
    
    
    15.7
    %
    
    
    42,390
    
    
    
    16.0
    %MMDAs
    
    
    18,406
    
    
    
    7.2
    %
    
    
    19,527
    
    
    
    7.9
    %
    
    
    19,106
    
    
    
    7.2
    %Fixed-rate certificates
    
    
    111,841
    
    
    
    43.9
    %
    
    
    101,743
    
    
    
    41.4
    %
    
    
    117,432
    
    
    
    44.2
    %IRA and Keogh accounts (1)
    
    
    40,632
    
    
    
    15.9
    %
    
    
    39,457
    
    
    
    16.0
    %
    
    
    39,120
    
    
    
    14.7
    %Total
    
    $
    254,891
    
    
    
    100.0
    %
    
    $
    246,179
    
    
    
    100.0
    %
    
    $
    265,580
    
    
    
    100.0
    %
 
 (1)
    
    IRA and Keogh accounts consist of fixed-rate certificates.  18




---



##### Table of Contents



Year Ended June 30,2005
    
    
    2004
    
    
    2003(In Thousands)Increase (decrease) before interest credited
    
    $
    4,666
    
    
    
    ($23,344
    )
    
    
    ($6,319
    )Interest credited
    
    
    4,046
    
    
    
    3,943
    
    
    
    5,268Deposits acquired
    
    
    
    
    
    
    
    
    
    
    41,212Total increase (decrease)
    
    $
    8,712
    
    
    
    ($19,401
    )
    
    $
    40,161
    As of June 30,
    
    
    Amount at June 30, 2005 maturing in the year ending June 30,2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    Thereafter(In Thousands)Certificate Accounts:0.00% to 1.99%
    
    $
    43,651
    
    
    $
    13,378
    
    
    $
    13,277
    
    
    $
    73
    
    
    $
    28
    
    
    $
    2.00% to 3.99%
    
    
    55,598
    
    
    
    94,201
    
    
    
    47,393
    
    
    
    36,285
    
    
    
    6,576
    
    
    
    3,9474.00% to 5.99%
    
    
    35,004
    
    
    
    39,461
    
    
    
    3,804
    
    
    
    3,727
    
    
    
    5,277
    
    
    
    26,6536.00% to 7.99%
    
    
    6,947
    
    
    
    5,433
    
    
    
    1,470
    
    
    
    520
    
    
    
    351
    
    
    
    3,092Total
    
    $
    141,200
    (1)
    
    $
    152,473
    (1)
    
    $
    65,944
    
    
    $
    40,605
    
    
    $
    12,232
    
    
    $
    33,692
 
 (1)
    
    Includes IRA and Keogh accounts. 19




---



##### Table of Contents



Amount(In Thousands)Three months or less
    
    $
    2,269Over three through six months
    
    
    3,241Over six though 12 months
    
    
    2,476Over 12 months
    
    
    14,710Total
    
    $
    22,696
 20




---



##### Table of Contents



WeightedAmounts
    
    
    % of Total
    
    
    Average(In Thousands)
    
    
    Deposits
    
    
    RatePassbook and club accounts
    
    $
    44,749
    
    
    
    17.6
    %
    
    
    0.20
    %Now deposits
    
    
    39,263
    
    
    
    15.4
    
    
    
    0.06MMDAs
    
    
    18,406
    
    
    
    7.2
    
    
    
    0.55Total
    
    
    102,418
    
    
    
    40.2
    
    
    
    0.21Certificates maturing by
quarter:September 30, 2005
    
    
    16,797
    
    
    
    6.6
    
    
    
    2.27December 31, 2005
    
    
    18,309
    
    
    
    7.2
    
    
    
    2.68March 31, 2006
    
    
    18,040
    
    
    
    7.1
    
    
    
    3.00June 30, 2006
    
    
    12,799
    
    
    
    5.0
    
    
    
    2.95September 30, 2006
    
    
    12,726
    
    
    
    5.0
    
    
    
    3.26December 31, 2006
    
    
    16,198
    
    
    
    6.4
    
    
    
    3.37March 31, 2007
    
    
    6,712
    
    
    
    2.6
    
    
    
    3.44June 30, 2007
    
    
    4,969
    
    
    
    1.9
    
    
    
    3.86September 30, 2007
    
    
    6,935
    
    
    
    2.7
    
    
    
    4.05December 31, 2007
    
    
    1,408
    
    
    
    0.6
    
    
    
    3.45March 31, 2008
    
    
    2,331
    
    
    
    0.9
    
    
    
    4.29June 30, 2008
    
    
    1,557
    
    
    
    0.6
    
    
    
    4.15Thereafter
    
    
    33,692
    
    
    
    13.2
    
    
    
    4.78Total certificate accounts
    
    
    152,473
    
    
    
    59.8
    
    
    
    3.46Total deposits
    
    $
    254,891
    
    
    
    100.0
    %
    
    
    2.15
    %
 Borrowings.
 21




---



##### Table of Contents



Year Ended June 30,2005(1)
    
    
    2004
    
    
    2003(Dollars in Thousands)FHLB advances:Average balance outstanding
    
    $
    21,605
    
    
    $
    22,716
    
    
    $
    22,372Maximum amount outstanding at
any month-end during the period
    
    $
    21,609
    
    
    $
    24,659
    
    
    $
    24,700Weighted average interest rate
during the period
    
    
    5.82
    %
    
    
    5.57
    %
    
    
    5.70
    %Amount outstanding at the end
of the period
    
    $
    21,602
    
    
    $
    21,609
    
    
    $
    24,672Weighted average rate at the
end of the period
    
    
    5.82
    %
    
    
    5.82
    %
    
    
    5.26
    %
 
 (1)
    
    All advances reflected have maturities greater than one year, the earliest of which is
February 20, 2008.  Subsidiaries
  Employees
  22




---



##### Table of Contents



Competition
    Sarbanes-Oxley Act of 2002
   23




---



##### Table of Contents



24




---



##### Table of Contents



REGULATION
 Set forth below is a brief description of certain laws and regulations which together with the
descriptions of laws and regulations contained elsewhere herein, are deemed material to an
investors understanding of the extent to which the Company and the Bank are regulated. The
description of these laws and regulations, as well as descriptions of laws and regulations
contained elsewhere herein, does not purport to be complete and is qualified in its entirety by
reference to applicable laws and regulations.
 The Company
 General
 BHCA Activities and Other Limitations
   25




---



##### Table of Contents



Capital Requirements
   The Bank
 General
 26




---



##### Table of Contents



FDIC Insurance Premiums
   Capital Requirements
  27




---



##### Table of Contents



Tier I
    
    
    Tier IITier I
    
    
    Risk-
    
    
    Risk-Core
    
    
    Based
    
    
    BasedCapital
    
    
    Capital
    
    
    Capital(Dollars in Thousands)Equity capital (1)
    
    $
    24,159
    
    
    $
    24,159
    
    
    $
    24,159Plus general valuation allowances (2)
    
    
    
    
    
    
    
    
    
    
    1,970Plus allowable unrealized gains
    
    
    
    
    
    
    
    
    
    
    0Total regulatory capital
    
    
    24,159
    
    
    
    24,159
    
    
    
    26,129Minimum required capital
    
    
    12,215
    
    
    
    6,302
    
    
    
    12,605Excess regulatory capital
    
    $
    11,944
    
    
    $
    17,857
    
    
    $
    13,524Regulatory capital as a percentage (3)
    
    
    7.91
    %
    
    
    15.34
    %
    
    
    16.59
    %Minimum required capital percentage
    
    
    4.00
    
    
    
    4.00
    
    
    
    8.00Excess regulatory capital percentage
    
    
    3.91
    %
    
    
    11.34
    %
    
    
    8.59
    %
 
 (1)
    
    Represents equity capital of the Bank as reported to the Federal Financial Institutions
Examination Council and the Department for the quarter ended June 30, 2005.(2)
    
    Limited to 1.25% of risk-adjusted assets.(3)
    
    Tier 1 capital is calculated as a percentage of adjusted total average assets of $305.4
million. Tier 1 and Total risk-based capital are calculated as a percentage of adjusted
risk-weighed assets 28




---



##### Table of Contents



Activities and Investments of Insured State-Chartered Banks
 Pennsylvania Savings Bank Law
   Interstate Acquisitions
 29




---



##### Table of Contents



TAXATION
 Federal and State Taxation
  Fiscal Year.
 Accrual Method of Accounting.
 Bad Debt Reserves.
   30




---



##### Table of Contents



Distributions.
 Minimum Tax.
 Net Operating Loss Carryovers.
 Capital Gains and Corporate Dividends-Received Deduction.
  State Taxation.
 31




---



##### Table of Contents



Item 2.
Properties.
  32




---



##### Table of Contents



Net Book Value of Property orOwned or
    
    
    Lease Expiration
    
    
    Leasehold Improvements as ofLocation
    
    Leased
    
    
    Date
    
    
    June 30, 2005Allegheny County:363 Butler Street
Etna, Pittsburgh
    
    Owned
    
    
    
    
    
    $
    601416 Mt. Royal Blvd.
Glenshaw
    
    Owned
    
    
    
    
    
    
    911801 Jancey Street
Morningside, Pittsburgh
    
    Leased
    
    
    2006
    (1)
    
    
    2724 Harts Run Road
Allison Park
    
    Owned
    
    
    
    
    
    
    491744 Little Deer Creek Road
Russellton
    
    Owned
    
    
    
    
    
    
    3405200 Butler Street
Lawrenceville, Pittsburgh
    
    Owned
    
    
    
    
    
    
    142900 Saxonburg Boulevard
Shaler, Pittsburgh
    
    Owned
    
    
    
    
    
    
    592Butler County:125 West Main Street
Saxonburg
    
    Owned
    
    
    
    
    
    
    111
 
 (1)
    
    At June 30, 2006, the Bank will have an option to extend this lease for an additional
five years. Ô Ô Ô Ô
 
 Item 3. Legal Proceedings .
  
 Item 4.
Submission of Matters to a Vote of Security Holders.
  33




---



##### Table of Contents



PART II.
 
 Item 5. Market for Registrants Common Equity and Related Stockholder Matters.
    
 Item 6. Selected Financial Data .
  
 Item 7.
Managements Discussion and Analysis of Financial Condition and Results of Operations.
  
 Item 7A.
Quantitative and Qualitative Disclosures about Market Risk .
  
 Item 8. Financial Statements and Supplementary Data .
  
 Item 9.
Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure.
  
 Item 9A.
Controls and Procedures.
  34




---



##### Table of Contents



Item
 9B. Other Information.
  
 PART III.
 
 Item 10.
Directors and Executive Officers of the Registrant .
   
 Item 11.
Executive Compensation .
  
 Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters .
  Equity Compensation Plan Information
  Number of Shares Remaining AvailableNumber of Shares to be issued Upon
    
    
    Weighted-Average Exercise
    
    
    for Future Issuance (Excluding SharesPlan Category
    
    The Exercise of Outstanding Options
    
    
    Price of Outstanding Options
    
    
    Reflected in the First Column)Equity Compensation Plans
Approved by Security
Holders
    
    
    140,683
    
    
    $
    13.42
    
    
    
    106,672Total
    
    
    140,683
    
    
    $
    13.42
    
    
    
    106,672
 35




---



##### Table of Contents



Item 13.
Certain Relationships and Related Transactions .
  
 Item 14.
Principal Accountant Fees and Services.
  
 PART IV.
 
 Item 15.
Exhibits, Financial Statement Schedules and Reports on Form 8-K.
 (a) Documents Filed as Part of this Report
 (1)
    
    The following financial statements are incorporated by reference from Item 8
hereof (see
Exhibit 13 hereto):Report of Independent Registered Accounting FirmConsolidated Statements of Financial Condition at June 30, 2005 and 2004Consolidated Statements of Operations for the Years Ended June 30, 2005, 2004 and 2003Consolidated Statements of Stockholders Equity for the Years Ended June 30, 2005, 2004 and
2003Consolidated Statements of Cash Flows for the Years Ended June 30, 2005, 2004 and 2003Notes to Consolidated Financial Statements(2)
    
    All other schedules for which provision is made in the applicable accounting
regulation of
the SEC are omitted because of the absence of conditions under which they are required
or
because the required information is included in the consolidated financial statements
and
related notes thereto.(3)
    
    The following exhibits are filed as part of this Form 10-K and this list
includes the Exhibit
Index.
 No.
    
    Exhibits
    
    Page3.1
    
    Articles of Incorporation
    
    *3.2
    
    Bylaws
    
    *4
    
    Common Stock Certificate
    
    *10.1
    
    1987 Stock Compensation Program
    
    *10.2
    
    1993 Key Employee Stock Compensation Program
    
    **
 36




---



##### Table of Contents



No.
    
    Exhibits
    
    Page10.3
    
    1993 Directors Stock Option Plan
    
    **10.4
    
    1996 Stock Option Plan
    
    ***10.5
    
    2000 Stock Option Plan
    
    ****10.6
    
    Employment agreement between Laurel Savings Bank and
Edwin R. Maus
    
    ***10.7
    
    Employment Agreement between Laurel Savings Bank, Laurel
Capital Group, Inc. and Edwin R. Maus, as amended
    
    *****10.8
    
    Employment Agreement between Laurel Savings Bank, Laurel
Capital Group, Inc. and John A. Howard, Jr., as amended
    
    *****10.9
    
    Change in Control Agreement between Laurel Savings Bank
and Robert A. Stephens
    
    *****10.10
    
    Laurel Capital Group, Inc. Deferred Compensation Plan
    
    *****10.11
    
    Form of Trustee Deferred Compensation Agreement for Trustees
Cessar and Norris
    
    *****10.12
    
    Form of Trustee Deferred Compensation Agreement for Trustees
Ganassi and Hamilton
    
    *****10.13
    
    Form of Supplemental Executive Retirement Plan for Messrs.
Maus and Howard
    
    *****10.14
    
    Form of Supplemental Executive Retirement Plan for Messrs.
Stephens and Puz and Ms. Schaefer
    
    *****11
    
    Earnings Per Share Computation13
    
    2005 Annual Report to Stockholders14
    
    Code of Conduct and Ethics
    
    *****21
    
    See Business  Subsidiaries for the required information23
    
    Consent of S.R. Snodgrass23.1
    
    Consent of KPMG LLP31.1
    
    Certification of Chief Executive Officer Pursuant to Rules 13a-14 and 15d-14 of the
Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer Pursuant to Rules 13a-14 and 15d-14 of the
Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification of Chief Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)32.2
    
    Certification of Chief Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)
 
 *
    
    Incorporated by reference to the Companys Registration Statement on Form S-4.**
    
    Incorporated by reference to the Companys Form 10-K for the year ended June 30, 1994.***
    
    Incorporated by reference to the Companys Form 10-K for the year ended June 30, 1997.****
    
    Incorporated by reference to the Companys proxy statement dated October 6, 2000. 37




---



##### Table of Contents



*****
    
    Incorporated by reference to the Companys Form 10-K for the year ended June 30, 2004.(b)
    
    See (a)(3) above for all exhibits and the Exhibit Index.(c)
    
    There are no other financial statements and financial statement schedules which were
excluded from the 2005 Annual Report to Stockholders which are required to be included
herein. 38




---



##### Table of Contents



LAUREL CAPITAL GROUP, INC.By:
    
    /s/ Edwin R. MausDate: September 26, 2005
    
    
    
    Edwin R. Maus, President andChief Executive Officer
  /s/ Richard J. Cessar

Richard J. Cessar, Chairman of the Board
    
    Date: September 26, 2005/s/ Annette D. Ganassi

Annette D. Ganassi, Director
    
    Date: September 26, 2005/s/ Richard S. Hamilton

Richard S. Hamilton, Director
    
    Date: September 26, 2005/s/ Edwin R. Maus

Edwin R. Maus, Director, President
    
    Date: September 26, 2005and Chief Executive Officer/s/ J. Harold Norris

J. Harold Norris, Director
    
    Date: September 26, 2005/s/ John A. Howard, Jr.

Date: September 26, 2005
    
    Date: September 26, 2005John A. Howard, Jr., Senior Vice President,Chief Financial Officer and Corporate Secretary/Treasurer
 39